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Transit or traffic

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Click here for the Clean Slate: Our printout guide to the Nov. 6 election

› steve@sfbg.com

San Francisco is at a crossroads. The streets are congested, Muni has slowed to a crawl, greenhouse gas emissions are at all-time highs, and the towers of new housing now being built threaten to make all of these transportation-related problems worse.

The problems are complicated and defy simply sloganeering — but they aren’t unsolvable. In fact, there’s remarkable consensus in San Francisco about what needs to be done. The people with advanced degrees in transportation and city planning, the mayor and almost all of the supervisors, the labor and environmental movements, the urban planning organizations, the radical left and the mainstream Democrats — everyone without an ideological aversion to government is on the same page here.

The city planners and transportation experts, who have the full support of the grass roots on this issue, are pushing a wide range of solutions: administrative and technical changes to make Muni more efficient, innovative congestion management programs, high-tech meters that use market principles to free up needed parking spaces, creative incentives to discourage solo car trips, capital projects from new bike and rapid-transit lanes to the Central Subway and high-speed rail, and many more ideas.

In fact, the coming year promises a plethora of fresh transportation initiatives. The long-awaited Transit Effectiveness Project recommendations come out in early 2008, followed by those from the San Francisco County Transportation Authority’s Mobility, Access, and Pricing Study (an unprecedented, federally funded effort to reduce congestion here and in four other big cities), an end to the court injunction against new bicycle projects, and a November bond measure that would fund high-speed rail service between downtown San Francisco and Los Angeles.

But first, San Franciscans have to get past a few downtown developers and power brokers who have a simplistic, populist-sounding campaign that could totally undermine smart transportation planning.

On Nov. 6, San Franciscans will vote on propositions A and H, two competing transportation measures that could greatly help or hinder the quest for smart solutions to the current problems. Prop. A would give more money and authority to the San Francisco Metropolitan Transportation Agency while demanding it improve Muni and meet climate change goals.

Prop. H, which was placed on the ballot by a few powerful Republicans, most notably Gap founder Don Fisher (who has contributed $180,000 to the Yes on H campaign), would invalidate current city policies to allow essentially unrestricted construction of new parking lots.

New parking turns into more cars, more cars create congestion, congestion slows down bus service, slow buses frustrate riders, who get back into their cars — and the cycle continues. It’s transit against traffic, and the stakes couldn’t be higher.

"If we are serious about doing something about global warming, it’s time to address the elephant in the room: people are going to have to drive less and take transit more" was how the issue was framed in a recent editorial cowritten by Sup. Sean Elsbernd, arguably the board’s most conservative member, and Sup. Aaron Peskin, who wrote Prop. A.

Peskin says Prop. H, which Prop. A would invalidate, is the most damaging and regressive initiative he’s seen in his political life. But the battle for hearts and minds won’t be easy, because the downtown forces are taking a viscerally popular approach and running against city hall.

The San Francisco Examiner endorsed Prop. H on Oct. 22, framing the conflict as between the common sense of "your friends and neighbors" and "a social-engineering philosophy driven by an anti-car and anti-business Board of Supervisors." If the Examiner editorialists were being honest, they probably also should have mentioned Mayor Gavin Newsom, who joins the board majority (and every local environmental and urban-planning group) in supporting Prop. A and opposing Prop. H.

The editorial excoriates "most city politicians and planners" for believing the numerous studies that conclude that people who have their own parking spots are more likely to drive and that more parking generally creates more traffic. The Planning Department, for example, estimates Prop. H "could lead to an increase over the next 20 years of up to approximately 8,200–19,000 additional commute cars (mostly at peak hours) over the baseline existing controls."

"Many, many actual residents disagree, believing that — no matter what the social engineers at City Hall tell you — adding more parking spaces would make The City a far more livable place," the Examiner wrote.

That’s why environmentalists and smart-growth advocates say Prop. H is so insidious. It was written to appeal, in a very simplistic way, to people’s real and understandable frustration over finding a parking spot. But the solution it proffers would make all forms of transportation — driving, walking, transit, and bicycling — remarkably less efficient, as even the Examiner has recognized.

You see, the Examiner was opposed to Prop. H just a couple of months ago, a position the paper recently reversed without really explaining why, except to justify it with reactionary rhetoric such as "Let the politicians know you’re tired of being told you’re a second-class citizen if you drive a car in San Francisco."

Examiner executive editor Jim Pimentel denies the flip-flop was a favor that the Republican billionaire who owns the Examiner, Phil Anschutz, paid to the Republican billionaire who is funding Prop. H, Fisher. "We reserve the right to change on positions," Pimentel told me.

Yet it’s worth considering what the Examiner originally wrote in an Aug. 2 editorial, where it acknowledged people’s desire for more parking but took into account what the measure would do to downtown San Francisco.

The paper wrote, "Closer examination reveals this well-intentioned parking measure as a veritable minefield of unintended consequences. It could actually take away parking, harm business, reduce new housing and drive out neighborhood retail. By now, Californians should be wary of unexpected mischief unleashed from propositions that legislate by direct referendum. Like all propositions, Parking For Neighborhoods was entirely written by its backers. As such, it was never vetted by public feedback or legislative debate. If the initiative organizers had faced harder questioning, they might have recognized that merely adding parking to a fast-growing downtown is likely to make already-bad traffic congestion dramatically worse."

The San Francisco Transportation Authority’s Oct. 17 public workshop, which launched the San Francisco Mobility, Access, and Pricing Study, had nothing to do with Props. A and H — at least not directly. But the sobering situation the workshop laid out certainly supports the assessment that drawing more cars downtown "is likely to make already-bad traffic congestion dramatically worse."

City planners and consultants from PBS&J offered some statistics from their initial studies:

•San Francisco has the second-most congested downtown in the country, according to traffic analysts and surveys of locals and tourists, about 90 percent of whom say the congestion is unacceptably bad compared to that of other cities.

•Traffic congestion cost the San Francisco economy $2.3 billion in 2005 through slowed commerce, commuter delays, wasted fuel, and environmental impacts.

•The length of car trips is roughly doubled by traffic congestion — and getting longer every year — exacerbating the fact that 47 percent of the city’s greenhouse gas emissions come from private cars. Census data also show that more San Franciscans get to work by driving alone in their cars than by any other mode.

•Traffic has also steadily slowed Muni, which often shares space with cars, to an average of 8 mph, making it the slowest transit service in the country. Buses now take about twice as long as cars to make the same trip, which discourages their use.

"We want to figure out ways to get people in a more efficient mode of transportation," Zabe Bent, a senior planner with the TA, told the crowd. She added, "We want to make sure congestion is not hindering our growth."

The group is now studying the problem and plans to reveal its preliminary results next spring and recommendations by summer 2008. Among the many tools being contemplated are fees for driving downtown or into other congested parts of the city (similar to programs in London, Rome, and Stockholm, Sweden) and high-tech tools for managing parking (such as the determination of variable rates based on real-time demand, more efficient direction to available spots, and easy ways to feed the meter remotely).

"As a way to manage the scarce resource of parking, we would use pricing as a tool," said Tilly Chang, also a senior planner with the TA, noting that high prices can encourage more turnover at times when demand is high.

Yet there was a visceral backlash at the workshop to such scientifically based plans, which conservatives deride as social engineering. "I don’t understand why we need to spend so much money creating a bureaucracy," one scowling attendee around retirement age said. There were some murmurs of support in the crowd.

Rob Black, the government affairs director for the San Francisco Chamber of Commerce, which is the most significant entity to oppose Prop. A and support Prop. H, was quietly watching the proceedings. I asked what he and the chamber thought of the study and its goals.

"We have mixed feelings, and we don’t know what’s going to happen," Black, who ran unsuccessfully against Sup. Chris Daly last year, told me. "The devil is in the details."

But others don’t even want to wait for the details. Alex Belenson, an advertising consultant and Richmond District resident who primarily uses his car to get around town, chastised the planners for overcomplicating what he sees as a "simple" problem.

Vocally and in a four-page memo he handed out, Belenson blamed congestion on the lack of parking spaces, the city’s transit-first policy, and the failure to build more freeways in the city. Strangely, he supports his point with facts that include "Total commuters into, out of, and within San Francisco have only increased by 206,000 since 1960 — more than 145,000 on public transit."

Some might see those figures, derived from census data, as supporting the need for creative congestion management solutions and the expansion of transit and other alternative transportation options. But Belenson simply sees the need for 60,000 new parking spaces.

As he told the gathering, "If someone wants to build a parking lot and the market will support it, they should be able to."

The San Francisco Planning and Urban Research Association (SPUR) is generally allied with the downtown business community on most issues, but not Props. A and H, which SPUR says could be unmitigated disasters for San Francisco.

"SPUR is a pro-growth organization, and we want a healthy economy. And we think the only way to be pro-business and pro-growth in San Francisco is to be transit reliant instead of car reliant," SPUR executive director Gabriel Metcalf told me in an interview in his downtown office.

He agreed with Belenson that the free market will provide lots of new parking if it’s allowed to do so, particularly because the regulatory restrictions on parking have artificially inflated its value. "But the negative externalities are very large," Metcalf said, employing the language of market economics.

In other words, the costs of all of that new parking won’t be borne just by the developers and the drivers but by all of the people affected by climate change, air pollution, congested commerce, oil wars, slow public transit, and the myriad other hidden by-products of the car culture that we are just now starting to understand fully.

Yet Metcalf doesn’t focus on that broad critique as much as on the simple reality that SPUR knows all too well: downtown San Francisco was designed for transit, not cars, to be the primary mode of transportation.

"Downtown San Francisco is one of the great planning success stories in America," Metcalf said. "But trips to downtown San Francisco can’t use mostly single-occupant vehicles. We could never have had this level of employment or real estate values if we had relied on car-oriented modes for downtown."

Metcalf and other local urban planners tell stories of how San Francisco long ago broke with the country’s dominant post–World War II development patterns, starting with citizen revolts against freeway plans in the 1950s and picking up stream with the environmental and social justice movements of the 1960s, the arrival of BART downtown in 1973, the official declaration of a transit-first policy in the ’80s, and the votes to dismantle the Central and Embarcadero freeways.

"We really led the way for how a modern dynamic city can grow in a way that is sustainable. And that decision has served us well for 30 years," Metcalf said.

Tom Radulovich, a longtime BART board member who serves as director of the nonprofit group Livable City, said San Franciscans now must choose whether they want to plan for growth like Copenhagen, Denmark, Paris, and Portland, Ore., or go with auto-dependent models, like Houston, Atlanta, and San Jose.

"Do we want transit or traffic? That’s really the choice. We have made progress as a city over the last 30 years, particularly with regard to how downtown develops," Radulovich said. "Can downtown and the neighborhoods coexist? Yes, but we need to grow jobs in ways that don’t increase traffic."

City officials acknowledge that some new parking may be needed.

"There may be places where it’s OK to add parking in San Francisco, but we have to be smart about it. We have to make sure it’s in places where it doesn’t create a breakdown in the system. We have to make sure it’s priced correctly, and we have to make sure it doesn’t destroy Muni’s ability to operate," Metcalf said. "The problem with Prop. H is it essentially decontrols parking everywhere. It prevents a smart approach to parking."

Yet the difficulty right now is in conveying such complexities against the "bureaucracy bad" argument against Prop. A and the "parking good" argument for Prop. H.

"We are trying to make complex arguments, and our opponents are making simple arguments, which makes it hard for us to win in a sound-bite culture," Radulovich said.

"Prop. H preys on people’s experience of trying to find a parking space," Metcalf said. "The problem is cities are complex, and this measure completely misunderstands what it takes to be a successful city."

When MTA director Nathaniel Ford arrived in San Francisco from Atlanta two years ago, he said, "it was clear as soon as I walked in the door that there was an underinvestment in the public transit system."

Prop. A would help that by directing more city funds to the MTA, starting with about $26 million per year. "I don’t want to say the situation is dire, but it’s certainly not going to get better without some infusion of cash to get us over the hump," Ford told the Guardian recently from his office above the intersection of Market and Van Ness.

The proposed extra money would barely get this long-underfunded agency up to modern standards, such as the use of a computer routing system. "We actually have circuit boards with a guy in a room with a soldering iron keeping it all together," Ford said with an incredulous smile.

The other thing that struck Ford when he arrived was the cumbersomeness of the MTA’s bureaucracy, from stifling union work rules to Byzantine processes for seemingly simple actions like accepting a grant, which requires action by the Board of Supervisors.

"Coming from an independent authority, I realized there were a lot more steps and procedures to getting anything done [at the MTA]," he said. "Some of the things in Prop. A relax those steps and procedures."

If it passes, Ford would be able to set work rules to maximize the efficiency of his employees, update the outdated transit infrastructure, set fees and fines to encourage the right mix of transportation modes, and issue bonds for new capital projects when the system reaches its limits. These are all things the urban planners say have to happen. "It should be easy to provide great urban transit," Metcalf said. "We’re not Tracy. We’re not Fremont. We’re San Francisco, and we should be able to do this."

Unfortunately, there are political barriers to such a reasonable approach to improving public transit. And the biggest hurdles for those who want better transit are getting Prop. A approved and defeating Prop. H.

"It’s clear to people who have worked on environmental issues that this is a monumental election," said Leah Shahum, director of the San Francisco Bicycle Coalition and an MTA board member. "San Francisco will choose one road or the other in terms of how our transportation system affects the environment. It will really be transit or traffic."

Shahum said the combination of denying the MTA the ability to improve transit and giving out huge new parking entitlements "will start a downward spiral for our transit system that nobody benefits from."

"We are already the slowest-operating system in the country," Ford said, later adding, "More cars on the streets of San Francisco will definitely have a negative impact on Muni."

But even those who believe in putting transit first know cars will still be a big part of the transportation mix.

"All of it needs to be properly managed. There are people who need to drive cars for legitimate reasons," Ford said. "If you do need to drive, you need to know there are costs to that driving. There is congestion. There are quality impacts, climate change, and it hurts transit."

"There are parking needs out there, and the city is starting to think of it in a more responsive way. We don’t need this to create more parking," Shahum said. "If folks can hold out and beat down this initiative, I do think we’re headed in the right direction."

Yet the Yes on A–No on H campaign is worried. Early polling showed a close race on Prop. A and a solid lead for Prop. H.

Fisher and the groups that are pushing Prop. H — the Council of District Merchants, the SF Chamber of Commerce, and the San Francisco Republican Party — chose what they knew would be a low-turnout election and are hoping that drivers’ desires for more parking will beat out more complicated arguments.

"The vast majority of San Franciscans call themselves environmentalists, and they want a better transit system," Shahum said, noting that such positions should cause them to support Prop. A and reject Prop. H. "But they’re at risk of being tricked by a Republican billionaire’s initiative with an attractive name…. Even folks that are well educated and paying attention could be tricked by this."

For Metcalf and the folks at SPUR, who helped write Prop. A, this election wasn’t supposed to be an epic battle between smart growth and car culture.

"For us, in a way, Prop. A is the more important measure," Metcalf said. "We want to focus on making Muni better instead of fighting about parking. We didn’t plan it this way, but the way it worked out, San Francisco is at a fork in the road. We can reinforce our transit-oriented urbanity or we can create a mainly car-dependent city that will look more like the rest of America."

Eugene Prince Coleman, 1937–2007

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› news@sfbg.com

Eugene Prince Coleman died Oct. 26, surrounded by his family, after losing a battle against pancreatic cancer. It was one of the few fights that he lost in his long and memorable life in San Francisco.

Born in Mississippi 70 years ago and raised in Cleveland, Coleman came to San Francisco in 1972 and, like many in that decade, found a home in the city. He never left — and never, ever quit working to make it better.

Coleman was one of the creators of modern, tolerant, progressive San Francisco. His decadelong service to South of Market as director of the Canon Kip Community House (until it was closed as the Episcopal Church turned away from the central city) was a model of dedicated, informed, and effective advocacy and service. He founded the first paratransit service for seniors in San Francisco. He presided over one of the most dynamic and well-attended youth-serving community centers in the city, which provided safe, secure, and supportive space for an entire generation of Filipino youths. He almost single-handedly got the South of Market Health Center up and running, serving seniors and families.

And when urban renewal devastated South of Market, Coleman provided space and support, counsel, know-how, and a patience that bested the saints themselves in helping to create one of the most effective community campaigns against redevelopment in the nation. Some 2,000 low-income senior homes were rebuilt, and a new capacity to develop community-controlled affordable housing was created, in large measure due to Coleman’s wisdom and vision.

Thousands of San Franciscans who never knew his name owe Coleman for the dignity and grace that well-organized substance-abuse, residential-treatment, and food and health programs have provided them at his insistence as he helped build the infrastructure of a substance-abuse policy that is known nationwide as the San Francisco model.

Coleman spent the past decade or so working for the city, bringing to his job the keen judgment and the caring heart that so characterized his service to the community. He demanded that all people — youths and seniors, black, brown, and white, working-class and poor — be treated with respect and courtesy, warmth and love, and that they, in turn, treat one another the same way. Coleman was also an African American who never once gave up on the African American community or the needs of his people, and fought and talked and thought and cried for their continued survival in San Francisco.

He was simply a quintessential late-20th-century San Franciscan who gave back more than he took, cared more than he probably should have, and was one of the finest people to ever walk these sometimes mean and uncaring streets — with a demeanor that was always sweet and caring. *

Calvin Welch worked with Gene Coleman for 30 years and was blessed by his friendship.

A memorial for Coleman is scheduled for 11 a.m. on Nov. 1 at Providence Baptist Church, 1601 McKinnon, SF.

Money and politics

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› sarah@sfbg.com

The upcoming election hasn’t generated much voter interest, with only a couple of measures that seem likely to have an impact. But corporate interests in San Francisco and beyond are still spending big money — in ways that are secretive, suspicious, and sometimes contradictory — to influence the election and win the gratitude of elected officials.

Although the final preelection campaign statements were due Oct. 25, the money continues to roll in. And perhaps most ominously, many campaign committees are spending far more than they are taking in, effectively using this accrued debt to hide contributors until after the election.

And almost invariably, the person at the center of such schemes — who facilitates the most creative and unsettling spending by downtown political interests — is notorious campaign finance attorney Jim Sutton, who also serves as Mayor Gavin Newsom’s treasurer (and didn’t return our calls for comment by press time).

Political donations are supposed to be transparent and reflect popular support for some campaign. But once again, this election is showing the disproportionate influence that corporations have on local politics and the difficulties faced in trying to accurately trace that influence.

There are "No on K" billboards all over San Francisco, showing a giant image of a man’s empty pocket alongside the dubious claim that "Proposition K will cut $20 million from Muni." The signs were created and funded by Clear Channel Outdoor.

Prop. K is an advisory measure that the Board of Supervisors placed on the ballot this fall to ask whether voters want to restrict advertising on public spaces like bus stops. But it was aimed at Clear Channel Outdoor’s contract to maintain 1,100 city bus shelters and sell advertising on them, which was approved by the Board of Supervisors on Oct. 23. In exchange, the CCO agreed to pay the Metropolitan Transportation Authority $5 million annually, plus 45 percent of its annual revenues from shelter ad revenues.

Nonetheless, the measure would put city voters on record as opposing the CCO’s basic business model, so the company fought back. The "No on K — Citizens to Protect Muni Services" filing suggests that there is no citizen involvement in the No on K campaign. So far, No on K has only received donations from Clear Channel Outdoor, including $120,000 in cash and $55,750 in in-kind contributions of radio time and ad space.

Maybe Clear Channel really is trying to help Muni get more money, rather than pad its own profits. After all, its parent corporation, Clear Channel International, donated $20,000 to support Muni reform measure Proposition A — authored by Board of Supervisors president Aaron Peskin — on Oct. 15, just days before Clear Channel Outdoor won its big bus transit deal with the city.

Yet following the corporate money even further makes it clear that altruism isn’t what motivates corporate spending. No on K also benefited from independent expenditures by the San Francisco Chamber of Commerce 21st Century Committee, a general-purpose committee created in 1999, which received major funding this year from the Gap ($10,000), Pacific Gas and Electric Co. ($7,500), Bechtel ($5,000), Catholic Healthcare West ($5,000), and Clear Channel Outdoor ($1,000).

The 21st Century Committee also spent $716 for newspaper ads opposing Prop. A, which would net the MTA at least $26 million per year from the city’s General Fund. Sutton — a former chair of the California Republican Party — and his associates effectively control the 21st Century Committee, which is also helping Newsom, his top client, avoid facing the Board of Supervisors in public. The committee has made independent expenditures opposing Proposition E, a charter amendment that would require the mayor to make monthly appearances before the board, something voters approved last year as an advisory measure. According to Newsom spokesperson Nathan Ballard, defeating that measure is the mayor’s top priority this election.

"I think he’s focused on his own race and also Question Time. There’s where he’s spending his resources," Ballard said when asked why Newsom isn’t campaigning or fundraising for the Yes on A and No on H campaigns, even though he supports those positions.

The 21st Century Committee has also made independent expenditures in support of Proposition C (which would require public hearings for measures that the board or the mayor places on the ballot), Proposition H (see "Transit or Traffic," page 18), Proposition I (which would establish an Office of Small Business), and Proposition J (Newsom’s wireless Internet advisory measure).

Each of these ballot measures has a committee dedicated to raising funds, but as of Oct. 25, only the Small Business Campaign (Yes on C) appeared to have no outstanding debts, or accrued funds, as they are called in campaign finance circles. Maybe that’s because the Small Business Campaign got $10,000 from the 21st Century Committee, $5,000 from PG&E, $2,500 from AT&T, $8,500 from the SF Small Business Advocates, and $1,000 from the Building Owners and Manufacturers Association of San Francisco’s political action committee.

Yes on C also got a $7,500 contribution from the Committee on Jobs Government Reform Fund, which has ties to Clear Channel, the MTA, and efforts to influence local transportation policy. Records show that on Nov. 4, 2005 — just before the election — the Committee on Jobs Government Reform Fund reported a $6,900 "loan" for radio airtime and production costs from Clear Channel to help defeat a measure that would have split the MTA appointments between the mayor and the Board of Supervisors.

Fast-forward to Oct. 3 of this year, when the Committee on Jobs, which reported its "loan" as accrued funds for almost two years, reported that this debt has now been forgiven. Which is odd, given that, as of Oct. 25, the Committee on Jobs had a cash balance of $778,000 — and had just received $35,000 from financier and Committee on Jobs board member Warren Hellman, $35,000 from AT&T, and $50,000 from the Charles Schwab Corp.

Equally interesting is the fact that the day after the Oct. 25 preelection filing deadline, the Committee on Jobs gave $25,000 to the Sutton-controlled No on E: Let’s Really Work Together Coalition. Such large late contributions require a notice to Ethics that can often escape notice by the media and voters.

The donation perhaps went to help balance the committee’s books; despite receiving $85,084 in monetary contributions, including $10,000 from attorney Joe Cotchett and society maven Dede Wilsey, No on E spent $110,244 before Oct. 25, leaving it with $26,610 in accrued debt.

No on E isn’t the only Sutton-controlled committee whose spending has outpaced donations received: as of Oct. 25 the Yes on H–No on A pro-parking committee and Newsom’s WiFi for All, Yes on J committee, not to mention the Gavin Newsom for Mayor campaign, were all registering large amounts of accrued debt.

Having these debts isn’t illegal. And it’s not unusual for a campaign to have a pile of unpaid bills at the time of its last preelection finance filing. But as Ethics Commission director John St. Croix told the Guardian, accrued funds "shouldn’t be used to hide who your contributors are. The idea of disclosure is to let voters know ahead of elections who is trying to influence their vote."

St. Croix points to the fact that committees are required to make reports every 24 hours in the 16 days before an election "so you know what they are spending on…. But if committees don’t report campaign contributions and people fundraise after the election, that could be a de facto way to hide who the contributors are."

And while Sutton has been characterized by many, including the Guardian (see "The Political Puppeteer," 2/2/04), as the dark prince of campaign finance, St. Croix says he doesn’t automatically suspect something is wrong just because a campaign has a lot of accrued debt.

"But if people suspect that to be the case and they file a complaint, Ethics investigates," St. Croix said, adding that for him, "really massive accrued funds would be a red flag."

Asked what he meant by massive, St. Croix said, "It depends on the office. You might expect a lot more to accrue in a mayor’s race or large campaigns that tend to do a lot of last-minute spending."

As of Oct. 25, Gavin Newsom for Mayor had received $1.1 million and spent $1.3 million, had a cash balance of $457,994 — and was reporting $97,548 in accrued debt, with $46,500 owed to Storefront Political Media, the company run by Newsom’s campaign manager, Eric Jaye.

Noting that Ethics’ job is "to get people to file on time and chase after those who don’t," St. Croix said that those who don’t file and are making major expenditures right before an election are the ones who will face the biggest fines. "They could face $5,000 per violation, which could be $5,000 for every contribution that was made to finance a smear campaign and wasn’t reported," he said.

The biggest fine the Ethics Commission has ever issued was $100,000 for Sutton’s failure to report until after the 2002 election a late $800,000 contribution from PG&E to help defeat a public power measure.

Compared to other years, the amounts of accrued debt in this election may look small, but former Ethics commissioner Joe Lynn points to a disturbing pattern in which Sutton-controlled committees were insolvent before the election, then raised funds later or, as in the case of the Committee on Jobs, magically saw their debts forgiven.

"If I am a candidate running for mayor, like Gavin Newsom, and I personally rake up $100,000 in debt and have a big financial statement, then that means there’s a creditor willing to advance me those funds," Lynn said. "But if the debt has been raked up by a ballot measure committee, then who is responsible? Why would vendors spend $10,000 for that committee unless they knew that debt was wired from the get-go?"

But the result is the same: voters don’t know who donated to the campaign until after the votes have been cast. A clear historical example of this debt scheme can be seen in the June 2006 No on D Laguna Honda campaign. In its last preelection report, No on D had $59,750 in contributions, $18,664 in expenditures — and $130,224 in debt.

But during the 16 days before the election, No on D suddenly got $110,000 in late contributions from the usual suspects downtown, including $2,500 from Hellman, $15,000 from Turner Construction, $10,000 from Wilsey, $2,000 from the San Francisco Chamber of Commerce, and $2,500 from the Building Owners and Manufacturers Association of San Francisco.

As Lynn explains, campaign finance laws only require disclosure of contributions, not expenditures, made in the 16 days before an election — and only $64,000 worth of the contributions used to pay off No on D’s accrued expenses were disclosed, with $10,000 each from the California Pacific Medical Center and Kaiser Permanente trickling in on or after Election Day.

This year campaign finance watchdogs like Lynn note that the Sutton-controlled Yes on H–No on A committee has been hiding its contributors. In its first preelection report, filed Sept. 22, Yes on H showed $113,750 in contributions, $111,376.18 in expenditures, and $69,806.98 in accrued debt.

A month later it has doubled its contributions, tripled its expenditures — and had increased its accrued debt to $77,509. Lynn predicts that Yes on H’s accrued debt will be paid down by late contributions after the election or forgiven later on.

"The solution to the debt scheme is twofold," Lynn said. "Prosecute people doing the scheme and pass a law prohibiting campaigns from making more expenditures than they have contributions. Technically there is nothing illegal about reporting more debt that you have the cash or contributions to pay, but no businessperson regularly offers services in situations where it isn’t clear that they will be paid."

Since the Oct. 25 filing deadline, late contributions have continued to pour into No on E big-time, for a total of $59,500. That includes $25,000 from the Committee on Jobs, $2,500 from Jonathan Holzman, $6,000 from Elaine Tsakopoulos-Kounalakis, $1,000 from Chris Giouzelis, $1,000 from Nick Kontos, $1,000 from Farrah Makras, $1,000 from Victor Makras, $1,000 from Makras Real Estate, $5,000 from John Pakrais, $1,000 from Mike Silva, $1,000 from Western Apartments, $5,000 from Maurice Kanbar, and $5,000 from the San Francisco Apartment Association PAC.

The Yes on A committee hasn’t used the accrued debt scheme, but it has been the second-largest recipient of late contributions. It received $57,000 in late contributions, with donations from Engeo ($1,000), Singer Associates ($2,500), Trinity Management Services ($10,000), Elysian Hotels and Resorts ($5,000), Luxor Cabs ($1,000), Marriott International ($15,000), the SF Police Officers Association ($2,000), Sprinkler Fitters and Apprentices ($1,500), Barbary Coast Consulting ($2,500), and SEIU International ($3,397.14).

No on H (Neighbors Against Traffic and Pollution) received $4,500 in late contributions, with donations from Norcal Carpenters, Alice and William Russell-Shapiro, and Amandeep Jawa. And in what looks like a classic case of hedging bets, Singer Associates has made a $2,500 late contribution to both Yes on H and No on H.

Steven Mele, who is treasurer for Yes on A and No on H, told the Guardian, "There’s some people that time their contributions, but their names are out there, reported on public sites. A lot of corporate money comes in prior to the last deadline, then some afterwards. If campaigns are running with a lot of accrued debt, then those people must have an idea of what money is going to come in."

Unlike the campaigns controlled by the Sutton Law Firm, Mele’s committees, which work with Stearns Consulting, are not carrying massive loads of unpaid debt. Yes on A had received $302,452 and spent $279,890 and had $17,749 in debt as of Oct. 25. No on H had received $134,458 and spent $124,088 and had no debt as of Oct. 25.
Mele also believes that while campaign finance rules were written to make the money trail more transparent, "They’ve resulted in the public being inundated with so much information that they tend to glaze over."

The Clean Slate

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RACES


Mayor:

1. Quintin Mecke

2. Ahimsa Sumchai

3. Chicken John Rinaldi

Sheriff: Mike Hennessey

District Attorney: Kamala Harris

PROPOSITIONS


Proposition A: YES

Proposition B: YES

Proposition C: NO

Proposition D: YES

Proposition E: YES, YES, YES

Proposition F: YES

Proposition G: YES

Proposition H: NO, NO, NO

Proposition I: YES

Proposition J: NO

Proposition K: YES

Campaign sewer overflows

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› amanda@sfbg.com

The flow of election cash is often a filthy river that you wouldn’t want to drink from, and a recent local lawsuit, coupled with a new bit of state legislation, has muddied the waters even more.

On Sept. 20, US District Court Judge Jeffery S. White granted a preliminary injunction preventing the city from enforcing key sections of its Campaign Finance Reform Ordinance.

Two local groups with a sordid history of influencing elections with large chunks of cash — the Building Owners and Managers Association and the Committee on Jobs — argued in court that campaign contribution limits violate the First Amendment by financially curbing the ability to communicate a message (see "Pressing the Scales," 8/22/07). The contribution limits of independent-expenditure committees stumping for candidates were set by the voter-passed Proposition O in 2000 after the 1999 reelection of Mayor Willie Brown, in which deep-pocketed business interests backed the mayor in exchange for preferential treatment by city hall.

Prop. O capped contributions to IEs at $500, and people and corporations are allowed to give no more than $3,000 total (e.g., $500 each to six committees).

Those caps are no longer enforceable.

Similar injunctions have been granted in San Jose and Oakland, also destroying local contribution caps in those cities. San Jose appealed to the 9th Circuit Court of Appeals and is waiting for a ruling. Ann O’Leary, a lawyer in City Attorney Dennis Herrera’s office, told us San Francisco is waiting to see what happens in San Jose before making the next move, though an appeal is planned regardless of that outcome. In the past the Supreme Court has ruled that the appearance of corruption in elections is sufficient grounds for restricting campaign contributions, and San Francisco’s history provides ample examples from which to draw to support that decision.

"We don’t know if it will get back to court before November 2008," O’Leary said of the case, "but it’s certainly something to watch in that election."

Meanwhile, over in Sacramento, legislators on cruise control recently passed a bill that may make it impossible for San Francisco to write its election laws anyway. Gov. Arnold Schwarzenegger just signed Assembly Bill 1430, and according to the legislative digest, the new law "prohibits local governments from adopting campaign finance ordinances that restrict communications between an organization and its members unless state law similarly restricts such communications, or by regulation by the Fair Political Practices Commission."

Proponents say the new law will resolve conflicting interpretations of campaign finance regulations, but opponents say it preserves wide-open loopholes in the Political Reform Act that local jurisdictions have tried to close. For example, a person may be prohibited by the city from giving more than $500 to support a certain candidate. That person can, however, give as much as $30,200 to the Democratic Party, which can then "communicate" a message of support for that candidate to its members.

A recent and egregious example: in San Diego the county Republican Party spent almost $1 million on local races in 2006.

The bill was authored by Carlsbad Republican Martin Garrick and flew through the State Assembly unopposed. Assemblymember Mark Leno told us it came to the Elections Committee, on which he sits, with no vocal opposition, so he gave it an aye. One of his aides, however, became concerned and started making calls. Eventually, Common Cause and the League of Women Voters rallied against it, but it only hit a speed bump in the State Senate. There was still too much support from the Democrats to kill it. Leno said, "It’s an uncommon situation to have the left and right supporting something that in fact runs counter to local election laws."

Only nine senators opposed the bill, including Carole Migden and Leland Yee. "She thought it was an end around campaign finance laws," Migden aide Eric Potashner told us.

San Francisco’s Ethics Commission also took a look at the bill and gave it a 5–0 thumbs-down, resolving to send a letter to both the mayor and the Board of Supervisors urging them to speak against it. Neither did. "The Mayor supports AB1430," his press secretary, Nathan Ballard, told us by e-mail. "He has some concerns about the local control issue, but ultimately those concerns are overridden by his belief that groups like labor unions and the Democratic Party should be allowed to communicate directly with their members."

The governor’s signature now makes it more difficult to pass future measures like Prop O.

Neither the injunction nor the new law seems to be affecting the Nov. 6 election — the FPPC won’t be ruling on AB 1430 until January, though the commission is holding a hearing for interested people to speak in Sacramento on Nov. 2.

Though BOMA and the Committee on Jobs stated in their filing for the injunction that the law harms their ability to raise and spend money for candidates in this November’s election, nothing on record with the Ethics Commission shows they’ve been putting up a lot of money for Newsom, Kamala Harris, or Michael Hennessey. But there’s always next year.

Lawsuit can move forward

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The Bay Guardian has presented enough evidence of predatory pricing by the SF Weekly that our lawsuit against the paper and its chain owners can go forward to trial, a judge ruled Oct. 25.

Judge Richard A. Kramer denied three separate motions by Village Voice Media, the Phoenix-based 16-paper chain, that sought to dismiss the case.

In a suit filed in 2004, the Guardian charged that the Weekly and the East Bay Express had engaged in a pattern of selling ads below cost in an attempt to put the locally owned alternative paper out of business.

VVM sold the East Bay Express this year to local owners.

The case was filed under the state’s unfair business practices law, which bars the sale of any good or service for less than the price of producing it if that cut-rate selling is aimed at hurting a competitor.

VVM’s motions for summary judgment argued that the Guardian couldn’t prove any intent by the Weekly or VVM to injure the local competitor. In briefs and oral arguments, VVM lawyers claimed that the chain’s CEO, Jim Larkin, had denied any predatory plans or intent. And VVM insisted that the evidence collected by the Guardian so far was inadequate to take the case to trial.

The chain lawyers also argued that the Guardian’s suit was a threat to the First Amendment rights of the Weekly, because if the paper was forced to quit selling discounted ads it might have to cut editorial space and staff.

Ralph Alldredge, a Guardian attorney, noted that the Weekly had admitted selling ads below cost. And he said the evidence collected so far in the case shows strong indications of predatory intent.

Alldredge acknowledged that selling below cost isn’t always illegal; start-up businesses, for example, often lose money at first trying to attract customers. But he said the Weekly has been losing money every year since New Times/VVM bought it in 1995, and those losses have only increased over time, to as much as $2 million a year. It’s hard to imagine any good reason why a business would set its prices so low that it operated at a loss every year for more than a decade, Alldredge argued, unless the goal was to use chain resources to starve out a locally owned competitor.

Alldredge cited a deal between Clear Channel, which owns the concert promoter Bill Graham Presents, and the Weekly under which the Weekly paid to have its name on the Warfield theater, a BGP venue – and in exchange, the Weekly would get almost all of the advertising money that once went to the Guardian. He cited a memo showing that the deal would give the Weekly 85 percent of the ads, and the Guardian would get “15 percent to zero.”

James Wagstaffe, arguing for the Weekly, said that forcing the chain paper to sell ads at a higher rate would be the equivalent of the government deciding how much of the finite space in the publication could be devoted to news. He said an economic expert hired by the Weekly, Harvard professor Joseph Kalt, had determined that the ad market in San Francisco was so soft that the only way to increase revenues enough to cover the Weekly’s operating costs was to cram more ads onto every page.

Alldredge countered that courts have always agreed that basic economic regulations can apply to newspapers without a First Amendment threat.

“One hundred years of cases say that the mere economic regulation of newspapers is not unconstitutional,” he said. “There is nothing in the First Amendment that says you can engage in predatory behavior.

He also noted that Jed Brunst, the top finance officer for VVM, had testified in a deposition that the chain had prepared projections in 2005 to present to investors. Those projections showed that the Weekly could become profitable – if it raised ad prices. The paper would lose some ad volume to the Guardian, but would be able to retain the same percentage of editorial space to ad space and would be a profitable operation, Brunst’s report to the investors said.

In other words, the top people at the chain knew they could make money by ending their below-cost sales – but they continued with the predatory practice. That, Alldredge said, created a pretty reasonable presumption that the chain was out to harm a competitor.

Kramer rejected all of the SF Weekly’s claims. He said that the First Amendment didn’t allow newspapers to engage in “impermissible anticompetitive” behavior. And the question of intent, he said, was a fact for a jury to determine – and “a denial of improper activity by itself is not enough” to dismiss this case.

New Times Executive Editor Mike Lacey and Executive Associate Editor Andy Van De Voorde came from Phoenix to attend the hearing, and Van De Voorde wrote a lengthy piece that appeared on the Weekly’s website calling the Guardian’s three-year-old lawsuit “looney.” The piece put the chain’s spin on the hearing and laid out the Phoenix operators’ opinions on the Guardian claim.

But in the end, only one opinion mattered, and that was the opinion of Judge Kramer — who didn’t buy one bit of the Weekly’s argument.

Trial is set to begin early in January, 2008.

The Guardian is represented by Ralph Alldredge, E. Craig Moody and Rich Hill. Three VVM lawyers — Ivo Labar and James Wagstaffe of the San Francisco firm Kerr and Wagstaffe and Don Bennett Moon of Phoenix — were in the courtroom representing VVM.

Who set up whom?

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@@http://www.sfbg.com/News/chaunceybailey@@

Jim Rivaldo, 1947-2007

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› tim@sfbg.com

There aren’t many political consultants in the world who deserve the term "sweet person." There aren’t many who last in that often vicious and horrible business who care more about their personal political principles than they do about money. There aren’t many who are universally liked, even by the people they routinely oppose.

Jim Rivaldo was weird that way. I knew him for almost 25 years, since I began watching the nasty world of insider San Francisco politics, and I don’t think I’ve ever met anyone who had anything bad to say about him.

Rivaldo was one of the first openly gay political consultants in the country, an advisor and campaign manager for Harvey Milk and an innovator in the early days of the business of using graphic art and direct-mail technology to elect people to public office. He was the state’s first openly gay commissioner, serving as Milk’s regional representative on the Coastal Commission.

Rivaldo and his business partner, Dick Pabitch, managed the campaign that defeated the Police Officers Association juggernaut to create the Office of Citizen Complaints in 1983. He helped elect Milk and his successor, Harry Britt, helped found what is now the Harvey Milk LGBT Democratic Club, and was one of the key players who put gay politics on the map, making the queer community a force to be reckoned with in San Francisco. He was the treasurer of the first campaign to bring district elections to San Francisco.

Rivaldo was also one of the first political activists to make connections between the gay and the African American communities. He ran the campaigns of nearly every black politician elected to office in the 1970s and ’80s. In other words, his professional résumé was, by any standard, impressive.

But when you ask people today about him, what they remember most is his sense of humor, his passion for what he cared about — and the fact that he was, above all, a wonderful human being.

"He was such a great guy," said City Attorney Dennis Herrera, who hired Rivaldo to run his first campaign. "I think it’s a measure of the integrity of the man that everyone in town had a fond spot in their hearts for him."

"He had principles," San Francisco Information Clearinghouse activist Rene Cazenave recalled. "He was sort of a socialist, with a real understanding of class, and he really believed in it."

State senator Carole Migden said, "He was the sort of person who could cross all political lines. He was like a UN ambassador."

Rivaldo was born in Rochester, NY, in 1947. It wasn’t an easy place to be a young gay man, but he persevered, as he always did later in life, and wound up graduating from Harvard. He arrived in San Francisco in the early 1970s, just as the gay pride movement was getting into full swing, and quickly became a part of community politics.

He set up a political consulting firm when managing campaigns for money was still a new line of work — and quickly demonstrated that he had an innate skill for it. With Pabitch, he set up shop in a second-floor office in the 500 block of Castro Street and started promoting queer candidates as citywide contenders.

"He was the first one to use turquoise and hot pink for political fliers," Migden recalled.

And over the next two decades, as many of his industry colleagues began to make a lot of money — and some became very wealthy — Rivaldo always seemed to barely get by. After he and Pabitch split up he moved to a little office near City Hall and took on a string of candidates who were often barely able to pay their bills.

"He wasn’t the ruthless, get-ahead-at-all-costs type," Migden said. "That’s why he wasn’t rich."

I always liked talking to Rivaldo. He never called to talk trash about someone else. I didn’t always like his candidates, but I knew he always did; when he told me about someone he thought should be in office I always knew he was telling the truth. He actually cared about people and issues, and when things went badly (when, for example, a candidate he helped elect to the school board voted the wrong way on the Reserve Officers’ Training Corps and infuriated the queer community) he felt personally let down, just like the rest of us.

AIDS has ravaged his generation of gay men in San Francisco, and there aren’t many people left in politics who are links to the days of Milk, who can remember and tell stories of a time when the idea of a queer person serving at City Hall was considered an astounding breakthrough. And it’s in part because of him that San Francisco now has two queer supervisors, two queer state legislators, and queer representation at virtually every other level of government.

But I think the most remarkable fact of Rivaldo’s life is that he was such a decent guy that he could be friends with so many people who were so often at odds, often to the point of not speaking. He talked to Jack Davis and Tom Ammiano, to Migden and Mark Leno, to Terence Hallinan and Kamala Harris. They all liked him; they all respected him. They’ll all miss him. And so will I.

The story of Q

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› sarah@sfbg.com

With just a couple of weeks to go until San Franciscans elect their next mayor, Quintin Mecke, the 34-year-old program director of the Safety Network, has emerged as Gavin Newsom’s top challenger.

Since declaring his candidacy, the fresh-faced Mecke has been endorsed by almost every significant progressive entity in the city, including supervisors Chris Daly and Ross Mirkarimi, BART board member and Livable City director Tom Radulovich, the Harvey Milk LGBT Democratic Club, the San Francisco Tenants Union, and the Guardian.

"Of all the mayoral candidates, Quintin has the longest record of working in the community and on important issues facing the city," said Daly, who was the first to publicly endorse the Pennsylvania native, shortly after Mecke declared his candidacy in August.

But despite his solid list of endorsers, Mecke hasn’t managed to raise much money. He didn’t come close to taking advantage of the mayoral public financing program created by Mirkarimi and approved by the most liberal members of the Board of Supervisors. Mecke said his late entry made it impossible to raise the required $25,000 (from at least 250 donors who could prove San Francisco residency) by the Aug. 28 deadline.

"Had I had more time, I don’t think raising the $25,000 is that much of a challenge," Mecke, a former Peace Corps volunteer, told the Guardian at the time. But two months later Mecke has only raised $11,203, with Sup. Tom Ammiano and former mayoral contender Matt Gonzalez respectively contributing $250 and $100, although neither has endorsed him yet.

With Newsom sitting on a $1.8 million war chest, Daly admits that it would take a perfect storm for Mecke to win.

"The incumbent would have to stumble between here and the finish line," said Daly, who toyed with running until Aug. 8, at which point Mecke dove into the race, challenging Newsom’s record on public safety, homelessness, and affordable housing — issues that Mecke has been intimately involved with since moving here a decade ago.

Mecke’s move to California came shortly after he survived a near-fatal climbing accident in Alaska, which shattered all of his teeth when he fell 40 feet off a glacier. The fall also saddled Mecke, who didn’t have health insurance, with $90,000 in medical bills.

"It was a humbling experience, but people have to take responsibility for the situations they find themselves in," said Mecke, who worked for Ammiano on arriving in San Francisco and has since worked on the Ammiano, Mirkarimi, and Gonzalez campaigns.

Mecke also helped found the South of Market Community Anti-Displacement Coalition, served as president of the Mental Health Association of San Francisco, and helped author a report on homelessness that led him to publicly debate then-supervisor Newsom over his Care Not Cash initiative.

"Accountability without support is a form of cruelty," Mecke stated in 2002, a belief he still holds as he tries, as a member of the Homeless Shelter Monitoring committee, to get the city to implement universal shelter standards.

"If you raise the quality of life and safety standards in the city’s shelters, then more homeless people will want to enter them," Mecke said.

Mecke, a Western Addition resident, believes in community-driven responses to crime and violence. While Newsom claims that black-on-black violence has decreased under his administration, Mecke counters that African Americans make up only 7 percent of the city population but constitute 60 percent of the homicide victims. He thinks we need a real community policing program.

"We have 10 fiefdoms, 10 police districts," Mecke said. "That means that the oft-touted and talked about idea of community policing doesn’t really exist."

Newsom campaign manager Eric Jaye claims the only thing he knows about Mecke is that "he opposed Care Not Cash and he is supported by Sup. Chris Daly.

"But his own record? That’s a little bit harder," Jaye continued. "Mecke works for a city-funded nonprofit, but ironically, he’s unhappy with the violence prevention work the city is doing. Presumably he’s running because he thinks he can do a better job, but we’re proud of our progress on universal health care, our work on climate protection, our civic efforts, the fact that the eviction rate has plummeted, and that there’s more housing and affordable housing in the pipeline than [under] any other mayor in recent history."

But Mecke points out that the city’s health care initiative was Ammiano’s brainchild and that Newsom failed to deliver on his "wi-fi for all" promise by stubbornly pushing a flawed proposal and refusing to engage with its critics.

"Newsom’s only successes are initiatives proposed and led by members of the Board of Supervisors," said Mecke, who accuses Newsom of "making every decision within the framework of a national model while promoting some future candidacy."

He faults Newsom for asking for mass resignations this fall and sees the fact that Newsom is raising piles of cash to defeat Proposition E, which would require the mayor to make monthly appearances before the Board of Supervisors, as further evidence of his cowardice.

"San Francisco need to demand of this race that there’s public accountability," Mecke said. "Newsom seems to fear any form of nonscripted public interaction. When you go to his fake Question Time–town hall meetings you don’t actually get to ask the mayor your own question. He selects what he wants to hear."

Door-to-door “education”

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Correction:

In “Door-to-Door Education” [10/24/07], we reported on a group called the San Francisco Homeless Services Coalition. Our story stated that 25 percent of the group’s income goes to overhead and in-kind donations. In fact, Daniel Rotman, the group’s director, says 10 percent of the income goes to overhead, 54 percent to “public education” (which includes door-to-door canvassing and fundraising), 13.5 percent to financial donations to local shelters, and 22.5 percent to in-kind donations. Our article also stated that the San Francisco Police Department was considering revoking the group’s charitable-solicitations permit and that department staff recommended the permit be revoked. In fact, the permit was extended for another six months while a decision on revocation is pending. The literature that the group was handing out early in its operation included the SFHSC name, address, and phone number.

› amanda@sfbg.com

While San Francisco’s problem of homelessness rages in the local streets and broadsheets, a Los Angeles–based organization that raises money for homeless people has set up a new shop in town. Situated in the high-traffic area of Seventh and Market streets, where the down-and-out regularly nap, panhandle, and hawk their wares, the San Francisco Homeless Services Coalition seems perfectly placed to lend a hand.

But a recent afternoon visit to its headquarters found the gate pulled shut, the door locked, and a person inside working at a computer while half a dozen homeless people loitered outside. Nothing, save a small piece of paper reading "SFHSC" posted in the window, indicated this was a place to give money or assist homeless individuals.

During another impromptu visit the gate was open and the room full of people — potential canvassers receiving instructions on going door-to-door to ask for $150 donations, which is how the group’s fellow organization, the Los Angeles Homeless Services Coalition, has raised more than $2 million in two years, according to its Web site.

When we asked for more information about the group, we were told it doesn’t print brochures or any kind of literature, in order to save money. A handmade business card with the phone number and Web site was given with an aside that we were "lucky to be getting that."

Concerns about the SFHSC have reached the San Francisco Police Department, which is investigating whether the door-to-door canvassers are carrying the proper identification and if that form of fundraising violates the group’s city-issued charitable-solicitations permit. The permit forbids soliciting within 10 feet of doors. A certificate of registration issued to the SFHSC on April 11 clearly states, "This does not authorize your organization to go door to door for solicitation. Public property only for charitable solicitation."

But the group has been knocking on doors in San Francisco for the past six months, telling people that "the best way to make a difference is by making a $150 tax-deductible donation," according to the script it gives its canvassers. It’s raised at least $100,000 so far in the name of helping the homeless, but its work has managed to alienate some of the local leaders it intended to support.

"There isn’t a relationship any longer," Erica Kisch, executive director of Compass Community Services, told us when asked about the three-month arrangement between the two groups during which the SFHSC agreed to donate 15 percent of its take to Compass. "We knew nothing about them. We met with the director. They said they were raising money for homeless services," Kisch said. "It was an opportunity, and it seemed aboveboard at the time."

Canvassers solicited with flyers clearly showing Compass’s name, federal tax-exempt identification number, and statistics but lacking the same details about the SFHSC. That caused concerned citizens to call Kisch. "We were getting inquiries from the community about what they were doing, their tactics. They were kind of aggressive, going up to people’s doors asking for a lot of money…. It wasn’t really clear to the people they were soliciting that money was going to direct services," she said.

In fact, most of it wasn’t. The SFHSC says only 15 percent of the money it raises makes it to the shelters and service centers. Most of the money raised goes to raising more money door-to-door — either to canvassers or their support staff — an effort the group calls "education." Kisch did some more research and ultimately decided "it wasn’t worth it to us to be attached to a controversial organization like that." Compass ended up receiving a total of $11,250 from the SFHSC.

Daniel Rotman, founder and executive director of both the SF and the LAHSC, said of the breakup, "Maybe they didn’t realize we’d be reaching so many people. I think we were just too new for them."

Rotman, a 27-year-old LA resident and UC Berkeley graduate with a degree in political science, used to work for the Democratic National Committee but decided politics wasn’t for him. He transferred the grassroots machinery of fundraising for politics to the particular issue of homelessness, he told us, "because I care. I’ve always been taken by the issue."

He confirmed to us that the SFHSC does not interface with needy folks — it just gathers money in their name. Homeless people who stop by the office are referred to other locations in the neighborhood and escorted out. Rotman said 15 percent of the net money raised is given to local groups, 60 percent goes to education, and 25 percent is for overhead, as well as a plan to buy delivery trucks for ferrying donated goods from homes to shelters.

"Our main goal is educating the community," Rotman said. "We don’t just raise money and give it to other groups. It costs money to set up speaking engagements and pay for field managers." But he admitted the SFHSC hadn’t done or set up any speaking gigs yet. The 10 to 11 canvassers employed at the SFHSC are paid minimum wage and earn a 30 percent bonus if they exceed a weekly office average. "They get that for going out into the community and informing people about the issue and about us. At the end we ask them to make a donation," Rotman said.

So the point of the canvassing is to educate, not raise money, but those who have received the pitch are dubious.

"It was not educational at all," one Bernal Heights resident said of her interaction with an SFHSC canvasser. "My husband works in that field, and I was surprised I’d never heard of them." She asked for a business card so she could do more research, but the canvasser had no printed materials. "Just a clipboard with names and addresses and a very vague petition." No envelope, no card, no pamphlet. "Basically, he was just asking for donations. I didn’t know what to think."

Besides the soliciting foot soldiers and an office at 1135 Market that’s so discreet it’s easy to miss, the group’s only public face is its Web site, www.sfhsc.org — a copy of the LAHSC site. "Who is homeless in San Francisco?" the Web site asks, but its answers don’t inspire a lot of confidence — they were clearly imported from our southerly neighbor. "50% of homeless adults are African American, compared to 9% of LA’s total population."

Paul Boden, executive director of the Western Regional Advocacy Project and former head of the Coalition on Homelessness, said he found out about the SFHSC from people who thought its canvassers were from COH. Boden, who’s been working on homeless issues since 1983, said none of his peers in LA had heard of the group, further raising his suspicions. "This group has to have one legitimate provider," Boden said. "One pimp group as the basis for all this funding — it’s a scam that’s as old as poverty."

Boden and Seth Katzman, director of Conard House, filed complaints with the SFPD that the SFHSC was vioutf8g the terms of its charitable-solicitations permit. An SFPD permitting officer confirmed the department had received concerned calls and a revocation hearing was held Aug. 15. Capt. Tom O’Neill said a backlog of work has kept him from releasing the final decision, but his staff has recommended the permit be revoked.

"Find out more before a gift is made," Bennett Weiner, chief operating officer of the Better Business Bureau’s Wise Giving Alliance, told us. He said legitimate nonprofits should make their annual report and other financial details publicly available and posted on a Web site.

And at the very least, they should have some flyers. "Not to have any literature available does raise potential concerns in donors’ minds," Weiner said. "It is something we encourage people to ask for."

Rotman told us the lack of literature was a fluke and the SFHSC always sends its canvassers out with four packets of envelopes to give to citizens. They’re required to knock on 75 doors, so it’s easy to imagine they might run out of envelopes.

The BBB also recommends that any such group be overseen by a board that meets three times a year, composed of at least five members, who should not make more than 10 percent of the organization’s total take. Rotman told us his board has three members — the IRS’s minimum legal requirement — and that he makes $36,000 a year. He could not provide annual reports or financial statements, explaining that the SFHSC is new and has had to rely on partnerships with fiscal sponsors.

Lisa Watson, executive director of the Downtown Women’s Center, said her group’s 17-member board of directors decided to terminate its relationship with the SFHSC after receiving $30,000. "Our board decided they didn’t think the canvassing was the way they wanted to go, because a certain percentage went to canvassing. Only a certain percentage went to us."

The LA Youth Network is the LAHSC’s current beneficiary, and director of administration Katherine McMahon expressed satisfaction with the relationship. "We work with homeless teens, and they’ve been an awesome advocate for us." The group has received more than $600,000 during the past two years.

Both Watson and McMahon said one of the benefits of the relationship with the LAHSC had been access to a new pool of donors, something that can be as important to many groups as money. "It’s more than raising money. Its building brand identity," Rotman said. In this case the "brand" is the problem of homelessness. "We have found more than anything that people in the community, based on our canvassing and talking to people one-on-one, there’s a general aggression from citizens and residents in the Bay Area towards the homeless." He wants to "talk to people on a one-on-one basis and say, ‘Hey look, it’s not necessarily what you think.’<0x2009>"

He said they’re raising empathy and support for public policy measures and "try to build up a little support for homeless services themselves." The SFHSC now partners with a different group every month, which will receive 15 percent of the net of its canvassing fruits.

"That specific setup, going door to door … this isn’t the way nonprofits in San Francisco raise money," Kisch said. "They’re pressing people to give $150 off the street. I would never give anyone that kind of money without more background on them. We were getting 15 percent after expenses. Where’s the rest of it going?"

Airlines demand corporate welfare

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› news@sfbg.com

The major airlines that serve the Bay Area, with the help of the Hotel Council of San Francisco, are trying to get out of paying millions of dollars in taxes to the city by claiming the right to use a law that was designed to help San Francisco’s poorest residents. And they’re threatening to prevent their employees from staying in the city if the Board of Supervisors doesn’t acquiesce to the corporate welfare demand.

At issue is the city’s 14 percent Transient Occupancy Tax, which is paid by hotel guests. It is the third-largest source of local tax revenue, after property taxes and payroll taxes, bringing in $177 million in the last fiscal year. The only major exemption from the tax is for permanent hotel residents, generally those on the brink of homelessness who live in the run-down single-room-occupancy hotels for months or even years on end.

Major airlines house hundreds of their employees in San Francisco’s hotels each night. They are arguing that because of past court rulings on corporate personhood — in which judges have deemed that corporations have the same rights as individuals — the airlines should be exempt from paying the tax when they rent blocks of rooms for their employees.

The airlines, in collusion with some hotels in the city, have long used the exemption to avoid paying taxes on many of the rooms they rent (about two-thirds, according to the Hotel Council, which translates into millions in lost city revenue every year). A few years ago city officials told the corporations that the exemption didn’t apply to them and that they should be paying the tax.

Enacted in 1960, the Permanent Resident Exclusion exempts from the tax individuals who occupy or have the right to occupy the same hotel room for at least 30 consecutive days. “We looked at the legislative history, and it was clearly put there to help formerly homeless people,” Treasurer José Cisneros told the Guardian. “The city has always said that 30 consecutive one-night stays are not the same as a 30-night stay by an individual.”

The hotels and airlines challenged that interpretation and had their case thrown out of court. So now they’ve turned to the Board of Supervisors in the hope that they can win this chunk of corporate welfare by using threats of an economic exodus.

 

CORPORATE SHAKEDOWN

In October 2004, American Airlines and the San Francisco Hilton filed a lawsuit against the city arguing that airline crew members staying in San Francisco hotels qualified for an exemption from the hotel tax. The lawsuit was dismissed in May 2006 without going to trial, with Superior Court Judge James Warren ruling that the plaintiffs “did not assert and did not present any evidence that any particular room at the Hilton was continuously registered to American Airlines for more than 30 days.”

To clarify any ambiguity in the law, Cisneros in May issued an interpretation stating, “Although an agreement between a person and a hotel may require that the person pay the hotel for a minimum number of ‘guaranteed’ daily reservations for the person’s employees over a period of time longer than 30 days, such an agreement does not create any permanent resident exemption for any guest rooms unless the above criteria are satisfied,” referring to criteria that include “a person is a registered hotel guest” and “that person or any of that person’s employees continuously occupy or have the right to occupy the same room for 30 days or more.”

Yet now, at the request of Sup. Michela Alioto-Pier, the Board of Supervisors’ Government Oversight and Auditing Committee has scheduled a Nov. 19 hearing for the purpose of “explor[ing] the unintended consequences of this decision, including the loss of revenue to the City when the airlines inevitably move their crews to another location in the Bay Area where room rates are more competitive.”

That implied threat comes from Hotel Council executive director Patricia Breslin, who paints a doomsday scenario if the airlines have to pay the hotel tax on every room they rent. Breslin warns that if the Board of Supervisors does not offer concessions to the airline industry, it could bring about an “economic tsunami” that would hit hotels, restaurants, and city government.

Airline employees occupy an average of 1,050 hotel rooms per night in San Francisco, according to Smith Travel Research, an information and data provider for the lodging industry. Given that the tax is collected by the hotels, Cisneros doesn’t have data on how much the airlines should be paying the city. But assuming the airlines negotiate rates of about $100 per night, that would translate into more than $5 million per year.

“We pushed so hard to get them to pay it that they sued us,” Cisneros told us.

Breslin said the airlines have been paying about $1.7 million per year in hotel taxes and that sales taxes generated by airline employees bring another $1.4 million into the city, all money that would be lost if the airlines go elsewhere. She said the airlines have threatened to begin putting their employees in hotels in Peninsula cities near the airport, like Burlingame, San Mateo, and even San Jose, to cut costs. Already Mexicana Airlines has stopped using San Francisco’s hotels for its employees. Other airlines, such as Virgin Atlantic, United, Cathay Pacific, and Lufthansa, have threatened to follow suit.

Breslin said hotels would be forced to lay off cleaners, servers, and other low-income workers due to the loss of business that would accompany the exodus of airline employees. San Francisco, she argues, would “lose a significant revenue stream” if the airlines lose their appeal.

“It will change the economics of San Francisco,” she told us. “This is not a frivolous issue.”

 

CALLING THEIR BLUFF

Granting the exemption would cost the city millions of dollars, but that isn’t the only reason being offered for opposing the gambit. Some city officials simply don’t believe the airlines — or their employees, most of whom are union members, many of whom have contracts specifying their accommodations be in urban centers — will abandon San Francisco.

Sup. Chris Daly, who is on the Oversight and Auditing Committee, is against granting the exemption to the airlines. “They blow smoke all the time,” he told us, referring to major industries such as the hotel and airline industries. “That’s how they get away with not paying taxes.”

Cisneros argues the airlines’ threat to move their employees into suburban hotels isn’t logical, noting that San Francisco hotel rooms are already far more expensive than their suburban counterparts — with or without the hotel tax — and the airlines have always chosen to keep their employees here anyway.

“I just don’t think the threat is realistic at all,” Cisneros said. “If they were basing their decision on which hotels are cheapest, they would have never been staying in San Francisco.”

Recently compiled data and trends in tourism and hotel occupancy rates also suggest that Breslin’s warning of a crippling economic backlash are unfounded. According to an August article in the San Francisco Business Times by Ryan Tate, “Next year promises to be by far the most robust for leisure and business travel in San Francisco since the dot-com boom.”

He continues, “Convention business will reach more than 900,000 hotel rooms in 2008, well above the 740,000 room nights booked by conventions in 2007.” The San Francisco Convention and Visitors Bureau forecasts that overall tourism will top 16 million visitors next year and that visitor spending will exceed last year’s record $7.8 billion.

The taxes the city collects from hotels go toward funding a wide range of public services. Some of the money is earmarked for the Convention and Visitors Bureau and for maintaining convention facilities. Some funds are allocated for low-income housing and rent supplements. The War Memorial Department, the Asian Art Museum, and the Arts Commission all receive funding through the hotel tax as well, with excess dollars poured into the city’s General Fund.

San Francisco’s tourism industry is the city’s largest industry and its second-largest employer, after the city and county government. “You want to make sure your number one industry is protected,” Breslin told us.

Yet the policy that she’s asking the city to enact runs counter to the policies in other major cities, including those thought to be less politically progressive than San Francisco. In Los Angeles, for example, only individuals can be granted exemptions from paying the hotel tax. In Chicago the exemption is even stricter and only applies to people who use hotel rooms as their domicile.

Famous Rib Shack

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REVIEW Some people might tell you that when it comes to barbecue, it’s all about the sauce. But to paraphrase Dr. Dre: sauces ain’t nothin’ but hos and tricks. Which is to say, even the most powerful sauce is destined to be turned out by the true pimp in the grilled-meats game: the smoke. The folks at San Bruno’s Famous Rib Shack are above passing off mere flash-fired meats as smokalicious BB-to-the-m-f’in’-Q. I walked in with my daughter, Dolly, and ordered the Tailgate for Two combo: three pork ribs, three beef ribs, a quarter chicken, one hot link, two pieces of corn bread, and two sides (I chose mac and cheese and collard greens), all for a measly $26.95. These were not teensy little ribs; they looked like they’d been cut off the local 4-H club’s prize sow and cow. The pork fell off the bone, and the beef was flavorful, though a tad chewy in spots. Hot links often come direct from the factory, but this one was spiced to perfection and purportedly hand-made by the owner, Isaac Mejia. The chicken was good too, but poultry is more of a cleansing palliative in between ribs than real barbecue — chicken is a vegetable with wings.

The sauces? Mild, hot, and maple, and all good, though Mejia has his priorities straight and got the meat right first and foremost. His corn bread was bangin’, which is important, as I’m not a fan of joints that slap a slice of flimsy white bread on a paper plate and call it authentic. That’s cheating. Greens should not taste like stewed lawn clippings either, and the shack’s tasted like, well, pork — the Cadillac of meats. Finally, nothing makes a kid happier than a brownie for dessert, especially when it’s covered in nuts and marshmallows.

The word on the Internet is that the Famous Rib Shack used to be called Jimmy’s Famous Rib Shack. No disrespect to Jimmy, but unless he was St. James of the Rib Rack, his food could not have been better. Long live Isaac’s Famous Rib Shack.

FAMOUS RIB SHACK Mon.–Fri., 11 a.m.–9 p.m.; Sat.–Sun., 11 a.m.–10 p.m. 223 El Camino Real, San Bruno. (650) 952-2809

41st Anniversary Special: Bilking the links

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By now, even most nongolfing residents of San Francisco have heard the dire refrain coming from City Hall: San Francisco’s public golf courses are sucking millions of dollars from the city treasury! Dozens of media stories have trumpeted this bleak pronouncement, and city leaders are using the shortfall to push for outsourcing control of the century-old open spaces. But a Guardian review of the Golf Fund shows that the links are not nearly as down-and-out as pro-privatization forces have led us to believe.

Recreation and Park Department accounting documents we obtained show revenues at the city’s six publicly owned golf courses last year were up nearly $1.5 million from 2005 to 2006 and more than $2.2 million dollars from 2004 to 2005, an increase of nearly 30 percent. But the cost of a lavish contract with a large, out-of-state golf-management corporation has risen precipitously over the same time frame and drained most of these new funds.

For the 2006–07 fiscal year the city shelled out more than $3.25 million to Kemper Sports Management to operate the pro shop and clubhouse at the Harding Park Golf Course and its nine-hole neighbor, Fleming. By comparison, in 2004–05, Kemper’s tab at Harding and Fleming was a still eye-popping $2.07 million, but that number is nearly $1.2 million less than what the city had to pay last year. These increased costs, as well as a hefty loan repayment for Harding Park’s botched remodel in 2002 and 2003, have eaten up the links’ improved revenue and forced the city to throw in an extra $1.4 million from the General Fund to keep golf solvent.

"What’s going on up at Harding is a disaster," Bob Killian told the Guardian. Killian ran the city’s golf operations profitably for two decades until 2001. "When I was in charge we had contracts with various managers for the pro shops and the restaurants, and they made us money. They paid us. Now, Harding is run at a deficit. Where the fuck is the money going? What’s it for? Nobody knows. It’s all this big secret…. It’s a scandal."

Kemper’s seven-year deal is unique, to say the least. At every other publicly managed course, the city leases control of the pro shops and clubhouses to outside companies. In exchange for a flat fee paid into city coffers, those companies bear all of the risk and reap most of the rewards of operating the facilities. But at Harding, the city pays Illinois’s Kemper $192,000 per year, regardless of its performance, to act as an on-site manager, plus a 5 percent incentive fee for gross revenues over $6 million. But those guaranteed sums are only the beginning of the bill.

Kemper hires staff, rents golf carts, and orders the supplies to be sold in the pro shop and the clubhouse. Unlike in the city’s lease arrangements at other courses, though, the company bears none of the risk. It simply invoices the city for its expenses, and the city signs the tab. And the tab just keeps growing.

One public-golf insider who declined to be identified for fear of retribution said, "They’ve got this enormous staff there, managers and assistant managers and assistants to assistants of managers. It’s a golf course, not a hospital! I hear the payroll for the restaurant alone is like $600,000. And it’s only open for one shift a day…. They stock their pro shop with top-of-the-line gear that just sits there. If they order 20 Arnold Palmer shirts and only sell two, who cares? The city still pays for all 20."

In an e-mail to the Guardian, Kemper’s general manager at Harding, Steve Argo, told us it has between 60 and 80 employees, depending on the season. Citing this seasonal variability and "competitive reasons," he did not break down those numbers between management and nonmanagement, as we requested.

Both Argo and Katharine Petrucione, Rec and Park’s chief financial officer, attributed much of the added costs at Harding to the opening of a new permanent clubhouse there in late 2005. Argo said the increased revenues from the clubhouse have "more than covered the city’s increase in payments." But while Rec and Park’s ledgers do show that concessions revenues at Harding and Fleming have gone up since the clubhouse opened, the increase in Kemper’s bill has gone up nearly as much. All in all, with Kemper’s multimillion-dollar deal and loan payments for the over-budget remodel at the course, accounts still put the course at more than $500,000 in the red — even though a round of golf there now costs well over $100 and Kemper is still making a handsome profit.

It doesn’t end there. Petrucione said Kemper’s contract costs taxpayers even more than meets the eye. Because the company submits monthly and yearly budget projections as well as reams of invoices and expenses for reimbursement, Rec and Park staffers spend hours examining Kemper’s paperwork and activities — essentially managing the manager. When we asked her for an accounting of how much the Kemper contract costs the city in staff hours for these oversight duties, Petrucione replied, "It definitely requires more time and effort … than a lease agreement [like those at every other course] would."

During a recent radio interview, Sup. Jake McGoldrick called Rec and Park’s deal with Kemper "the worst contract I’ve ever seen." He added, "We don’t have a golfer problem. Golfers are coming out and playing. We have an accountancy problem."

The golf insider we spoke with echoed McGoldrick’s sentiments: "Business is up like 30 percent this year, but Kemper’s contract is jeopardizing the whole department…. If we redid the greens, tees, and fairways [at the other courses], just Band-Aid stuff like that, we would have the premier municipal system in the country. But instead they’ve given this cushy deal to a company from Chicago with no connection to San Francisco. It’s so unfair."

Despite the controversy over Kemper’s all-expenses-paid arrangement, Mayor Gavin Newsom, Rec and Park general manager Yomi Agunbiade, and others at City Hall have been using the deficits largely brought on by Kemper’s contract to push for more private control of the city’s links. In June the Mayor’s Office put forward a plan to outsource not just clubhouse and pro-shop management but all golf operations at the city’s premier courses, including Harding. The proposal was tabled after several contentious hearings at the Board of Supervisors, but many observers expect that it will make its way back to the board in the near future.

"In a perfect scenario, the city could [manage the courses efficiently], but the city has proven that it doesn’t have the ability to do it," Sup. Sean Elsbernd told us in July. Elsbernd has been one of the most vocal supporters of bringing in private golf management.

But McGoldrick, Killian, and other opponents of the idea point out that the city provided quality, inexpensive golf for nearly 100 years. They worry that private managers will find profit in higher greens fees, more part-time workers, and lower salaries and fewer benefits for full-time staff. But beyond those concerns, they see the mayor’s plan as yet another example of publicly owned assets being offered up for private gain.

The courses, McGoldrick told us, are "priceless…. We can’t just dump [them] because you’ve got folks from the Mayor’s Office and his Rec and Park Department who don’t want to be bothered."

In his endorsement interview with the Guardian, Newsom said about the golf courses, "You gotta deal with the reality of where we are and what our core competencies are. Golf courses do not reflect a core competency of government. We’re losing hundreds of thousands of dollars and about to lose over a million dollars a year, and that comes from somewhere. So rather than continuing to do what we’ve done and hope for a different result, we’re looking at best practices across the country and finding ways to manage our assets differently, and I’m not apologetic for exploring those things."

41st Anniversary Special: Private practice

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› gwschulz@sfbg.com

Low-income tenants cheered late last year when the San Francisco Department of Public Health ended its housing contract with the John Stewart Co. But no one expected the alternative would be a secret $5 million deal between DPH officials and a preferred vendor.

In fact, the DPH has opened a new chapter in privatization by creating a dubiously accountable, quasi-independent nonprofit while paying someone else to operate it with a sole-source contract.

The health department leases several single-room-occupancy hotels in San Francisco that house mental health and substance-abuse patients through a program called Direct Access to Housing, part of a laudable nationwide trend toward deinstitutionalizing such medical clients and changing how the formerly homeless receive services.

The Camelot on Turk Street and Le Nain on Eddy Street were among those managed by John Stewart until last autumn. Mercy Housing oversaw two more. But there were problems; tenants complained about the Stewart company’s management, and political organizers last year charged that desk clerks at some of the buildings prevented them from registering tenants to vote.

"If you’re part of a larger company that just sees themselves as a more generic property-management company," said Marc Trotz, director of the health department’s housing office, "there isn’t necessarily the training and skills development that needs to be there to handle the complexities that come up on a daily basis with the population we’re dealing with."

So the health department’s answer was to broker an exclusive $5 million contract with a nationwide nonprofit based in San Francisco known as the Tides Center. Tides doesn’t do any of the heartwarming outreach we tend to associate with nonprofits. Instead, the outfit handles the boring administrative functions like payroll and human resources for community projects created by others.

The project in this case is Trotz’s brainchild Delivering Innovation in Supportive Housing, which essentially exists as a nonprofit only on paper. There’s no board of directors. There are no federal tax forms outlining expenses and revenue. And Tides doesn’t itemize projects like DISH in its annual financial statements. So there’s no easy way for the public to track the money that goes into the project.

Yet DISH has so far never been forced to compete for property-management contracts like any other nonprofit wanting to do business with the city. That means the DPH gets the best of both worlds, paying someone in the private sector to manage its books and not having to subject its pet project to the competitive atmosphere of contract bidding.

Further, since Tides is technically the employer of record for DISH’s 60 or so employees, they exist in an ethereal world where they don’t fall under the city’s salary and benefits structure, but unions can’t reach them unless they’re willing to organize all 200 projects managed by Tides nationally.

Needless to say, none of this is sitting well with the nonprofits and unions that insist they weren’t informed of the plan until it was off and running.

"I feel like at union nonprofits, the turnover’s much lower, the training’s higher, and if a manager is abusing a tenant, for instance, a union worker can make a complaint to a city agency, write them up, do something without being afraid for their jobs," said Sarah Sherburn-Zimmer, a former organizer for the Tenderloin Housing Clinic. "And we just give better care."

The THC, whose workers are represented by Service Employees International Union Local 1021, says it was never formally invited to bid on DISH, despite the fact that it does extensive work with the city and manages more than 1,500 units of low-income housing.

"All they had to do to find out was send a letter or call us…. The fact that they made the effort to set up their own entity kind of shows that’s what they wanted to do," THC director Randy Shaw said.

The Tides contract so annoyed Board of Supervisors president Aaron Peskin that he drafted a resolution pointing out that Mayor Gavin Newsom signed an executive order in 2004 calling for maximum competition in city contracts.

"This Board of Supervisors has been on record for years in wanting to make sure contracts are competitively and fairly bid," Peskin told the Guardian. "This whole thing seems rather bizarre. The government was in essence contracting with itself."

The health department’s Trotz dismisses this criticism, saying sole-source contracts were designed in the first place to allow for agreements like the Tides deal, which he calls a pilot project. Next time, he promises, the department will open the contract to bids. Trotz added that Tides is responsible if a DISH employee screws up, and it faces an annual monitoring probe by DPH staffers, just like any other contractor.

"I know now that THC and the union seem to be upset by this," Trotz said. "What we’re saying is we’ve heard that and we are doing what we always intended to do, which is run a two-year pilot and put a [request for proposals] out on the street and ready for people to apply to prior to the start of the next fiscal year."

Of course, no one’s suggesting Tides and DISH will necessarily do a poor job handling supportive housing. Shaw said lefties were the first to argue nearly three decades ago that nonprofits could address public health much more sensitively than did Dianne Feinstein’s mayoral administration of the 1980s. Last year the health department did $174 million worth of business with nonprofits. While unions have been slow to organize nonprofits, the trend is growing, but Tides and DISH seem structured to stiff-arm them when covert, sole-source contracts haven’t done that already.

"This obviously was a secret decision," Shaw said. "[The DPH] never consulted with anybody. They just did it. I don’t want to comment on the health department beyond what I’ve said. But this experience has left people very cynical about dealing with the health department [and] the way they handled the whole thing."

41st Anniversary Special: Wrecked park

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The San Francisco Recreation and Park Department has a long history of maintaining parks, community centers, and other recreational offerings. In fact, it controls more land in the city than any other entity, public or private. But after seeing its budget repeatedly slashed during lean fiscal years, the underfunded department has become a prime target for some controversial privatization schemes.

There are ongoing efforts to privatize city golf courses, supported by Mayor Gavin Newsom and Rec and Park general manager Yomi Agunbiade (see “Bilking the Links,” page 22). And there are ongoing fears that the city intends to privatize its popular Camp Mather vacation spot, something the RPD studied a few years ago and Sup. Jake McGoldrick has fought and highlighted.

Rec and Park has identified $37 million in needs at Camp Mather — the product of a private study the agency has been unable to fully explain to the public (see “From Cabin to Castle,” 4/4/07) — but left Camp Mather off a big bond measure planned for February 2008.

“They say $37 million you need up here, and how much you got in there for the ballot measure? Zip, zero,” McGoldrick told the Guardian. “It’s a familiar pattern: you underfund the hell out of something, and then you turn around and say, ‘We, the public sector, cannot handle taking care of this.'<0x2009>”

Rec and Park spokesperson Rose Dennis denies there are plans to privatize Camp Mather or that its omission from the bond measure is telling. “Many people disagreed — including you — with the funding needs and whether we could back it up,” she explained as the reason for its omission from the bond measure.

In his Oct. 1 endorsement interview with the Guardian, Newsom said, “We actually made some commitments just this last week with Sup. McGoldrick to help support his efforts, because he’s very protective of Camp Mather, and I appreciate his leadership on this, to help resource some of the needs up there without privatizing, without moving in accordance with your fears.”

And while Newsom said he hoped to avoiding privatizing Camp Mather, he refused to say he wouldn’t: “I’m not suggesting it’s off the table, because I’m not necessarily sure that the conditions that exist today will be conditions that exist tomorrow, and I will always be open to argument.”

But at least the Camp Mather and golf arguments have been happening mostly in public. That’s what voters intended in 1983 when they passed Proposition J, which requires public hearings, a staff study, and a vote by the Board of Supervisors before city services can be privatized. Yet over the past couple of years, there’s been an effort to quietly shift operations at a half-dozen rec centers away from city programs and toward private nonprofits.

It’s called Rec Connect. Its supporters bill it as an innovative effort to bring much-needed recreation programs to underserved, low-income neighborhoods. “This is a pilot program to see if a collaboration between a community-based organization and a rec center yields a richer program and a more engaged community,” said Margaret Brodkin, director of the Department of Children, Youth and Their Families, which created the program and oversees that and other uses of the city’s Children’s Fund.

But to members of the Service Employees International Union Local 1021 — which includes most city employees and has filed grievances challenging Rec Connect — the program is a sneaky attempt to have underpaid, privately funded workers take over services that should be provided by city employees, who are better paid, unionized, and accountable to the public.

“The city took funds from the city’s coffers and gave them to the Department of Children, Youth and [Their] Families,” Margot Reed, a work-site organizer for the union, told the Guardian. “DCYF is using these funds, through Rec Connect, to contract out to private nonprofits work that rec staff were doing for a quarter of the cost.”

Brodkin was the longtime director of Coleman Advocates for Children and Youth — a perpetual thorn in the side of City Hall and the author of the measure that set aside some property taxes to create the Children’s Fund — before Newsom hired her to head the DCYF. She sees her current role as a continuation of her last one, and she sees Rec Connect as an enhancement of needed services rather than a privatization.

“There is a commitment that no jobs would be lost. I’m a big supporter of the public sector,” Brodkin said, while acknowledging that the RPD is chronically underfunded. “I am certainly aware of the resources issue at Rec and Park…. I’d be a happy camper if the Rec and Park budget was doubled. But I’d still believe in this program and say it offers a richer experience.”

Rec Connect began in 2005 with a study that looked at unmet recreational needs and evaluated facilities that might be good places to bring in community-based organizations to offer specialized classes. The whole program was financed through a mix of public funds and grants from private foundations. The three-year pilot program started just over a year ago.

“The Rec Connects,” Newsom told the Guardian, “are a way of leveraging resources and getting more of our CBOs involved and using these great assets and facilities, instead of limiting use to the way things have been done.”

Rec Connect director Jo Mestelle denied that the initiative is a privatization attempt.

“Rec and Park brings the facilities, the sports, and traditional recreation. The CBOs bring the youth-development perspective and nontraditional programming,” Mestelle said. “Hopefully, together we build a community that includes youth-leadership groups and advisory councils.”

Few would dispute the need for more after-school or other youth programs, particularly in the violence-plagued Western Addition, where some of the Rec Connect centers are. But the means of providing these programs is something new for San Francisco, starting with the fact that even though Mestelle works in the DCYF office, her salary is paid for entirely by private foundations.

That relationship and those funders aren’t posted anywhere or immediately available to the public, but Brodkin agreed to provide them to the Guardian. They include the Hellman Family Philanthropic Foundation ($50,000), the Hearst Foundation ($50,000), the San Francisco Foundation ($128,000), the Haas Foundation ($100,000), and the SH Cowell Foundation ($150,000).

Brodkin and Mestelle characterized those foundations as fairly unimpeachable, and Brodkin defended the arrangement as part of a national trend: “The thing that’s odd about SEIU’s perspective is this is happening all over.”

That’s precisely the point, SEIU’s Robert Haaland says.

“It’s been a strategy since the ’70s to, as [conservative activist] Grover Norquist calls it, ‘starve the beast,'<0x2009>” or defund government programs, Haaland said. “On a national level there is a lot going on that impacts us locally.”

Minutes from a recent Recreation and Park Commission meeting confirm that rec center directors have only about $1,000 each year to cover the cost of buying basketballs, team jerseys, referee whistles, and other basic sports and safety supplies. The SEIU grievance also notes that recreation staff positions have decreased by a third just as senior management positions increased by a third.

“We don’t have enough dollars for $20-an-hour rec center staff who are directly responsible for the kids and are well known to the community. We believe kids deserve great coaches, consistency, longevity, and commitment,” Reed said.

SEIU Local 1021 chapter president Larry McNesby is also the Rec and Park manager who oversees Palega Park, one of the Rec Connect sites. He told the Guardian that while his rec directors are “under pressure from the mayor to show him numbers of people that they are serving,” Rec and Park’s new online registration fails to reflect the “hundreds of drop-ins” that rec staff serve on a daily basis.

But he said the department has been set up to fail by chronic underfunding.

“I’d love Rec Connect and DCYF to be on a level playing field, because my directors could out-recreate theirs any day,” McNesby said. “You can’t just eliminate our jobs and replace them with someone who makes just above minimum wage.”

Actually, Brodkin and Mestelle note that negotiations with SEIU over Rec Connect have resulted in a guarantee that no jobs will be replaced and an agreement by the city as to 250 different tasks that the Rec Connect CBOs can’t perform. Still, they say the program brings innovation to a stagnant city agency.

“Before Rec Connect the rec centers always had a Ping-Pong table and some board games, but some of them were really poor, many were tired looking, none had computers or Internet. So we’ve had to think outside the box. Rec [and] Park is a big department, and it’s not always efficient,” Mestelle said.

Public records show that in 2006, the DCYF, whose primary function is to administer grants, sent $1 million in public money to Rec Connect from the Children’s Trust Fund, a pool of cash the city gathers each year by levying 3¢ per dollar of property tax.

Both Rec Connect and city workers stress the importance of offering a range of good programs to young people. “Our work is at a more social level,” McNesby says. “Every minute a kid spends in a rec center is a minute they’re not breaking into a car or victimizing someone or being victimized.”

The question is who should provide those programs. “It’s society’s value system that controls where the money goes,” Rec and Park spokesperson Dennis said. “It’s a really provocative discussion. There are some very compelling trade-offs argued in convincing fashion by intelligent people on both sides. These aren’t easy decisions.”

But the union people say that when it comes to Rec Connect, that discussion isn’t happening in public forums in a forthright way. As Reed said, “Gavin Newsom never went to the voters and said, ‘Here’s what we want to do: cut the rec staff and bring in private nonprofits.'”

41st Anniversary Special: Psych out

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> gwschulz@sfbg.com

San Francisco is a beautiful place. But it’s also a city where an extraordinary number of people suffer from mental health problems, sometimes quietly, sometimes visibly. City government has always taken on the burden of caring for those who really need it, but the Gavin Newsom administration has been trying to outsource that obligation in recent years.

Department of Public Health director Mitch Katz has tried for years to trim the number of psychiatric-care beds maintained by San Francisco General Hospital. He proposes to replace those services by contracting them out to local nonprofit Progress Foundation, which earned most of its $11.5 million in revenue last year from government sources.

The proposal is for Progress to develop and operate a community-based psychiatric treatment center as an alternative to SF General’s emergency-room and inpatient beds. A key difference would be that the alternative treatment would be voluntary and cater to those without severe symptoms.

Katz wants to eliminate 14 of SF General’s beds and reduce the number of patients it assesses by 30 percent. Add to that seven other beds that were stripped of funding two years ago, and it’s clear that mental health treatment in San Francisco is changing.

"It’s a problem we have to solve by coming up with alternatives," Katz told the board’s budget committee Oct. 10, "because it’s not right for that person, or for the cost to the system, that [they] be in a locked ward. It’s more downstream alternatives."

Opponents of the cuts, however, including psych nurses at SF General, led by the hospital’s chief of psychiatry, say the Progress proposal might complement SF General’s services but it would be dangerously shortsighted to think it can replace them.

Private-sector hospitals in San Francisco have already cut a combined 100 psych beds over the past 10 years, leaving behind only 75. Patients relying on Medi-Cal subsidies end up at SF General more than ever. Admissions, in fact, have climbed by as much as 50 percent in the past decade.

"I don’t want to be alarmist," said Alfredo Mireles, a psychiatric nurse at SF General who is opposing the cuts, "but we have this one guy who’s been in and out of here since his teens. He’s in his 30s now. He’s smart, college educated. But he has these violent outbursts with no remorse."

The man had assaulted a police officer just the night before, Mireles said. He recalled another patient who was so paranoid he wouldn’t come out of his room to eat. He had ended up in the emergency room after not eating for eight days.

Nonetheless, SF General’s psych ward maxed out last December for the first time in its history, forcing police offers to divert patients to jail or to hospitals unprepared to deal with them. All those facilities can do is strap down the patients or lock them in seclusion until a slot opens at SF General.

"You have to be very acute to get admitted," psych nurse Stacey Murphy said, referring to SF General. "But then we can’t get rid of people, because nobody wants them. They’re not acute enough to technically belong in our hospital, but they belong in a locked facility or in board and care."

Murphy explained that Progress won’t be able to handle certain patients now living in a sort of gray area at SF General — between being willingly and unwillingly hospitalized — such as the drug addled or violent. And that’s one problem with privatization in general: corporations and nonprofits will gladly take over profitable services, but the hard or expensive cases often fall to government … or simply through the cracks.

Progress argues that SF General spends too much time and money on patients who have serious mental health problems but aren’t so acute that they need to be locked up. Its idea is to put psych patients back into the city but help alleviate the misery they might otherwise endure alone or in a maddeningly sterile hospital. It seems to think the hard cases aren’t that hard.

"The time and resources devoted to this group of clients in a psychiatric crisis who are not hospitalized represents a cost to the mental health system that is unnecessary and avoidable if the intervention, triage, assessment, and treatment can occur in a community setting," the Progress Foundation’s June proposal reads.

"To the extent that there are people who would do better if we really wrapped services around them, shouldn’t we all focus on those people who would accept services voluntarily?" Katz asked the committee. "I think to focus a lot of our resources trying to convince people to take treatment against their will as outpatients when so many people would benefit from more loving, positive care, I don’t think it’s the right priority."

Piers Mackenzie still views Katz’s plan as poor public policy. His daughter, then 22, required a brief stay at SF General’s psych ward during a sudden mental health catastrophe four years ago. The event politicized Mackenzie, and he has since agitated against attempts by Katz to scale back psychiatric services at the hospital.

"I couldn’t think of a more retrogressive step, simple as that," Mackenzie said. "When there’s a proven need for more beds than there are presently, to cut them is just plain idiotic. I don’t understand it."

41st Anniversary Special: The perils of privatization

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Click here for Amanda Witherell’s exclusive interview with Columbia professor Elliott Sclar

› amanda@sfbg.com

Over the past few weeks almost every major news outlet in the country has reported on Blackwater, a private company the US government hired to do work in Iraq that was once the exclusive province of soldiers.

The deal hasn’t gone so well: on Sept. 16, Blackwater guards opened fire and, according to the Iraqi government, shot 25 civilians. The incident set off an international furor and has brought into focus the breadth of the company’s work for the US government. It’s prompted an investigation by the House Committee on Oversight and Government Reform, which showed that since 2001, Blackwater’s federal contracts have increased 80,000 percent. It’s revealed the massive pay inequalities between private security guards and US soldiers — the cost of one private guard could pay the salaries of six soldiers.

And it’s raised a question that’s critical to understanding how government increasingly works in the United States: should a private company be doing the work of the military?

Privatization of public services is all the rage in this country now, at all levels of government, from Washington DC to San Francisco. Supporters say the private sector can often work better and more efficiently than the old, bureaucratic, much-maligned government.

But Blackwater is a great example of the perils of privatization. And there are many more.

STARVE THE BEAST


Over the past few decades governments at all levels in this country have been in a near-perpetual state of deficit. Taxes are way down from their historic post–World War II levels, and except for a brief period during the tech boom, there is rarely enough money for even basic social services.

"It’s been a strategy since the ’70s to, as Grover Norquist calls it, ‘starve the beast,’<0x2009>" Robert Haaland, an organizer with Service Employees International Union Local 1021, told us.

And because politicians, even Democrats, are terrified of tax hikes, they’ve been looking for more efficient ways to use the money they have. The magic bullet goes by many names — privatization, public-private partnerships, competitive outsourcing, creative financing solutions — but the basic idea is to allow the power of competition, set free in an unregulated market, to provide the public with the best services at the lowest cost.

"To do or to buy is the question that all governments face," says Ken Jacobs, director of UC Berkeley’s Labor Center.

We’ve been buying. Since 2000, outsourcing of federal dollars has increased 100 percent, to $422 billion in taxpayer funds in 2006, according to a September study by the Washington DC US Public Interest Research Group. The US government is now the private sector’s largest customer.

San Francisco may be known as one of the most progressive cities in the country, but this town has also been wooed by public-private partnerships with promises of improvements to the golf courses, construction of a new power plant, and funding for the many civic needs we have.

PRIVATIZE MUNI?


Cheerleaders for privatization look at someone like Nathaniel Ford, executive director of San Francisco’s Metropolitan Transit Authority, and see everything that’s wrong with the public sector. Ford’s salary is nearly $300,000, plenty high enough to attract a talented leader. But the Muni system he runs keeps the average San Franciscan waiting on the corner in the morning, delivers that person to work at an unpredictable hour, and lurches them homeward every night aboard a standing-room-only bus. Nobody thinks Muni is performing well.

That makes the case for privatization seem almost appealing.

"The public has been schooled to think that government is the problem, not the solution," Elliott Sclar, professor of economics at Columbia University, told us. In his 2000 book on privatization, You Don’t Always Get What You Pay For: The Economics of Privatization (Cornell University), he writes, "American folk wisdom holds that, by and large, public service is uncaring, unbending, bureaucratic, and expensive, whereas competitively supplied private services such as FedEx are efficient and responsive."

Competition, the privatizers say, drives innovation. Less red tape means more efficiency. A lack of unions and collective bargaining agreements translates to lower labor costs. Large-scale multinational operations can reduce redundancy and streamline their processes — all of which adds up to a lean-running machine.

But this country has a lot of experience with privatization, and the record isn’t good.

One hundred years ago private companies did a lot of what we now call government work. "Contracting out was the way American cities carried out their governmental business ever since they grew beyond their small village beginnings," writes Moshe Adler, a Columbia professor of economics, in his 1999 paper The Origins of Governmental Production: Cleaning the Streets of New York by Contract During the 19th Century. At one time private companies provided firefighting, trash collection, and water supplies, to name just a few essential services.

But according to Adler, "By the end of the 19th century contracting out was a mature system that was already as good as it could possibly be. And it was precisely then that governmental production came to America. The realization that every possible improvement to contracting out had been tried led city after city to declare its failure."

For example, the 1906 earthquake and subsequent fires in San Francisco were what prodded the city to municipalize water service after the company charged with the task, Spring Valley Water, failed to deliver while the fires raged.

In Philadelphia as well as San Francisco, the business of firefighting was once very lucrative — for both the firefighting companies and the arsonists who were paid to set fires for the former to fight. And corruption was rampant. "Large amounts of public contracting out historically created lots of opportunities for fraud and nepotism," Jacobs said.

So public agencies stepped in to provide basic services as cheaply and uniformly as possible. Towns and cities took on the tasks of security with police and firefighting, education with schools and libraries, and sanitation with trash collection and wastewater treatment. Nationally, the federal government improved roads and transit, enacted Social Security benefits, and established a National Park System, among many other things.

And then, about 30 years ago, the pendulum started to swing the other way. Driven by University of Chicago economist Milton Friedman, enacted in a massive policy shift by Ronald Reagan, proliferated by Grover Norquist and the neocon agenda, and fully appreciated by corporations and private companies, privatization came back.

In Reagan’s first term, he cut taxes 25 percent overall; the rich got a 40 percent cut. Domestic spending fell by half a trillion dollars in the 1980s, although any savings were countered by a rise in the defense budget.

Harvard economist Lawrence Summers, quoted in Looking Back on the Reagan Presidency (Johns Hopkins University), put it this way: "The Reagan budgets will influence the government for the rest of this century. Just as the Great Society left an imprint of Federal commitment to help the indigent and equality of opportunity, the Reagan budget deficits will leave an imprint of non-involvement."

Such a massive realignment of money coupled with tax breaks too politically painful to reinstate led to a boom in the outsourcing of public services. Private companies began doing more municipal work, while nonprofit organizations tried to fill the gaps in funding for social services, welfare, housing, health care, and the environment.

The George W. Bush era has seen even more overt outsourcing. These days no-bid contracts are preferred, and at times government services are completely turned over to the private sector in "direct conversions," and the public agency that once did the job is not allowed to compete to keep it. The Washington Post recently reported that no-bid government contracts have tripled in the past six years.

This doesn’t really sound like the competitive free market espoused by the theory of privatization.

FLUNKING THE TEST


To field-test the primacy of privatization, the Reagan administration sponsored a transportation experiment in the early ’80s: Miami’s Metro-Dade Transit Agency got to compete against Greyhound. The two providers were each given five comparable transit routes to manage over three years, and 80 new buses were bought with a $7.5 million grant from the federal government.

After 18 months 30 of the Greyhound buses were so badly damaged that they had to be permanently pulled from service. Passenger complaints on the Greyhound line were up 100 percent, and ridership was down 31 percent over the course of a year.

Why? There was no incentive in Greyhound’s contract to maintain the equipment or retain riders. The company’s only goal was to deliver the cheapest service possible.

The Miami transit contract could have contained clauses calling for regular inspections or guaranteed ridership, but that would have significantly increased the cost of the work — perhaps to the point where it would have been competitive with what the city provided.

That’s an important lesson in privatization politics: when you add the cost of adequately protecting the public’s interest and monitoring contract compliance, the private sector doesn’t look so efficient.

Which is why many say privatization only succeeds as a theory — and why, for all the problems with Muni, no private company is likely to be able to do a better job.

"Market fundamentalists present an idealized, simpleminded notion of competitive markets in which buyers and sellers have equal knowledge," Sclar told us. "Anyone can be a buyer, anyone can be a seller, everyone can evaluate the quality of the good. In this never-never land, that’s often the way the case is made for privatization by this particular group of economists."

In the real world a number of issues arise when a service goes private. "Accountability gets to be a really big problem," Ellen Dannin, professor of law at Penn State University, said in an interview. "There are predictions about how much money will get saved through privatization, but no one ever goes back to check."

The September study by the US Public Interest Research Group profiled several companies that do government work, including Bank of America, LexisNexis, ChoicePoint, KBR (formerly Kellogg, Brown, and Root), General Electric, and Raytheon, and found instances of illegal behavior in all cases. There were often massive errors in the companies’ work.

Bank of America and LexisNexis had security breaches compromising the data of at least 1.5 million customers they were handling for the government. ChoicePoint allowed identity-theft scams amounting to more than $1 million in fraud. KBR overcharged the government millions of dollars for work in Iraq and Kuwait. GE made defective helicopter blades for the US military. Raytheon failed to fully test the systems of new aircraft. These companies are all still employed by the government.

When companies take over services that aren’t typically part of a competitive market, all sorts of unexpected problems occur. Jacobs points to the rash of contracting for busing services in cash-strapped school districts. Not only did costs eventually rise in many places, but when schools tried to go back to providing their own service, the skilled drivers who knew the routes, knew the kids, and were able to do much more than drive a bus were gone.

Sclar and Dannin agree that any service that lacks competition should be public. Sclar presented the example of electricity. "It’s a natural monopoly," he said. "Essentially it’s either going to be a well-regulated industry or it’s got to be done publicly."

Corporations exist to make money. And although graft, mismanagement, and scandal have always been present in City Halls around the country, in the end the legislative, judicial, and executive branches were not designed to generate profits. That alone means contracting out is financially dubious.

Hiring mercenaries is a classic example. "It costs the US government a lot more to hire contract employees as security guards in Iraq than to use American troops," Walter Pincus wrote in an Oct. 1 article in the Washington Post. "It comes down to the simple business equation of every transaction requiring a profit."

As Pincus details one of the many contracts between the security firm and the US, "Blackwater was a subcontractor to Regency, which was a subcontractor to another company, ESS, which was a subcontractor to Halliburton’s KBR subsidiary, the prime contractor for the Pentagon — and each company along the way was in the business to make a profit."

Blackwater charged Regency between $815 and $1,075 per day per security operative. Regency turned around and charged ESS a slightly higher average of $1,100. After that, the costs dissolve into the enormous bill that KBR regularly hands the federal government.

When the US Army is paying the bill the costs are far lower. An unmarried sergeant earns less than $100 a day. If you’re married, it’s less than $200. If you’re Gen. David H. Petraeus, it’s about $500 — less than Blackwater’s lowest-paid workers.

Very little about the Blackwater contracts would be known by anyone outside the company if it weren’t for the federal investigation, since private businesses are not subject to the same public-records laws as the federal government. They don’t have to open their books or publicize the details of their bids and contracts, and they often fiercely lobby against any regulations requiring this, which leaves the door wide open for corruption — which is what brought sunshine laws to government in the first place.

Sclar said that when it’s a good call to contract out, corporations, private companies, and nonprofits should be required to abide by public-records laws in addition to adhering to a five-year wait for employees departing the public sector for the private. "I think transparency should always be the goal," he said. "As much information as possible." If a company doesn’t want to make its records public, he told us, "[it shouldn’t] go after public work."

THE AIDS LESSON


Privatization comes in many forms and emerges for what often seem like good reasons.

In the early 1980s gay men in San Francisco were starting to get sick and die in large numbers — and the federal government didn’t care. There was no government agency addressing the AIDS crisis and almost no government funding. So the community came together and created a network of nonprofits that funded services, education, and research.

"The AIDS Foundation was founded in response to the epidemic at a time when there wasn’t a response from the federal government," Jeff Sheehy of the AIDS Research Center at UC San Francisco told us.

At first, activists all over the country praised the San Francisco model of AIDS services. Over time the nonprofits began to get government grants and contracts. But by the 1990s some realized that the nonprofit network was utterly lacking in public accountability. The same activists who had helped create the network had to struggle to get the organizations to hold public meetings, make records public, and answer community concerns.

That, Sheehy said, shouldn’t have come as a surprise.

"There isn’t that same degree of accountability that you would have" with the public sector, he told us. "SF General is not going to turn you away at the emergency room, but nonprofit hospitals are less and less interested in running ERs."

Sheehy said he’s seen cases where difficult clients have been banned from accessing help from nonprofits. Unlike at public institutions, "the burden is not on the agency to provide the service. It is with the client to get along with the agency," he said.

Sheehy outlines other issues: nonprofits run lean and are more apt to make cuts and resist unionization, which means workers are often paid less, there can be higher turnover, and upper management is often tasked with fundraising and grant writing and distanced from the fundamental work of the group. There’s no access to records or board meetings. "If service takes a sudden downward shift, what can you do?" Sheehy asks. "You can’t go to board meetings. You can’t access records. What’s your redress?"

And that perpetuates the problem of government not stepping up to the plate. More than half of the social services in San Francisco are run by nonprofits, a trend that isn’t abating.

"When the services are shifted from the public sector to the nonprofit sector," Sheehy said, "that capacity is lost forever from government."

THE LOTTERY TICKET


When Dannin teaches her students about privatization, she uses the analogy of personal finance. "If I find my income does not meet my expenses, I can cut my expenses, but there are certain things I have to have," she said. To meet those needs a person can get a second job. In the case of the government, it can raise taxes.

But "that is not an option governments see anymore," she told us. "So the third option is to buy a lottery ticket — and that’s what privatization is."

When a publicly owned road is leased for 99 years to a private company, the politician who cut the deal gets a huge chunk of cash up front to balance the local budget or meet another need. When the new owner of the road puts in a tollbooth to recoup costs, that’s the tax the politician, who may be long gone, refused to impose. What option does the voting driver have now?

Public goods, from which everyone presumably benefits, are frequently and easily falling out of the hands of government and into the hands of profit-driven companies. In New Orleans, charter schools have replaced all but four public schools. In about 15 municipalities public libraries are now managed by the privately owned Library Systems and Services. (In Jackson County, Ore., it’s being done for half the cost, but with half the staff and open half the hours.) At least 21 states are considering public-private partnerships to finance massive improvements to aging roads and bridges. User fees have increased in the national parks as rangers have been laid off and some of the work of park interpretation is picked up by private companies, as is the case with Alcatraz Island.

Dannin also asks her students to consider who really owns a job. The easy answer is the employer. "But there is another claimant of ownership of that job," she says. "That is the public. Employers depend on roads for their employees to drive to work, a public education system to train their workers. They depend on housing, police, the court system, the system of laws. That is a huge amount of infrastructure we tend not to think about.

"We live within an ecosystem. We’re having a hard time seeing that ecosystem, that infrastructure that we’re all in. That’s what your taxes pay for."

Google’s gentrification shuttle

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OPINION Cari Spivek thought it was wasteful that so many employees like her were driving to work in different cars. Her idea became the Google Shuttle, a private transit network made of biodiesel-powered, wi-fi-enabled, air-conditioned buses transporting employees from around the Bay Area to Google headquarters in Mountain View, south of San Francisco.

At first it was used by a hundred employees from the entire area. But Google has been growing and now shuttles more than 1,200 Googlers every day, many from the Mission District, which has recently added a second bus.

Anyone who has ever taken a population class knows that every migration has a countermigration. In addition to all of the Google employees already living in the city and doing less environmental damage by taking the shuttle, many employees are choosing to move to the city because there is now a comfortable shuttle to take them to work. And many want to be a short walk to one of the stops.

When one takes into account the cost of gentrification, which is destroying the arts in San Francisco and forcing many low-income workers out of the city, the Google Shuttle no longer looks so environmentally friendly. Low- and middle-income wage earners are forced to commute to the neighborhoods they can no longer afford to live in. Their commute can take more than an hour, and they can’t afford environmentally friendly cars.

It’s very possible the Google Shuttle is doing as much harm to the environment as good. And the young Google employees, many making well over $100,000 a year, who move to places like the Mission for the art and diversity, are unintentionally devastating the neighborhood they love. Soon there will be no economic diversity in the Mission, and the young rich who have driven the rents so high will wonder how they ended up living in a place that resembles Greenwich, Conn.

Ending the Google Shuttle is not the only solution. It’s not even the best solution. A much better alternative would be for Google to make substantial investments in low- and middle-income housing in the areas it’s transforming, like the Mission and the Tenderloin, where its employees are clustered.

Google could give back to the community by donating $5,000 per employee living in the Mission to a fund that offsets the costs incurred by tenants forced from their homes by owner move-ins or loss of primary leaseholder, with the rest of the money going to fund neighborhood artists and new middle-income housing. Annually, we’re talking between $5 million and $10 million, a cost Google could easily afford. It would be good for Google in other ways, keeping this an area its creative employees still want to live in, before they follow the rest of the artists to Portland, Ore., or Detroit.

It’s hard for people to admit that their mere presence is doing damage, that their ability to pay exorbitant rent is destroying the neighborhood they love. But the Mission cannot endlessly absorb renters with six-figure incomes. In many ways, including the use of biodiesel shuttle buses, Google has behaved like a responsible profitable corporation should. Now it has a responsibility to help the Mission maintain its diversity. Otherwise, Google needs to stop shuttling its employees from 24th and Mission and stop encouraging them to live in a neighborhood that simply can’t afford them.

Stephen Elliott

Stephen Elliott is the author of six books. He has lived in the Mission for eight years.

41st Anniversary Special: Connect the Connects

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› steve@sfbg.com

Mayor Gavin Newsom has created an entirely new branch of city government that is private, funded by undisclosed corporate donations, staffed by volunteers who are often city employees or his campaign donors, and unaccountable to any internal controls or outside scrutiny.

Yet rather than being a cause for concern, Newsom has touted San Francisco Connect and its four subprograms — Project Homeless Connect, Tech Connect, Green Connect, and Project Children and Families Connect — as his proudest achievement, a model he is actively exporting to other cities.

According to its Web site, "The mission of SF Connect is to mobilize residents and sectors for a stronger San Francisco. SF Connect is about engaged residents volunteering their talent and time for the City, as well as innovative partnerships between the private, public, and social [nonprofit] sectors."

Green Connect (and "partners" that include Pacific Gas and Electric Co. and Oracle), does cleanup and tree planting. Tech Connect (and partners Netgear.com and Hewlett Packard) works on "digital inclusion." And Project Homeless Connect (Gap, Visa, AT&T, Blue Shield, IBM, the Hotel Council, and Charles Schwab among its partners) does homeless outreach events.

During his endorsement interview with the Guardian, we asked Newsom about the programs and how they allow the private sector to take a more active role in delivering public services on behalf of city government, sometimes with the help of public resources. Is that a model he likes?

"Oh, you’d better believe that!" Newsom said. "Am I for actual responsibility and civic service and duty? You’d better believe it. I think it should be mandated for everyone who graduates from our public education system. I think they should be forced to give back and contribute in community service. What the Connects are all about is community service and connecting the dots. The Rec Connects, which may be what you’re referring to, is a way of leveraging resources and getting more of our [community-based organizations] involved."

All of those involved with SF Connect also seem to sing its praises. But there’s another side to Newsom’s feel-good approach to delivering public services: they often displace social services delivered by qualified providers, supplement underfunded city services with private providers rather than simply fixing and funding them, provide wedges for corporations to take over public spheres (as the Google-EarthLink wi-fi deal through Tech Connect very nearly did), and allow corporations to buy influence with unregulated contributions to a politician’s pet program.

"If you look at the ways of privatizing, volunteering is one, and it sounds nice," said Margot Reed, an organizer with Service Employees International Union Local 1021.

Yet that volunteerism sometimes replaces services that previously were provided by government or nonprofit agencies whose contracts and performance could be scrutinized. But Newsom’s approach through SF Connect doesn’t allow that kind of transparency.

To illustrate the problem, the Guardian made a Sunshine Ordinance records request to the Mayor’s Office, asking for a complete breakdown of the budgets of all the Connect programs. The office refused to provide the information, referring us instead to SF Connect, but that organization has a history of refusing to provide the Guardian and other media organizations with its budget and donor lists.

Last year the San Francisco Chronicle fought the Newsom administration for two months to get it to reveal the donor list, finally winning the release of the names of donors who had agreed to be disclosed (some asked for their money to be returned instead). SF Connect’s donors included PG&E, which gave $25,000; Google investor Ron Conway, who gave $100,000; Wells Fargo Bank, which gave $20,000; and Carmen Policy (the former 49ers top dog who was recently named to push a June ballot measure on a new stadium that Newsom wants to build), who gave $2,500. Other donors included Newsom appointees, contributors, and companies that do business with the city.

When we tried to get a current list of donors, staffers didn’t respond to Guardian phone calls or e-mails.

We also asked Newsom’s office for a complete breakdown of city staff time, money, and other resources that have gone into supporting the Connect programs, knowing that city staff have been involved in their events and e-mails have gone out from city offices.

"There is no line item in any budgets nor any reporting within our office on time spent coordinating with SF Connect," Joe Arellano from the Mayor’s Office of Communications responded by e-mail after repeated requests for answers.

That’s probably because there seems to be no clear line drawn between where the private SF Connect ends and where the public-sector Mayor’s Office begins. Call the phone number on the San Francisco Connect Web site for Project Homeless Connect, and it rings at the desk of Judith Crane in the Department of Public Health.

Even getting a list of privatization proposals by Newsom hasn’t been easy. The Mayor’s Office cited technical inadequacies when we asked it to search all of Newsom’s speeches, press releases, e-mails, and other documents for the words "public-private partnership," a favorite Newsom phrase.

We know that he’s unsuccessfully sought to privatize jail health services, security at the Asian Art Museum, and the city’s golf courses (see "Bilking the Links," page 22) and to create a citywide wireless Internet system run by Google and EarthLink.

But ask Newsom about it, as we did, and you’ll hear his semantic gymnastics: "Privatization is failing, so I’m not pro-privatization. I don’t look to privatize. I look for ways to manage more creatively and more efficiently."

John Barleycorn must die

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› molly@sfbg.com

"There was three men come out o’ the west, their fortunes for to try,

And these three men made a solemn vow, John Barleycorn must die.

They plowed, they sowed, they harrowed him in, throwed clods upon his head,

And these three men made a solemn vow, John Barleycorn was dead."

From an old English folk song

It’s a dark, rainy Friday night, and Larkin Street is eerily quiet except for one beacon of light: the John Barleycorn pub. Inside this almost 40-year-old watering hole, logs crackle in a fireplace built with cobblestones from old San Francisco streets.

Neighbors, law students from a nearby university, and longtime regulars cluster together on cable car benches and onetime church pews, tippling and talking quietly beneath a ceiling made from the beams of an old Petaluma chicken coop.

Behind the bar, owner Larry Ayre, with rosy cheeks hugged by a pair of spectacles, serves drinks and good cheer the same way he has for more than three decades. Some of his customers have been coming here for just as long.

"There’s only one bar you call your home bar, and somehow, they have to take you in," Ayre said. "In here, you can be whoever you want to be."

Unfortunately for the Barleycorn, its lease is up, and it’s part of a building that was recently purchased by Louisa Hanson, a controversial local entrepreneur who owns several other properties in the area, including Louisa’s on Union Street and Delaney’s in the Marina. Hanson refuses to renew the Barleycorn’s lease, and it’s rumored she plans to turn the building into a new restaurant.

So tonight the mood is bittersweet. Ayre’s birthday is tomorrow, and neighbors are already stopping by. But no one’s forgetting that the pub’s doom is imminent, and unless a miracle happens the beloved bar will shut its doors October 26. For good.

Pub supporters nonetheless began appealing to Hanson last December when they heard of her plans not to renew the ‘Corn’s lease. They tried to make the case that the popular pub is the right size and scale for the neighborhood, that any other venture would be hard to support in such a tough retail environment, and that the bar is so well loved, Hanson would alienate potential future customers by closing it.

But the notoriously elusive Hanson — who’s obtained licenses for more than 22 businesses in the past two decades, most of which closed within two years or never opened at all — wouldn’t discuss the future of the ‘Corn, much less consider their pleas.

In an effort to save it, weekend bartender and longtime patron Tony Antico helped found the Save the John Barleycorn Coalition. Volunteers gathered more than 4,000 signatures from friends and fans in 30 countries and 20 states. They staged a demonstration outside Hanson’s Union Street restaurant. They lined up formal support from the SF Appreciation Society, the Polk Corridor Business and Middle Polk Neighborhood associations, Lower Polk Neighbors, and Sup. Aaron Peskin, who represents the district. The Board of Supervisors even passed a resolution commending the pub and recommending it be kept open.

"In America you can be a mean nut, and if you own property, the law protects you," Peskin told the Guardian.

Despite all the effort, Hanson is heavily invested in the property and appears to have little incentive to back off now. Public records show that she first bought it for $2.3 million in autumn 2005 and then took out two loans against it totaling $2.5 million.

She seems so eager to develop the property, in fact, that in June city building inspectors found ongoing construction work being conducted at Barleycorn’s neighbor, the former Front Room, without a permit, including taking out a wall and removing fixtures.

But Hanson is no stranger to conflict. Superior Court records show that she’s been the target of a fairly steady stream of litigation since the 1980s, ranging from allegations that she refused to pay contractors or employees to charges that she disregarded contractual agreements with business partners.

One case, brought against Hanson in 2003 by the former owners of her Marina restaurant, alleged that she agreed to a purchase but then withheld payments in hopes of forcing a better deal when the sellers grew desperate. According to the suit, the "alleged secret intent" of Hanson "constitutes an intentional misrepresentation, deceit, or concealment of a material fact that has caused injury" to the former owners. A judge ruled against Hanson and demanded that she pay the plaintiffs $183,674.

That case didn’t surprise Vickie Hall, who had a similar experience when she tried to sell her coffee shop in Amador County to Hanson earlier this year. After agreeing to pay full price for Hall’s homegrown business, Hanson allegedly held the deal in escrow, and therefore off the market for sale to someone else, until Hall would agree to a lower purchase price.

Hall claims that when she begrudgingly agreed but asked for a higher deposit, Hanson simply never responded to the counteroffer. Hall says Hanson couldn’t be reached for six weeks to sign over the original deposit money.

"It was a bad situation with a woman who I think is ruthless and could give a hoot about how her business practices are handled," said Hall, now living in Arkansas, who only sold the business because she and her partner are now on disability.

Look Hanson up on Yelp.com and you’ll find a litany of complaints from former employees, neighbors, business partners, and customers. There’s even a blog dedicated to the "eccentricities and out-and-out weirdness of San Francisco’s worst entrepreneur," located at Luisaconfidential.blogspot.com.

In fact, Barleycorn supporter John Clark, who has lived in the city 25 years and worked in local restaurants for eight years, was warned by peers not to pursue a job in any of her restaurants, so he avoided them.

"She’s a bad businesswoman and unscrupulous," Clark said. And the Barleycorn "is a great little English pub. I’m tired of the character that makes this city what it is getting sucked out of it. This is just another long-standing neighborhood institution being closed because of greed."

So far, Hanson has refused to discuss the Barleycorn, not returning calls from Ayre, Peskin, or the Guardian for this story. Her response to the demonstration outside her Union Street business was to give pub supporters the Italian version of the bird (video posted at savethebarleycorn.org).

In fact, the only thing anyone, including government officials, can do now is make it hard for her to open a new business in the building by changing zoning laws or refusing permits — actions that may hurt Hanson in the long run but won’t change the Barleycorn’s fate.

For now, the ‘Corn’s supporters are trying to maintain their optimism while being realistic. At Ayre’s birthday party Oct. 13, patrons continued to add their names to the petition at the end of the bar while Ayre’s wife explained where in their house the couple would put the historic wooden countertop once the bar closes. But no one will be done enjoying the establishment, or fighting to keep it open, until the last minute of its last day.

"I always believe that little miracles can happen," Peskin said. "I’m waiting for one."

41st Anniversary Special: Bus stop

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› gwschulz@sfbg.com

There’s a money room in the basement of 1 South Van Ness, where the Municipal Transportation Agency, which operates Muni, is headquartered. Workers literally count by hand bags of cash and coins taken in as fares from passengers throughout the day.

When Muni recently needed to pull some of those unionized bean counters away from the money room to staff kiosks around the city where transit passes are sold, its managers hoped to replace them with workers from a private contracting outfit.

The plan unsettled the Service Employees International Union Local 1021, which persuaded Muni against the idea and instead encouraged it to create 10 new full-time city positions to cover the work that was needed. But the MTA’s immediate turn to the private sector is telling.

Powerful local unions would no doubt fight it, but public-transit consultants working with the city have insisted that the outright privatization of San Francisco’s municipal transit system is worth consideration. Advisors to the Transit Effectiveness Project, first unveiled by Mayor Gavin Newsom during a 2006 speech, insist nothing is too controversial for debate.

"There’s nothing we’ve been told to take off the table," a consultant hired by the city told the San Francisco Chronicle late last year.

The Transit Effectiveness Project’s final recommendations are expected next year, when it’s likely Newsom will be starting his second and final term. Big segments of Muni have already been privatized over the years. In fact, Controller’s Office records show the MTA has privatized far more formerly public services over the past two decades than any other city department by far.

In 1983 voters passed Proposition J, authorizing the city to contract out services performed by city workers who’d passed civil service exams to prove their skills as long as the Board of Supervisors passed a resolution certifying a cost savings. The MTA issued $46.5 million worth of private contracts last year covering 689 positions, according to figures maintained by the Controller’s Office.

Muni has used private security guards since 1975, and 400 private workers handle paratransit services, which aid the disabled. Towing, janitorial, meter-collection, and citation-information services have all been privatized. In total, the MTA’s purported cost saving is as much as $20 million per year.

But that’s a sliver of MTA’s $680 million budget, and there are perennial fears of more privatization pushes. This fall’s Muni reform measure, Proposition A, nearly went to the ballot with language that could have allowed millions of dollars in new privatized work at Muni without review from civil service commissioners, but it was removed at the insistence of labor leaders.

San Diego privatized many of its transit services in the ’80s, gradually contracting out services as public employees retired. By last year about half of San Diego’s bus routes were managed by three private contractors, including Violia, an Illinois company that also runs Muni’s paratransit services. Labor leaders say service in San Diego suffered under privatization, and they oppose similar changes here.

"Whenever you contract out a department, whenever you let go of control, then you don’t have control of the product," Cristal Java, an organizer for SEIU Local 1021, told the Guardian.

Prop. A’s language was changed to preserve union jobs if new routes and lines are introduced that may otherwise have been susceptible to privatization, but there are no assurances that city officials won’t eventually point to Muni’s widely bemoaned system deficiencies and claim that further contracting out is necessary.

"We see the same operational problems, and hiring new full-time, permanent people is a way to deal with it instead of contracting out," Java said. "The unions, allies, and MTA got together to make Prop. A something that worked for everyone."

41st Anniversary Special: Privatize the airport?

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› gwshulz@sfbg.com

In August 2006 the five commissioners who oversee San Francisco International Airport discussed renewing a small contract with a consulting outfit called John F. Brown Co.

The contract’s value doesn’t matter as much as the advice the outfit was giving. Brown is helping San Francisco prepare for 2011, when an agreement SFO maintains with several airlines is set to expire.

This, the folks at the airport realize, is a very big deal — one that could cost the city hundreds of millions of dollars and tempt city officials to try to privatize one of San Francisco’s most lucrative assets.

The contract that will expire four years from now is basically a lease the airlines pay in exchange for using SFO facilities like runways and terminals. The agreement was established in 1981 as part of a legal settlement with the airlines, and it permits the city to draw millions of dollars in concession revenue from the airport into San Francisco’s General Fund. Last year the city received nearly $22 million from the airport.

But San Francisco is one of the few cities in the nation that are allowed to take money that the airlines pay for landing and use it to subsidize other city services. And the airlines have shown little desire to keep paying fees that are above what the airport needs to break even on its operations.

Nobody is talking publicly about what will happen after 2011, but it’s entirely possible that the airlines, with the support of the federal government, will refuse to keep subsidizing San Francisco’s General Fund. So $22 million per year in city revenue could suddenly dry up.

If the mayor is someone like Gavin Newsom, he or she will be looking for an easy answer — and a lot of people will argue that San Francisco should follow the trend set by airports in Chicago, Indianapolis, and Pittsburgh and head toward a private management contract.

The Reason Foundation, a libertarian Los Angeles think tank, concluded in the 1990s that SFO could be worth as much as $888 million to the private sector; that number is almost certainly higher now. Imagine, for a moment, the deal the city would be offered: lose $22 million per year in revenue — or get close to $1 billion in cash by turning over the airport to a private operator on a long-term contract.

But the airport’s past experiments with privatization suggest that giving SFO to the private sector might not be such a good idea.

In 2001, Congress created a pilot program in which five cities, San Francisco among them, privatized their security screening of passenger, checkpoint, and baggage operations. Federal airport officials here hired Illinois company Covenant Aviation Security.

An investigation last year revealed that Covenant and SFO officials relying on surveillance cameras conspired to tip off personnel working at checkpoints when undercover federal inspectors were on their way to test possible security breaches.

A whistle-blower first revealed the scheme. Covenant, which partnered in the security venture with global weapons designer Lockheed Martin, was nonetheless rehired by the federal Transportation Security Administration late last year with a $314 million contract lasting until 2010, signed just weeks after an inspector general for the TSA’s parent bureaucracy, the Department of Homeland Security, revealed the results of its probe.

What is perhaps the airport’s greatest privatization disaster began in 1997 and didn’t end until earlier this year. Managers at the airport formed a private, for-profit company called SFO Enterprises, which they hoped would join a consortium of other airports doing consulting and managing work around the world. The initial consulting contract was with a Honduran airport.

The plan turned into a disaster, leaving the airport in Honduras worse off. By the time San Francisco’s controller caught up with the scheme in an investigation completed in January, he declared the city could lose as much as $1.5 million, with much of it poorly accounted for.

41st Anniversary Special: Blast from the past

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33 YEARS AGO (OCTOBER 5, 1974)


Dianne Feinstein takes off her gloves

By Katy Butler


White gloves still haunt Dianne Feinstein’s political life. She has been wearing them ever since she first went to dancing class, and fellow politicians have accused her of refusing to take them off for politics. Her old political allies bring up the image again and again: those little white gloves seem to crystallize their irritation with her Pacific Heights femininity, the world of the Junior League, the chauffeur and the Goody Two Shoes approach to politics. In 1971 during her disastrous campaign for Mayor, she did her best to reach beyond her background. She promised a Hunters Point crowd she’d never shuck or jive. But she was still wearing those little white gloves.

The white gloves are off now. Feinstein learned from her 1971 defeat and she doesn’t want to lose this time around. She is jostling with state senators Milton Marks and George Moscone for first place at the starting gate in next year’s Mayor’s race, and she is no longer a political dilettante operating on intuition and integrity.

The new Dianne Feinstein is a canny political animal, assiduously cultivating the "homeowner vote" in the foggy reaches of the Avenues while nursing along her original liberal constituency. "She’s dropped the Goody Two Shoes act and she’s willing to play hardball politics," one of her fellow supervisors says admiringly. "She’s moving toward the center and she’s getting very good advice."

"How can you be for the vice squad, for police helicopters, against nude shows and for gay rights?" asks Harvey Milk, a gay former candidate for supervisor. "It doesn’t add up."

31 YEARS AGO (OCTOBER 8, 1976)


Staggering with Bukowski

By William Graham


The beer, the day, whatever the reason, [poet Charles] Bukowski is not reading well — with little enthusiasm, little animation, little inflection in his voice, save the long drawl on certain words. He rarely looks up from his script while reading, as if he hasn’t seen the poems before. Hunched over, his glasses reflect the two spotlights and act as mirrors, blocking the audience from his eyes. At his best he is poetical, distant. At his worst, he is an old man reading the news. And finally the warning, "This is going to be my next-to-last poem." A few say "No, no." Bukowski asks, "Are there any questions?" Again, mixed shoutings answer, a few voices mimic animals, and far from the rear, the high nasal voice says "Bullshit". Bukowski replies, "Lay off that cheeeeeep, rot-gut wine or you’re not going to live a weeeeeeek. If the wine doesn’t get youuuuuuu, I might." The crowd likes this. Shifting gears, the poet says, "Any young girls want my phone number — try Joe Wolberg." Several replies follow, many sound dubious, and the poet says, "Okay, Babe-A."

31 YEARS AGO (OCTOBER 8, 1976)


EVEN COWGIRLS GET THE BLUES. By Tom Robbins. Houghton-Mifflin, $4.95.

Reviewed by Don McClelland


Tragedy ensues but is softened by the cosmic good humor that shines throughout the book. For this world and its languages, Robbins shows an infectious love that is constantly leading him into literary excesses guaranteed to get him hanged in more proper circles. Didactic, discursive, anthropomorphic, loaded with enough outrageous similes to send a basketful to each poet in the American Academy, Even Cowgirls Get the Blues operates on the refreshing premise that the whole world is alive. This book will make you laugh out loud in the elevator. This book should have champagne and tears spilled on it. This book is Cervantes born again. Thank you, Tom Robbins.

31 YEARS AGO (OCTOBER 29, 1976)


The Film Festival

By Robert Di Matteo


The 20th Annual San Francisco International Film Festival, which was held at the Palace of Fine Arts Oct. 13-24, was another one of those Sacred Monster affairs that exist above and beyond almost anything that can be said about them.

For me, there was the added excitement this year of the Guardian‘s Banned-from-the-Festival status (see Guardian 10/8, 10/22/76). Because of our reporting on the Film Festival last year, the Guardian was not allowed to attend this year’s event on the same basis as the 98 acceptable representatives from the press. But we went ahead and bough some tickets on the sly, and on the nights of the showings I slunk in to take my place in the audience, glancing furtively around to make sure I hadn’t been spotted. As something of a natural-born outsider, I found the role of a party crasher to fit like a glove.

Still, my perspective on the festival has not really changed. I doubt that I could ever really resolve my attitudes about culture to fit the festival’s concept of Culture. Movies are still just movies to me, and charging an extra dollar to see them does not alter that fact.

26 YEARS AGO (NOV. 4, 1981)


From the personal ads:

Plug Me In

Says my refrigerator. Very attractive lesbian who lacks only cooking skills would like sympathetic Jewish woman to offer either her knowledge of the art or dinner for the rest of my life. Write P.O. Box 11528 SF CA 94101

Wanted: Wife

Long hours, no pay. For a good-looking San Francisco man, 29. Qualifications: must be beautiful, intelligent, easygoing. No experience necessary. Please, no Republicans.


WM, 38, angry, depressed, timid, gentle, understanding seeks similarly minded F with whom to wait for Godot and/or etc.

My Marriage Was No Fun

Finally my wife and I figured out that we would be happier if we weren’t together. Since then, I have discovered freedom, but it hasn’t been in single bars. It has been squeezing the toothpaste any way I please, or being able to change plans at the last minute. I am 44, nice-looking, secure, and I would be interested in meeting a woman, younger or older, who would like to share her freedom with me.

I am an R.C. priest who takes his religious calling very seriously. But God also made me a man. I have thought about leaving the Church, but feel that that would be very wrong. God didn’t create us to live half lives, He will understand. While I’m sexually inexperienced, I am attractive, accomplished and sincere. Obviously discretion is a must.

Women Are Taught to Say "No"

This one is happy, bright, and attractive, and she is ready to begin saying "Yes." Now, what are the questions?

41st Anniversary Special: The privatization of San Francisco

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› tredmond@sfbg.com

William M. Tweed was one of the greatest crooks in American political history, a notorious Tammany Hall boss in New York who managed in the course of just a few years, starting in 1870, to steal more than $75 million (the equivalent of more than $1 billion today) from the city coffers. The way he did it was simple. As Elliott Sclar, a Columbia economist and expert on privatization, notes, Tweed took advantage of the fact that much of the work of city government was contracted out to private companies. Boss Tweed controlled the contracts; the contractors overcharged the city by vast sums and kicked back the money to Tammany Hall.

This is a rather extreme example, but not, Sclar argues, an atypical one: the worst corruption scandals in American history usually involve private contractors and public money. In fact, he argues, privatization is almost by its nature a recipe for scandal and corruption.

Nothing in the public sector — no incompetence, no waste, no bureaucratic bungling — begins to compare with what happens when private operators get their hands on public money. And the cost of monitoring contracts, making sure contractors don’t cheat or steal, and forcing them to act in ways that reflect the public interest is so high that it dwarfs any savings that privatization seems to offer.

That’s the message of the Guardian‘s 41st anniversary issue.

It’s relatively easy to investigate government malfeasance. The records are public, the players are visible, and the laws are on the side of the citizens.

But when Bruce B. Brugmann started the Guardian in 1966 with his wife, Jean Dibble, he realized that the real scandals often took place outside City Hall. They involved the real powerful interests, the giant corporations and big businesses that were coming to dominate the city’s skyline and its political life. The details were secretive, the money hidden.

One of the first big stories the paper broke, in 1969, involved perhaps the greatest privatization scandal in urban history, the tale of how Pacific Gas and Electric Co. had stolen San Francisco’s municipal power, to the tune of hundreds of millions of dollars. The famous Abe Ruef municipal graft scandals of the early 20th century, the Guardian wrote, were "peanuts, birdseed compared to this."

When I first came to work here, in 1982, Brugmann used to tell me that daily papers, which loved to try to expose some poor soul who was collecting two welfare checks or a homeless person who was running a panhandling scam, were missing the point. "If you look hard enough, you can always find a small-time welfare cheat," he’d tell me. "We want to know about corporate welfare, about the big guys who are stealing the millions."

And there were plenty.

In his new book Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (Knopf), Robert Reich, the economist and former secretary of labor, argues that during the cold war, when American politicians railed against the socialist model of economic planning, this country actually had a carefully planned economy. The planning wasn’t done by elected officials; it was done by a handful of oligarchic corporations and military contractors.

Modern San Francisco was born in that same cauldron. During World War II, captains of industry and military planners took control of the city’s economy, directing resources into the shipyards, collecting labor from around the country to build and repair Navy vessels, and making sure the region was doing its part to defeat the Axis powers. It worked — and when the war ended the generals went away, but the business leaders stayed and quietly, behind closed doors, created a master plan for San Francisco. Downtown would become a new Manhattan, with high-rise office buildings and white-collar jobs. The East Bay and the Peninsula would be suburbs, with a rail line (BART) carrying the workers to their desks. Private developers, working under the redevelopment aegis, demolished low-income neighborhoods to build a new convention center and hotels.

Nobody ever held a public hearing on the master plan. And it wasn’t until the late 1960s that San Franciscans figured out what was going on.

By 1971 the fight against Manhattanization began to dominate the Guardian‘s political coverage. It would play center stage in San Francisco politics for two more decades. The paper ran stories about high-rises and freeways and environmental impact reports, but the real issue was the privatization of the city’s planning process.

Ronald Reagan soared into the White House in 1980, rolling over a collapsing Jimmy Carter and a demoralized, moribund Democratic Party. Reagan and his backers had an agenda: to dismantle American government as we knew it, to roll back the New Deal and the Great Society, to get the public sector out of the business of helping people and give the benefits to private business. "Government," Reagan announced, "isn’t the solution. Government is the problem."

The Guardian was firmly planted on the other side. We supported public power, public parks, public services, public accountability. We had no blinders about the flaws of government agencies — I spent much of my time in the early years writing about the mess that was Muni — but in the end we realized that at least the public sector carried the hope of reform. And we saw San Francisco as a beacon for the nation, a place where urban America could resist the Reagan doctrine.

Unfortunately, the mayor of San Francisco in the Reagan years might as well have been a Republican. Dianne Feinstein’s faith in the private sector rivaled that of the new president. She turned the city’s future over to the big real estate developers. She vetoed rent control and gave the landlords everything they wanted. And when the budget was tight, she ignored our demands that downtown pay its fair share and instead raised bus fares and cut library hours.

When gay men started dying of a strange new disease, there was no public money or service program to help them, from Washington DC or San Francisco. So the community was forced to build a private infrastructure to take care of people with AIDS — and years later, as Amanda Witherell notes in this issue, those private foundations became secretive and unaccountable.

In 1994 we got a tip that something funny was going on at the Presidio. The Sixth Army was leaving and turning perhaps the most valuable piece of urban real estate on Earth over to the National Park Service … in theory. In practice, we learned, some of the biggest corporations in town had come together with a different plan — to create a privatized park — and Rep. Nancy Pelosi was carrying their water. Every detail of the Presidio privatization made the front page of the Guardian — and still, the entire Democratic Party power structure (and much of the environmental movement) lined up behind Pelosi. Now we have a corporate park on public land, with that great pauper George Lucas winning a $60 million tax break to build a commercial office building in a national park.

And still, it continues.

Mayor Gavin Newsom, a rising star in the Democratic Party, who told us he’s no fan of privatization, demonstrated the opposite in one of his signature political campaigns this year: he tried (and is still trying) to turn over the city’s broadband infrastructure — something that will be as important in this century as highways and bridges were in the last — to a private company. That’s what the whole wi-fi deal (now on the ballot as Proposition J) is about; the city could easily and affordably create its own system to deliver cheap Internet access to every resident and business. Instead, Newsom wants the private sector to do the job.

The Department of Public Health is running public money through a private foundation in a truly shady deal. The mayor’s Connect programs operate as public-private partnerships. Newsom wants to privatize the city’s golf courses, and maybe Camp Mather. He’s prepared to give one of the worst corporations in the country — Clear Channel Communications — the right to build and sell ads on bus shelters (and nobody has ever explained to us why the city can’t do that job and keep all the revenue). Housing policy? That depends entirely on what the private sector wants — and when we challenged Newsom on that in a recent interview, he snidely proclaimed that the city simply has to follow the lead of the developers because "we don’t live in a socialist society."

This is not how the city of San Francisco ought to be behaving. Because when you give public land, public services, public institutions, and public planning initiatives to the private sector, you get high prices, backroom deals, secrecy, corruption — and a community that’s given up on the notion of government as part of the solution, not just part of the problem.

You start acting like the people who have been running Washington DC since 1980 — instead of promoting a city policy and culture that ought to be a loud, visible, proud, and shining example of a different kind of America.

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