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Beyond the Ford severance scandal

Andrew Lam
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Supervisor John Avalos and state Senator Leland Yee, who are both running for mayor, picked up on a populist issue last week, blasting away at Muni for paying outgoing chief Nathaniel Ford a whopping $384,000 severance. “With $384,000,” Yee’s website lamented, “the entire city of San Francisco could park free of charge for three days. Muni could be entirely free for a whole day. We could stripe seven miles of new bike lanes.”

In reality $384,000 is a fraction of Muni’s budget — less than half of 1 percent. And it’s a trivial amount compared to what CEOs get in the private sector — Peter Darbee, whose firm killed eight people and wiped out a neighborhood, walked away with $35 million when he left Pacific Gas and Electric Co. in disgrace.

But this is exactly the sort of deal that infuriates the public. When the cost of parking meters and tickets keep rising, and Muni’s on-time performance lags, why is the guy in charge, who’s leaving in part because he isn’t doing the job, getting such a nice golden parachute, courtesy of the taxpayers?

In the end, there’s not a lot Yee or Avalos can do about it. For one thing, the decision was made not by the supervisors but by the San Francisco Municipal Transportation Agency. Beyond that, SFMTA had only limited choices — Ford has an employment contract. And it’s hard to fire someone in the middle of a term of contracted employment without buying out at least part of the deal.

That’s the larger issue here, one that the mayoral candidates ought to be talking about. Why does the head of Muni get a special employment contract? The heads of the Police Department and Fire Department don’t get one. In fact, most department heads don’t get contracts specifying a term of office and including severance pay.

Those contracts can be expensive — Susan Leal got $400,000 when she was dismissed as head of the SF Public Utilities Commission. Arlene Ackerman got $375,000 when she left the San Francisco Unified School District.

No rank-and-file city employees get severance if they’re fired for cause (or if they negotiate a resignation to avoid disciplinary action). City department heads shouldn’t either.

We understand why school superintendents and Muni managers want those sorts of deals: If you work for a political agency, there’s always a chance that the people who hired you will be gone at some point and you’ll be working for people with different visions and political positions. But none of these department heads are paupers — they’re well paid, and, like anyone who takes a management job, they know that their job security depends on performance.

It’s akin, in a much more limited way, to what’s been happening in the private sector, where the top people get compensation that vastly exceeds what even the people immediately below them get. Muni’s assistant general managers don’t get employment contracts with golden parachutes.

San Francisco needs a city policy on special employment contracts — and rules barring excessive severance pay for management-level employees. The supervisors ought to ask the budget analyst for a report on which city employees have contracts, what they call for, and how they compare to what similar-level employees without contracts are paid. There should be hearing on this and legislation that clears up what is now an expensive — and disheartening — hodgepodge of private deals.

 

On the hook

Andrew Lam
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4
On the hook

rebeccab@sfbg.com

Unique Roberts squared back her shoulders and recalled what it was like when she first moved to San Francisco from East Oakland more than a decade ago. A tall, 33-year-old African American transgender woman with piercing eyes and a charming smile despite gaps of missing teeth, Roberts said she performed as a showgirl at clubs like Harvey’s and the Pendulum in the Castro. In those exciting days, “I fell in love with this boy, and he was an addict,” she explained. “I thought that if I did it, it would keep our relationship together.”

She recalled how awful her boyfriend felt when he found out she was using, telling her, “You don’t know what you’re doing to yourself.” He departed for Texas several years later, but addiction stuck with her as a way of life.

She says she’s tried to kick the habit, but it’s wrapped up in a battle against depression stemming from the loss of loved ones. Roberts was wearing one of the bright orange sweatshirts issued to inmates at San Francisco County Jail. She landed there after being arrested in April for allegedly selling a tiny rock of crack, weighing just 9/100s of a gram, to an undercover narcotics officer. According to the police report, the cop offered her $20 for it — but based on National Drug Intelligence Center street-value estimates, that amount is only worth about $2.50.

Roberts may go by the first name Unique, but her lawyer Tal Klement, who works for the San Francisco Public Defender’s Office, is fond of saying her case is hardly unique at all. She was one of several people arrested in the Tenderloin that day after interacting with the same plainclothes officer.

It was part of a coordinated sweep known as a buy-bust, a common practice under which an officer may pose as a homeless person, a clueless outsider, or a dope-sick fiend to lure people into selling crack, pills, meth, heroin, or marijuana. Once a transaction is made, a team of officers awaiting the signal immediately closes in and arrests the seller.

As of June 20, there were at least 109 open buy-bust cases in San Francisco. Based on defendants’ rap sheets, 92 percent had prior drug-use histories, according to a tally conducted by the Public Defender’s Office.

The officers posing as buyers — who often earn overtime — use street lingo, know which drugs can be obtained at which intersections, and sometimes offer higher prices than the accepted street value. Attorney Anne Irwin, also a public defender, is critical of the practice, saying it’s an expensive tactic that’s makes for easy arrests — because the money is irresistible to addicts who think they’re getting an opportunity to convert a personal stash into more drugs.

In a lean budget year, “they’re cutting social services left and right, and these are the very services that could help the addicts get off the street,” Irwin noted. She’s skeptical that the strategy stems the flow of substantial quantities of drugs.

Police Chief Greg Suhr, who said he participated in buy-busts for years as a narcotics officer, credits the tactic for helping to eradicate a rampant open-air drug market on Third Street in the Bayview, and says it can help prevent drug-related violence.

Klement, however, condemns it as a “war on crumbs,” saying it ensnares far more addicts than serious dealers and often ends up unnecessarily pinning felony convictions onto low-level offenders.

 

NUMBERS GAME

Buy-busts usually involve around eight officers, according to an average calculated by the Public Defender’s Office based on open cases, but have involved as many as 14 and as few as three. There’s the decoy buyer, who sometimes dresses in grimy sweatpants, goes without shaving, or dirties his face to look like a street addict in desperate need of a fix. There’s a “close cover” officer who follows the decoy, plus an arrest team that is also sometimes in plainclothes. Beforehand, officers will photocopy cash — usually $20 bills — to document the serial numbers so that the same marked city funds can be used as evidence once recovered from arrestees. Busts can happen within minutes of one another, and a single shift may net five or six arrests.

Irwin says the people snared aren’t typical drug dealers — certainly not big-time players. But they’re charged as dealers — and in many cases wind up branded as felons, with severe legal penalties such as multiyear prison sentences.

While the police department is able to show on paper that it’s brought hundreds of drug dealers into custody — and the district attorney can point to a boost in the conviction rate thanks to the program’s efficiency — Irwin says the amounts being peddled are tiny.

“In traditional narcotics operations, they cultivated snitches, used surveillance, and obtained search warrants” to go after major dealers, Irwin said. With buy-busts, “It’s like shooting fish in a barrel. Everyone agrees that we need cops on the streets to help keep us safe … But do we want to be paying hundreds of thousands of dollars for this?”

Sharon Woo, chief assistant of operations for the San Francisco District Attorney, told the Guardian that “we charge based on the conduct of the individual.” Woo went on to say that the DA tried to “exercise appropriate discretion” on a case-by-case basis when individuals are selling to support an addiction or due to being in dire financial straits.

Sometimes individuals are ushered into alternative programs such as drug court or a Back on Track program for first-time offenders, Woo said. And while the DA typically includes charges that make defendants ineligible for probation under state law if they have prior convictions for selling crack-cocaine — a discretionary practice that has drawn criticism from public defenders — Woo observed that “it doesn’t mean that’s how cases resolve.”

Police forces in nearly every major metropolitan area practice buy-busts, said Frank Zimring, a law professor at UC Berkeley’s Boalt Hall School of Law specializing in criminal justice issues. Yet he described the practice as costly and noted that paying overtime for it “makes what would ordinarily be a very expensive operation into a more expensive operation.”

Cost estimates for the entire program are tough to pin down. It costs $130 per day to house each prisoner in the county jail, amounting to more than $14,000 per day if all of the defendants with pending cases are in custody. If an average of eight officers per bust were paid $60 an hour each to spend six hours conducting a buy-bust, the current caseload represents more than $300,000 in officer pay — a conservative estimate — and that’s before lawyers in the offices of the public defender and district attorney are paid to prosecute and defend the suspects in court.

But no matter how you add it up, it’s a lot of money.

Suhr told the Guardian that apprehending street-level offenders occasionally leads officers to bigger fish. “Sometimes you get a low-level person, or a buyer if you will … if that same person would say, ‘But I know this guy and he has guns and he’s a big dealer and whatever.’ That is a good way to get to those bigger people.”

“We’ve never seen that happen in practice,” Klement countered.

One of Irwin’s clients, a homeless man, was charged with selling narcotics after he scraped out the contents of his pipe to sell 1/1,000th of a gram of crack to an undercover officer for $20. In a rare twist, the case was ultimately settled on a misdemeanor possession of narcotics.

Inspector Robert Doss, who served as the decoy in that case, has earned substantial amounts of overtime while going undercover to buy drugs, according to a court transcript. In 2009 Doss earned $35,488 in combined overtime and “other pay,” which includes time spent testifying in court, according to a San Francisco Chronicle database of municipal salaries.

 

ON THE STREET, OFF THE STREET

The Tenderloin is frequently targeted for buy-busts, with 65 percent of open cases as of June 13 having taken place in that neighborhood. The Haight ranked second, with nearly 12 percent of cases, and the Mission followed with 10 percent. Shortly after District Attorney George Gascón was sworn into his prior post as police chief in 2009, he announced a concerted effort to clean up the Tenderloin, and Klement maintains he’s seen a surge in cases stemming from buy-busts there ever since.

Drug dealing in the Tenderloin often makes the news as a source of frustration to merchants and residents. “You try and explain to the people of San Francisco that it’s okay for people to have open-air drug markets right in front of their stores,” Suhr said.

Yet Klement maintains that what is essentially a quality-of-life crime should not be treated as a felony. “There’s a lot of pressure from people who are invested in businesses [in the Tenderloin] who would love to see that neighborhood become the next Hayes Valley,” he said. “But what they don’t realize is that people are paying with prison for that agenda.”

Once someone has been labeled a drug dealer in the eyes of the law, he said, it becomes more difficult for them to access drug treatment — not to mention get a job, qualify for a student loan, or find housing.

Roberts’ case nearly went to trial. If convicted, she could have been sent to prison for a minimum of three and a maximum of 17 years due to extra penalties from prior convictions. On the eve of the trial, however, the case was settled on a possession charge for a year in jail, a rare outcome. Klement was hoping to have her placed in a treatment program.

Asked if she knew of others swept up in undercover operations, Roberts gave a wry chuckle and gestured to the jail corridor behind her, indicating that nearly everyone there had been taken down in similar fashion. Klement noted that the targets of the buy-busts are almost exclusively people of color, saying, “You walk into the holding cell and you think you’re in Alabama or Mississippi, not San Francisco.”

In an editorial on the subject that he wrote a couple years ago, Klement noted that by contrast, predominantly white middle class people with a fondness for illegal drugs are rarely targeted because they aren’t the ones selling drugs on the street. “The hard truth is that the police ignore most of the middle class drug use and dealing occurring out of private homes in every neighborhood or other public venues in the city — bars, nightclubs, concert halls. More drugs are being transported to Burning Man as we speak than will probably be seized during Gascón’s entire crackdown.”

For Klement, it’s just another symptom of a broken system. “A lot of these people are repeat players because we don’t have the right interventions at the right time,” he said. “We don’t understand addiction.”

 

Yearbook of heartbreak and outrage

Andrew Lam
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0
Yearbook of heartbreak and outrage

news@sfbg.com

The giant commemorative AIDS ribbon that was up on Twin Peaks during the first half of June has been taken down, but the 30th anniversary of the epidemic, and how it changed San Francisco, is still reverberating throughout the city.

“It was like paradise,” Mark Ottman said as he guided me through the high-ceiling lobby, quiet as a library, of Union Bank on 400 California St. “For a few years. Then things got really scary.”

Ottman, the vice president of personal trust and estate services at the bank, recalled arriving in the city in 1981 as a 22-year-old Montana transplant. That year, the gay newspaper the Bay Area Reporter published the word AIDS for the very first time.

Although the paper has been at the forefront of reporting gay news for its 40 years — from White Night Riots of the 1970s through the Lavender Sweep of the 1990s, the Bowers vs. Hardwick decision through the “don’t ask, don’t tell” repeal — the way it straightforwardly handled the heartbreak of AIDS and the outrage that followed has become its lasting legacy.

“This was not stuff that was shown on the nightly news,” Ottman continued. “The B.A.R. was three or four months ahead in covering AIDS. In that sense, it was really the leader.”

This month, those with a thirst for history will need to look no further than newsprint. Union Bank’s LGBT Alliance has commissioned a retrospective exhibit highlighting the Bay Area Reporter’s coverage of the gay and lesbian community.

When the B.A.R. started in 1971, founders and friends Paul Bentley and Bob Ross had the intention of making it more than just a gossipy guide to bars and bathhouses. The newspaper focused on serious local news — even recruiting Harvey Milk as a political columnist.

“The founders weren’t journalists,” said Rick Gerharter, the longtime freelance photographer who curated the photo- and front page-filled exhibit at Union Bank. “But as the paper grew, it certainly became more professional.”

In 1981, when AIDS first appeared, the B.A.R. had no choice but to undergo a journalistic coming of age as it struggled to be first and be fair covering the mysterious disease that had begun to mow down gay men.

 

UNEASY EARLY AIDS COVERAGE

Yet the newspaper was not immune to the confusion and uneasiness that enveloped the community during the early days of the “gay cancer.”

“Me and my boyfriend both laughed — it must be another Anita Bryant plot against homosexuals,” said Robert Julian, recalling his first response to talk of the “gay-related immunodeficiency” or GRID.

“Gay people are united by sexual orientation, not genetics,” said Julian. Initially, the former B.A.R. entertainment editor and author of But the Show Went On: San Francisco 1987-1988 had his suspicions, thinking that a “physical ailment confined solely to gay people was a practical impossibility.”

It didn’t take long before the B.A.R. began reporting on the latest research, medical resources, and information about financial services available to the hundreds of gay men in San Francisco who had contracted the HIV virus.

Once researchers discovered that AIDS was being transmitted sexually, public opinion divided. Then-Mayor Diane Feinstein and Director of Public Health Mervyn Silverman wanted to close the bathhouses, but some members of the gay community considered this a violation of personal rights.

“There was this repression around gay people and sex, this hysteria around bathhouses,” said Gerharter. And the B.A.R. was hesitant to feed into that frenzy at first. “When it was clear what was really happening, how this thing was being spread around, then it clicked — and the paper really jumped to the forefront of covering what had tuned into an epidemic.”

 

STEAMY BATHHOUSE DEBATE

The paper not only began to cover the AIDS crisis extensively, but did it with an editorial slant that fostered debate in the community. Paul Lorch, then-managing editor, became a prominent voice arguing to keep the bathhouses open. Bathhouses don’t give you AIDS; unprotected sex gives you AIDS, Lorch expressed in strongly-penned editorials. Sometimes he even answered back to Letters to the Editor.

“Lorch and the publishers didn’t believe closing the bathhouses would solve it,” said Wayne Friday, who took over the paper’s political column after Harvey Milk was assassinated and continued it for 27 years. “But no one had an alternative. Diane [Feinstein] would call me at 5 a.m. asking me what we should do about this thing.”

The community was split. Some, including Friday, believed that the bathhouses were a public health hazard while others accused Feinstein of scapegoating. “Those people were being selfish and foolish,” Friday said. “Closing the bathhouses saved lives.”

In 1984 the San Francisco Health Department asked for a court order forbidding renting out private rooms in bathhouses. Without the luxury of privacy, most closed within months. “San Francisco became a blueprint of how to handle AIDS on the city level for the rest of the country,” Friday said.

 

OBITUARIES KEPT SAD TALLY

During this time, the B.A.R. was also keeping a more morbid type of tally: the obituaries. Each week the paper published two pages — 30 to 50 obituaries — until 1998.

“When you picked it up, it was the first thing you turned to,” Gerharter said. “It was just a name and a face. Maybe you recognized the person. Maybe someone you tricked with.”

In 1989, art director Richard Burt became so overwhelmed by the number of obituaries that had been turned in to the B.A.R. within the first 10 months that he wanted to convey the sinking feeling in the pages of the paper. The Nov. 16 issue included a four-page collage of everyone who had passed away due to AIDS that year. Just a name and a face.

“It was heartbreaking,” Julian said, “to see my friends and lovers pictured there.”

Through the efforts of Tom Burtch and the San Francisco GLBT Historical Society, a massive searchable online database of B.A.R. obituaries since 1979 was launched in 2009 (www.leifkerdesigns.com/olo/index.jsp).

During his tenure at the paper, Julian chose not to cover AIDS, feeling that the point of entertainment news was to distract away “from the soul-crushing presence of the grim reaper stalking our neighborhoods.”

Though AIDS was a heavily political newsbeat, Friday removed himself from covering it for different reasons. “I knew every elected official. I sat in on all the City Hall meetings about the bathhouses,” Friday said. “But I just couldn’t do it every week. It was too damned personal.”

“Thinking about turning the page to those obituaries even now is making me shiver,” Ottman said. “It’s like a high school reunion, except you don’t know which half made it.”

 

COVERING THE RISE OF ACTIVISM

The B.A.R. was also instrumental in covering the various political and protest actions that accompanied the disease, including the bloody police sweep of ACT-UP protesters the Castro and the Stop AIDS Now or Else blockade of the Golden Gate Bridge, both in 1989.

Gerharter remembers the blockade. “They arranged it for the morning commute. And thank God it was foggy or else the surveillance cameras would have stopped us.”

Gerharter would often be trusted with information about an upcoming demonstration and be the only photographer allowed to tag along. “You can document history better when you become a part of it. You get closer to the people — they’re not posing,” he said. “It was our job to be advocates and watchdogs.”

After consistently seeing the tragedy of AIDS on the front page for almost a decade, the B.A.R. became more active itself, inciting its readers to action. “We’d read the B.A.R. to find out about the rallies were happening so we could skip work and take a road trip to Sacramento,” Ottman said. “The Chronicle would never cover that.”

When the fight against AIDS became a war, the B.A.R.’s writers often felt like they had become war correspondents, complete with all the outsize personality conflict and drama of the classic stereotype.

“[Bob] Ross was a nightmare boss, a pain in the ass, and complete rageaholic,” Julian said of B.A.R.’s often conservative cofounder, who died in 2003. “But he was committed to keeping the paper and us running.”

THE BAY AREA REPORTER 40TH ANNIVERSARY EXHIBIT

Through June 30, 9 a.m.–5 p.m.

Union Bank Main Branch

400 California, SF

 

Alerts

Maria Poblet
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0

ALERTS

 By Jackie Andrews

 

THURSDAY, JUNE 23


Radical Women meeting

Attend this round-up of radical women and LGBTQ organizers who work hard to improve their communities to fight against racism, sexism, homophobia, and labor exploitation. Tonight there will be a light summer supper followed by a discussion and brainstorming session inspired by the “It Gets Better” campaign — a national group that provides hope for queer youth around the country. Collaborate with like-minded people who want to make change happen at home and help hammer out a plan to translate the mission of the “It Gets Better” campaign to our local queer community’s needs.

6:15 p.m., $7.50

New Valencia Hall

625 Larkin, SF

(415) 864-1278

www.radicalwomen.org

 

Medicare for all

Many progressives around the country are less than enthusiastic with the current administration’s reform on health care, which they see as a sellout to corporate interests. The San Francisco chapter of the Progressive Democrats of America presents this public forum on the topic, where Don Bechler, a tireless organizer for single-payer healthcare since 1994, and clinical psychologist Stephen Berman will discuss just how close we are to having a truly universal healthcare.

7 p.m., free

Unitarian Universalist Center

Martin Luther King Room

1187 Franklin, SF

(415) 776-4580

www.pdaamerica.org

 

SATURDAY, JUNE 25


People’s Movement assembly

Attend this community forum and planning session for next year’s East Bay Social Forum — inspired by the U.S. Social Forum in Detroit last June where more than 20,000 diverse people came together to build strong progressive movements for housing, health, justice, education, immigration, ecology, and peace.

9:30 a.m.–4:30 p.m., free

Lutheran Church of the Cross

1744 University, Berk.

(510) 848-1424

www.eastbaysocialforum.org

 

TUESDAY, JUNE 28


Clean Air Act

Find out how the Clean Air Act, signed into law by President Nixon in 1970, is the U.S.’s most important and successful law for controlling air pollution and why it is our best hope in curbing climate change. If used effectively, it could significantly reduce greenhouse gases to a level deemed safe by climatologists. Learn how the Clean Air Act works, what kinds of threats it faces from Congress, and how it can be used to protect the planet and our future.

7–10 p.m., free

Unitarian Universalists’ Hall

1744 University, Berk.

(510) 841-4824

www.bfuu.org 

 

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Treasure Island: 11 ayes, no sight

Andrew Lam
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Treasure Island: 11 ayes, no sight

On June 7, the San Francisco Board of Supervisors voted 11-0 to reject an appeal of the Treasure Island environmental impact report. The appeal was brought by Arc Ecology and our colleagues the Sierra Club, Golden Gate Audubon Society, Wild Equity, former Sup. Aaron Peskin, and Yerba Buena Island resident Ken Masters.

The board will tell you that the Department of City Planning and the Mayor’s Office of Economic and Workforce Development found the appeal lacking in merit.

In the appeal, we claimed the EIR lacked the specificity to qualify as a project EIR, which means that after it passes, the city will have substantially limited the ability of any future Board of Supervisors to address the project’s actual environmental impacts. But these impacts cannot and will not be known until actual development proposals, none of which presently exist, are made.

Sup. Jane Kim and city planning staffers argued that the EIR had almost too much specificity. For example, without showing a single confirming diagram, project sponsors claimed they could cut as many as 100 stories off the proposed skyscrapers — yet keep the same number of condos without increasing the bulk, height, or number of buildings in the overall project. How? Through the Harry Potter-like magic of “flex buildings and zones.”

The board will tell you that this project presents a vision of a new community unrivaled in the Bay Area and nation — a new Athens. But the supervisors don’t seem to realize that it’s a development with a population larger than Emeryville, about the size of Albany. Indeed, the separate dedicated buildings of affordable homes truly make Treasure Island like Athens of old, with poorer people segregated from the rich.

They don’t see that this is a self-reflecting vision blithely unconcerned about the impacts it will have on the greater Bay Area region, and that it’s a bloated project that will vastly exceed the region’s capacity to support it. It’s a project whose impacts will enslave legions of people to longer commutes as more cars flood the bridge, pushing traffic like rising sea levels into the upper reaches of East Bay freeways. Nor are project proponents particularly concerned about the impacts of air pollution blowing from the bridge and the region’s freeways into Berkeley, Emeryville, and Oakland.

Finally, neither the supervisors, nor the city planners, nor the Office of Economic and Workforce Development seem to be aware that San Francisco currently has 30,000 vacant housing units. It will cost a projected $577,000 to build each Treasure Island unit. But more units could be built on San Francisco’s mainland with almost no impact, simply by allowing rental units in the basements of some of our stock of 130,000 single-family homes.

That kind of housing isn’t as luxurious as a 45-story view of the bay from Treasure Island perhaps — but at a cost of $100,000 to $200,000 per unit, more than half of those in-law apartments could be rented at or below market rate. Infill housing of that sort would also mean greater stability for established home owners, more jobs and business opportunities, and more riders for Muni.

Still, the appellants weren’t trying to halt any project at Treasure Island. The appeal was about was fixing the deficiencies in the EIR and right-sizing the project so it can move forward with its benefits intact.

In the Tarot, the Five of Cups depicts an individual so besotted by that possibilities floating before his eyes that he stands mesmerized, believing they are at hand — of course, in reality he’s fooling himself. In the case of Treasure Island, the supervisors and city officials are intoxicated by the visions floating in the bay — and are thus blinded to the better options of making this city and region more sustainable and affordable.

Groupon’s secret

Andrew Lam
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0
Groupon’s secret

sarah@sfbg.com

A San Francisco-based bus tour operator who relies on the Internet to drum up business has filed a class action suit against Groupon, alleging that the deal-of-the-day website uses false advertising, or bait-and-switch tactics, to get customers to its site.

San Francisco Comprehensive Tours, LLC, which does business as San Francisco Shuttle Tours and Wine Country Tour Shuttle, originally filed suit March 17 in the U.S. District Court, Northern District of California “to stop false and misleading business and advertising acts and practices employed on Google.com by Groupon, Inc.”

In essence, the tour company claims that Groupon is dominating Google searches with offerings for discounted local tours — of, say, Alcatraz — that don’t actually exist.

On April 19, SFCT amended its complaint into a class action suit. The amended suit includes “all persons and entities in the United States who purchased Internet ads with Google for the purpose of advertising local tour company business information and whose tour businesses, including the cost of advertising on Google, have been affected by the false advertisements of Groupon which claim to provide discounted offers for tours but actually provide no such offers.”

Attorneys for Groupon have asked for an extension until June 13 to respond to SFCT’s complaint. Representatives for Groupon told the Guardian they can’t comment on the case.

SFCT’s attorneys claim that Groupon is arguing that this shouldn’t be a class action suit because everyone’s complaint is different.

“They’re spamming the Internet with false advertising that affects everyone’s ability to do business, so this is tailor-made for a class action suit,” said SFCT’s attorney Steve Williams of Cotchett, Pitre & McCarthy in Burlingame. “It’s not easy to take on Groupon now that it has gotten so big and can afford top-notch lawyers.” In other words, it could take a group to take on Groupon.

The suit comes as Groupon, which launched in Chicago in 2008 and now claims to have 70 million subscribers as well as annual revenues of $700 million and an estimated worth of $12.7 billion, prepares to go public. Investors are trying to figure out if Groupon has a sustainable business model.

Last December Groupon fueled speculation that it would offer an initial public offering (IPO) when it rejected Google’s jaw-dropping $5 billion-plus takeover bid. Spurned, Google responded by launching Google Deals, a Groupon clone, in Portland, Ore., this June and announcing plans to expand into San Francisco and other U.S. cities later this year.

But as Forbes magazine noted last August, Groupon founder Andrew Mason has “managed to build the fastest-growing company in Web history.” Groupon’s meteoric rise has been attributed to Mason’s decision to combine a familiar concept with a novel idea: customers only get Groupon’s deeply discounted deals if enough customers pay up in advance for the deal that day.

 

A BAIT AND SWITCH?

SFCT is accusing Groupon of manipulating ad space that it buys from Google to funnel visitors to its site and collect data about these visitors — while SFCT and other tour companies lose customers and have to spend more money on online advertising.

This isn’t the first time Groupon has been sued since it was launched. But the bulk of those cases revolved around claims that Groupon’s “Daily Deal” gift certificates have illegal expiration dates. By contrast, SFCT’s suit is about Groupon hurting other businesses through manipulating Google’s AdWords program, which is Google’s main advertising program and main source of revenue.

“It’s the means that Groupon uses that is harming legitimate businesses. But they argue that it’s the Internet, it’s all new, and therefore the rules don’t apply,” Williams claimed.

Even though Google has not been sued in this instance, Eric Goldman, an associate professor at Santa Clara University School of Law and director of the school’s High Tech Law Institute, said that much of SCTF’s complaint is as much an indictment of Google’s platform as it is of Groupon’s practices. “Even though Google hasn’t been sued, I wonder if Google has or will make changes to its ad platform in response to the allegations in this complaint,” Goldman said.

Google spokesperson Diana Adair told the Guardian: “Unfortunately, we’re not able to comment.”

Williams claims that Groupon is gaming the algorithm that underpins Google’s AdWords program, which uses a combination of the number of click-throughs to a website, the closeness of an ad’s wording to an Internet user’s search terms, and the amount of money businesses are willing to bid on specific keywords to rank search results on Google.

“Groupon can’t say it’s just an AdWords problem,” Williams said. “It’s a manipulation.”

In its suit, SCTF claims it successfully bid on keywords such as “San Francisco tours,” “Alcatraz tours” and “Napa wine tours” for years. Then, in September 2010, Groupon started bidding on these terms as well — and though it rarely offered any discounted Alcatraz tours, it began to rank high in search results, driving up SFCT’s ad costs.

The suit notes that one time, in response to the keyword “Alcatraz tickets,” Groupon’s ad copy read “Alcatraz tickets — one ridiculously huge coupon a day: Do Alcatraz CA at 50 to 90 percent off.” Groupon’s actual ad that day was for discounted acting lessons.

“But they don’t care because they are trying to direct as many people as they can to their website,” Williams claimed.

Williams said he believes he can show that from the moment Groupon started placing ads for tours it didn’t sell, SFCT has suffered financially. “For someone like the plaintiff who is not about to put out an IPO, the frustration is that Groupon is funneling people into their direct mail campaign to develop huge databases and monitor what people like to buy so Groupon can target those people in future,” he said.

Williams told us he thinks he knows how Groupon will try to defend its strategy. “They’ll probably say that there is nothing wrong with what they are doing because if a business want to attract people to its product, it can talk to them about other products,” he said.

But he doubted they would try to blame it on Google. “Google would say that Groupon is taking advantage of AdWords,” Williams explained.

He sees Groupon’s strategy as a “bait and switch” tactic that’s illegal under the federal Lanham Act and California’s unfair competition and false advertising laws. “If I did this in a newspaper’s classified advertising section, it would be wrong. But the way Groupon looks at it, the normal rules don’t apply because it’s doing this online,” Williams said.

 

TRUTH IN ADVERTISING

Williams also noted that Groupon hasn’t disclosed all the other lawsuits it’s facing. “They view this as a pesky little thing. But most companies, unless the suits are patently without merit, will err on the side of caution, believing it’s better to disclose than fail to disclose,” he said. “Or maybe they are thinking, ‘Soon we’re going to be making $30 billion, so who cares?'<0x2009>”

Goldman notes that SFCT’s class action adds extra complexity for its lawyers. “Groupon will likely try to prevent the class from forming in addition to attacking the substance of the arguments. This is not a quick-and-easy win for the plaintiffs. In many cases, companies like Groupon decide to settle rather than fight because it’s a costly defense, even if they ultimately win.”

“The starting point of this suit is simple enough, namely that businesses need to tell the truth in advertising,” he said. “The complaint alleges that Groupon wasn’t telling the truth because it says X in its ad but when you get there it says Y, which has nothing to do with X.”

Goldman also predicted that, to the extent that SFCT’s suit is truly about an algorithm problem, it won’t be helpful to Groupon. “But that doesn’t mean the plaintiff will win,” he added, noting that establishing false advertising is tricky.

The plaintiffs will have to establish that their parties are competitive and that their businesses were harmed, Goldman said. He also observed that this particular class action suit points to a broader range of questions about the legitimacy of Groupon’s business practices and problems with Google’s AdWords platform.

Goldman pointed to a lawsuit filed June 7 against Amazon suggesting that Amazon had an algorithmic tool for buying ads and that perhaps the tool had gone awry. In that case, Maxfield, a New York City company that markets and distributes the magnetic desk toys called Buckyballs, alleges that beginning May 5 when people searched online for “Buckyballs,” an ad popped up for Buckyballs at Amazon. But when customers clicked on this ad, they wound up on a website that purports to be a listing for Buckyballs but is actually an ad for Maxfield’s competitors’ products.

Goldman also said there is a growing trend of plaintiff law firms feasting on Internet companies, especially in Silicon Valley. “They are watching for these companies to make a mistake and are pouncing on them. It’s possible that suits are mushrooming into class action suits because someone is looking to get more money,” he said.

But in SFCT’s case, Goldman noted, “the plaintiff’s story makes sense.”

Editor’s notes

Andrew Lam
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7
Editor’s notes

tredmond@sfbg.com

I heard Phil Ginsburg, the head of the San Francisco Department of Recreation and Parks, on KQED’s Forum June 13, talking about the state of the public parks, and he got the usual angry calls. One person wanted to know why it costs so much to play on the city’s ball fields. Another wanted to know why the city is working with a private foundation to put artificial turf and big lights out at the end of Golden Gate Park. (I still don’t understand why the baseball field at Holly Park is always — always — locked and nobody seems to be allowed to play on it at all. Except the people who jump the fence. Not that my kids and I would know anything about that.)

Ginsburg did his best to duck and weave and answer — and portray this as a tough situation with a lack of public resources. But what he didn’t say is that the overall mission of the department has changed over the past few years. Dramatically. And it follows an alarming national trend that, ironically, started right here in San Francisco, with the Presidio National Park.

When the Sixth Army moved out of the Presidio and the land reverted to the National Park Service, Republicans in Congress threatened to sell it off. The NPS was short of money to develop and maintain the place, so Rep. Nancy Pelosi came up with a plan. She turned the park into a semiprivate enclave run by a board of real-estate developers with a mandate to become economically self-sufficient. Step one: give that notable Marin County pauper George Lucas a $50 million tax break to build a commercial office building in the middle of a national park.

It was a terrible precedent. Public parks aren’t supposed to be money-making enterprises. But it took hold — and now Ginsburg is following the same model.

Rec and Parks these days is all about commercialization. The recreation centers are leased to private operations. More and more park space is going to private food vendors. The Stowe Lake concession is set to become an upscale café (run by an out-of-town outfit). The City Fields Foundation, run by the sons of Gap Inc. founder Don Fisher, is taking over soccer fields. It costs money for tourists to visit the arboretum.

I know: there’s no cash, the city’s broke, and Ginsburg says this is the only way to keep the department running. But it’s really dangerous — because once you treat the public commons as a commodity, you’ve crossed a line. And it’s hard to go back.

CPMC’s stunning arrogance

Andrew Lam
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0
CPMC’s stunning arrogance

The San Francisco City Planning Commission hearing June 9 on California Pacific Medical Center’s expansion plans was remarkable — both in the comments that the commissioners had and in the mind-boggling arrogance of the giant hospital chain.

CPMC wants to build a massive new hospital and medical office building on Van Ness Avenue and rebuild St. Luke’s Hospital in the Mission. The plans aren’t even close to complying with city planning codes — the Sutter Health affiliate will need city approval to exceed height limits on Van Ness (by more than 100 feet); a modification of the housing construction requirement for new offices; permission to demolish existing housing units; permission to take over a part of San Jose Avenue — and a lot more. In other words, CPMC is asking a lot from the city.

And since this nonprofit controls four major hospitals in the city, its future development decisions need to be considered in the context of San Francisco’s overall health care needs.

It’s entirely reasonable that the city ask CPMC for a development agreement that provides benefits to city residents. Mayor Ed Lee has made it clear that the approval of this project will depend on whether CPMC can address affordable housing, healthcare access for low-income people, a secure future for St. Luke’s, workforce development, and transportation impacts. Lee’s proposals are more than reasonable: he’s asking that CPMC pay the standard fee for affordable housing required of any major commercial developer; increase its level of charity care (now an abysmal 0.99 percent) to the average of other regional hospitals (2.3 percent); increase its Medical acceptance rate; and maintain St. Luke’s as an acute care facility with an emergency room. Union nurses are asking that Sutter deal with them in good faith.

But Dr. Warren Browner, CEO of CPMC, showed little interest in working with the city. The demands are way too high, he told the commissioners, insisting that it was unreasonable to ask the hospital to contribute that much to affordable housing. He acted as if CMPC was somehow entitled to move forward — at its own proposed schedule — and that all of these city demands were nonsense.

That’s not going to work.

A clear majority of the commissioners got the point. As Ron Miguel pointed out, Sutter is a nonprofit — and its tax-exempt status mandates a certain level of social responsibility. Every big commercial developer has to pay for housing and transit impacts. Gwyneth Borden and Bill Sugaya noted that hospital officials knew full well what the planning rules were when they bought the Van Ness site.

This is a $2.5 billion project. Community benefits need to be a significant part of the final plan. If anything, Lee’s proposals are too limited (Sutter should agree to protect St. Luke’s for 50 years, not 20). The planning commissioners should stick to their positions — this project is out of control, and if Browner wants to see it built, he needs to come back with a new set of numbers, and a new attitude.

Alerts

Maria Poblet
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ALERTS

By Jackie Andrews

 

WEDNESDAY, JUNE 15

Golden Wheel Awards

Join the SF Bike Coalition to celebrate and congratulate the movers and shakers who realize the potential for connectedness and comfortable biking in San Francisco. Award recipients include the SFMTA for the safer green bike lanes installed along Market Street, which have attracted new commuter cyclists to the Financial District. Also hear from Leah Shahum about the Bike Coalition’s bold vision of cross-town bikeways.

6–9 p.m.,

$75 individual, group packages available

War Memorial Building

401 Van Ness, SF

www.sfbike.org

 

THURSDAY, JUNE 16

The Castro and LGBTQ history

Attend this panel discussion called “No Equality Without Economic Equality: The Struggle Against Gentrification and Displacement in the Castro in the Late 1990s” and learn about the tumultuous period of dot-com boom and doom in San Francisco’s Castro District — a time when rents soared, long-term tenants were displaced (many living with HIV and AIDS), and queer youth ended up on the street. But there was a silver lining. Out of the gentrification grew a strong community of activists and much- needed social services, as well as historical milestones like the Tom Ammiano write-in mayoral campaign of 1999 and the progressive takeover of the Board of Supervisors the following year. Speakers include Tommi Avicolli Mecca, Jim Mitulski and Gabriel Haaland, and Paola Bacchetta.

7–9 p.m., $5

GLBT Historical Museum

4127 18th St., SF

www.glbthistorymuseum.org

 

TUESDAY, JUNE 21

Guardian forum: Budget, Healthcare, and Social Services

This is the second forum in a five-part series that examine local issues that are expected to have a major impact in the upcoming mayoral race. Representatives from labor groups and local nonprofits will be on hand, as will budget experts, to discuss the city budget, access to healthcare for San Franciscans, and other useful and threatened social services. This is sure to be a lively discussion and a unique opportunity to get involved in local politics. Be there.

6–8 p.m., free

Local 2 Hall

309 Golden Gate, SF

www.sfbg.com

Media access here and now

Weigh in on the issue of media access in San Francisco and the controversy around the accessibility of media passes for journalists while out on assignment. Panelists at this conversation with the Society of Professional Journalists will include SFPD’s Lt. Troy Dangerfield, attorney David Greene with the First Amendment Project, interim City Administrator Amy Brown, and a local journalist who has experience going through the process of trying to obtain a press pass.

5:30 p.m., free

SF Public Library

Latino Community Room

100 Larkin, SF

www.spj.com 

 

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Tipping point

Jesse Hawthorne Ficks
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3
Tipping point

sarah@sfbg.com

On June 14, members of the Board of Supervisors will vote to appoint a new member of the Police Commission — in the wake of a messy string of alleged police misconduct scandals that, progressives argue, underscore why having strong civilian oversight is critical to ensuring a transparent, accountable police department the public can trust.

The appointment comes less than two months after San Francisco native Greg Suhr was sworn in as chief in the wake of Mayor Gavin Newsom’s decision to appoint former Chief George Gascón as the next district attorney — a move that has served to muddy the D.A. Office’s efforts to investigate the alleged police misconduct.

Further complicating the board’s choice is the heated battle that erupted over the appointment, led in part by members of two Democratic clubs that represent lesbian, gay, bisexual, and transgender communities.

The Alice B. Toklas LGBT Democratic Club has officially endorsed Julius Turman, a gay attorney and community activist who was a former assistant U.S. attorney and the first African American president of the Alice club. Turman currently works for Morgan, Lewis & Bockius, where he represents companies in actions for wrongful termination, employment discrimination, and unfair competition. He is also state Sen. Mark Leno’s (D-SF) proxy to the San Francisco Democratic County Central Committee and serves on the Human Rights Commission.

On the other side, members of the Harvey Milk LGBT Democratic Club, the voice of the city’s queer left, are supporting David Waggoner, an attorney and community activist who is a former Milk Club president. Waggoner has worked on police use-of-force policy and as a pro bono attorney for the National Lawyers Guild at the Oakland Citizen’s Police Review Board, and been a passionate advocate for the LGBT community, immigrants’ rights, people with disabilities, and the homeless.

The other two applicants for the post are Vanessa Jackson, a staffer at a women’s shelter with experience in counseling ex-offenders; and Phillip Hogan, a former police officer who serves on the board of the Nob Hill Association and has been trying to get on a commission for years.

Although both Jackson and Hogan have diverse experience with law enforcement — Jackson as an African American woman who claims the police have “no respect for people of color” and Hogan as a former police officer of Lebanese-Irish descent who manages real estate — neither has the support of the LGBT community. The position occupied by Deputy District Attorney James Hammer for the last two years, and Human Rights Commission director Theresa Sparks occupied before that, is widely considered to be an LGBT seat.

 

WHO’S THE REFORMER?

So now the fight is about whether Turman or Waggoner would be the strongest reformer.

In a recent open letter, former Board Presidents Harry Britt, Aaron Peskin. and Matt Gonzalez expressed support for Waggoner. “While most hardworking police officers perform their jobs admirably, insufficient oversight and poor management systems have led to significant problems,” their letter stated. “Despite these widely reported problems, the Police Commission has failed to adequately address these issues. San Francisco needs real reform, not more of the same. We believe David Waggoner will be that voice at this critical time.”

At the June 2 Rules Committee hearing, Waggoner proposed taking away master keys to single-resident occupancy (SRO) hotels from the police. “Significant abuse of that resulted in seriously tarnishing the department,” he said.

Turman made an equally impassioned — if less stridently reformist-sounding — speech. “Why would we allow an officer to enter a home, regardless of the master key rule, which I’m not a fan of?” Turman asked. He also said Tasers are dangerous weapons with unintended consequences. “I fear communities of color will suffer more from Taser use.”

Waggoner’s supporters noted that their candidate has more than 15 years of police accountability experience. Turman’s supporters vouched for his integrity, maturity, ability to build consensus, and “belief in strategically serving his community.”

In the end, Sups. Sean Elsbernd and Mark Farrell voted for Turman, while Rules Committee Chair Sup. Jane Kim voted for Waggoner.

That means Turman’s name has been forwarded to the full board with a recommendation. But because the Rules Committee interviewed all the candidates, the board can still appoint any of them.

At the Rules Committee, Sup. Scott Wiener voiced support for Turman. And Board President David Chiu recently told the Guardian that he has known Turman for years, has worked with him professionally, and will vote for him. “I found him to be fair, thoughtful, and compassionate,” Chiu said, noting that he believes the role of the commission is “to provide oversight and set policy.”

Sup. David Campos, one of the solid progressive votes on the board and a longtime Milk Club member, believes Waggoner would make an excellent commissioner but is a friend of Turman, and believes he’ll be a strong voice for reform. “Sean [Elsbernd] and Mark [Farrell] could be in for a big surprise if Julius gets appointed,” Campos mused shortly after Elsbernd and Farrell voted for Turman.

Campos recalled how he and Turman started working at the same firm years ago. “So I got to know him well,” he said, adding he is “like a family member.

“By virtue of his involvement with Alice, some folks think Julius will be a certain way,” Campos added. “But I believe he’ll take a progressive point of view on the issues. He has both the knowledge and the experience with the police, he understand the important role that police oversight and the Police Commission play in making the SFPD accountable.”

Kim told us that she primarily voted for Waggoner because she knows him the best, and not out of concern that Turman wouldn’t do a good job. “I’m more familiar with David and that’s what tipped the scale,” Kim said. “It’s great to have two strong LGBT attorneys who have a clear understanding of public safety issues, the law, and are advocates for the community.”

But Debra Walker, who ran against Kim last November, steadfastly supports Waggoner. “Julius has been active in the Alice B. Toklas club for a while, he’s a prosecutor, while David is more of a citizen’s defense attorney,” she said.

Turman continues to be dogged by reports of domestic violence, thanks to a lawsuit that Turman’s former domestic partner Philip Horne filed in March 2006 alleging that Turman came into his house when he was sleeping on New Year’s Day 2006 and tried to strangle him.

Horne claimed he “was terrified that the lack of air supply would cause him to pass out and potentially die at the hands of such a jealous and unmerciful former lover.” He alleged he was able to calm Turman down only to see him get enraged again and punch Horne in the face seven to 10 times. When Horne decided he needed to go to the emergency room, the complaint states, Turman grabbed his phone and keys saying, “If you leave, you’ll never see the cats (alive) again,” and “I will report you to the state bar.”

Horne claimed he ran outside screaming for help and that when SFPD arrived, they arrested Turman for domestic violence and called an ambulance for Horne.

Turman responded in July 2006 to what he described as Horne’s “unverified complaint,” arguing he acted in “self-defense” and that the conduct Horne complained of “constituted mutual combat.” He added that “damages, if any, suffered by Horne were caused in whole or in part by entities or persons other than Turman.”

In the end, no criminal charges were ever filed against Turman and the case was settled out of court. Turman now says “I’ve done nothing wrong and these allegations are false.”

Campos warns people not to jump to conclusions. “We need to remember that there is a presumption of innocence,” Campos said. “Yes, there was a court case, but there was never a conviction. Yes, there was a settlement, but people do that for a lot of reasons.”

Turman told the Rules Committee that the incident was from “an extremely difficult time that is now being used against me as a political sideshow.”

Meanwhile, Campos notes that without a reform-minded mayor, there will be only so much any board-appointed police commissioners can do. “What we really need to implement police reform is a mayor who is willing to do that,” he said. “Otherwise it’s going to be very difficult because the mayor still gets to appoint four commissioners and mayor still gets to control who is in charge of the police department.”

 

WHAT DIRECTION?

Civil liberties advocates praised as a “first step in the right direction” Suhr’s May 18 decision to issue an order clarifying that SFPD officers assigned to the FBI’s joint terrorism taskforce should adhere to SFPD policies and procedures set by the Police Commission, not FBI guidelines.

But in the coming months, the commission will have to decide whether to push a Portland-style resolution around SFPD involvement with the FBI. The commission also will be dealing with fallout from the other scandals, including the crime lab, the use of force against mentally ill suspects, and videos that allegedly show police conducting warrantless search and seizure raids in single residential occupancy hotels.

These scandals have progressives arguing that it’s critical that the board’s three seats on the commission are occupied by applicants with proven track records of reform.

Waggoner notes that in 2003, voters approved Prop. H., which changed the composition of the commission from five to seven members. Four are appointed by the mayor; three by the board.

Last year, he said, the commission made significant progress in the right direction when it adopted new rules after the Jan. 2 shooting of a man in a wheelchair in SoMa. “That was not the first time an unarmed person with a disability was killed,” he said. “After Prop. H and a crisis, the commission finally took steps. It remains to be seen if Chief Suhr will implement that.”

Waggonner said the current arrangement “creates tension between people who are more willing to defer to the chief on policy issues and being in an advisory capacity, as opposed to people who want to be in the forefront of setting policy.”

That tension played out when Commissioners James Hammer, Angela Chan, and Petra DeJesus tried to find consensus on the Taser controversy last year. “Overall they worked well together. But there’s been no progress yet on Tasers,” he said, noting that the commission eventually decided on a pilot project.

Waggoner said he would be in favor of the commission having a more active role and exerting its authority under the city charter to set policy, but in collaboration with the chief.

The Police Commission’s May 18 joint hearing with the Human Rights Commission about FBI spying concerns was a symbol of the broader issue at the Police Commission. The majority of the commission didn’t see any major problems — but the progressives were highly critical. “Is the commission there to set policy and take leadership, or is it there in an advisory capacity?” Waggoner asked.

With Hammer’s departure, Chan and DeJesus, both board-appointed women of color, are the most progressive members of the commission. Chan hopes Hammer’s replacement believes in strong civilian oversight. “We should never be a rubber stamp for the police department,” he said. “We need to take community concerns very seriously. When the police department is doing great things, we should support them — but if we see something wrong, we should not be afraid to speak out.”

Turman told the Guardian that “being the voice for reform and advising are not mutually exclusive roles — and an effective police commissioner needs to be both.

“I would advocate for series of meetings with representatives from the Arab community, the SFPD, and the FBI to increase communication and understanding of each side’s perspective on exactly what we need to implement in San Francisco,” Turman said.

Asked more about Tasers, Turman said that “one of the things I would be interested in pursuing is a recognition by some that female officers are less likely to incapacitate during an arrest, which could lead to learning for the larger police force.”

But does this means Turman will turn out to be a swing vote for Tasers? Only time — and the board’s June 14 vote — will tell.

Lee should veto Parkmerced

Jesse Hawthorne Ficks
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0
Lee should veto Parkmerced

EDITORIAL Mayor Ed Lee got his start as a lawyer working on tenant issues. He understands the city’s rent laws and the shortage of affordable housing. He also knows — or ought to know — that when the city’s tenant groups are unanimously opposed to a project, elected officials who care about tenant rights should pay attention.

The Parkmerced project will be a clear test: Does he follow his activist roots, stick with the people he started with and show his independence — or side with the big out-of-town developer and allow the project to move forward?

The supervisors approved the project by the narrowest of margins, 6-5. All of the progressives voted to reject the development agreement and rezoning — and for good reason. The deal would lead to the demolition of 1,500 units of rent-controlled housing. And while the developer says it will abide by the rent laws for the newly built replacement units, that’s a shaky legal guarantee. The larger point, tenant advocates say, is that demolishing existing affordable housing is always a bad idea.

In the end, 1,500 people will have to leave the homes they’ve lived in for years — in some cases, many years. They will be offered replacement units in a high-rise — very different from the garden apartments (with, yes, gardens) that they’ve occupied. And if the developer decides that there’s more money to be made by jacking up the rents on those units, it’s a safe bet that an army of lawyers will arrive attempting to undermine the questionable guarantees now in the deal.

There’s also the problem of transportation and traffic. The project will include a new parking space for every new unit, meaning 6,000 new cars in an area already overwhelmingly congested. Since the vast majority of the units will be market-rate (the developer will provide 15 percent affordable units, under city law, which means 85 will be sold or rented to rich people) the development will transform what is now still something of a working-class neighborhood into another enclave for the wealthy.

When we talked to Mayor Lee, he was noncommittal on the deal. At the same time, he noted that the garden apartments are old and will have to be replaced at some point. We don’t dispute that there are ways to add more density at Parkmerced. But wholesale demolition of affordable housing isn’t the answer.

This deal is bad for tenants and bad for the city. Mayor Lee ought to recognize that then tenant groups opposing this have analyzed it carefully and come to an entirely reasonable conclusion.

Sup. David Chiu, the swing vote in favor of the project, did serious damage to his reputation as a progressive and lost thousands of tenant votes by siding with the developer. Lee, who insists he isn’t running in November, ought to demonstrate that he hasn’t forgotten his roots, that he listens to activists, and doesn’t simply go along with poorly conceived development projects. He should veto the development agreement and zoning changes and send this thing back to the drawing board.

Behind the all-smiles budget

Jesse Hawthorne Ficks
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2
Behind the all-smiles budget

news@sfbg.com

When Mayor Ed Lee released his 2011-12 budget proposal June 1, all was sweetness and light at City Hall.

The mayor delivered the document in person, to the supervisors, in the board chambers. Sup. Carmen Chu, chair of the Budget Committee, was standing to the mayor’s right. Board President David Chiu was to his left. There was none of the imperious attitude we’d come to expect in the Gavin Newsom era — and little of the typical hostility from the board.

As Sup. David Campos, who was elected in November 2008, remarked afterward: “It’s the first time since I’ve been elected that the mayor has taken the time to come to chambers. It’s reflective of how this has been a lot more of an inclusionary process.”

Lee went even further. “This is a pretty happy time,” he said. “There are no layoffs, and instead of closing libraries we’ll be opening them.” That earned him an ovation from assembled city leaders, including mayoral candidates City Attorney Dennis Herrera and Assessor-Recorder Phil Ting along with District Attorney George Gascón. “I think this budget represents a lot of hope.”

It’s true that this year’s cuts won’t be as bad as the cuts over the past five years. It’s also true that the pain is spread a bit more — the police and fire departments, which Newsom, always the ambitious politician, wouldn’t touch, are taking their share of cuts.

But before everybody stands up and holds hands and sings “Kumbaya,” there’s some important perspective that’s missing here.

Over the past half-decade, San Francisco has cut roughly $1 billion out of General Fund spending. The Department of Public Health has eliminated three- quarters of the acute mental health beds. Six homeless resource centers have closed. The waiting list for a homeless family seeking shelter is between six and nine months. Muni service has been reduced and fares have been raised. Recreation centers have been closed. Library hours have been reduced.

In other words, services for the poor and middle class have been slashed below acceptable levels, year after year — and Mayor Lee’s budget doesn’t even begin to restore any of those cuts.

“We’re not ready yet to restore old cuts,” Lee told the Guardian in a June 2 interview. “It was enough for us to accomplish a pretty steady course and keep as much. Particularly with the critical nonprofits that provide services to seniors and youth and homeless shelters, we kept them as close as we could to what last year’s funding was.”

But the current level of funding is woefully inadequate. As Debbi Lerman, administrator of the Human Services Network, noted, the people who work in the nonprofits Lee was talking about haven’t had a pay raise in four years — even though the cost of living continues to rise. “Our costs have gone up with cost of inflation,” she noted.

She said the cuts over the past few years have deeply eroded services for children, homeless people, substance abuse programs, and others. “There have been significant cuts to every area of health and human services.”

And in a city with 14 billionaires and thousands more very wealthy people, Lee’s budget is distinctly lacking in significant new ways to find revenue.

 

THE GOOD NEWS

Just about everyone agrees that the budget process this year has been far better than anything anyone experienced under Newsom. “He [Mayor Lee] listened to everybody,” Lerman said. “That doesn’t mean they fixed everything. Mayor Lee fixed as much as he could.”

At his press conference announcing the release of the budget, Lee thanked Police Chief Greg Suhr for having already made significant cuts through management restructuring and for considering an additional proposed cut of $20 million.

“We want to thank you for that great sacrifice,” Lee said, addressing Suhr, who sat in front row of public benches, dressed in uniform. Lee next acknowledged that adequate funding for social services also helps public safety. “Without those services, officers on the street would have a harder job,” he said.

Lee also praised the departments of Public Health and Human Services for helping to identify $39 million in federal dollars and $16 million in state dollars, to help keep services open and the city safer.

Lee noted that San Francisco no longer has a one-year budget process and has just released its first five-year financial plan as part of its decision to go in five-year planning cycles.

“To address this, I’ve asked for shared sacrifice, ” Lee continued, adding that he recently released his long-awaited pension reform charter amendment, emphasizing that it was built through a consensus and collaborative-based approach.

Lee also said he would consider asking voters to approve what he called “a recovery sales tax” in November if Gov. Jerry Brown is unable to extend the state’s sales tax. That would bring in $60 million — but it is only on the table as a way to backfill further state budget cuts.

Lee observed that San Francisco is growing, the economy is looking brighter, and unemployment is down from more than 10 percent last January to 8.5 percent today. He plugged the America’s Cup, the city’s local hire legislation, the Department of Public Works’ apprenticeship programs, and tourism, both in terms of earmarking funding in the budget for these programs and their potential to boost city revenues.

He said his budget proposed $308 million in infrastructure investments that include enhanced disability access, rebuilding jails, and energy efficiency, and is proposing a $248 million General Obligation bond for the November ballot to reduce the street repair backlog.

“We will get these streets repaired,” he promised.

“This submission of a budget is not an end at all, it’s the beginning of the process,” he continued, going on to recognize Chu for her work getting the process rolling and thanking Budget Analyst Harvey Rose in advance. “I do know his cooperation is critical.”

And he concluded by thanking each of the supervisors. “I will continue enjoying working with you — we need to keep the city family tight and together.”

The sentiment was welcomed by supervisors. “As he said, this is the beginning of the process, and it’s an important and symbolic step” Campos said. “The budget shows that a lot of good programs have been saved. But there is still work to do.

“There are still gaps in the safety network,” he added, singling out cuts to violence-prevention programs. “It’s my hope they will be restored.”

 

THE BAD NEWS

But even if the cuts for this year are restored, the city budget is nowhere near where it ought to be. “We still had to make cuts,” Lee acknowledged.

“We did consider very seriously a whole host of revenue ideas that we had,” he said. “They were not off the agenda at all.” At the same time, he noted that state law requires a two-thirds vote for new taxes (although that threshold drops to 50 percent in presidential election years). “We decided that it’s not that they were bad ideas, but that we wouldn’t be able to sell them at this time.”

Lee praised some of the revenue ideas that have been suggested in the past year, including the alcoholic beverage fee proposal by Sup. John Avalos, which Lee called “a pretty good idea.” He said that “a year or two from now” an additional sales tax and a parcel tax (for the police or for schools and open space) might be on the agenda.

The city now has a multiyear budget process and projections are supposed to go beyond a single year. But what’s missing — and what nobody is talking about — is a long-term plan to restore critical city services to a sustainable level. That means talking — now — about tax proposals for 2012 and beyond and including those revenue streams in long-term budget planning.

Because the city parks, the public health system, the libraries, the schools, affordable housing programs, and the social safety net are in terrible condition today, the result of year after year of all-cuts budgets. And while the supervisors and the mayor wrangle over the final details, and advocates try to win back a few dollars here and a few dollars there, it’s important to recognize that this budget does nothing to fix the damage.

“We’re about $10 million short of what we need right now to keep service providers at current levels,” noted Jennifer Freidenbach, who runs the Coalition on Homelessness. “But we also need to restore the health and human services system that was slaughtered under Gavin Newsom.”

Stopping foreclosure secrecy

Jesse Hawthorne Ficks
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Stopping foreclosure secrecy

OPINION Thanks to a shadowy corporate mortgage recording system, millions of Californians have no idea who owns their home loans.

As we suffer through this recession triggered by reckless subprime lending and Wall Street speculation, our recovery is being held back in part because people are struggling with foreclosures and underwater home values — exacerbated by a lack of mortgage transparency.

The mess created by Wall Street is causing wrongful foreclosures and wreaking havoc. Real people — often lower-income families and communities of color — are enduring the devastation of foreclosure processes because of the excesses of bankers and investment firms.

In San Francisco, we’ve seen the highest number of foreclosures in the Ingleside-Excelsior, Bayview, Tenderloin, and Mission neighborhoods — many of the places where home values have fallen most. Whether or not you face foreclosure, we all pay for this crisis by losing vital tax revenue that could go to support our schools, protect our neighborhoods, or build our economy.

When Wall Street realized it could make billions by bundling mortgages and selling them to investors, banks and financial institutions needed a way around recording the ownership and assignment of home loans. What the banks and Wall Street came up with is a shadowy, industry-backed reporting system called MERS — mortgage electronic reporting system.

Simply stated, subprime and predatory lending allowed banks to create millions of questionable mortgages, Wall Street bundled these risky mortgages together to sell to investors, and MERS made it quicker and easier to conduct these risky transactions with impunity.

As San Francisco’s assessor-recorder and a financial advocate for low-income communities, we have seen harmful industry practices wreak havoc on families trying to stay in their homes — whether by use of MERS that clouds property titles, wrongful foreclosures, or denied loan modifications.

The state Legislature considered several good foreclosure bills this year. One proposal placed a $20,000 fee on financial institutions attempting a foreclosure. This would have discouraged foreclosure and helped defray costs to communities if the process went ahead.

State Sen. Mark Leno( D-SF) and Senate President pro tem Darrell Steinberg (D-Sacramento) offered legislation stopping banks from proceeding with foreclosures when a homeowner is attempting to modify his or her mortgage.

Assessor-Recorder Ting is sponsoring a bill requiring that all mortgage assignments and transfers be recorded with counties, thus taking this process out of the murky MERS system.

Unfortunately, the banks and their armies of lawyers and lobbyists have been able to stymie these reforms.

We must continue to fight these wealthy, powerful lobbies so that the long road to recovery in our housing markets and communities can begin. We cannot let Sacramento forget it was financial institutions that fueled the housing bubble, crashed the stock market, and sent shockwaves throughout the economy with their reckless practices.

Few states have been ravaged by subprime lending and the meltdown of mortgage-backed securities the way California has, so we must continue reforming the practices of banks and Wall Street that have thrown our economy and communities into turmoil.

Phil Ting is San Francisco assessor-recorder. Kevin Stein works with the California Reinvestment Coalition.

Alerts

Maria Poblet
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ALERTS

By Jackie Andrews

 

THURSDAY, JUNE 9

Reporting back from Cuba

Gloria la Riva, recent winner of the Friendship Medal by the Cuban Council of State, will update the public on the new Cuban economic policies, their impact on the country’s economy, and the Latin American struggle for liberation — often called the Bolivarian Revolution. Afterward, check out a special screening of South of the Border, Oliver Stone’s investigative documentary that exposes the mainstream media’s misrepresentation of Latin America in its demonization of the Venezuelan President Hugo Chavez.

7–9 p.m., free

ANSWER Coalition

2969 Mission, SF

www.answersf.org

 

FRIDAY, JUNE 10

Protest nuclear power

It’s been almost three months since the earthquake in Japan and resulting Fukushima nuclear disaster, and many fear that California’s coast is similarly vulnerable. Rally against the corporations that influence the U.S. government in favor of nuclear industry despite its dangers to people and the environment. Demand that all U.S. power plants — funded by tax dollars — be shut down and help promote a cleaner public power.

3:30–5:30 p.m., free

The Consulate General of Japan

50 Fremont, SF

Facebook: No Nukes Action SF-Solidarity with 6.11 Action in Japan

 

SATURDAY, JUNE 11

World Naked Bike Ride

Ride your bike in the buff to express the public’s vulnerability to the social, economic, and environmental dangers caused by a global dependence on oil. A kind of naked Critical Mass, this fun, provocative bike ride will tour the city’s hot spots including Fisherman’s Wharf, the Marina, and Civic Center. All are welcome, so ride as you dare — bare or square — but don’t forget the sunscreen.

11 a.m., free

Justin Herman Plaza

Market and Embarcadero , SF

Facebook: World Naked Bike Ride-San Francisco

 

International Day of Solidarity

Enjoy an evening of solidarity and support for Marie Mason and Eric McDavid, two political prisoners sentenced for Earth Liberation Front-endorsed actions — what the feds call ecoterrorism. This event features a screening of If a Tree Falls: A Story Of the Earth Liberation Front, as well as information about the so-called “green scare,” or the recent wave of government repression meant to disrupt and discredit environmental activism.

7–9:30 p.m., $15

Women’s Building

3543 18th St., SF

www.june11.org 

 

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Waggoner for Police Commission

Maria Poblet
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Waggoner for Police Commission

By Harry Britt, Matt Gonzalez, and Aaron Peskin

OPINION Given the escalating scandals in the San Francisco Police Department, the time is ripe to appoint a police commissioner who understands the recurring problems and the need for reform.

The supervisors have the opportunity to appoint such a commissioner: David Waggoner. Waggoner’s extensive background in policy reform, community policing, and criminal justice issues will be a valuable asset to the commission.

Waggoner has worked as a pro bono attorney before the Oakland Civilian Police Review Board and has earned the respect and admiration of people from highly diverse political and social backgrounds. His integrity and sense of justice and fairness inspire trust and confidence — and frankly, we could use a lot more of that in this city.

Credibility with historically marginalized communities — including people of color, new immigrants, the homeless, people with disabilities and the LGBT community — is essential in developing the kind of mutual respect that makes the department’s work effective or even possible. David Waggoner has that credibility.

In 2003, in response to years of strained relations between the SFPD and the community, the voters approved Proposition H. Prop. H gave the Police Commission more authority to adjudicate cases of officer misconduct and changed the makeup of the commission by giving the board three appointments to balance the mayor’s four.

Despite these significant steps toward reform, eight years later we have a Police Department that is under investigation by the Justice Department and the FBI and struggling to overcome serious credibility and morale problems.

Case in point: in the last year alone, the department’s credibility was undermined by a major crime lab scandal, the disclosure of Fourth Amendment violations in SRO hotels, use of excessive force on the mentally ill, and widespread withholding of evidence of officer misconduct from attorneys. These scandals resulted in the dismissal of hundreds of cases.

A number of outstanding policy issues remain in need of serious attention. In 2005, the Civil Grand Jury published a report on compensation in the Police Department, finding that officers receive greater salary increases than other city employees while San Francisco is in a state of fiscal stress. In 2007, the grand jury recommended filling significant numbers of desk jobs with civilians. When the department finally rolled out a pilot program this year, it called for only 15 civilians.

The San Francisco Police Department needs to improve its training of officers, including fostering a respect for the civil liberties that San Franciscans cherish. This should be basic to all police work. However, last year San Francisco paid $11.5 million in lawsuits because of police misconduct.

San Francisco needs police commissioners who understand the challenges of police work but who also are willing to explore the nature of endemic problems that have led to embarrassing scandals. We need commissioners who have a broader understanding of criminal justice policy and how it can be changed to promote public safety.

We join with the San Francisco La Raza Lawyers Association, Community United Against Violence, the Harvey Milk LGBT Democratic Club, and a host of other elected officials, community activists, attorneys, and local leaders in wholeheartedly supporting the appointment of David Waggoner to the San Francisco Police Commission. It’s about time. 

 

Harry Britt is a former president of the Board of Supervisors and the author of the landmark 1982 legislation that created the Office of Citizen Complaints. Matt Gonzalez is chief attorney in the Public Defender’s Office, a former president of the Board of Supervisors, and a co-sponsor of Prop. H. Aaron Peskin is chair of the San Francisco Democratic Party, a former president of the Board of Supervisors, and a co-sponsor of Prop H.

 

Editor’s Notes

Jesse Hawthorne Ficks
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Editor’s Notes

tredmond@sfbg.com

Three weeks before the June 25-26 Pride Weekend — which is the unofficial opening of the official fall mayoral race — there are two front-runners: state Sen. Leland Yee and Sup. John Avalos.

I’m not saying either is going to win. Things change quickly in this town. We don’t even know for sure if the incumbent, Ed Lee, is going to be in the final scrum.

But here’s what we do know: Yee and Avalos — right now, today — are doing the things they need to do to emerge from a crowded pack. And the others are either hanging back or flailing around.

Avalos had more than 400 people at his kickoff. State Assemblymember Tom Ammiano was there to endorse him. He’s got window signs all over the east side of town. He’s showing momentum, energy; he’s on track to solidify the progressive base and start moving west. He has agreed to cosponsor the mayor’s pension reform plan (but only if SEIU Local 1021 gets the amendments the union wants).

Yee has figured out a very smart strategy: He realizes that he’s already got name recognition and a west-side base, that he’s never going to get the support of the Chinatown establishment (powerbroker Rose Pak hates him), and that he’s one of at least five candidates fighting over the center. So he’s trying to grab a share of the left.

Yee’s people were thrilled that he and Avalos got the Sierra Club. The more groups that endorse the two together (in any order), the more Yee becomes associated with the progressive standard-bearer. And the more second-place votes he gets on the left. (Don’t kid yourself; this race may well come down to who gets second-place votes on the left.)

And Sup. David Chiu just gave Yee a great big gift. Chiu defied every single tenant group in town and became the swing vote in favor of the Parkmerced project. Now the tenants are pissed — and you know Yee is going to try to take advantage of it.

The frustrating part of that scenario is that Yee was never a good tenant vote when he was a supervisor. That’s his Achilles’ heel on the left — but it’s old history, and the anger at Chiu is here today.

Would Chiu be a better mayor for tenants than Yee? Quite possibly. Is any tenant group thinking that right now? No.

Chiu’s in a tricky spot. He’s trying to be the centrist progressive — and that’s a hard thing to sell to either the center (where he’s one of five candidates) or the left (where Yee is edging him out in cozying up to Avalos).

City Attorney Dennis Herrera hasn’t recovered from the political consultant lobbying mess (not a new story, he’s hardly the only, or even remotely, the worst offender, but damn, it makes him look bad). Former Sup. Bevan Dufty’s doing great at the candidate forums but doesn’t have a breakout move. Assessor Phil Ting is awfully quiet.

It’s only June. But it won’t be “only” anything much longer.

Don’t undo ballot measures

Jesse Hawthorne Ficks
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0
Don’t undo ballot measures

EDITORIAL The California initiative process is broken. The state’s too big, and it costs too much to gather signatures and mount a media campaign for or against a ballot measure.

But in San Francisco, the initiative process has traditionally been, and for the most part continues to be, a check on corrupt or ineffective political leaders and a chance for progressive reforms that can’t make it through City Hall. That’s why Sup. Scott Wiener’s proposal to allow the supervisors to amend (or, in theory, abolish) laws passed by the voters is a bad idea.

Since 1968, the San Francisco voters have approved 96 ordinances; that’s an average of about two a year. Obviously the pace has picked up since the 1970s. In 2008, there were eight measures approved; in 2010 there were four. The length and complexity of the ballot makes it appear that the supervisors aren’t doing their work, Wiener says. He notes that when he was campaigning, one of the most common complaints was that the voters were being asked to decide too many things that should have been handled at City Hall.

Some of that is the result of an unwieldy City Charter. Benefits for police and firefighters, for example, are specified in the charter, and any change needs voter approval. Wiener’s measure, aimed only at initiatives and not charter amendments, wouldn’t change that situation.

But some of it relates to the political alignments in San Francisco. For much of the past decade, the supervisors and the mayor were at odds over major issues. The mayor couldn’t get his (bad) proposals, like a ban on sitting on the sidewalks, through the board, and the progressives couldn’t get their proposals past a mayoral veto. So both sides went directly to the voters.

That’s a lot better than the paralysis we’re seeing in Sacramento. At least the issues are getting decided.

And over the years, some of the most important legislation in San Francisco — growth controls, tenant protections, protections for children’s programs, the city’s landmark open-government law — has come through ballot initiatives. The only way public power advocates have been able to get the issue on the agenda has been through ballot initiatives.

Those were issues that generations of supervisors and mayors wouldn’t take on — the developers and landlords and secrecy lobbyists and Pacific Gas and Electric Co. had too much power at City Hall. And those protections for the public, the environment, and the most vulnerable residents only survive today because they’re set in law and can’t easily be changed.

If Wiener’s measure has been in effect a decade ago, for example, Proposition M — the 1986 law that set neighborhood planning priorities and limits on office development, would have been summarily scrapped by Mayor Willie Brown and a pro-developer board. Key rent-control laws would have been repealed or amended to death. The ban on buildings that cast shadows on parks would be gone. Killing the Sunshine Ordinance would have been Brown’s first act.

Today’s district-elected board is far more accountable to the voters — but there’s hardly a reliable progressive majority. And the point of ballot initiatives is that you can’t predict who will control City Hall next year, or in 10 years.

We don’t think the initiative process in San Francisco is out of control. Sure, big money wins the day too often — but on balance, it’s a check that the Board of Supervisors should leave alone.

Not in our neighborhood

Jesse Hawthorne Ficks
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6
Not in our neighborhood

news@sfbg.com

San Francisco faces an enormous shortage of affordable housing for young people at risk of homelessness, but a pair of projects intended to address the issue are under fire from neighborhood activists in supervisorial District 2, home to the city’s wealthiest residents.

The proposed conversion of the defunct Edward II Hotel and the major overhaul at the Booker T. Washington Community Service Center (BTWCSC) could create a combined 74 units of affordable housing for vulnerable youth, complete with services and support systems to help young people coming from foster or homeless families.

“We are building houses for young people who are getting their start in life,” said Julian Davis, president of the board of BTWCSC. “There was a great need for foster youth housing that has been studied ad nauseam … Our center wanted to contribute.”

But both projects have run into strong neighborhood opposition that appears to have turned D2 Sup. Mark Farrell against the projects as proposed, despite initial support for the BTWCSC project by both Farrell and his predecessor, Michela Alioto-Pier. Farrell’s approach has frustrated project opponents and caused the representative of a neighboring district, Sup. Ross Mirkarimi, to sponsor the project.

“The project emanated from Michela Alioto-Pier and she supported the original project, which is why I joined her in support and it initially appeared that Sup. Farrell was joining that support,” Mirkarimi told us, noting that he is continuing to champion the project because it borders his district and because “the Booker T center has a long reach and serves clients from throughout city.”

After hearing from constituents concerned about parking, the size of the five-story building that is proposed, and other issues, Farrell dropped his sponsorship of the project and submitted alternative legislation that cut the building to four stories, presenting it to project proponents without their input as a take-it-or-leave-it proposal.

“The thing I find most puzzling about this is the lack of communication with me personally,” BTWCSC Executive Director Pat Scott said of Farrell, noting how helpful Alioto-Pier and Farrell’s staff had been before opponents convinced him to drop his support for the project. “I was a little taken aback, quite frankly. I would just assume that he’d talk to me.“

But Farrell said he was simply trying to heed neighborhood concerns and craft a compromise that would get neighbors to drop their lawsuit threats and appeal of the Planning Commission’s 6-1 vote to approve the project. “I can’t control what happened in the past, I’m only here to make sure everyone is happy now,” Farrell told us. “I absolutely support the project, I think the community center is great … We’re arguing over a story.”

Yet Scott noted that project proponents already had compromised on a project that was initially proposed for eight stories, and she said that even at five stories, it isn’t coming anywhere near what the city actually needs. So while Farrell casts it as a fight over one story, Scott said, “10 units is a big thing in a city that has nothing for these kids.”

That need was outlined in a 2007 report by the Mayor’s Transitional Youth Task Force. The group of city officials and nonprofit providers, convened by then-Mayor Gavin Newsom, studied issues affecting at-risk youth between the ages 16 and 24 and one of the major needs identified was housing.

A follow-up study found that 4,500 to 6,800 young people are “homeless or marginally housed each year.” The citywide affordable housing stock for this population sat at meager 314 units at the time.

“We are not doing a good enough job as a city and as a state [to help at-risk youth],” Davis said. “Once they leave the foster care system, there is very little support for them.”

The report called for 400 new affordable housing units for this population to be completed or under construction by 2012. Edward II and BTWCSC are located in the Marina and the Western Addition, respectively, in proximity to affluent neighborhoods in a district with a dearth of affordable housing.

“With supportive housing [going] into neighborhoods that never had affordable housing, there is a certain unknown and it makes people uncomfortable,” said Gail Gilman, Executive Director of Community Housing Partnership, which owns and manages the Edward II project.

Patricia Vaughey, a resident of the Marina-Cow Hollow area since 1976, is perhaps the most vocal critic of the project. She has used the neighborhood associations and every other city forum she can find as platforms to lambaste the plans. “It just kills my soul to see this project,” she told us, voicing a variety of concerns about how the project would be managed. “I am so worried about the kids … We are asking for the best program in the country and we are not getting it.”

Yet Gilman said that considerable energy and many resources have been invested in designing Edward II and that she trusts Larkin Street Youth Service, a respected nonprofit agency, to do the programming. “We chose to partner with Larkin Street because they are the experts in this area,” she said.

Vaughey characterized the stretch of Lombard Street between Divisadero and Van Ness streets, where Edward II will be located, as marred by crime and prostitution and unsuitable for this project. “We have a little Tenderloin down here,” she said.

Gilman disputed that characterization and said the building was chosen after an extensive search and that it met the criteria of having the right sized building in a safe neighborhood with good access to public transit and open space.

But many residents have expressed concern over the pending change to zoning for the building. And if the BTWCSC project couldn’t win Farrell’s support, the Edward II project faces an even more uphill battle because Farrell told us, “There’s an even stronger level of neighborhood concern over that project…. It’s going to be a tough hill to climb.”

The contentious issue under review by the Planning Department is an application to expand the density limit from 16 units to 24.

John Miller, president of the Marina Community Association, said that “from a neighborhood dynamic perspective,” a change to density is problematic. He said changing the density for one building is a slippery slope that could hurt the entire neighborhood. “Higher density is inconsistent with the neighborhood. It could work beautifully at lower density.”

Miller said potential renters in the vicinity would be concerned with “loitering that could occur when people are coming and going … With so many people there is no sense of community”

Yet as with BTWCSC, proponents say simply slashing the project to a smaller size would kill it because then it wouldn’t pencil out financially. Making an issue of density is therefore obstruction of the project because compromise cannot be reached on the issue.

Farrell, a venture capitalist, said he ran the numbers on BTWCSC and believes it would still be a viable project at four stories if the Mayor’s Office of Housing is able to offer some unspecified assistance, as he said the officials there have pledged to him they would. “I know we need more affordable housing,” Farrell said, rejecting suggestions that D2 residents tend to oppose all affordable housing projects. “I don’t think that should be a part of this conversation.”

Farrell criticized the outreach done by Edward II proponents, telling us, “I don’t think it was done in a tactful way.” But Miller said a recent meeting with Gilman and others was positive. “It was an effort on their part to respond to the neighborhood concerns as best they can,” Miller said.

“We are confident we can partner with the community in a proactive way to address the concerns that are addressable,” Gilman said. “If we diligently work with the community, we can have positive project.”

Edward II is on track to come before the Planning Commission in mid-July, while the appeal of the BTWCSC project is scheduled to be heard by the Board of Supervisors Land Use Committee on June 6 at 1 p.m. Neither Mirkarimi nor Farrell offered predictions, but both said the issue of whether the project should be four or five stories will likely be a key part of the discussion.

“Coming through the process has made me super supportive of all plans for transition age housing. I was already a supporter but this made me a fervent supporter,” Scott said. “The amount of opposition by people who don’t care what happens to our children — it makes you want to fight.”

Vote your vote away

Jesse Hawthorne Ficks
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Vote your vote away

The article has been changed from the print version to correct an error.

In a surprising move that is causing a strong backlash from progressives and other groups that have won important reforms at the ballot box, Sup. Scott Wiener is pushing a charter amendment that would allow the Board of Supervisors to change or repeal voter-approved ballot measures years after they become law.

If voters approve Wiener’s charter amendment, among the most vulnerable reforms may be tenant protections such as limitations on rent increases, relocation assistance for no-fault tenant removal, and owner move-in eviction limits, to name a few.

The Rules Committee heard concerned testimony about the proposal May 19 and opted to hold off on voting to send it to the full board for approval until the next meeting on June 2 to allow for more public comment.

If approved, the amendment will be on the November ballot, although the public may be confused about why such an amendment would be on the ballot in the first place. The measure covers ordinances and resolutions that were placed on the ballot by supervisors, and Wiener has said he plans to amend the measure to exempt those placed on the ballot by voter petition. Changes to taxes or bonds are not a part of the amendment because those are required by state law to go to the ballot box.

Paradoxically, Wiener’s reasoning for the proposal is that he believes voters are bogged down with too many ballot measures with complex issues that need changes, measures he claims the board could deal with more efficiently. But critics say it makes progressive reforms vulnerable to attack by a board that is heavily influenced by big-money interests.

At the committee meeting, about a dozen people spoke in opposition to the amendment, saying it seemed broad in scope and would be a more appropriate change at the state level.

Matthias Mormino, a legislative aide to Sup. Jane Kim, who chairs the Rules Committee, said that his boss is still on the fence. “She has concerns and hasn’t made up her mind yet.”

Currently California is one of the last states where a voter-approved initiative cannot be subject to veto, amendment, or repeal, except by the voters.

“It’s not a radical thing,” Wiener told the Guardian about the proposed amendment. “My thinking is that we should do our jobs. We elect public officials to make decisions every week. I wanted to strike a balance where the voters still have a strong say.”

But how strong of a say will the voting public have in cases where voter-approved initiatives are changed by the decisions of a board of politicians with their own influences and bias?

Wiener stated that he had no specific initiatives in mind when he decided to propose the amendment nor was he targeting any kind of legislation, except ones that are “outdated.” Wiener cited an example of updating campaign consultant reporting from quarterly to monthly as a change that needed to happen but could seemingly be a nuisance at the ballot box.

He is proposing a tiered system in which, for the first three years, an initiative is untouchable. In four years, a two-thirds majority vote by the board could make changes to initiatives; after seven years, a simple majority could do so. That means a raft of tenant measures approved in the 1990s could come under immediate attack.

“Does he not like our sick-leave policy?” Sup. John Avalos told us. “It’s so vague and unclear on what he is trying to do. I’m afraid that he is trying to change laws that are popular with the voters. It’s not a democratic way to resolve policy issues.”

Calvin Welch, a longtime progressive and housing activist, has his own theory on Wiener’s proposal. “Voters don’t have a big problem discerning which ones they agree with and which ones they don’t,” he said about voter-approved initiatives.

He did the number-crunching and concluded that of the 983 policy ordinances on the books, 207 (21 percent) were policy initiatives. Of those, 102 (about 10 percent) were approved by the voters.

“Not quite overwhelming the ballot,” Welch said. “The argument that what is promoting this — the inundation of the initiatives — is not borne of the facts.”

Welch believes Wiener is targeting certain landlord and tenant issues that date back to 1978, when San Francisco voters first started adopting rent control measures. “That is what the agenda is all about — roughly 30 measures that deal with rent control and growth control,” he said.

Wiener denies this is an attack on tenants, and claims he doesn’t have a specific agenda in mind. “This is long-term reform, not immediate gratification reform. To take the big, big step, we would have to change state law. This is just a modest first step.”

Welch also took issue with the idea of “election proportionality,” calling the measure an undemocratic power grab since many initiatives in San Francisco’s history were approved with more than 200,000 votes.

“Mayors don’t get 200,000 votes — these measures do,” Welch said. “That a body can overrule thousands of voters undermines the election process of San Francisco. Why not limit government actors instead of the people? It’s about what Sup. Wiener wants to change.”

Budget set-asides have long been a target for legislators, explained Chelsea Boilard, a budget analyst with Coleman Advocates for Children and Youth. Historically in San Francisco, moderate politicians have mostly honed in on social service programs, not those with a lot of clout and political backing, like police and fire budgets. Although the Children’s Fund, which was set up by a charter amendment, would be exempt, other social program priorities set by voters could be eroded.

“The reality is that the police and fire departments don’t have to go to City Hall every year to defend their budgets, but health and human services do,” Boilard said.

While many on the left would love for the California Legislature to have the authority to make changes in the property-tax-limiting Proposition 13 — like by removing commercial property from being taxed at artificially low levels — activists see real danger in Wiener’s measure.

“I think this is bad policy. I know folks are frustrated with Prop. 13, for example, and wish it was easier to amend or repeal. But the way he’s going about this is odd to me,” political activist Karen Babbitt told us. “For one thing, it appears to apply to retroactively to existing ordinances and policy declarations.”

Babbitt also cites legal research indicating that Wiener’s proposal might contradict state law and be subject to legal challenge if it passes. Plus, that challenge could come from any direction since it would allow liberal and conservative reforms to be challenged by the board.

One proposition that would fall under Wiener’s amendment is Proposition L, the sit-lie ordinance approved last year that prohibits sitting or lying on public sidewalks between 7 am and 11 p.m. After a divisive campaign against the measure, police began enforcing it in April. In three years and with enough votes by the board, the board could repeal a law that Wiener supports.

“It’s really interesting,” said Bob-Offer Westort, a civil rights organizer with the San Francisco Coalition of Homelessness. “I have a lot of questions. I guess it cuts both ways. We’d like to see the aggressive panhandling law changed. We’d like to see the sit-lie repealed. There are definitely things, with the right composition of the board, we would benefit from. And there are things that we would not want to see changed.”

Either way, the measure could result in some divisive fights at the board. “One person presenting this as a way to get it done is not the answer,” Avalos said. “I worry that he will use the amendment to dismantle certain voter-approved laws.”

Awaiting consensus

Jesse Hawthorne Ficks
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5
Awaiting consensus

news@sfbg.com

Mayor Ed Lee’s pension reform proposal was unveiled May 24 with support from some of those who helped develop it, including investment banker Warren Hellman, Rebecca Rhine from the Municipal Executives Association, San Francisco Chamber of Commerce head Steve Falk, and San Francisco Labor Council Executive Director Tim Paulson.

The plan would dramatically alter the way the city manages employee retirement benefits, starting July 2012, while exempting employees who earn less than $50,000. Lee described it as “serious,” “comprehensive,” and a plan that “reflects consensus.”

Already the legislation to place it on the fall ballot has secured the cosponsorship of Board President David Chiu and Sup. John Avalos, rival candidates for mayor. Other mayoral candidates also offered their support, including former Sup. Bevan Dufty and City Attorney Dennis Herrera.

But there is one notable exception to the support for this plan, a party that has been at the negotiating table where it was crafted: Service Employees International Union Local 1021, which represents about half of the city’s 26,000 employees. The union claims the plan disproportionately affects 500 SEIU members, who are mostly women and people of color and already took large pay cuts last year to avoid layoffs.

Avalos, who described Lee’s proposal as “a sensible approach” and “the right way to go,” has said that if SEIU’s concerns aren’t adequately addressed, he’ll withdraw his sponsorship.

“I’d like to get to a consensus, but if we don’t and 10,000 union workers don’t sign on, I’m going to take my name off as a sponsor,” Avalos said. “We have to find ways to pay for pension benefits without decimating jobs and social services.”

Lee’s measure also didn’t win over Public Defender Jeff Adachi, who claims the proposal won’t make deep enough or fast enough cost savings in the next few years, so he will continue gathering signatures to place a rival measure on the ballot.

So rather than the consensus product Lee hoped the whole city family would be able to convince voters to support, it’s looking like pension reform could again be a divisive issue and one that spills over into this year’s mayor’s race.

Chiu thanked “our brothers and sisters from the labor community” when Lee announced his pension measure, noting that “each city worker that makes more than $50,000 would have to give thousands every year.” He supports the pension deal and hopes SEIU will eventually back it. Avalos and Sen. Leland Yee, another mayoral candidate, seem to be waiting for SEIU to sign on before offering their full support.

Mayoral spokesperson Christine Falvey told us that Lee views SEIU’s concerns as separate from the pension reform proposal. “He appreciates SEIU’s input in the pension reform talks and has committed to sitting down with them and trying to resolve this issue.”

Then there’s Adachi, who helped qualify Measure B, a 2010 pension reform proposal that united labor and city leaders in opposition. He continues to gather signatures to qualify a competing pension measure, needing about 50,000 signatures by early July unless Lee amends his plan to secure greater cost savings in less time.

“My focus is on this issue,” Adachi said, praising Lee’s efforts at achieving consensus. “But is this going to solve this problem so we don’t have to come back within two to three years? It comes down to a math problem.”

Adachi says Lee’s plan doesn’t adequately address the city’s need to save money now.

“The stress period is really in the next four years, so my hope is that the mayor’s proposal could be strengthened,” Adachi said, noting that his proposal yields $90 to $144 million in annual savings, compared to $60 to $90 million annually under Lee’s plan.

“SEIU is right that Mayor Lee’s proposal is inequitable,” Adachi added, noting that Measure B was criticized for being unfair to lower-income workers. “That’s why my new proposal increases pension contribution rates in $10,000 graduations. But under Lee’s plan, a person who earns $100,000 contributes the same rate as someone who makes $50,000.”

He criticized Lee’s plan for requesting only modest increases from safety workers. “Police and fire cost two to three times as much as everyone else’s retirement. They pay 17 percent of what’s in the fund and take out 36 percent. So that means SEIU folks are subsidizing the costs of safety workers’ retirement.”

Adachi acknowledged it would be better to have one measure everyone can support. “But I don’t agree that we should put ineffective reform on the ballot,” he said.

Adachi took a lead role on the issue in 2010 when he qualified Measure B mostly with backing from a few wealthy sponsors, including venture capitalist Michael Moritz, a financial supporter of Republican Ohio Gov. John Kasich and the Ohio Republican Party. Adachi took lots of political heat for the move, but he shrugs off the criticisms.

“It comes down to making sure people understand the issue,” he said. “A year ago, no one was acknowledging that it was a problem, but now everyone does. I’m hoping the board strengthens the proposal. It’s going to take supervisors really looking at this to see if works, not just jumping on the bandwagon.”

According to the Department of Human Resources, Lee’s plan would yield an estimated savings of $800 million to $1 billion over 10 years, with the bulk coming from increased employee retirement fund contributions of up to 6 percent for future and current employees. The proposal raises the retirement age from 62 to 65 for most city workers and from 55 to 58 for public safety workers. It also imposes caps on pensions for new employees.

Lee’s proposal must now make its way through the Rules Committee and win the approval of the full board by July 12, the deadline for supervisors to submit charter amendments. According to the Department of Human Resources, 89 percent of San Francisco’s 26,000 city workers earn more than $50,000. That means only 3,000 city workers fall below the $50,000 cut-off that exempt them from paying extra, under Lee’s plan.

But Larry Bradshaw, a bargaining unit member of SEIU 1021, said that members who make slightly more than that threshold will face pay cuts under the plan, on top of the pay cuts they took last year to avoid being laid off by Mayor Gavin Newsom.

For certified nursing assistants, the shift would amount to a roughly $12,000 annual pay cut, Bradshaw said. Security guards would face an estimated $5,000 per year cut, and clerical workers could face anywhere from $1,000 to $11,000 per year.

These workers faced getting fired and rehired at lower-paid classifications to make up for a revenue shortfall, but the union reached an agreement to stave off the worst pay cuts for those “de-skilled” employees by imposing a one percent across-the-board cut for all members in order to restore the salary cuts.

As SEIU workers take the pay cut to fund pensions, he said union members won’t be able to continue subsidizing the salaries of these deskilled workers.

“So we’re not going to have that option of asking our members to keep funding these workers who have taken this 20 percent pay cut,” he said. “And these are primarily women and people of color.”

But Sup. Sean Elsbernd and other supporters of the pension deal say the plight of these workers is an unrelated issue. “They aren’t a pension issue, so wouldn’t it be more appropriate to discuss them in the collective bargaining context?”

Elsbernd believes Lee’s measure is “fair and equitable,” partly because employees’ pension contributions would be reduced in boom years when tax revenue and stock market gains swell the city’s coffers.

“But Jeff Adachi is throwing a big roll of the legal dice,” Elsbernd said. He noted that city employees have long paid 7.5 percent toward their pensions. “But now, along come two pension reform plans that both challenge that notion.

“And every case in California shows you have to provide a commensurate benefit to change that kind of right,” he continued, arguing that Lee’s proposal is more legally sound because it lowers employees’ contributions during boom years. “So the $60 million that our plan would save is a hell of a lot more secure than the $90 million Jeff claims his plan would save.”

Sup. David Campos has yet to take a position on Lee’s plan, but hopes there is a way to address legitimate concerns about lower-income workers. “There’s no question that we have to do something about pension reform,” he said. “I don’t know if there’s a perfect proposal. But I’m especially intrigued by Mayor Lee’s plan. It recognizes that low-wage workers should not be expected to contribute at a higher rate than higher-wage workers. But we have to put the mayor’s proposal in the context of what else is happening, which is why SEIU’s de-skilling concerns are legitimate.” Campos credited Adachi for highlighting pension reform. “My hope is that we can come up with something that we can all be supportive of, where the mayor and Jeff’s proposals are combined. And while we have to be careful that the balance that has been constructed is maintained, this allows for a dialogue at the board, and for Jeff to be involved, so we can come up with a unified proposal. Because if we are going to address pension reform, we need to do so with a united front.”

Alerts

Maria Poblet
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0

ALERTS

By Jackie Andrews

 

WEDNESDAY, JUNE 1

Awarding human rights

Join Global Exchange for its ninth annual awards ceremony to celebrate the people and organizations that honor human rights and work for change with dinner, activities, and a silent auction. This year’s winners include Bolivian U.N. Ambassador Pablo Solon, U.S. gulf coast toxicologist Wilma Subra, and more..

6:30 p.m., $125

Bimbo’s 365 Club

1025 Columbus, SF

www.humanrightsaward.org

 

FRIDAY, JUNE 3

Bluegrass for the Greenbelt

Help raise funds for local eco-heroes Greenbelt Alliance with a foot-stomping hoedown featuring Marley’s Ghost, Kathy Kallic Band, the Wronglers, and more. Show up a day early and camp out with your family. Proceeds benefit an organization that works to preserve the region’s natural ecosystems and sustainable farms.

Fri/3–Sat/4, $25–$50

Dunsmuir-Hellman Estate

2960 Peralta Oaks Court, Oakl.

www.greenbelt.org

 

SATURDAY, JUNE 4

Walk for hope

Get a group of friends together and raise funds — check out the online tips on how–for breast, ovarian, and cervical cancer research. Meet at Justin Herman Plaza and walk in solidarity down the Embarcadero and around AT&T Park. Enjoy lively music and other entertainment along the way.

9 a.m., free

Justin Herman Plaza

Market and Embarcadero , SF

800-888-5323

www.cityofhope.org

 

Cuba-U.S. relations

Find out what the 50th anniversary of the failed Bay of Pigs invasion means and how recent changes in Cuban politics will affect the country’s relationship with the U.S. Go online or call the library to receive readings to prepare yourself for this interesting discussion.

10 a.m., free

Niebyl-Proclor Library

6501 Telegraph, Oakl.

(510) 595-7417

www.marxistlibr.org

 

SUNDAY, JUNE 5

Sonoma County Pride Parade

Just can’t wait for the SF Pride Parade, huh? We can’t either. Come march with our LGBTQ neighbors by the Russian River for what is promised to be a fun and outrageous event featuring a parade followed by a party with food, drinks, and loads of entertainment for the whole family.

11 a.m. –6 p.m., free

Guerneville Lodge

15905 River Road, Guerneville

www.sonomacountypride.org

 

TUESDAY, JUNE 7

Radical SF History

Former Bay Guardian reporter Rachel Brahinsky reads her chapter from the book Ten Years That Shook the City: San Francisco 1968-1978, a selection of essays about the city’s gay rights and other identity-based social movements, anti-gentrification efforts, and more.

7:30 p.m., free

Green Arcade Books

1680 Market, SF

www.shapingsf.org 

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 437-3658; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

 

The secret life of Michael Peevey

Maria Poblet
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11
The secret life of Michael Peevey

rebeccab@sfbg.com

Inside a legislative hearing room at the state capitol, things were beginning to get uncomfortable. Roughly five weeks had passed since a Pacific Gas & Electric Co. pipeline explosion killed eight and leveled an entire San Bruno neighborhood, and this California Senate committee hearing was an early attempt to get answers.

San Bruno residents who lost loved ones in the deadly explosion huddled in the front row, their eyes fixed on company representatives and agency bureaucrats as they spoke. At the back of the room, a band of immaculately dressed PG&E executives and utility lawyers sat clustered together.

Richard Clark, director of the consumer protection and safety division of the California Public Utilities Commission (CPUC), fielded questions from visibly frustrated state legislators. Sen. Dean Florez (D-Shafter) wanted know why the CPUC hadn’t done anything when PG&E ignored an impaired section of the ruptured pipeline even after it was granted $5 million to fix it.

“Did the PUC do any accounting when you gave them $5 million?” Florez demanded. “Do we just give them money and cross our fingers and hope they fix it? Is that what we do? Until some terrible tragedy occurs?”

Sen. Mark Leno (D-San Francisco) said the CPUC needed to step it up and start practicing serious hands-on oversight. He recalled a tragedy that occurred in 2008 when a gas leak in Rancho Cordova triggered a pipeline explosion, killing one person and injuring several others. Although an investigation determined that PG&E was at fault, the CPUC hadn’t yet gotten around to fining the company.

“We’ve got a pattern here,” Leno said. “And we’re not doing anything differently.”

Less than three weeks after CPUC staff members were grilled in Sacramento, Michael Peevey — president of the CPUC and the top energy official in the state — boarded an airplane for Madrid. He was embarking on a 12-day travel-study excursion, with stops in Sevilla and Barcelona, sponsored by the California Foundation on the Environment and the Economy (CFEE).

Peevey’s wife, California Sen. Carol Liu (D-Glendale), was along for the trip. So were two other state senators, several members of the state Assembly, CPUC commissioner Nancy Ryan, and a host of representatives from the energy industry. The group included executives from Chevron, Mirant (now GenOn, the owner of the Potrero power plant), Covanta Energy Corporation, Shell Energy North America, and engineering giant AECOM. High-ranking executives of the state’s investor-owned utilities also participated, including Fong Wan, the senior vice president of energy procurement for PG&E.

Although strict rules normally govern commissioners’ interactions with parties that have a financial stake in the outcomes of commission rulings, there wasn’t anything especially unusual about Peevey traveling internationally with a group that included representatives from the same companies his regulatory commission oversees. CFEE trips happen every year. The nonprofit has footed the bill to fly groups of regulators, legislators, and utility executives to prime vacation destinations like Italy, Brazil, and South Africa in recent years, excursions organizers say are critical for educating top-level stakeholders about worldwide best practices for sustainable systems. However, groups such as The Utility Reform Network (TURN) have decried CFEE trips as “lobbying junkets.”

As PG&E and the CPUC both work to win back the public’s confidence after their latest deadly failure, it’s worth analyzing whether their relationship — shaped by vacations together at exotic locales — has grown too cozy.

 

THE BUDDY SYSTEM

CFEE isn’t the only nonprofit that regularly flies Peevey overseas for green travel tours with high-ranking utility executives, and the 12 days he spent in Spain wasn’t the only time he spent away from official duties and in the company of the corporations his commission regulates.

These controversial getaways are just a small part of Peevey’s involvement with private-sector interests. He also chairs the board of a nonprofit investment fund created as part of a $30 million settlement agreement with PG&E. Called the California Clean Energy Fund, it funnels money into private venture-capital funds that invest in green start-ups, plus a few companies in the fossil-fuel sector.

While legislators have voiced frustration that lax CPUC oversight of PG&E on pipeline-safety issues opened the door to disaster in San Bruno, inside observers are critical of the outright favors Peevey has granted utilities, such as guaranteeing an unprecedented, higher-than-ever profit margin for PG&E as part of the company’s 2004 bankruptcy settlement.

The CPUC is set up to perform as a watchdog agency, yet social and professional ties running deep within California’s insular energy community mean regulators sometimes run in the same circles as the executives who answer to them, making for cozier relationships than the general public might anticipate. It’s an old-fashioned insider game that one longtime observer wryly characterizes as “the buddy system.” But the buddy system can bring consequences.

As the public face of the CPUC, Peevey repeatedly has been thrust into the spotlight. He has absorbed advocates’ concerns about pipeline safety, rising electricity rates, SmartMeters, missed targets for energy efficiency, and municipalities’ David-vs.-Goliath battles with PG&E to implement community choice aggregation (CCA), to name a few. He’s a magnet for public scrutiny while occupying the center seat at commission meetings, but Peevey’s behind-the-scenes engagements with private-sector organizations bent on shaping statewide energy policy demonstrate how power is wielded in California’s energy world, a system in which regulators seem to be partnering with utilities rather than policing them.

Based at Pier 35 in San Francisco, CFEE’s board of directors is composed of a small group of officers, plus a long list of members who hail from some of the most prominent businesses nationwide. Shell, Chevron, J.P. Morgan, Goldman Sachs, AT&T, and PG&E all hold positions on CFEE’s membership board, and each entity chips in to fund the foundation’s activities and travel excursions.

The group also includes representatives from labor organizations like the International Brotherhood of Electrical Workers and mainstream environmental groups such as the Natural Resources Defense Council. Among the emeritus members of CFEE’s governing board are some high-ranking figures, such as CIA director-turned-Pentagon boss Leon Panetta. CFEE received $45,000 in donations from PG&E in 2009 (the most recent year available) and was granted similar amounts in prior years.

CFEE spokesperson P.J. Johnston, the son of former state senator and CFEE officer Patrick Johnston and the press secretary under former Mayor Willie Brown, described the trips as valuable opportunities for top-level stakeholders to gain insight on best practices and engage in noncombative dialogue on key issues.

“The idea for us was that it made sense to have someplace where it was nonconfrontational to engage in policy, work-type discussions,” Johnston explained. He added that the trips are “all about policy, on the 30,000-foot level,” and emphasized that discussions aren’t about specific decisions pending before the CPUC.

Loretta Lynch, a former president of the CPUC who brought a reformist spirit to the agency and was never shy about rebuking utilities, is skeptical of CFEE’s stated program goals. When she was first appointed to the commission, Lynch said, CFEE contacted her to ask where she wanted to travel. If the trips are arranged to fly regulators to destinations they’ve been itching to visit, she reasoned, must-see green innovations probably aren’t dictating the itineraries. “To me,” Lynch said, “they don’t have anything to study in mind.”

 

“PARTYING WITH THE JUDGE”

The CFEE trip to Spain included a briefing on developing wind energy from AES, a company working on wind and solar development in California that also operates polluting, gas-fired power plants in Huntington Beach, Long Beach, and Redondo Beach. There was a round table on solar energy featuring a presentation from the Independent Energy Producers Association, a trade group that regularly files petitions and comments on CPUC proceedings. The trip included a tour of a desalination plant, a talk from the president of the Madrid Chamber of Commerce, and discussions about California’s energy market. Scheduled activities ended by midafternoon on some days, and the itinerary left a Friday afternoon, Saturday, and Sunday in Sevilla wide open.

Asked to comment on concerns about inappropriate lobbying, Johnston said: “We’re not guarding against anyone’s potential behavior any more than we would be on the streets of Sacramento. We’re not setting ourselves up as the guardians. We’re not facilitating that, per se, either.” He added, “I realize there are critics of any kind of travel and any kind of commingling. But it is wise for us not to close our eyes to the rest of the world, and there’s not a great appetite for spending taxpayer money on these trips.”

Yet Lynch countered that there is an important distinction between the roles of Sacramento legislators and that of utility commissioners. “Regulators are not legislators,” Lynch said. “They’re more like judges. Their decisions have the power of a judge’s decision.” By inviting commissioners along on these lavish getaways, she said, “it’s as if you’re partying with the judge.”

Mindy Spatt, a spokesperson for TURN, echoed Lynch’s concerns. “These ostensibly educational trips are essentially lobbying junkets, where utilities … wine and dine legislators,” Spatt said. TURN raised the issue several years ago, she said, when Peevey joined a CFEE trip attended by a representative of Southern California Edison “just coincidentally at the exact same time that he was penning an alternate decision in Edison’s rate case.” She added: “In TURN’s perspective, the commissioners need to be more in touch with what actual utility customers are experiencing, rather than in touch with the top restaurants in Brazil.”

While Peevey is only one of a host of officials who attend CFEE trips, he has more than just a casual tie to the nonprofit. From 1973 to 1983, he served as president of the California Coalition for Environment and Economic Balance (CCEEB), an organization CFEE grew out of and whose membership shares some overlap with CFEE.

Based in San Francisco, CCEEB was founded by Edmund G. “Pat” Brown (Gov. Jerry Brown’s father) in 1973. CCEEB backed a late-1970s proposal to construct a series of nuclear power plants along the California coastline. More recently, the group honored BP with a 2009 award for environmental education — shortly before the company and lax federal regulators were responsible for the worst oil spill in U.S. history.

 

A YEAR IN THE LIFE

Spain wasn’t the only country Peevey jetted off to with complimentary airfare in 2010. According to a Form 700 filing with the Fair Political Practices Commission, he also traveled to Germany from Aug. 1–5 for a sustainable energy study tour organized by the Energy Coalition. Joining that trip were representatives from investor-owned utilities PG&E, Southern California Edison, and Sempra, plus various city officials and energy experts from the Swedish Energy Agency.

The group stayed at the Radisson Blu Berlin Hotel, which is famous for its AquaDom. “Standing at 25 meters high, it is the world’s largest cylindrical aquarium containing 1 million liters of saltwater,” according to the hotel website. All Radisson Blu Berlin guests have free access to “the hotel’s well-being area,” called Splash, which features a pool, sauna, steam bath, and fitness room.

Based in Irvine, the Energy Coalition’s Board of Directors is chaired by Warren Mitchell, a retired chair of the Southern California Gas Co. and San Diego Gas & Electric Co.. Another director is a utility lawyer who also sits on the board of directors of the Northeast Gas Association, a consortium of natural gas companies in the northeastern U.S.

Founded in the late 1970s by John Phillips to get large businesses to reduce energy consumption in partnership with utilities, the Energy Coalition has arranged excursions for years to bring energy regulators, city officials, and utility executives to Sweden (where Phillips’ wife was born) to exchange ideas on energy issues. The nonprofit organizes an annual summit called the Aspen Accord, “an energy policy forum where cities, utilities, regulators, and end-users collaborate to identify problems and propose solutions to our most pressing energy issues,” according to a 2009 tax filing. While it used to be held in Aspen, Colo., the most recent Aspen Accord was held at San Francisco’s Westin St. Francis. Peevey gave introductory remarks, and the conference featured talks from PG&E, among others.

Craig Perkins, executive director, told the Guardian that the Aspen Accord and study trips are designed to create a venue for major stakeholders to arrive at outside-the-box solutions. “What we try to do is get everybody out of their comfort zone, if you will — that’s the best way to support more creative thinking,” he said. Official regulatory proceedings are “so rigidly legalistic and bureaucratic that it almost prevents any creative thought from happening,” he added. “We’re not in San Francisco, we’re not in Sacramento, we’re not in corporate offices — let’s just talk about these really big issues, and really big challenges.”

The Germany tour included meetings with the Berlin Energy Agency, talks about climate policy, and a tour of an eco-community in Freiburg. Perkins said utility companies must to pay their own way on the trips, but costs are covered for governmental officials.

An Energy Coalition tax filing reveals that board members receive a monthly retainer of $1,000, quarterly meeting fees of $1,000, plus $500 for each board committee meeting. Teleconferences also result in $500 meeting fees.

Several years ago, the Energy Coalition partnered with PG&E to create the Business Energy Coalition, which paid businesses including Bank of America and the Westin St. Francis $50 per KW of energy savings for banding together to reduce energy during peak load hours. According to a tax filing, total annual Energy Coalition revenue dropped from $10.7 million in 2008 to $3.75 million in 2009 “due to large revenue receipts for participant incentives” for the Business Energy Coalition program, as “revenues were used for direct pass-through payments to program participants and contractors.” In 2006, according to a CPUC filing, PG&E paid the Energy Coalition $227,373 for unspecified consulting services.

In addition to the $8,880 trip to Spain (comped), and the $6,583 trip to Germany last year (comped), Peevey’s 2010 disclosure form shows that he also went to Australia May 14-19 to participate in a conference hosted by the Sydney-based Total Environment Center called “Smart Metering to Empower the Smart Grid” ($12,577, comped). And while it doesn’t show up on his FPPC filing, an agenda for CFEE’s Energy Roundtable Summit from Dec. 9-10 at the Carneros Inn in Napa lists Peevey as a participant. A glance through past filings suggests that 2010 was no anomaly; it’s a typical year in the life of a jet-setting utilities regulator.

 

GREEN CAPITALISM

Peevey once served as president of the Southern California Edison, an investor-owned utility, and was president of NewEnergy, Inc., an electricity company that later was sold to Williams Energy. Yet his professional image is that of a forward-thinker on climate change. According to a bio on the CPUC website, he’s received awards for achievements on green and sustainable energy from various organizations throughout California.

In 2005, speaking in Berkeley at an annual conference for the California Climate Action Registry, Peevey touted a list of his accomplishments on sustainable energy. “My final example of PUC actions on climate change is related to PG&E‘s bankruptcy,“ he said. “When they emerged from bankruptcy last year, one of many conditions of our support for their reorganization plan was that they create a $30 million Clean Energy Fund, devoted to investing in California businesses developing and producing clean technologies.“

What Peevey didn‘t mention is that he chairs the board of directors of that fund. As a “nonprofit venture capital fund,“ the obscure, San Francisco-based CalCEF sounds like an oxymoron. Based on the terms of the PG&E bankruptcy settlement, it‘s governed by a nine-member board consisting of three CPUC appointees, three PG&E appointees, and the rest selected jointly by the CPUC and PG&E appointees. Other board members include past PG&E executives, a former member of the California Energy Commission, and a former chair of the board of governors of the California Independent System Operator (Cal-ISO), the body that ensures statewide grid reliability and blocked the closure of the Mirant Potrero Power Plant for years.

The nonprofit’s stated mission is to catalyze clean energy investment to aid in the state’s transition away from fossil fuels. CalCEF president Dan Adler described it as a sort of seasoned guide for fledgling green companies that might otherwise fail to navigate the murky, complicated clean-energy sector. CalCEF is in a position to usher start-ups toward success with a combination of funding, networking, and insider wisdom on state energy policy.

Among the challenges that the clean-energy sector faces, Adler said, are the utilities themselves. “They are effectively monopoly, or oligopoly, controllers of the energy industry,” he said. “And they don’t like outside innovation coming and disrupting their work process or their relationship with their customers.”

CalCEF aims to guide the finance community “to be partners with what public policy is doing around clean tech and clean energy,” Adler went on. “There’s a tremendous amount of money to be made, but there’s also a lot of opportunity for money to be wasted. If you don’t have a private-sector investment community that understands these rules and can put their money alongside these rules in a collaborative framework, we’re very unlikely to achieve the really aggressive energy targets that California has set.”

Yet as one skeptical energy insider noted, “there are 15 to 20 other funds, with 10 times as much money, an hour south in the same field,” referring to the burgeoning clean-tech hub in Silicon Valley. It’s questionable whether the CPUC is actually fulfilling some dire need with CalCEF, this person said.

Lynch, not surprisingly, takes a dim view of CalCEF. The former CPUC president questions what business the CPUC has creating a private foundation to guide venture capital investment. “It is a fundamental distortion of the PUC’s authority,” she charged, “all in service of Peevey’s ambitions.”

Peevey’s economic disclosure showed that he holds more than $1 million in a private family trust, without disclosing whether private investments contributed to that fund.

Adler stressed that there is arms-length relationship between CalCEF board members and the companies that benefit from the fund’s investments. “Because we are a nonprofit, and because we have on our board members of the regulatory community, we recognized quickly that we can’t be making direct investments into companies,” said Adler, a former CPUC staff member who was highly regarded even by the critics of CalCEF. “So … we’ve picked the venture-capital funds that we wanted to partner with.”

CalCEF funnels its capital into three different for-profit investment firms, which in turn select the companies that will be included in CalCEF’s investment portfolio. Several directors of the partnering investment firms also sit on the boards of directors of the companies they invest in. The startups run the gamut, from carbon-offset outfits, to energy-efficient lighting manufacturers to solar and wind companies, to biofuels startups to various kinds of technology firms related to the smart grid.

But CalCEF has also poured money into companies that bolster the fossil-fuel industry. One of its first investments was CoalTek, a company developing technology for so-called “clean coal.” Asked to explain why, Adler told the Guardian, “We don’t have veto power on every deal that goes down.”

Adler said he personally believes that “there’s no such thing as clean coal,” but tempered this by adding, “there are some very smart people in our community who will tell you that there’s no future … without coal.”

Another CalCEF investment, DynaPump, is developing technology to make it more energy efficient to pump oil and gas. Asked about this decision, Adler responded: “I will say that when we were approached with this investment by the venture partner that ultimately undertook it, we had our misgivings. If you can save energy in the production of oil and gas, then you’re definitely making a contribution to overall energy efficiency.”

 

TAX-EXEMPT TESLA

There appear to be some closer-than-arms-length links between CalCEF board members and the investment fund’s beneficiaries. A bio for CalCEF director Nancy Pfund, for example, notes that in her capacity as manager of an outside investment fund, she had “worked closely” with Tesla Motors, a CalCEF investment. Tesla provided CalCEF’s first investment return earlier this year after Tesla went public. A principal of one of the investment firms that works with CalCEF, Stephen Jurvetson of Draper Fisher Jurvetson, holds Tesla shares in a personal trust, according to a filing with the U.S. Securities and Exchange Commission.

Tesla manufactures sleek, electric, zero-emission sports cars with prices in the six-figures, and it’s gearing up to roll out a model that will cost somewhere closer to $50,000. The company’s success was helped by a sales-and-use-tax exclusion granted by the state of California last year. Peevey had a hand in that, too. Few Californians may have heard of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), a state body within the Office of the Treasurer, which has the power to authorize sales-tax exclusions for companies that are developing alternative energy technologies. Peevey has a seat on it.

In October 2009, according to a CAEATFA document, Tesla was granted a sales tax exclusion from that financing authority. The sports car manufacturer had received a tax break of $3.3 million as of December 2010, and stands to gain a tax break as large as $29.1 million, depending on its property purchases. As a CAEATFA member, Peevey approved the deal by proxy.

A central question is whether the CalCEF dollars that benefited Tesla and other CalCEF portfolio investments were originally derived from PG&E shareholder profits or ratepayer funds. Adler was careful to note that the initial $30 million came from company shareholders, not PG&E customers. But Lynch pointed out that every dime in PG&E coffers originates with the millions of customers who pay utility bills.

Lynch noted another provision of the bankruptcy settlement agreement, which guarantees PG&E a minimum annual profit of 11.2 percent, catapulting it forever into a higher rate of return than the 8 percent to 11 percent profit traditionally granted by the CPUC in prior decades. “They’re manipulating how big this bucket is to siphon off funds into programs like CalCEF,” Lynch said. “It’s all to give Peevey and his friends access — and to greenwash what was a very stinky deal for the ratepayer.”

 

ELUSIVE CLEAN ENERGY FUTURE

In California, a national leader in addressing climate change, the stakes are high in the energy sector. The CPUC is tasked not only with shoring up transmission-pipeline safety to prevent another San Bruno disaster, but helping to chart a course away from reliance on fossil fuel-powered energy sources.

CFEE, the Energy Coalition, and CalCEF share a common thread — their missions relate to advancing the cause of a clean energy future in California. And while utility funding and partnership is evident in all three operations, the overarching goal is understood to be green.

But as Adler observed, the utilities themselves present one of the greatest obstacles to progress on a clean-energy transition. While California has increased renewable energy sources, it’s done a poor job at supplanting fossil fuel generation with green alternatives, in part because the CPUC has allowed for increasing fossil fuel power generation even as renewable energy expands. According to a listing on the California Energy Commission website, nine natural gas power plants have won approval statewide and are moving toward construction, while six new ones are under review.

The CalCEF approach to addressing climate change, rather than aggressively targeting polluting industries, is to encourage the fledgling green industry in hopes of facilitating success in partnership with the financial sector. In many cases, the backers of the clean-tech companies are the same players behind the big energy giants.

Environmental advocates are critical. “If anyone thinks the CPUC is set up to serve public interests, forget that,” says Al Weinrub, executive director of the Local Clean Energy Alliance, a group that organized against PG&E’s ill-fated Proposition 16 last year. “They never have and they never will.”

Weinrub said he viewed proponents of green energy as falling into two camps: Moneyed interests motivated by a growing new market sector, and activists motivated by environmental and social justice causes. Major green investment firms “want to de-carbonize capitalism,” he observed. “But everything else stays the same.”

Peevey is considered a major driver behind the state’s climate change legislation, and he’s highly regarded for his dedication to green energy. Yet as long as the interlocking dynamic between energy regulators and California’s largest utilities goes unchallenged, change will only come in a way that’s as comfortable, profitable, and manageable for the state’s top polluters as they wish. And in a state with an aging energy infrastructure that’s vulnerable to the impacts of climate change, that pace isn’t nearly quick enough. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power to the powerful

Maria Poblet
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0
Power to the powerful

news@sfbg.com

On Thursday, May 26, the California Public Utilities Commission is set to vote on changes to the electricity rates of Pacific Gas and Electric Co. customers. Currently two proposals are on the table, and consumer advocates characterize the better one as merely the lesser of two evils.

At its last meeting on May 5, the commission approved a requested 8.1 percent increase in the total amount of money PG&E will collect from its customers in 2011. The $454 million revenue increase is supposed to account for costs accrued by the company’s spending on infrastructure.

The big question that remains is how the increased burden will be divided among customers, or more precisely, what class of customers will see a bump in their monthly bill. The price of electricity in California is regulated by a tiered structure, meaning the less you use, the less each kilowatt of power costs you. In this way, higher usage customers pay above-cost prices for power, subsidizing users who conserve and those enrolled in the energy discount program.

Under both proposals, the rates would be moving away from that structure. Their description summarizes the new structure this way: “Lower-usage customers will incur higher rates offset by reductions in higher usage customer rates.” Critics said the proposal hurts conservation and the poor.

“The policies are going to hurt low-income household in a time when low-income households can’t take any more hurting,” said Stephanie Chen, senior legal counsel for the Greenlining Institute.

One of the proposals is especially detrimental to the 20 percent of PG&E customers who use the program known as California Alternate Rates for Energy (CARE) to afford their bills. If approved by the commission, PG&E would introduce a new fixed monthly fee. CARE customers would have to dish out an extra $2.40 every month and everyone else would pay $3.

The effect can be acute for households on fixed incomes, which is why Matt Freedman, staff attorney from The Utility Reform Network (TURN) said, “Our top issue is killing the customer charge.”

He is confident in his case against the customer charge and says he is supported by California laws that limit how much the rates of low-income consumers can go up. The law is meant to keep prices stable for the poor, which TURN said it will defend.

“We are prepared to sue the commission if they adopt the customer charge,” Freedman said. “We are prepared to fight.”

Although protecting vulnerable consumers is at the top of the agenda of many consumer advocates, there are other reasons to oppose PG&E’s new rate scheme. “If your bill gets lower all of sudden for using the same amount of power, you are not going to conserve,” Chen said, referring to the how high-usage customer may respond to their new bills.

PG&E failed to reply to Guardian phone calls, but public comments by the energy giant elucidate the push for a change to customer rates. The company cited the “historical context” of more than 10 years of frozen rates for low-income customers.

Melissa Kasnitz, a spokesperson for Disability Rights Advocates, said the data from PG&E indicates that many households already on the lowest rungs of the economic ladder are teetering on the brink of disconnection. She called the historical context of frozen rates a “meaningless abstraction” given the hardship those households will face.

Even more alarming is that PG&E sees the proposed change to the rate structure as a “continuing movement toward a cost-based framework for [rates].” California law, however, says that the guiding principle for determining rates should be accessibility and conservation, not simply cost. But that could change under Senate Bill 142, a bill introduced by state Sen. Michael Rubio’s (D-Bakersfield) that would more directly link utility rates to the costs of generating power. 

 

The death drug dealers

Maria Poblet
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The death drug dealers

tredmond@sfbg.com

The federal Drug Enforcement Administration is conducting a multistate criminal investigation into the actions that prison systems have taken to obtain a death drug no longer produced in the United States, documents obtained by the Guardian indicate.

The documents don’t reveal the specific targets of the investigation, but federal agents have seized drug shipments in Alabama, Georgia, Kentucky, South Carolina, and Tennessee and are apparently also looking into drug procurement policies in California, Arkansas, Alaska, and Arizona.

The states have been scrambling to obtain sodium thiopental, a drug used in executions, after the lone American manufacturer, Hospira Corp., stopped producing it last year.

Georgia and Arizona both received shipments of the drug from Dream Pharma, a British wholesaler that, according to the Associated Press, “shares a building with a driving school in a gritty London neighborhood.”

In October 2010, the California Department of Corrections and Rehabilitation sent agents on a secret mission to get some of Arizona’s supply. The agents drove under cover of night to the Arizona state prison in Florence, where at midnight the warden handed them 12 grams of thiopental, enough for an execution.

The state later ordered 521 grams — far more than the state could possibly use in the next few years — from Archimedes Pharma, also a British supplier.

Several other states, including Georgia, obtained the drugs from a different British supplier, Link Pharmaceuticals. According to the Associated Press, Nebraska’s supply was imported from India.

Most of the states imported the drugs without the proper DEA paperwork, a federal crime, the documents show.

Sodium thiopental is part of the three-drug mix used for lethal injections in most states that allow capital punishment. It renders the subject unconscious before the other drugs stop the heart and lungs from operating.

If the drug isn’t effective — that is, if it’s an improper formulation or an off-market product that doesn’t meet U.S. standards — the condemned inmate could suffer horrible pain, something the U.S. Supreme Court has made clear is not legally tolerable.

The drug isn’t often used in hospitals; it has been replaced by other drugs. And California had to put all of its executions on hold last fall when the state’s last batch expired.

The documents are the latest released as the result of a federal lawsuit filed by the ACLU of Northern California and the Guardian seeking access to all records related to the import of the death drug. Last week the DEA released 71 pages of documents, but withheld 160 pages, justifying the withholding by saying that some of the records are part of an ongoing criminal investigation.

A May 16 letter from Katherine Myrick, the DEA’s chief Freedom of Information Officer, states that there are “two active investigations” and that release of the records could “reasonably be expected to interfere with enforcement proceedings.” The documents reveal how desperately state prison authorities were trying to find a way to procure the drug — and how concerned the DEA was about importing a controlled substance by agencies that had no medical or research functions.

Among other things, they show that the Obama administration was taking an active role in the process: “The White House is involved and is trying to sort things out,” a Nov. 11, 2010 memo from the Office of Diversion Control states.

Another Nov. 11 memo notes that “states have been importing the lethal drug regimen from England … the U.K. has written the State Department (and the FDA?) asking the U.S. to end the importation of the drug, which is being used in lethal injections.”

A Nov. 9 memo notes that “FDA is concerned about importation of non-FDA approved sodium thiopental used for executions … Safety, efficacy and indication are FDA issues. So is the matter of off-label use (which was also brought up).”

The memo from the Liaison and Policy Office explains that the “DEA requires a valid DEA registration as an importer and a properly executed declaration in order to import controlled substances.”

A Nov. 12 memo confirms that “only two import declarations have been filed for sodium pentothal” — meaning that all the other states obtained their supplies illegally. The identity of the two states is blacked out.

Arizona has an execution date set for May 25, and Nebraska has an execution scheduled for June 14. But the documents are so heavily redacted, and so many pages are missing, that it’s impossible to tell exactly which states are doing what — and whether any of the upcoming executions would be using illegally obtained drugs.

“The DEA is making it impossible to know whether the states are complying with the law and whether DEA is fulfilling its obligation to enforce our nation’s drug laws,” said Natasha Minsker, death penalty policy director for the ACLU of California. “Importing sodium thiopental without informing the DEA is a crime. We now know the DEA was poised to go into the Arizona Department of Corrections and seize their drugs, as they did in Georgia, but for some unknown reason they did not. Why did the DEA seize drugs in some states but not others?”

Calls and e-mails to the California Department of Corrections seeking information on whether the department is the target of a federal investigation were not returned. 

 

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