G.W. Schulz

SXSW: Postcard from Texas – High on Fire, Motorhead, Municipal Waste


High on Fire @ Stubb’s

High on Fire @ Stubb’s

High on Fire @ Stubb’s

High on Fire @ Stubb’s

Killing in the dark


› gwschulz@sfbg.com

The San Francisco Police Department doesn’t want people to know about Asa B. Sullivan, a case that illustrates how difficult it is to get even basic information about law enforcement, which leaves the public in the dark about a public agency that makes life-and-death decisions.

Officers filled Sullivan with 16 bullets nearly two years ago on June 6, 2006. Sullivan was unarmed and hiding in the cramped attic of a townhouse at the Parkmerced complex near San Francisco State University when the shooting occurred.

The Guardian has spent the intervening time trying fruitlessly to obtain public records and other information from the department about what happened to Sullivan and about the officers involved, including the results of now-completed investigations.

Sullivan’s death briefly grabbed headlines, but beyond what police told the press at the time, the department has rejected several requests for reports and other documents related to the shooting. The department in February of this year rejected another records request, one of four rebuffed since Sullivan’s death.

Police initially claimed Sullivan’s gun was found at the scene, but that story changed significantly within a short period of time. Police later said the officers who shot him believed an eyeglasses case held by Sullivan was a gun.

It all started when the neighbors of 2 Garces Drive called police believing squatters had taken over the townhouse, but Sullivan was helping the tenants clean up so they could get their security deposit before moving out.

When police arrived, they ordered Sullivan’s friend, Jason Martin, to the floor after the officers aimed their weapons at him without explanation while Sullivan fled into an attic, according to allegations that later appeared in a federal civil suit filed by Sullivan’s family.

Sullivan was on probation for pot and any contact with police would surely have caused him more problems, but as we reported shortly after Sullivan was killed, the department’s General Orders instruct that when a suspect is barricaded, the responding officers should call in a negotiator. A K-9 unit was called that night, according to the suit, but it doesn’t appear the officers waited for it to show up.

Two officers tried to call Sullivan down before pursuing him into the attic. The rest is unclear except that the officers, John Keesor and Michelle Alvis, shot Sullivan to death believing he was armed and intended to shoot them first. But no gun was ever found. The 25-year-old Sullivan, a San Francisco native, was working for Goodwill Industries at the time and had a young son named Asa Isaiah Sullivan.

We first sent a public records request to the SFPD shortly after Sullivan’s death asking for "any and all documentation" related to the shooting including e-mails, notes, and witness statements. The department’s legal division responded that the material was exempt from disclosure laws because they were part of an ongoing law-enforcement investigation, a common response when reporters seek such documents.

After learning at a September 2006 San Francisco Police Commission meeting that some elements of the investigation were complete, we filed another request. The department’s rulebook requires that two divisions in the department — the homicide detail and internal affairs — complete their examinations of deadly officer-involved shootings within two months of the incident.

But again, citing the state’s Government Code, which allows them to withhold material considered part of an ongoing probe, the department responded that an investigation by the district attorney and an analysis of Sullivan’s body by the medical examiner were not complete.

Two months later, we confirmed through Sullivan’s autopsy that he’d been shot 16 times, so we filed another request for documents related to the shooting. But again the department’s legal division claimed the investigation was still open and disclosure would endanger its successful completion.

The alternative by then was to wait for the federal civil suit filed against the city by Sullivan’s family to unfold slowly: through that, perhaps we could determine if new evidence from the shooting would appear in the public record. No success there either. The parties requested a protective order in August 2006 that made crucial information in the case confidential, including personnel records of the officers involved as well as audiotapes, videotapes, photographs, and transcripts related to the investigation.

Through the suit, however, we did learn last November that the Office of Citizen Complaints and the police department’s Management Control Division, a.k.a. internal affairs, had completed their investigations of the shooting.

So we filed another request in February of this year. Yet again, however, the department’s legal division responded that the records were protected under the state’s Penal Code, which grants special exemptions for information related to the conduct of law-enforcement personnel. The OCC responded the same way in its denial of our request.

Making matters worse, California’s State Supreme Court ruled in an unrelated case in August of 2006 that citizens and the press would no longer be able to access most public information about why individual officers are charged with misconduct or even possibly breaking the law.

Records of misconduct charges filed by the OCC or the police chief against officers had largely been open to the public until then through summaries that appeared on the agenda of the police commission. The public could also attend misconduct hearings at the Hall of Justice which included testimony from officers.

But the Supreme Court ruling — known as the Copley decision — put a stop to it by broadening the scope of privacy laws that exclusively protected cops from the disclosure of disciplinary records. Since then, stories from Bay Area media outlets about police misconduct have been few and far between despite a steady stream of cases.

Of course, there’s a way around it all. Sometimes documents show up at the Guardian building in Potrero Hill without a return address, and literally dozens of people with potential access to records related to Sullivan’s death could plausibly deny knowing how they were accidentally sent to G.W. Schulz, San Francisco Bay Guardian, 135 Mississippi St., San Francisco, Calif., 94107.

Maybe by the June anniversary of Sullivan’s shooting, a fuller story of what happened that day (from any number of perspectives — we’re interested in talking to anyone) could land in front of readers. Maybe.

One day at a time, Bubs


Thank you, David Simon. Newspaper journalism couldn’t have asked for a clearer voice. But it would have been nice to see Frank Pembleton one last time.

On shaky ground


› gwschultz@sfbg.com

The violations were purported to be accidental. Top administrators broke the law in two separate incidents in 2005 when they diverted a total of $30,000 belonging to City College of San Francisco to a local bond campaign committee, although they said it was an innocent mistake.

Now new documents obtained by the Guardian show an apparent pattern to this misuse of public funds. A special audit indicates that on Nov. 7, 2006, administrators from the school district transferred $38,670 to a bank account controlled by the Foundation of the City College of San Francisco, a nonprofit that seeks donations for the school and funds scholarships.

Just one day before, on Nov. 6, 2006, the foundation made a $35,000 cash contribution to the Community College Facility Coalition Issues Committee, which lobbies for and promotes statewide bonds to benefit schools like City College. State law bars City College from using public funds for such political purposes.

When asked about the money transfers, Vice Chancellor Peter Goldstein conceded to the Guardian that $28,670 of the newly uncovered funds were improperly moved to the foundation to replenish the Nov. 6, 2006 contribution, but he referred questions regarding who made that decision to outgoing chancellor Phil Day, who did not return a call.

The firm that conducted the audit, Louie & Wong, based in San Francisco, could find no evidence that the foundation’s board approved the contribution, and a lawyer hired by the foundation says the directors were not aware of the transfer of district funds into the foundation bank account at that time.

Although some of the board members later recalled authorizing the contribution, it wasn’t reflected in meeting minutes, and the directors say they never intended to launder public funds into a political contribution.

These revelations further damage the credibility of City College administrators, who for several months have undergone an investigation by the District Attorney’s Office into political fundraising efforts by the school. Spending public funds to support or oppose a ballot measure or candidate is against California law.

Two school trustees, Rodel Rodis and Julio Ramos, confirmed for the Guardian that the district attorney in recent weeks requested documents related to the transactions and will be interviewing senior administrators at the school soon, presumably including Day, who is leaving for a new job in Washington, DC, as this story goes to press. Both say the trustees only learned about the audit’s conclusions this month, although it was completed last summer.

"The way it’s always been presented to me is the foundation is supposed to give the district money in order for the district to fulfill its function of educating students," Ramos told us, "not vice versa."

The District Attorney’s Office will neither confirm nor deny the existence of such probes, but its investigation has been confirmed by sources and reported in both the San Francisco Chronicle and the Guardian (see "Day’s Dilemma," 8/8/07).

Day characterized the earlier diversions from the 2005 bond campaign as a simple misunderstanding when they were publicized last year. His administration wasn’t trying to do anything illegal, he wrote in a public statement at the time, and a resulting internal investigation called for by City College’s board of trustees seemed to confirm his claim.

"The 2005 campaign was compressed into little more than three months, and as a result of this rush, we made some mistakes," Day wrote in response to the report when it was released in January. "As the chancellor and CEO of this college, I take responsibility for these missteps."

But despite the breadth of the internal investigation, which filled 232 pages and detailed the history of the hastily organized 2005 bond election, its scope never reached the foundation’s political activities.

Now it appears that after the Chronicle published stories last April exposing the misdirected funds from 2005, the foundation’s board of directors asked for a special audit to ensure that all its financial transactions between 2005 and 2007 were free from any association with public funds the board wasn’t aware of.

The foundation at that time hired a lawyer, Peter Bagatelos, who told the Guardian that the board didn’t know $38,670 was transferred to the foundation’s bank account on the day of the November 2006 statewide election, when voters were asked for $10.4 billion in bond money to support California’s public schools.

"It was never done with their consent or knowledge or participation," Bagatelos said.

During the same two-year period covered by the audit, the foundation made cash donations to other political action committees (PACs) totaling $110,000, including $75,000 that went toward City College’s $246.3 million local bond election in 2005.

Those transactions appear to be legal because the foundation is a 501(c)3 nonprofit that technically operates separately from the school and can promote political causes that benefit community colleges within certain parameters, according to a coalition lobbyist. Each of those contributions were approved and properly documented by the foundation’s board, unlike the transactions from early November 2006.

Goldstein also said that the foundation’s board was not happy about the discovery and that the directors returned the money last April, just as the Chronicle‘s stories were breaking. He said the remaining $10,000 was legally acquired from yet another nonprofit controlled by the college and through a private vendor, but the foundation’s board elected to return that money as well on the advice of legal counsel "to avoid any appearance of impropriety."

"Any funds that the college is entitled to cannot and should not be transferred to the foundation," Goldstein told us. "The particular item that you’re asking about was absolutely a mistake. It should not have been transferred. It was found internally, corrected, and the funds were distributed to a variety of student organizations."

The Community College Facility Coalition, which received the $35,000 donation, was formed by a small group of school presidents in the spring of 1993 and today includes 52 districts across California. Its "issues committee" was created expressly for financing statewide bond campaigns.

The political action committee’s state election filings show that the foundation’s contribution was actually made on the same day City College transferred the $38,670 to the foundation’s bank account, rather than a day earlier as the audit states.

City College has aggressively sought such state money — nearly $200 million since 1998 — to match funds raised through local bonds from San Francisco taxpayers to help with its ongoing capital projects like a new gymnasium, a performing arts center, and campuses in the Mission and Chinatown.

The $35,000 contribution was among the largest made to the coalition’s PAC leading up to the election, and Paul Holmes, a lobbyist for the coalition, said only 10 to 12 schools use their foundations to support ballot measures each year. Rarely does it receive a donation of more than $20,000, he said. Holmes added that many colleges use their supporters for donations.

Judy Iannaccone, a spokesperson for the Rancho Santiago Community College District in Orange County, which helped raise $13,600 for the 2006 election, said they did so by forwarding the names of potential donors to the coalition, which allowed the school to remain impartial.

"The money was absolutely not from the general fund," Iannaccone told us.

Colleges and universities commonly form nonprofit foundations to raise money on their behalf from alumni and other supporters, like the behemoth $1.1 billion endowment of the UCSF Foundation, which encourages and administers private giving to the medical school and health-related research of the University of California-San Francisco.

City College’s foundation is considerably smaller. It had $22 million in net assets at the end of the 2007 fiscal year, according to district documents, and describes itself in an audit as a discrete component of the school. The foundation gives out hundreds of relatively small scholarships to students every year, some worth up to $3,000, but most for smaller amounts of between $250 and $500.

The foundation also maintains a separate board of directors that, like many higher-education foundations, contains top officials from the school itself, like Chancellor Day and Vice Chancellor Goldstein.

Most of the foundation’s other directors, however, are simply civic leaders who support City College’s mission but don’t work for the district and aren’t affiliated directly with Day’s administration.

The two entities are still close enough that the district handles bookkeeping for the foundation and shares its employees. For instance, the audit shows that the foundation’s finances — including its political contributions — were often prepared by City College’s chief administrative services officer, the title carried by Stephen Herman, who was implicated in the first round of illegal diversions made public last year.

"People literally thought that the college was obligated to make a contribution to this statewide campaign and that meant funds that would otherwise be under the college’s control could be eligible for a donation," Vice Chancellor Goldstein told us. "But, of course, that’s incorrect."

Dems running out of ballots in Texas


*UPDATE: It’s happening in Ohio, too.

Below is a quick post from the Austin American-Statesman. Does the shortage of ballots in some states foreshadow the Dems taking on traditionally Republican sections of the country?

Williamson Democratic ballots running low
By Andrea Lorenz | Tuesday, March 4, 2008, 01:44 PM

So many Democrats have voted in Republican stronghold Williamson County that ballots are already running low in some precincts.

“I have a little bit of concern that (the Democrats) didn’t order enough ballots,” Elections Administrator Rick Barron said.

Democratic election workers in some Williamson County precincts have called the county elections office today to say they’re already halfway through their ballots, and the afternoon and early evening heavy traffic has yet to happen.

The Democrats ordered about 50,000 paper ballots, Barron said, and the Republicans ordered 57,000. Each Williamson County polling location has one electronic voting machine. If precincts run out of paper ballots completely, voters will be directed to the machines, Barron said, which could mean long lines later today.

The location most in danger is Precinct 382 at Cactus Ranch Elementary School in Round Rock. Richard Torres, the chair of the Williamson County Democratic Party, said two more electronic machines are being delivered to Cactus Ranch to make up for it.

Torres said his party ordered 4.5 times as many ballots as the Secretary of State recommended, according to the state formula of how many people to expect to vote.

“People are just coming out all over the place,” Torres said.

Barron also clarified that the problems with the Williamson County election site did not cause a crash of the system, but the site was only allowing 150 people on the site at one time. This created a system down notice to the other people trying to access the site. The problem has been fixed, he said, by allowing more users to visit the site.

Jealouz cat is ultra jealouz


My Icanhascheezburger buttons arrived in the mail today. I ordered 16 of them. Snap. If you’re extra nice or leak me documents, I’ll give you one.



Diablo Cody is fucking punk rock



She used to write for alt-weekly newspapers. She worked as a stripper. She wrote a well-received memoir. Oh yeah, she won an Oscar, too. Then, when she was offered a pair of million-dollar shoes to wear to the Oscars, she told the maker, Stuart Weitzman, to go shove them up his ass.

I’ve always loved watching aging Midwest punk and hardcore kids make good, like those who went on to become nonprofit administrators, nurses, defense lawyers, journalists and screenwriters, quietly nurturing that side of their own mind that wasn’t afraid to call bullshit.

Thank you, Diablo Cody. This could only get better if the one-time Minneapolis resident started name-dropping Hammerhead, Holding On, Harvest, Profane Existence and AmRep Records in interviews. Yeah, yeah. Bob Mould and the Jayhawks, too.

Sharing the Panopticon


› gwschulz@sfbg.com

When two airline workers were robbed at 14th and Mission streets last August, the victims called 911 and described their attackers to the dispatcher as a pair of African American males.

At the time, several groups of people stood two blocks away at the always manic intersection of 16th and Mission streets, a high-crime area where the city installed four public surveillance cameras as part of an ongoing pilot project that began in 2005.

Police nabbed two suspects there whom they believed fit the description, and the victims later identified the duo as their attackers. Case closed. Except for one problem: the suspects claimed they were standing at 16th and Mission streets the whole time and never ventured two blocks away, to where the robbery occurred.

So a deputy public defender, Eric Quandt, tried to obtain footage from the city’s controversial public safety cameras to confirm their story. He was denied access to it by the San Francisco Department of Emergency Management because, according to the city’s Administrative Code, only police officers with a written request can review the recordings.

Other government agencies must get a court order, and since the recordings are held by the city for no more than seven days, by the time defense attorneys realize crucial evidence might exist, it’s likely to be long gone.

Mayor Gavin Newsom’s expansion of public surveillance cameras across the city has been the subject of regular criticism from privacy advocates who say no substantial evidence exists that they reduce crime or provide valuable evidence to prosecutors. But few imagined Big Brother could serve as an alibi proving someone’s whereabouts when police placed the wrong suspect at the scene of a crime.

Quandt managed to get the footage in time after appealing to a police inspector, and 23-year-old Neil Butler and 21-year-old Robert Dillon, who had served 70 days in jail, were freed. However, the city’s elected public defender, Jeff Adachi, said there have been almost a dozen or so other instances when his office believed surveillance footage from the cameras could refute a prosecutor’s claims, but city officials have barred PDs from accessing it.

"These two men would have faced decades in prison," Adachi told the Guardian, "so I find it shocking that law enforcement would object to the defense obtaining these tapes. It has to be a two-way street."

"[City officials] act as if they have a proprietary right over the footage," added Rebecca Young, the managing attorney for Adachi’s felony unit. "We are officers of the court. We should not have to deal with bureaucratic red tape to access and review the footage."

Few cities in the United States have rules in place reguutf8g the use of surveillance footage to begin with, so determining procedures for how defense attorneys might use the cameras to free innocent people once again puts San Francisco on the cutting edge of public policy.

After learning about the robbery case last August, Sup. Gerardo Sandoval decided defense lawyers need access to the recordings if they could be used as evidence to free people wrongfully charged with crimes.

Sandoval’s legislation would require the city to preserve the footage for 30 days instead of seven, giving defendants more time to access the footage. Their lawyers would only need to submit a written request to the Department of Emergency Management, which controls the tapes.

But Newsom’s newly appointed top criminal-justice aide, Kevin Ryan, and the mayor’s chief of staff, Phil Ginsburg, want to kill the legislation, claiming it would cost the city too much money and could potentially compromise ongoing criminal investigations by exposing witnesses or confidential informants who appear in the footage.

"It’s safe to say that they tried to derail the legislation," Sandoval told the Guardian.

Ryan, you may recall, is the former US attorney for the Northern District of California who attempted to define his law enforcement career by prosecuting the steroids scandal in major-legal baseball and later the stock options backdating imbroglio that consumed Silicon Valley.

His last major imprint on the public, however, came when the White House ousted him from the Justice Department along with seven other chief federal prosecutors. While his colleagues were said to be let go because they weren’t fully cooperative with the GOP’s political agenda, it was reported that Ryan was asked to resign because of mounting criticism that he’d poorly managed his office and alienated staffers, despite being an eager loyalist of President George W. Bush.

After that, Ryan worked briefly in the private sector before Newsom surprised the city at the beginning of the year by making him director of the Mayor’s Office of Criminal Justice. While a prominent San Francisco Democrat making a Republican devotee his top aide on issues related to crime raised eyebrows, Ryan’s inaugural act in that capacity epitomizes the outlook of a conservative law enforcement official.

Sandoval has attached to his ordinance a string of amendments to satisfy law enforcement, such as instituting punishments for defense lawyers who publicly disclose videos and allowing the district attorney and the Police Department 180 days to review footage and block its release if it’s deemed too sensitive for any reason.

However, the supervisor says he’s still not sure that Newsom, through his new conservative crime-fighting proxy, will accept making a traditional tool of law enforcement the new weapon of public defenders who serve indigent criminal suspects.

"I got the impression from Ryan that he outright opposed it," Adachi said. "But I’m not sure where the mayor stands on it."

Ryan and mayoral chief of staff Ginsburg did not return calls for this story, nor did the mayor’s press spokesperson, Nathan Ballard, respond to a detailed e-mail.

But Ryan has already shown a willingness to flout Newsom’s caution on the cameras. After the Feb. 6 Police Commission meeting, Ryan told the San Francisco Chronicle that police should be permitted to monitor the city’s surveillance cameras in real time to identify crimes about to occur or already in progress.

When the safety cameras were first launched, however, Newsom made a major concession to privacy advocates, the American Civil Liberties Union of Northern California most notable among them, by prohibiting law enforcement officials from watching the cameras live, in part to protect against potential voyeurism or racial profiling.

Ryan’s desire to expand the camera program is "all the more reason to make sure there’s a process in place," Adachi said, for defense lawyers to obtain the footage.

The Police Commission, meanwhile, has made it clear that the footage should not be widely available as public records and the cameras ought to be shut off during political demonstrations to protect First Amendment rights and keep federal agents from using them to target undocumented immigrants.

"If the public defender or a defense lawyer needs it, to me that’s an appropriate use of the information," police commissioner David Campos told the Guardian. "The concern should be: is there any way to keep the feds from getting this footage? We don’t have a way of doing that right now."

San Francisco launched its surveillance program in mid-2005 with two cameras outside public housing tracts in the Western Addition. Two and a half years later, 74 cameras are spread across the city in 25 locations, even though city officials were still calling this a pilot project as recently as this month.

The city was supposed to provide the Board of Supervisors and the Police Commission with a report by last year that evaluated how well the cameras were performing, but city administrator Ed Lee has missed several deadlines, and now it’s not due until March.

Jennifer King, a research analyst for the University of California at Berkeley’s Samuelson Law, Technology and Public Policy Clinic, is leading the study and says it’s one of only two that she’s aware of taking place in the US at this time.

A preliminary report done by the Berkeley team will only include an analysis of crime statistics, but a second study will involve comparing camera locations with control sites that are the same size and have similar demographics and crime profiles, because "there could have been changes in the background crime rate citywide that had nothing to do with the cameras," King told the Guardian.

In the meantime, Police Chief Heather Fong told the commission Feb. 6 that inspectors had requested footage nearly 80 times but in only two instances was it "useful in a prosecution."

At another public meeting last year, an official acknowledged that of the 178 cameras controlled by the federally subsidized San Francisco Housing Authority, none has ever led to an arrest in a homicide case, despite the fact that a large percentage of the city’s violent crime occurs in public housing developments.

Even Sandoval’s not convinced of the cameras’ efficacy: "We have to do everything we can to make sure everyone has fair access to the cameras…. But I’m fairly certain that the cameras really are just an intrusion into our privacy and the risk greatly outweighs any benefit."

Super lessons


› news@sfbg.com

The Super Fat Tuesday presidential primary election in San Francisco was marked by some portentous trends and factors that could have a big impact on who becomes the Democratic Party nominee — and whether that person will be accepted as the people’s legitimate choice.

Consider the scene the night before the election. A small army of young people made its way up Market Street carrying signs and pamphlets supporting their candidate, Barack Obama, taking up positions outside Muni and BART stations and on high-profile corners to spread the message of change.

Meanwhile, inside the Ferry Building, Mayor Gavin Newsom and former president Bill Clinton convened one of several "town hall meetings" held simultaneously around the country to promote the presidential campaign of Hillary Clinton, who checked in on a satellite feed.

Among the many luminaries on hand was State Sen. Carole Migden, a superdelegate (one of 71 from California) who has not yet pledged her support to either Clinton or Obama and who could ultimately play a huge role in determining the nominee. Migden made a show of exchanging pleasantries with the former president, warmly embracing him in front of a crowd of about 250 people and more than a dozen news cameras before taking a seat nearby.

But Election Day was for the regular citizens, and once their votes were counted and analyzed, a couple of things became clear. Clinton won California with the absentee ballots that she had been banking for weeks thanks to her deeply rooted campaign organization. Her margin of victory among early voters was about 20 percentage points.

Yet a late surge of support for Obama caused him to win at the polls on Election Day, leading to his outright victory in San Francisco by a margin of about 15,000 votes, or almost 8 percentage points. It was a symbolic victory for progressives on the Board of Supervisors, who backed Obama while Newsom campaigned heavily for Clinton (see "Who Wants Change?," 1/30/08).

Obama and Clinton were close enough in California and the rest of the Super Fat Tuesday states that they almost evenly split the pledged delegates (those apportioned based on the popular vote). But if present trends continue, even after Obama’s sweep of four states that voted the weekend after California, neither he nor Clinton will have captured the 2,025 delegates they need to secure the nomination before August, when the Democratic National Convention convenes in Denver.

That means the nomination could be decided by superdelegates such as Migden, a group comprising congresspeople and longtime Democratic Party activists, from party chair Art Torres down to those with key family connections, such as Christine Pelosi and Norma Torres.

And that could be a nightmare scenario for a party that hopes to unify behind a campaign to heal the country’s divisions.

Political analyst David Latterman, president of Fall Line Analytics in San Francisco, said this election was marked by a higher than expected turnout and more people than usual voting on Election Day rather than earlier. In San Francisco turnout was more than 60 percent, including an astounding 88.4 percent among Democrats.

"In the last couple weeks there was a strong get-out-the-vote push by Obama’s people," Latterman said during a postelection wrap-up at the downtown office of the San Francisco Planning and Urban Research Association (SPUR), which he delivered along with campaign consultant Jim Stearns.

Latterman said that Obama surge, which drew out voters who were generally more progressive than average, may have been the margin that pushed Proposition A, the $185 million parks bond, to victory. It trailed among absentee voters but ended up less than five points above the 66.6 percent threshold it needed to pass.

"I don’t know if this would have passed or not if it had not been for the Obama push at the end," Latterman said.

Stearns agreed, saying, "In some ways, we should name every park in the city Obama Park."

At the measure’s election-night party at Boudin Bakery on Fisherman’s Wharf (where some of the bond money will renovate Pier 43), Yes on A campaign consultant Patrick Hannan told us he was worried as the initial results came in.

"That is a high threshold to hit," he said of the two-thirds approval requirement for bond measures.

But as the crowd nibbled on crab balls and sourdough bread, the results moved toward the more comfortable level of around 72 percent support, prompting great joyful whoops of victory.

Recreation and Park Department executive director Yomi Agunbiade acknowledged that the decision to place the measure on the February ballot rather than June’s was a leap of faith made in the hopes that the presidential election would cause a high turnout of Democrats.

"We’re excited," Agunbiade said at the party. "This was a hard-fought race that involved getting a lot of people out in the field and letting folks know what this was about — and we’re definitely riding the wave of high voter turnout."

The strong turnout helped Obama win half of the Bay Area counties, Sacramento, and much of the coast, including both the liberal north coast and the more conservative Santa Barbara and San Luis Obispo counties.

But Clinton’s advantages of socking away early absentee votes and her popularity with certain identity groups — notably Latino, Asian, and LGBT — helped her win California.

Yet Obama’s appeal reaches beyond Democratic Party voters. He got some late support from prominent local Green Party leaders, even though their party’s candidates include former Georgia congressional representative Cynthia McKinney and maybe Ralph Nader (see "Life of the Party," 1/16/08).

Sup. Ross Mirkarimi, a founder of the California Green Party who also worked on Nader’s 2000 presidential campaign, announced his endorsement of Obama at the candidate’s Super Fat Tuesday event at the Fairmont San Francisco. Mirkarimi also noted the support of Greens Mark Sanchez, president of the San Francisco Board of Education, and Jane Kim, the highest vote getter in the school board’s last race.

"I registered Green because I felt their values were closer to mine," Kim, who left the Democratic Party in 2004, later told the Guardian. "But I’ve always endorsed whoever I thought was the best candidate for any office…. I saw Obama as a candidate taking politics in a different direction that I hadn’t seen a national candidate take things before."

If Obama’s campaign can continue to develop as a growing movement running against the status quo, he could roll all the way into the White House. But it’s equally possible to imagine the Clintons using their deep connections with party elders to muscle the superdelegates into making Hillary the nominee.

Stearns said this scenario could hurt the party and the country: "I can’t imagine a worse outcome for the Democratic Party than to have Obama go into the convention ahead on delegates he’s won and have Hillary Clinton win on superdelegates."

Amanda Witherell and David Carini contributed to this report.

Chancellor Bling-Bling


› gwschulz@sfbg.com

Outgoing City College of San Francisco chancellor Phil Day presided over major institutional changes during his decade-long tenure, although he leaves under a cloud of financial scandals involving the misuse of public funds. Now a Guardian review of public records shows the decision to reward Day handsomely and neglect recommended internal auditing controls set the scene for the problems to come.

Day’s high-end compensation and accompanying expense account allowed him to live well. His total compensation last year eclipsed that of the heads of 18 other two-year colleges across California surveyed by The Chronicle of Higher Education, which included community colleges for the first time in its 2007 analysis.

Day’s earnings totaled $403,441 for the fiscal year ending in 2007 and included $25,448 in retirement pay plus $31,975 in deferred compensation. He received $12,000 to cover housing expenses — one of only two chancellors who were awarded the benefit — and the state paid $7,200 more for a car.

No one else surveyed from California came close. The runner-up, at Rancho Santiago Community College, made $80,000 less than Day and received nothing for a home or a car. Chui L. Tsang, head of a two-year college in Santa Monica, where the median home value is higher than in San Francisco, received about $30,000 toward housing and automobile expenses but earned a whopping $140,000 less than Day in total compensation.

Darroch Young, former chancellor of the community college district in Los Angeles, which has more students than any other in the country, earned almost $100,000 less than Day, who first joined City College in 1998. Day even made more money than the chancellors at six University of California campuses, including San Diego, Irvine, Davis, and Santa Cruz.

"Raw politics" was how trustee Julio Ramos described it to the Guardian. "The chancellor has had the majority on the Board of Trustees at City College," Ramos said. "Like with any majority, he can dictate the terms of his compensation package."

Trustee Milton Marks, who along with Ramos represents a frequently critical minority on the school’s independently elected board, added that the terms of Day’s contract were crafted before Marks and others ran for open seats on a reform slate.

As long as the board extended Day’s contract each year, it was difficult to slow his salary increases without convincing a majority to start from scratch and reevaluate his performance to determine if his compensation was reasonable. But it’s too late for that now. Day is leaving the school March 1 for a new job on the East Coast, but Marks wants the next chancellor to receive increases "that are not so rigidly tied to a formula."

Day’s compensation is a small fraction of the school’s $375 million budget. But it reflects the district’s priorities, and a recently unveiled 232-page internal probe of campaign law violations at the college stemming from a 2005 bond election offers a telling look at how the school has been operated under Day’s leadership.

To conduct the investigation, the school hired Steven Churchwell of the multinational law firm DLA Piper, the same group that examined steroids in major-league baseball for former senator George Mitchell. One of first things Churchwell did when he arrived at the school was to search for City College’s internal auditor. He soon discovered, however, that the college doesn’t have an internal auditor or an audit committee.

"It’s very common to have an internal auditor at an entity of this size," Churchwell told the school at a Jan. 24 meeting.

Outside auditors inspect the school’s books annually as required by law to make sure it’s following the rules of basic money management, a limited review compared to what an internal auditor, working full-time for the district, might check.

The Guardian reviewed the school’s annual outside audits going back several years and discovered that each of the reports between 1998 and 2003 advised the school to hire someone to do the job year-round internally.

"Regular internal audits enable timely detection of accounting inconsistencies and deviations from established policies and procedures," the reports state year after year. But each year the inspectors found anew that their recommendations were "not implemented."

Regarding the headline-grabbing mess that began when two school bureaucrats in separate instances illegally diverted public funds to a campaign committee, Churchwell said its causes were mistakes due more to ignorance than knowing attempts to break the law.

"It’s almost like lightning striking twice," Churchwell told the school.

But now it appears the storm might have been averted if Day and others in his administration had listened to the school’s outside auditors 10 years ago. Churchwell concluded that an internal auditor might have immediately caught election law violations but without one "no one person has a firm grasp on all the accounts that are open, what they are used for, or who can deposit checks into them," leading to a "glaring lack of oversight of the college’s involvement in fundraising from college contractors."

Day didn’t respond to requests for comment, nor did trustees Lawrence Wong or Anita Grier. But vice chancellor Peter Goldstein argued that the school would set the agenda for an internal auditor, so such a person might focus on how the district reports student attendance or manages financial aid, not necessarily on accounts receivable.

"My response would be that this is a very large and complicated institution from several different perspectives, including the financial one," Goldstein told the Guardian. "While no single person may have a complete understanding of every single account, I believe that we have enough professional staff at the right level with the right background over all the accounts."

It could be that like many bureaucrats, Day is threatened by the possibility of an efficiency expert roaming the school’s halls and compromising the administration’s control over its bank accounts. But Day complained at the Jan. 24 meeting that City College just didn’t have the resources to hire an internal auditor, even though auditors often find enough ways to reduce wasteful spending that they cover their own expense and much more.

Not to mention that if Day had earned as much in compensation as his equivalent in Los Angeles, City College would have had about $100,000 left over for an internal auditor. A district report from 2000 even concluded that an internal auditor at that time would have cost about $105,000.

Two vice chancellors implicated in the election law violations, James Blomquist and Stephen Herman, earned about $200,000 and $170,000 respectively during the 2007 calendar year, compensation figures obtained by the Guardian through a records request.

Blomquist worked as a regular consultant to the school before earning $175,000 his first full year as a City College administrator in 2005. His firm, Blomquist Consultancy, made $401,074 from the college between April 2002 and May 2004, records show.

As for Day, his largest pay increase came after the 2005 bond election, when he was given an 18 percent raise for the 2006 calendar year. He received a 17 percent raise during the year of the 2001 bond election, when the school asked voters for $195 million.

The Chronicle of Higher Ed points out that compensation for community college presidents lags behind what the heads of four-year institutions tend to earn, despite their growing responsibilities, like courting major donors and lobbying legislators. The extreme exception, however, is Day, who last year ranked third nationally in earnings among 68 other community college heads.

"Do I feel guilty at all about being one of the highest-paid college presidents in the country?" Day asked the education rag’s surveyors in November 2007. "Absolutely not."

His supporters argue that Day has attracted millions of new dollars from Sacramento to the district, and along with the school’s trustees, he helped promote a February ballot initiative designed to ensure that a greater portion of the state’s General Fund go toward community colleges. The current formula used by the state for financing two-year schools hinges on how much money is set aside for California’s K–12 system.

Day also took over a school with crumbling buildings, some constructed in the early 20th century. When Day inherited the more than 90-year-old John Adams Campus in the Haight, its bricks were "falling off the side of the building," he said in a glossy 12-page advertorial the college ran in the San Francisco Chronicle on Dec. 19, 2007.

The school floated two bond measures totaling about $458 million in 2001 and 2005 to complete projects citywide, but the latter was badly rushed. Poor planning and rising construction costs have forced the school to cancel projects promised to voters.

Diana Muñoz-Villanueva, a student representative on the Board of Trustees, said she lives on about $600 per month, "so I know there are ways to survive on less" than what the chancellor makes. But based on his duties, she said, "I think it’s fair. I hope to make that much money someday."

Day could nonetheless be taking a substantial pay cut for his new job in Washington DC, at the National Association of Student Financial Aid Administrators. According to its tax forms, the organization’s last president, Dallas Martin, who led the nonprofit for more than 30 years, earned about $250,000 during 2006 in pay and benefits.



Chancellor Phil Day’s departure from City College of San Francisco is not an indication that he’s easing into retirement. Instead, he’s crossing the country to join a controversy potentially hotter than anything he faced in politically rancorous San Francisco.

Day announced at the end of 2007 that he will be leaving the college in early March to accept the top job at the National Association of Student Financial Aid Administrators, one of the nation’s most powerful lobbying groups on issues related to higher education.

But the Washington DC nonprofit has spent the past year mired in a nationwide scandal over how student loan administrators at individual colleges promote certain bank lenders to students in exchange for kickbacks.

Six student loan administrators were fired or resigned and dozens of schools ceased entering into revenue-sharing agreements with lenders following an extensive investigation by New York attorney general Andrew Cuomo.

Several schools agreed to reimburse borrowers — i.e., college students — millions of dollars as part of a series of settlements with Cuomo’s office, which is still investigating how major lenders market their products to needy students.

The organization Day is poised to take over has been suffering embarrassing waves of unwanted attention as a result. Officials from Cuomo’s office physically monitored the group’s annual convention last July to ensure that corporate sponsors from banking institutions didn’t ply student loan administrators with lobster dinners, iPods, DVD players, nighttime parties, or trips to vacation resorts, all types of incentives offered to attendees in the past.

In other cases, school employees in charge of handling student loans simultaneously held thousands of shares of stock in lending companies, earned tens of thousands of dollars in consulting fees from them, and served on their advisory boards.

The Chronicle of Higher Education has followed the investigations closely and quoted a lobbyist in mid-January describing the NASFAA as "radioactive" on Capitol Hill due to the widening tumult. A congressional inquiry led by Sen. Ted Kennedy (D-Mass.) revealed last September that a University of Southern California official accepted Rose Bowl tickets from Citibank, a major national player in student lending.

Aid officials at the University of Texas "were treated to ice cream, lasagna, barbecue, candy bars, popcorn, happy hours, birthday cakes, cookies, and other personal benefits," according to the report.

A spokesperson for the NASFAA refused to comment beyond a statement released following Day’s appointment. But Day told the group’s members in a recent e-mail that national headlines regarding the kickbacks "have diminished the significance of our contributions," and he hopes to ease the criticism by holding "listening sessions" around the country.

"We need to develop a public relations/marketing and communications offensive that paints a more complete and compelling picture of the difference we can make in students’ lives," Day wrote.

The scandal erupted around what are known as preferred lenders lists, which colleges and universities distribute to students struggling to navigate the complex world of school loans, where private banks compete aggressively with direct lending offered by the federal government.

Most students rely on their school’s list of preferred lenders to make a decision, so banking institutions do whatever it takes to get their name on those lists (or their logos on school paraphernalia), from showering student-loan bureaucrats with lucrative gifts to exclusively sponsoring athletic departments and alumni associations.

Schools and lenders have promised to abide by a new list of ethics rules, drafted by Cuomo’s office in addition to other settlement terms, to regulate their conduct, and to restore faith in financial aid administrators.

Photos from Obama’s party at the Fairmont


The crowd here grumbled loudly when CNN announced that Hillary had a substantial lead in California. But the state is far from lost to Clinton. A massive portion of California’s voters submitted absentee ballots that have not been counted. And as we pointed out earlier, even if the rest of the state’s Democratic establishment goes for Hillary, San Francisco would rather share a tumbler of bourbon with Obama. Here are some images from his Super Tuesday party at the Fairmont Hotel in downtown SF:



Obama’s party at the Fairmont Hotel


Finally settled in at the Fairmont downtown after searching fruitlessly in the beginning for a wireless connection.

The most significant thing I’ve seen so far tonight is Oakland City Attorney John Russo throwing his weight behind Obama and MCing tonight’s event. Last night we saw San Francisco City Attorney Dennis Herrera at a rally for Hillary attended by Bill Clinton, Gavin Newsom, Carole Migden and Oakland Vice Mayor Henry Chang.

So now at least we know who wants to return has-been bureaucrats to Washington and who might actually be interested in some original ideas at the federal level. We haven’t seen much talk from analysts about what an Obama cabinet might look like, but for some of us, that’s one of the most intriguing questions of all.

Bill Clinton coaxes voters into windowless van


Bill Clinton always excelled at telling stories. Facing a tough question from a somber-looking vet? Tell a story. Bleary-eyed after hitting several California cities in a single day campaigning on behalf of your wife? Tell a story. Trying to convince undecided voters your family isn’t an inhuman band of relentless over-achievers that hasn’t experienced what most Americans might consider a normal day in decades? Tell a story.

Joined by Gavin Newsom, that’s what Bill Clinton did again for voters yesterday at the Ferry Building in San Francisco. Told a bunch of stories.

What didn’t make sense was why Bill Clinton spent so much time on Monday canvassing California when Hillary’s people have acted as if the state was a lock. By the way, who are the badasses working for her that so brilliantly managed to make C.W. Nevius the vehicle of a localized, anti-Obama whisper campaign? Those bastards are earning their keep.

Hillary’s latest commercial

Money for nothing


› news@sfbg.com

Nedir Bey, a close confidant of the late Your Black Muslim Bakery founder Yusuf Bey, received public funds for his anemic 2002 run for the Oakland City Council but faced little scrutiny from election officials for suspect political contributions and spending.

The discovery appears to be one more example of the Bey empire’s alleged scams and schemes uncovered by the Chauncey Bailey Project since the eponymous journalist’s August 2007 murder, which law enforcement sources have linked to the bakery.

For five years the Fair Political Practices Commission in Sacramento sat on a request to investigate alleged campaign finance irregularities committed by Nedir Bey — who owes the city of Oakland $1.5 million in another matter — then dropped the probe because too much time had elapsed.

Bey ran for the Oakland City Council’s District 4 seat in March 2002 but got only 268 votes. He received $14,178 in public matching funds for his campaign despite questions raised by the head of Oakland’s Public Ethics Commission about the sources of the candidate’s contributions.

In August 2007, however, the FPPC sent a letter to Bey announcing it would not be taking any action against him, “given the age of this case and our current enforcement priorities.” Bey refused to comment on any of the main points in this article.

FPPC spokesperson Roman Porter said he could not say why the investigation lagged as long as it did, other than to say that a former enforcement official refrained from pursuing the case. Porter said the official closed a large number of cases to decrease a backlog, but Bey’s wasn’t one of them.

A new chairman and enforcement team came on board last year, but by that time the statute of limitations had already expired on two of the matters contained in Oakland’s complaint and there wasn’t enough time left to investigate the third matter before the statute of limitations ran out, Porter said.

Oakland’s Public Ethics Commission executive director, Dan Purnell, passed the case to Sacramento instead of completing the investigation locally. City law gives the Public Ethics Commission the sole authority for civil enforcement of the Limited Public Financing Act, which contains regulations for disbursing matching funds.

Purnell suspected irregularities in Bey’s campaign expenditures as early as January 2002, 10 months before he asked the state FPPC to initiate an investigation.

The March 2002 election was the first in Oakland to offer public financing to candidates who agreed to abide by voluntary spending limits. Candidates in the election could qualify for up to $14,700 in matching public funds from a special account established by the city to help defray the cost of running for office.

Matched contributions had to be $100 or less. The Committee to Elect Nedir Bey reported it had raised a total of $14,517, of which $14,178 was eligible for matching funds. The campaign reported it spent a total of $39,741 on the election.

Documents obtained from the FPPC through a public records request show that of 145 contributions, 123 were made with $99 money orders with sequential numbers, all apparently purchased from the same location over a four-day period between Jan. 14 and 18, 2002. Only 22 donations to Bey’s campaign were written on personal checks.

Purnell asked Bey prior to disbursing the matching funds if the money orders were purchased at the same time in bundles and if anyone other than the donor had purchased them. Bey declined to comment for this story, but he explained to Purnell at the time that the donors were transported to the store en masse to buy the money orders, and he promised no one else had obtained them for the donors.

Bey also assured Purnell that the listed contributors were adults who gave their own money, as required by law, although 26 donors listed their addresses as either 5832 or 5836 San Pablo, locations used at that time by Your Black Muslim Bakery.

Once Bey got the money, he stopped filing required campaign finance statements with the city. When he eventually filed them in September 2002, the forms offered no detailed accounting of the $39,741 worth of expenditures. Nor did Bey explain the gap between the amount spent on his campaign and the contributions received, which came to $28,695, including the public matching funds.

Often the bulk of election costs come from fees paid to consultants, printed campaign materials, fundraising events, and office rental. Bey’s committee paid all but $500 to a person by the name of Vaughan Foster, who provided no address or further identification. Foster reportedly received $27,000 for salary, $11,000 for circuutf8g petitions, $241 for voter registration, and $1,000 for phone banking.

Bey’s birth name is Victor Foster.

The Public Ethics Commission received a complaint and ultimately voted in August 2002 to forward the matter to the state FPPC after a stormy hearing during which Bey told the commissioners he was “not a professional politician,” as the Contra Costa Times reported. He also told the commission he “would not bow down to [them].”

In an Oct. 10, 2002, letter to state authorities, Purnell wrote, “The commission believes this matter is important because the commission relies on the content and accuracy of campaign statements to help administer its matching fund program.”

The FPPC has moved to subpoena bank records and other materials during the intervening years. But in August 2007, nearly five years after Purnell’s initial request and four years after he forwarded hundreds of pages of documentation from the campaign to Dan Schek, an FPPC investigator, Bey received a letter declaring the case closed.

Jean Quan, the District 4 incumbent who ran against Bey in 2002, said she didn’t recall him stumping widely or knocking on doors in the area’s neighborhoods. She was surprised he raised $15,000 from private donors to begin with and said he didn’t appear to spend much of it on campaign signs.

“I ran into a few fliers of his,” she said, “but nothing that would cost $30,000.”

According to the city’s municipal code governing elections, the Public Ethics Commission is supposed to “promptly advise” the city attorney in writing, as well as the “appropriate prosecuting enforcement agency,” of any evidence of criminal violations.

The law states, “any person who knowingly or willfully misrepresents his or her eligibility for matching funds … is guilty of a misdemeanor.”

The law also gives the local commission broad latitude to recover the funds, including penalties and fines not to exceed $1,000 per violation, and authorizes the commission to sue the candidate.

But none of that was done in Bey’s case, Purnell said. The matter was referred to the state because the Ethics Commission does not have the authority to enforce state elections laws, which at that time appeared to be Bey’s most obvious violation, Purnell said.

“To make a criminal complaint we have to prove intent,” Purnell said.

He said he was never pressured by anyone to refer the matter to the state instead of local authorities. Back then he had no idea who Bey was, that he was connected to Your Black Muslim Bakery, or that he had defaulted on a $1.1 million economic revitalization loan from the city of Oakland just a few years before running for the Oakland City Council, Purnell said.

“I didn’t know Nedir Bey from Adam,” Purnell said, adding that he later learned of Bey’s background from a November 2002 article in the East Bay Express.

“What I recall him telling me was that it was a big grassroots effort on his part, that many of his contributors were poor and lived in a complex and he organized them to go down there [to buy the money orders],” Purnell said. “It sounded plausible.”

The city’s original public financing ordinance was less restrictive regarding matching contributions than it is now, partly because of the Bey case. Contributions made by money order are no longer eligible for matching funds and now must be made on two-party checks drawn on the bank account of the contributors.

In the past, Bey has represented himself as a “spiritual adviser” to the late Antar Bey, who was briefly head of Your Black Muslim Bakery. Other bakery associates face numerous criminal charges in Alameda County, including torture, kidnapping, real estate fraud, and the Aug. 2, 2007, killing of Oakland journalist Bailey, who was working on stories about the Bey empire.

Most recently Nedir Bey served as president of the school site council for Fruitvale Elementary School.

Bob Stern, president of the Center for Governmental Studies in Los Angeles, said the understaffed FPPC couldn’t investigate every small-time municipal election.

But, he said, “when the ethics commission realized the FPPC wasn’t acting on the case quickly, then Oakland really should have begun looking at it.”

Cecily Burt is a staff writer for MediaNews, one of the Guardian‘s partners in the Chauncey Bailey Project. For more information and to read past stories, go to www.sfbg.com/news/chaunceybailey.

New College still poorly managed, report says


The beleaguered New College of California is facing another gloomy report just released from its accrediting agency after first being placed on probation last July. Meanwhile, two trustees of the school, Peter Gabel and Colleen O’Neal, reportedly resigned from the school’s board Jan. 15.


Representatives of the Western Association of Schools and Colleges made a special site visit to the famous liberal arts institution and training ground for social justice activists in November to see what progress the school had made since an array of deficiencies were identified in the July report. During the summer, WASC found a history of administrative “sloppiness and arbitrariness” and identified “clear and egregious violations of institutional integrity, academic integrity.”

WASC is still apparently skeptical that New College can improve its management practices despite having repeatedly allowed the school to remain on probation intermittently for years without stripping its accreditation away entirely.

“The institution has established a pattern over the years of being placed under sanction by the commission, responding with superficial adjustment, and rapidly falling back into past practices.”

The great escape


› gwschulz@sfbg.com

There are some dark clouds hovering over City College of San Francisco. The District Attorney’s Office is investigating political corruption allegations, a long-awaited audit of half a billion dollars in bond spending is just months from completion, and several infrastructure projects are running tens of millions of dollars over budget.

But Chancellor Phil Day won’t be around to clean up those messes. He’s leaving City College for a new job on the East Coast at the National Association of Student Financial Aid Administrators as early as March 1.

Day’s announcement came just weeks before the school’s Board of Trustees Jan. 10 unveiling of the results of an internal investigation into who knew what about City College money from taxpayers being diverted to an election campaign committee that should have operated entirely independently of the school.

The investigation concludes that there was no evidence that contractors made donations to a campaign committee formed by the school’s leadership in exchange for favorable business arrangements.

But the report does confirm that two lower-level bureaucrats, Stephen Herman and James Blomquist, instructed business tenants who used school facilities — the coffer vendor Bean Scene and Bay Area Motorcycle Training — to sign rent checks over to the committee instead of to the school. Neither tenant appeared to have any intention of contributing to the committee.

The timing of the checks is also questionable. The school returned the Bean Scene’s $20,000 rent check shortly after recognizing a potential violation of the state’s Education Code, which prohibits using school funds for electioneering purposes. But officials then violated the same provision when a $10,000 rent check from the motorcycle-training outfit wasn’t returned to public coffers until a year and a half later, when the San Francisco Chronicle‘s Lance Williams began snooping around.

"The fact that an apparent misuse of public funds could be discovered, corrected, and then occur again after such a short period reveals a glaring lack of oversight of the College’s involvement in fundraising from College contractors, literally from start to finish during the campaign," the report states.

City College’s trustees and school administrators created the Committee to Support Our City College in 2005 as a campaign vehicle for convincing voters to authorize $246 million in bond projects, the third such bond election for City College in a decade.

The report’s executive summary in part downplays the significance of the Chron stories from last April that inspired the probe in the first place. Rather, it implies that the fund diversions had more to do with a poor accounting system and an 11th-hour decision to rush the bond election to voters with minimum preparation.

It’s not clear how the report will impact a DA’s investigation of the campaign committee related to the same allegations. The Guardian revealed last summer (see "Day’s Dilemma," 8/8/07) that just days before the November 2005 election, Kamala Harris’s office also requested documents stemming from the college’s $8.7 million purchase of land in Chinatown that the county determined was worth only $1.7 million for tax purposes.

We also reported that City College’s half a billion dollars in infrastructure improvements are running approximately $225 million over budget and as a result, the school has gutted projects promised to voters and reallocated about $130 million in order to sustain others (see "The City College Shell Game," 7/4/07). An expansive management audit of the school’s bond spending is due in June.

In a prepared statement, Day insists the fund diversions were an accident, and he complains that if the San Francisco Ethics Commission had notified it of the mistake sooner, the school would have corrected it. The Guardian reported that the Ethics Commission had known the Bay Area Motorcycle Training check was illegally used by the committee but waited for more than a year to notify the state’s Fair Political Practices Commission of a possible elections law violation (see "At the Crossroads," 7/18/07).

"As the chancellor and CEO of this college, I take responsibility for these mistakes," Day’s statement reads. "However, it is important to understand that these mistakes occurred innocently and inadvertently, and as soon as we learned of them, we took immediate action to rectify them."

An exasperated Day, who became City College’s chancellor in 1998, said in a phone interview that he didn’t believe the school’s troubles would make it difficult for his successor to return to the ballot and get voters to approve bond projects they’ve already partially paid for, including a stem-cell technology training center.

"I don’t feel like I’m leaving someone with disarray," Day told us. "It’s the people in the institution that sometimes make mistakes, not the institution itself."

Day’s departure also comes as a building inspector hired by the school in 2003 alleges in a federal lawsuit that he was wrongfully terminated last summer for blowing the whistle on illegal building code violations and for making safety complaints during facility renovations. The suit was filed Dec. 24, 2007.

Plaintiff Lawrence Lauser contends that he’d repeatedly informed his bosses at City College that building codes were being violated during construction work, but there was no willingness to fix them.

Instead of being outright fired, Lauser alleges, he was told the work had run out. "That was a complete sham," his attorney, Frank Sarro, said. "There wasn’t a lack of work at all." Lauser is also suing his union, the United Brotherhood of Carpenters and Joiners Local 22, for refusing to request arbitration with the school on his behalf.

"He just had a strong feeling that things should be done by the book," Sarro said of Lauser. "And his bosses didn’t want to hear it."

How Oakland’s fearful politicos enabled waste: Part III


In 1996, Your Black Muslim Bakery lieutenant Nedir Bey had a wealth of ammunition with which to lobby city leaders for a $1.1 million loan to fund his health care company, E.M. Health Services.

The previous year, the city of Oakland had agreed to spend hundreds of millions of dollars to bring the Oakland Raiders back from Los Angeles, a deal that quickly soured and has cost the city and Alameda County taxpayers more than $20 million a year ever since.

The developers of a new downtown ice rink had defaulted on $11 million in bonds just three months after the facility opened.

The city had also given plenty of money to other businesses, most white-owned. As a result, the City Council was getting a relentless drubbing from bakery members and black business associates who lined up at meetings to speak on behalf of E.M. Health Services and its efforts to obtain the loan.

They argued that white business owners had an easier time obtaining credit, unsecured loans and support from the city while black-owned businesses endured undue scrutiny. Elected officials endured hints and outright accusations of racism if they dared ask questions about the company or collateral for the loan.

Some of those accusations occurred during the June 4, 1996, council meeting where the officials discussed giving E.M. Health an interim start up loan of $275,000 in city funds. The loan was needed because the company’s application for a $1.1 million share of federal Housing and Urban Development funds for job training programs had not yet been distributed to the city of Oakland.

During the meeting, Shannon Reeves, then-president of the NAACP Oakland chapter, accused the city’s black elected officials of forgetting where they came from.

“It’s time to deliver for the people in the community…,” Reeves said. “We need those who look like us to advocate for us.”

Beth Aaron, executive director of the Bay Area Black Contractors Association also testified at the meeting that night. She said the record proved that white-owned businesses had a much easier time getting Oakland to open its purse strings.

“Those who are white or friends of friends get things done very quickly,” she charged. “Those of us who are of color… do not.”

Even Nedir Bey got into the act.

“A few years ago we wouldn’t have been able to come here and ask for anything without getting run out,” he said. “Cut us a check on Friday for $275,000. Compare us to other projects that you have passed.”

A decade later, E.M. Health is just an unpaid debt on the city’s books, its license suspended by the California Franchise Tax Board. Principal payments first due in May 1998 never materialized, and by the time city staff knocked on its doors in October 1999, the offices had been cleared out.

But the story of how the business, a subsidiary of the now-bankrupt Your Black Muslim Bakery, received the money despite a flawed business plan and a disturbing criminal incident in Nedir Bey’s past illustrates the extent politics and pressure played in officials’ decision to approve the loan.

Bakery members have also been linked to several violent incidents, including the shooting death of journalist Chauncey Bailey, as well as alleged real estate and welfare fraud and child rape. ‘Intimidation factor’

“In reality it was political pressure that got them the loans,” said now-City Council President Ignacio De La Fuente, who was a councilmember at the time. “Deep down inside everybody knew it was bull—. No business plan, no records anyone could show. … And they kept saying they were failing because they didn’t get the city’s money soon enough.”

Retired councilmember Dick Spees, who is white, remembers how heated those meetings were, of being accused of racism because he dared question the business plan or ask about collateral or a missing business license. Bakery members would line up along the wall and refuse to sit, he recalled.

“It sounded good (on paper), this training program to help black people who were not getting opportunities,” Spees said recently. “But there was this intimidation factor, it just didn’t feel comfortable.”

Spees said he grew suspicious when Nedir Bey started racking up ineligible expenses even before federal government lenders had determined E.M. Health’s job training program met its criteria for financing.

Spees said he ended up voting for the loan and for several thousand dollars in advances from city coffers after he was assured by city staff on more than one occasion that HUD would approve the loan and that Bey had put up collateral.

De La Fuente, now council president, said he understood that the HUD money was intended for riskier loans, but that was no reason to cave in to pressure and give the money without trying to protect the city’s resources.

“I never got their support,” he said, referring to his black council colleagues, Nate Miley, Dezie Woods-Jones, Elihu Harris and Natalie Bayton.

Kidnap, torture

The city gave Nedir Bey money despite a disturbing incident that occurred on March 4, 1994, when Qiyamah Corporation, E.M. Health’s nonprofit parent company was still in its infancy.

On that date, Nedir Bey and Abaz Bey, another spiritually adopted son of bakery founder Yusuf Bey, were arrested and charged with abducting, assaulting, torturing and robbing a man they believed had cheated them on a real estate transaction.

Abaz Bey and other members of the bakery lived in an apartment building on 24th Street in North Oakland, the same one Nedir Bey wanted to buy with his very first request for city money, that ultimately was reduced in scope. The owner had hired the bakery to provide security after being sued by tenants fed up with rampant drug dealing and other crime.

According to police and court records, three men, led by Nedir Bey, beat the man with a flashlight and burned him with a hot knife. The arrests sparked a tense, full-scale standoff between more than 40 police officers and a similar number of male bakery members.

According to news reports, then-Mayor Elihu Harris agreed to meet the demand of bakery patriarch Yusuf Bey to discuss the standoff and the arrests.

Nedir Bey pleaded no contest to one felony count of false imprisonment. He was sentenced to three years’ probation after a veteran Oakland police officer and members of the community wrote a support letter on his behalf.

The probation report noted that two other prominent Oakland residents acted as character references for Nedir Bey: Alameda County Supervisor Keith Carson and Larry Reid, then aide to Mayor Harris. However, Reid, now an Oakland city councilmember, said he never wrote a letter or served as a reference for Nedir Bey.

When Tribune reporters Diana Williams and Paul Grabowicz questioned whether the the arrest should impact his loan application, Nedir Bey said such details were irrelevant.

“Nelson Mandela spent 27 years in prison, and he was respectable enough to become president of South Africa,” he was quoted as saying in a June 1996 Oakland Tribune article.

Unapologetic support

Alameda County Supervisor Nate Miley, who was an Oakland council member and pushed hard for the E.M. Health loan, said recently that he never knew about Nedir Bey’s felony conviction or other clashes between bakery members and the police.

“Then-police chief Richard Word and I chaired the Public Safety committee and I didn’t know about it,” Miley insisted. “Clearly, I had a sense that the police had some concerns (about bakery members), but not how it’s been depicted recently.”

Miley is unapologetic about his unflinching support of E.M. Health during his time on the council. He wasn’t overly concerned when the company defaulted, he told his colleagues at the time, because the federal money was intended to fund higher-risk ventures.

He recalled in a recent interview that African-Americans had good reason to believe black businesses weren’t getting a fair share of city contracts or loans. Oakland’s leaders had poured millions in public money into bringing the Raiders home from Los Angeles and bailing out the Ice Center, Miley said, and African-Americans never let them forget it.

It’s also possible that city staff and some council members were intimidated by the accusations of racism, he added.

“I think we were very sensitive (about accusations) of being racist and Uncle Toms,” said Miley, who is African American.

“When E.M. came in to get a loan … on the face of it that looked like very worthy cause, something that would serve the public. So we decided to give them a chance,” Miley said, adding that there was some concern over the money being used for a car and consultants.

“We gave them some technical assistance and guidance rather than pulling the rug out from under them completely,” Miley recalled. “Still, even if it’s federal money they got, it’s still public taxpayer dollars down the toilet.”

Miley said he admired Yusuf Bey and the way he preached self-reliance, spirituality and discipline. Oakland was suffering record homicides and here was someone who was reaching out to ex-cons or those who might otherwise get caught up in the cycle of violence and helping them turn their lives around and earn money legitimately for their families, Miley said.

In February 1996, a smiling, soft-spoken Nedir Bey stood before the City Council and told them as much.

“This is an excellent program and it will target men and women who are not working presently and have no job skills,” Bey said. “We can train them in the home health care field and start them on a better way of life.”

‘Brilliant’ concept

Redevelopment Agency Director Gregory Hunter said the company’s goals were hard to turn down even if E.M. Health’s promises lacked details.

“The concept was brilliant, absolutely brilliant,” he said, adding that the business proposal drew applause from as far away as Washington, D.C. “Unfortunately, the execution fell somewhat short of the expectations the city had.”

Elihu Harris, now the chancellor of Peralta Community College District, was reluctant to discuss the matter recently because he said he did not recall many details. Harris said his dad received home health care from employees of E.M. Health, but it was his mother who handled the contract.

He added that a community loan advisory committee _ a body the federal lenders required _ had voted to fund E.M. Health, and the council debated that recommendation back and forth for many months. He said the council was not provided with a lot of details about the company.

“The (loan committee)… had really done the research,” Harris said. “The council was between a rock and a hard place.

“(E.M. Health) had made some mistakes and they were going to try and rectify those mistakes,” Harris said. “There was a lot to be concerned about, but they had strong community support.”

One supporter who turned out early and often to lobby for Nedir Bey was Theodora Marzouk, an administrator for Oakland-based Community Care Services, Inc.

She testified more than once about the shortage of training programs for nurses’ aides and said her own company couldn’t supply enough of them. She urged Oakland’s leaders to fund E.M. Health.

But Marzouk ended up on E.M. Health’s payroll for the last two quarters of 1996 earning more than $20,000, city records show.

Marzouk refused to comment for this story, but she sounded surprised to hear that she’d once been listed as an employee.

In any case, by 2000, the company’s business license was suspended, and by 2003, Alameda County records show, state and federal tax officials during the intervening years had imposed tax liens on the company’s assets totalling nearly $200,000.

But today, E.M. Health’s motto “Big enough to serve, small enough to care” is little more than a failed promise.

MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell, and radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.

How Oakland’s fearful politicos enabled waste: Part II


E.M. Health Services, a home health care company founded by a high-ranking member of Your Black Muslim Bakery, opened for business in July 1996, flush with a $1.1 million loan from the city of Oakland.

But shortly over a year later, signs of trouble already plagued the business — and a review of documents shows that the founders of the struggling company paid themselves lavish salaries, and lucrative consulting contracts went to bakery associates and family members.

More than a decade later, the city hasn’t received one penny in repayment for the loan, and questions remain over why city officials granted the loan in the first place.

Under the terms of E.M.’s loan, the company wasn’t scheduled to make principal payments for two years — until 1998 — but just 15 months after getting the money, CEO Nedir Bey asked to defer repayments until 2000.

The city, which had already questioned several invoices submitted by the company, did not approve the extension. Instead, officials responded by requesting an audit of E.M.’s books.

In his request for an extension, Bey did not mention that in May 1997, E.M. Health had applied to the California Department of Insurance for a $2 million loan to purchase a 4,000-square-foot office building on 17th Street in downtown Oakland.

In his application to the state, Bey cited Oakland’s loan approval as proof of his good reputation, even though by then the city was already questioning tens of thousands of dollars in operating expenses claimed by his company.

The $1.1 million loan agreement called for E.M. Health to begin repaying monthly interest and principal payments of $19,692 on May 1, 1998, the date the company was projected to have enough billable clients to break even.

But May came and went with no payments.

And, documents show, E.M. Health would ask for more.

But the story of how the business, a subsidiary of the now-bankrupt Your Black Muslim Bakery, received the money despite a flawed business plan and a disturbing criminal incident in Nedir Bey’s past illustrates the extent politics and pressure played in officials’ decision to approve the loan.

Bakery members also have been linked to several violent incidents, including the Aug. 2 shooting death of journalist Chauncey Bailey, as well as alleged real estate and welfare fraud and child rape.

Details of the company’s financial growth were outlined in correspondence between Nedir Bey and various city staff who reviewed documentation to support the original $1.1 million loan application, as well as documents surrounding Nedir Bey’s later attempts to obtain a $2.5 million loan that was never granted.

In a January 1997 letter to the city, E.M. Health said it had contracts with 13 patients between October and December 1996, which should have generated more than $23,000 in revenues for the three-month period.

The same letter said seven would-be home health aides had graduated from a training program run by a different company. Those aides could not be sent out to care for Medicare/MediCal patients until they passed their certification exams that month, the letter said.

The letter also reveals that E.M. Health had a goal of generating $1.2 million in income in 1997 by providing services to 50 clients. The company instead reported large losses in 1996 and 1997.

It started to pull in more revenue early the following year, according to a letter from former Economic Development Chief Bill Claggett addressed to then-City Manager Robert Bobb.

Clagget’s letter stated that the company had a net profit of $30,068 for the first two months of 1998, but was still experiencing delays in receiving reimbursements for its Medicare/MediCal clients.

By June 17, 1998, Nedir Bey stated in a letter to city loan department manager Teri Robinson-Green that E.M. was “doing about $80,000 a month.” In another letter listing E.M.’s achievements, Bey claimed the company had hired 55 people, trained 30 people and served more than 200 patients.

But still no loan payments.

E.M. Health’s agreement with the city stated that the company and its employees, many of whom were also trusted bakery associates and family members, would not profit from the business. Any extra income after expenses would be funneled back into Qiyamah, a nonprofit organization founded by the bakery to further Yusuf Bey’s community work. Qiyamah was E.M. Health’s parent company.

But the salaries, car lease and billing rates charged by bakery members who moonlighted as consultants to E.M. Health coupled with too few billable clients and delays in reimbursements by Medicare and MediCal all but ensured there wouldn’t be enough money left over to pay back the city’s loans.

“It’s interesting how that millionaire from the skating rink got $12 million and declared bankruptcy and never paid the city back,” Nedir Bey said, referring to the builders of Oakland’s downtown ice rink, who defaulted on an $11 million loan before E.M. Health Services was funded. The city took possession of the rink. “Is the city calling him and trying to ask him those kind of questions?

“The bottom line for me, I’m trying to move forward with my life. Everything that you’re discussing is in my past,” Bey said.

A popular message

E.M. Health’s business model resonated with Oakland’s black politicians who were eager to even the playing field for black businesses that had not gotten an equitable share of city contracts and loans. They lauded the accomplishments of Yusuf Bey — the controversial but charismatic founder of Your Black Muslim Bakery — and viewed the health care proposal as a continuation of his good works.

The plan also resonated with the U.S. Department of Housing and Urban Development and appeared to meet its criteria for loan funding. E.M. Health’s $1.1 million loan came from a $44 million pot of money the federal agency offered Oakland to fund start-up organizations that sought to provide jobs in low-income communities.

Still, in a June 4, 1996, letter to Kofi Bonner, Oakland’s then-director of community development, local HUD director Steven Sachs wrote that “E.M. Health Services business plan is still being developed …” with many “issues still to be worked out.”

Sachs urged the city to consider “providing a much smaller amount of financial assistance to this start-up business.”

That same night, despite Bonner’s warning that Nedir Bey had not yet provided several documents the city required for the loan, nor procured a provisional license from state health officials, the council voted to give the company a $275,000 advance on the $1.1 million HUD loan.

In fact, even though E.M. Health was $63,000 in arrears in its business taxes, the company ended up getting $538,000 in interim loans from the city of Oakland over the next six months, before HUD officials reimbursed Oakland for the money in April 1997.

Nedir Bey relied on that type of sentiment when he approached the city in February 1998 and asked for an additional $2.5 million — half loan, half grant — to buy a shopping center in West Oakland to house a new urgent care clinic, in addition to funds he sought unsuccessfully from the state department of insurance.

The shopping center plan lacked numerous financial details and included no downpayment or personal investment by Nedir Bey.

Nonetheless, he lined up his supporters and produced letters of recommendation from well-respected medical experts, including David Kears, director of the Health Care Services Agency for Alameda County; Michael Lenoir, president of the Ethnic Health Institute at Alta Bates/Summit Hospitals; and H. Geoffrey Watson, president of the Golden State Medical Association, which represents 2,000 African-American physicians in California.

Claggett said he would have loved to have someone revitalize that blighted shopping center, but nothing about E.M.’s finances by then suggested it could support a new business venture. City records show that E.M. Health incurred losses of $425,000 during 1996 and $343,000 in 1997.

E.M. Health was already three months behind on the payments for the $1.1 million loan, and a mere six months later, E.M. Health’s parent, the Qiyamah Corporation, would default on a

$100,000 bank loan originally signed by Saleem Ali Bey, also known as Darren Wright.

‘I don’t think they ever gave up’

Nedir Bey nonetheless again pressured the city into rushing the review of his new loan request. By July 1998, he sought direct backing from then-Mayor Elihu Harris, whose father was an E.M. Health patient for a short time, according to company records on file with the city.

“Staff should be more inform (sic) on the procedures and policies of the city of Oakland as opposed to me having to check with the mayor and then letting you know what you can and cannot do,” Bey said in a July 1998 letter to Gregory Hunter, now Oakland’s redevelopment agency director, apparently unhappy that the request had not yet been forwarded to the loan review committee.

Kears recalls Nedir Bey first approached him for a letter of recommendation, but that evolved into a request for money to finance outreach efforts for new patients. The county wound up giving Bey a $25,000 contract, the most it could provide without approval from the Alameda County Board of Supervisors. Kears said he doesn’t know whether E.M. Health ever submitted invoices to use any of the money.

The $2.5 million loan application eventually stalled as Nedir Bey failed to produce documentation requested by the city related to the first infusion of cash, the repayment of which was falling further and further behind.

By the time the city sent its first default letter to E.M. Health in December 1998, the payments were eight months past due and the company had crumbled.

City employees would later discover that the company’s offices had been cleaned out, office furnishings and computer equipment pledged as collateral gone.

Claggett said that not long afterward, he was questioned by the FBI about E.M. Health and Nedir Bey. The FBI’s San Francisco office did not return a call seeking comment about the probe.

No way to collect

The Oakland city attorney sued E.M. Health

in December 2000 in an attempt to recover $1.45million in loan funds and $98,600 in unpaid interest. The city won a default judgment, but no one could collect on it, in part because there was no personal guarantee made when the loan was awarded.

City Attorney John Russo said recently that it is up to the city’s Finance Department to collect on the $1.5 million judgment, which remains unpaid today.

The city wasn’t the only one left holding worthless paper when E.M. Health deteriorated. Orthopedic and Neurological Rehabilitation, Speech Pathology Inc. of Los Gatos sued Nedir Bey and Cecil R. Moody, an E.M. Health agent listed among business registration records, in 2000 to recover $8,700 worth of services it provided to the company’s patients over a two-month period. According to the lawsuit, E.M. Health billed MediCal and Medicare but never reimbursed the company.

In May, Daulet Bey, a Muslim wife of Yusuf Bey and mother of current bakery CEO Yusuf Bey IV, 21, and her daughter Jannah Bey filed papers to revive Qiyamah’s state business license. It’s not clear whether bakery associates plan to use Qiyamah to attempt a new business venture.

The license was promptly suspended again by the state Franchise Tax Board for failing to file an information report in 2005, according to spokeswoman Denise Azimi.

Nedir Bey’s costly experiment was finished and thousands in unaccounted for public funds were left in his wake.

MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell, and radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.

How Oakland’s fearful politicos enabled waste: Part 1


Editor’s note: This is the first of a three-part series examining a $1million city loan to a Your Black Muslim Bakery affiliate that was never repaid.

It was a noble cause: Train welfare recipients as home health aides and put them to work caring for homebound sick and elderly clients.

A decade ago, while Your Black Muslim Bakery founder Yusuf Bey enjoyed unwavering support and adulation from black businesses and politicians, his spiritually adopted son, Nedir Bey, pressured and shamed city leaders into giving him a $1.1 million loan to help finance the promise of black entrepreneurial independence.

But the venture, E.M. Health Services, swiftly collapsed. The failure of CEO Nedir Bey to repay a dime of the loan made headlines at the time and prompted most to assume the company’s demise was caused by a combination of poor business decisions, bureaucratic hurdles and simple bad luck.

But was it?

City officials overlooked flaws in the company’s business plans and relented to black community leaders who insisted they award the loan, according to interviews, documents and other correspondence reviewed by the Chauncey Bailey Project.

The loan was granted to Nedir Bey despite his well-publicized arrest for the torture and kidnapping of a man two years earlier. Bey pleaded no contest to one felony count of false imprisonment and was sentenced to three years’ probation.

In awarding the loan to Nedir Bey, nearly every elected official lauded the accomplishments of Yusuf Bey in turning around the lives of troubled young men. Yet dozens of those men had armed themselves during a standoff with police two years earlier. And a few years later, Yusuf Bey himself would be accused of raping and fathering children with young girls who were placed in his care.

And the Chauncey Bailey Project has learned that in late 1999 and early 2000, the FBI investigated E.M. Health Services’ loan and Nedir Bey, although it’s not clear how the probe was resolved.

In the wake of reported real estate and welfare fraud allegedly committed by the wives and children of Yusuf Bey _ as well as the August arrest of a bakery member accused of the Aug. 2 shooting death of Bailey, the editor of the Oakland Post _ a deeper review of the E.M. Health Services loan reveals several questionable expenses that suggest an internal pattern of cronyism that enriched nearly every facet of the bakery empire’s inner circle including:

-Tens of thousands of dollars in consulting fees paid to companies controlled by Nedir Bey and his wife, Rosemarie Boothe-Bey, as well as other bakery insiders.

-Thousands of dollars in security fees paid to yet another company controlled by Your Black Muslim Bakery and thousands more in advertising fees paid to Universal Distributors, a company operated by associates of the bakery.

-$20,000 paid to the administrator of an Oakland home health company who had urged the city to award the loan to E.M. Health Services.

-Top-end salaries paid to Nedir Bey and his wife, Rosemarie Boothe, as well as to two of the Muslim wives of bakery patriarch Yusuf Bey who are accused of receiving fraudulent welfare payments at the time, and a second woman with whom Nedir Bey fathered children. Other bakery insiders filled the company’s payroll.

-15-day loans made to E.M. Health by Nedir Bey and other bakery associates that were repaid with hefty loan fees.

The beginnings

On April 30, 1996, the Oakland City Council awarded E.M. Health conditional approval for a $1.1million federal loan to establish a training program for home health aides.

According to loan documents and internal memos, the city approved that loan despite flaws in the company’s business plan and no discernible collateral or equity to back up the debt.

The money was part of a $44 million pot — half loan, half grant — awarded to the city by the federal Department of Housing and Urban Development to fund start-up ventures or help expand existing businesses in three distressed areas of Oakland with high unemployment rates. The federal money was supposed to create jobs, and it was intended for borrowers who could not qualify for conventional loans.

E.M. Health’s share of that pot — through the leadership of then-bakery lieutenant Nedir Bey — would further Yusuf Bey’s efforts to empower poor black residents and ex-cons by giving them training and job opportunities at various bakery outlets and private security companies affiliated with the patriarch’s expanding empire.

The loan proceeds were supposed to be used for start-up costs to recruit workers and patients, establish the home health training program and provide ongoing operating expenses.

The company never lived up to its promise. Ten years have passed and still not a cent has been repaid. The equipment pledged to secure the proceeds never surfaced. The promised jobs for low-income residents, as well as the promised services for sick and elderly clients, evaporated. The Oakland city attorney sued to recoup the debt, plus interest, but the city’s finance department has not been able to collect.

Nedir Bey, whose last listed occupation is business development consultant, would not answer questions about the business operations or why the company failed to take hold, saying that was “in the past.” In a brief telephone conversation, Bey said there were other Oakland businesses that defaulted on city loans and he asked if they were receiving the same level of scrutiny. Bey remains in Oakland but says he is no longer affiliated with the bakery.

Former bakery associate and businessman Ali Saleem Bey has spent the last several months trying to save the heavily indebted bakery enterprise from liquidation. Saleem Bey said he hasn’t spoken to Nedir Bey in years, but he defended E.M. Health’s efforts to provide job training and services to poor Oakland residents.

Saleem Bey, reached by phone, said the city subjected the business to undue scrutiny compared with others seeking public money. That scrutiny also led to the company being underfunded, Saleem Bey said, and contributed to its demise.

“We really felt we were sabotaged by the city, …” said Saleem Bey, who worked alongside other bakery associates to help launch the business.

“Politically, they never wanted to give us the money … and when it came time to work with us and make it go, they made it as hard as possible,” Saleem Bey said. “They wanted to wag their fingers at us.”

But the only thing that remains today from the ashes of E.M. Health is a considerable outstanding debt to taxpayers — a debt that could have been much larger.

Big plans, big loan requests

The Qiyamah Corp., E.M. Health’s nonprofit parent company, first filed state business registration papers in October 1993. The nonprofit organization was formed to expand the bakery’s community work and job training programs, and it wasn’t long before bakery members sought the city’s help in financing a new home health care venture.

Nedir Bey originally approached the city in approximately 1994 for a $3.4million loan to buy an apartment building on 24th Street in North Oakland. That would be used, he said at the time, as a base for his home health care program.

The building purchase didn’t qualify for HUD funds, and over time it was dropped from the plan. The loan request was whittled down to the $1.1 million, which was conditionally awarded to Qiyamah’s for-profit subsidiary, E.M. Health.

The company promised to create 32 full-time jobs, more than half of which would be filled by residents of West Oakland, East Oakland or San Antonio/Fruitvale — the three economically depressed areas targeted by HUD.

The company also promised to train 120 low-income residents and welfare recipients as home health workers, who would in turn provide services to Medicare and MediCal patients and other clients who were privately insured. According to E.M. Health’s business plan accepted by the city, insurance reimbursements would be more than sufficient to repay the loan. It might have worked if Nedir Bey had started small.

Instead, he purchased expensive office furniture and loaded the payroll with bakery insiders, most of whom had no health care experience, while spending little initially on actual medical supplies, according to loan documents.

Bill Claggett, the former director of Oakland’s Community and Economic Development Agency who inherited the E.M. loan in late 1997, said he couldn’t believe the city gave the company “a dime,” let alone $1.1 million.

“They didn’t know what they were doing,” Claggett said. “The cost per person served was much higher than any other similar business. It was clear (Bey) didn’t have the kind of staffing he needed for that operation.”

E.M. Health opened its doors on July 10, 1996, in an office storefront on Grand Avenue. That first year’s tax return posted income of $6,007 and a loss of $437,802. It spent $85,886 on consultants, $10,600 on security and only $5,708 for medical supplies. It survived almost exclusively on the city loan.

The list of employees included Nedir Bey’s wife, Rosemarie Boothe; and another woman, Kathy Leviege, with whom he has two children; family associate Janet Bey; and Madeeah Bey and Farieda Bey, two wives of bakery patriarch Yusuf Bey who are alleged to have received illegal welfare payments at the time, according to civil depositions taken recently in an unrelated case.

Within three months of receiving start-up funds from the city, Nedir Bey was on track to earn $108,000 a year, a figure that was out of line with what similar agencies in the Bay Area paid their CEOs, according to a spring 1997 memo in the city’s loan files.

Quarterly wage reports filed with the state show that Nedir Bey’s wife earned $47,000 as the assistant administrator, and Yusuf Bey’s wives — whose occupations were listed as marketing director and LVN/outreach coordinator — earned nearly $60,000 each, the same as Janet Bey, a registered public health nurse. Other than Janet Bey, none of the women had nursing degrees or related licenses, according to a review of state documents. Saleem Bey said it should not seem suspicious that members of the bakery’s extended family ended up on E.M. Health’s payroll. He said they worked many different jobs to help support the bakery empire and to further Yusuf Bey’s edict to be self-reliant.

He said they also worked alongside Nedir Bey to try and make the enterprise a success. To infer otherwise would be a mistake.

“It behooved the organization to be successful, so it wasn’t as if everybody was just eyeing this money and they wanted to steal a million,” Saleem Bey said. “If the business plan was successful, by this time it would have created 10 times that amount of money and created many jobs.”

Even so, the city’s loan staff requested that the compensation for E.M.’s three top executives be reduced by 20 percent, a move Nedir Bey protested in a memo to city officials.

Other questionable expenses

There were other missteps and invoices that city officials questioned before the city received the HUD proceeds, including a lease on a Cadillac and reimbursements to a security company controlled by the bakery.

One city staffer flagged the vehicle lease, $64,000 in consulting contracts, and thousands budgeted for security as ineligible uses of the federal funds. “Staff is exploring options for recovering these costs,” reads one memo from April 1, 1997.

That same year, in addition to their salaries, E.M. Health paid approximately $40,000 in consulting fees and service payments to Nedir Bey and relatives either directly or through companies that he and other associates of the bakery controlled, according to records on file with the city of Oakland.

Bakery associates also made 15-day loans to E.M. Health to cover operating expenses and charged substantial interest fees in return. Nedir Bey earned a $750 fee for a $9,000 loan he made to the company, and Ali Saleem Bey charged $1,000 interest for a $13,750 loan. Time after time, city staff questioned the invoices E.M. Health submitted for reimbursement, asking for more details or supporting documentation. But the money was never withheld for long.

MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell and freelance radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.

Internal investigation of City College complete


Remember those stories from Lance Williams at the Chronicle that surfaced awhile back about City College of San Francisco improperly diverting public funds to a campaign committee? The school’s Board of Trustees promptly called for an internal probe, and all 232 pages of it are now publicly available. The executive summary downplays the significance of the allegations and lauds the school’s administration for fully cooperating with the investigation:

“The proponents of California ballot measures tend to seek contributions from those who stand to benefit financially from the passage of the measure. This can lead to the criticism that such fundraising has the appearance of “pay to play.” One need only conduct a cursory review of each campaign statement … filed by the Committee to Support Our City College to find numerous engineering firms, building trades and other construction businesses who could benefit from the proceeds of the bond.

Hugues de la Plaza’s autopsy unveiled


San Francisco’s Medical Examiner is refusing to rule the gruesome June 2 death of French national Hugues de la Plaza a homicide, releasing an autopsy only recently after the man’s friends and family waited six months for its conclusion.

There’s no doubt de la Plaza’s life ended due to multiple stab wounds, but the December report describes the manner of his death, i.e. who wielded the knife, as “undetermined.”


Assistant medical examiner Venus Azar admits that no one close to him was aware of any suicidal inclination on his part, and therefore, it was not possible for her to rule out homicide. But the scene at his apartment where he was found “was not inconsistent with self-inflicted stab wounds,” she wrote (our emphasis).

The Guardian reported in September that no obvious weapon or suicide note was found at de la Plaza’s small Linden Street apartment in Hayes Valley where his body was discovered. A neighbor told us he heard a distinct set of footsteps running away from the apartment shortly after de la Plaza’s front door slammed three times around 2:30 in the morning.

The neighbor, Orion Denley, said the questions asked of him by police all revolved around whether or not de la Plaza suffered from depression, one of many clear indications that the San Francisco Police Department believed from the start that de la Plaza took his own life.

“It’s fucked-up in retrospect,” Denley told us at the time. “I kept thinking, ‘How come they aren’t asking me if I heard anything?’ All they did was ask over and over again if he was suicidal, like they had already made up their minds that he had committed suicide.”

Portrait of the artist as an old cop


› gwschulz@sfbg.com

Imagine Gary Delagnes, president of the San Francisco Police Officers Association, pondering the impact of abstract expressionism on the American zeitgeist with a far-off gaze. Or picture him dressed in fashionably tight jeans, walking his fixed-gear bike to the San Francisco Academy of Art University with a leather portfolio tucked under his skinny arm.

Does that seem incongruous to you? It does to us as well. After all, Delagnes is the very antithesis of an art school student. So why are the POA and Delagnes, a brutish former narcotics officer, lobbying the San Francisco Planning Commission on behalf of the Academy of Art?

The academy, which has been rapidly snapping up properties around town to accommodate its ambitious expansion plans, has become an entity of increasing concern in San Francisco’s dicey world of land-use politics.

The for-profit school, which costs students around $16,500 per year to attend, today owns or controls more than 30 properties across the city, half of which are used to house its students, and expects to take over nearly a dozen more to accommodate approximately 14,500 students by 2017.

In the meantime, the school is facing several enforcement actions initiated by the Planning Department for brazenly making building conversions without bothering to obtain proper permits.

Delagnes was nonetheless first in line at a September 2007 commission meeting held to address the academy’s pending enforcement cases and praised the school as a tremendous asset to the academic community.

"I think that their reputation in San Francisco is unquestioned as some of the finest, true San Franciscans that I know," Delagnes said of the wealthy Stephens family, which owns the Academy of Art. "They are heavily involved and invested in the city of San Francisco and care deeply about its future."

Delagnes’s lobbying on behalf of the academy surprised and appalled at least one commissioner, Hisashi Sugaya, who told the POA president that he was "really offended" someone representing law enforcement was carrying water for a private art school that had flouted the law by racking up alleged planning and building code violations.

Responding in the union’s newsletter, POA vice president Kevin Martin reached a dizzyingly patriotic pitch in denouncing Sugaya as a liberal and demanding he apologize not just to Delagnes but also to the entire union for "demeaning our president" and "censuring his freedom of speech."

Delagnes admitted to the Guardian that his testimony was essentially a "quid pro quo." The academy has supported the POA, even offering special summer apprenticeships to the children of its members. "I’m sure that they were thinking, ‘You know what? The POA is a pretty powerful organization. It wouldn’t hurt to get close to them,’<0x2009>" Delagnes said. "Here came this problem with the Planning Commission. They called me and said, ‘Hey, would you mind going up there and basically saying that we’re a good organization? We’re good people.’<0x2009>"

During the meeting, school president Elisa Stephens, who did not return calls, portrayed the academy as a simple mom-and-pop business ignorant of planning politics and intending to fully cooperate with the city.

"My grandfather was an artist…. We’re an integral part of this community," Stephens told the commissioners. "I live in this community. We’ve been here since the late 1800s. We’re dedicated to this city…. I apologize for not being involved in city politics. I’m involved in education."

But city staffers implied there’s more to the academy’s troubles than a few honest mistakes. In March 2007, the school was hit with a litany of alleged code violations, including 14 properties converted without conditional-use permits and seven made into group housing or modified for other school uses without building permits, Planning Department records show.

Before last year the academy had never submitted an institutional master plan to the city, even though San Francisco’s Planning Code has required them from universities since the 1970s, particularly for a scattered campus that’s in a position to dramatically alter the face of downtown, where the school is primarily located and its private transit buses are ubiquitous.

The academy finally turned one over in 2007 after city planners issued a citation in summer 2006. Afterward the department visited all of the school’s properties and discovered multiple problems with use permits, plus an additional property the academy had recently acquired but didn’t include in its plan.

Code enforcers tried to negotiate with the school, planning staffer Scott Sanchez told the commission. But after department personnel outlined the March 2007 violations for the academy, it simply continued onward, converting 601 Brannan for its own use without any building permits and doing the same at the Star Motel on Lombard, this time without a conditional-use application.

As the department worked to keep up, the academy purchased four new buildings and put its eye on another, all between spring and fall 2007.

"All of our information about their new facilities came from members of the public…. It wasn’t actually through the academy, with whom we thought we had a dialogue about their institutional master plan," Sanchez told the Guardian. "We had something ongoing with them, yet they were not informing us of their new acquisitions, and they weren’t obtaining proper permits for them."

The school, in fact, is accelerating plans to convert 575 Sixth St., known as the San Francisco Flower Mart, into studio space, despite opposition from the Mayor’s Office, the Planning Commission, and the Board of Supervisors. The 30 floral business tenants that currently inhabit the building received eviction notices dated Christmas Eve 2007.

A future academy gymnasium is slated for 620 Sutter, but building it would result in the eviction of the Lorraine Hansberry Theatre, a 25-year-old institution specializing in African American stage performances. The academy already converted part of the building to group housing without a permit.

So what else is the POA getting for its support of the arts? For one, the Academy of Art was a $5,000 putf8um sponsor of the POA’s 2007 charity golf tournament at the StoneTree Golf Club in Novato, beating out dozens of other donors for the top of the list. The exclusive title was used for only three other contributors.

The union’s November 2007 newsletter, which appeared just after Delagnes voiced his support for the school, announced that academy president Stephens had also given POA members working at the police department’s Southern Station in SoMa 15 free underground parking spots on Bluxome, just a short walk from the Hall of Justice and the union’s headquarters.

And that’s the art of politics in San Francisco.

New city Web site will end hunger as we know it



Gosh, look at that. The city has a brand spankin’ new Web site appearing just as the mayor is inaugurated to his second term. There are even riveting photos of the mayor looking down right gubernatorial, but the board’s section of the site still mostly looks the same. Why aren’t there any steamy photo slides of Mirkarimi or Elsbernd? The latter made a compelling speech at today’s board meeting about, um, well, we’re not quite sure ’cause he mumbles a lot. But we know that there were tigers involved.

Sen. Feinstein swore in DA Kamala Harris as well. It is indeed a new day in San Francisco, people. Okay, maybe not for that guy who was shot several times shortly before Midnight on Monday at 26th and Mission. But hey, we were still able to find the city’s vendor database on the snappy new site, so we can at least see who’s doing business with San Francisco and for how much. There’s actually a lot about the site that doesn’t look all that new, save for how press releases from the mayor’s office are presented.

Maybe today was just another day in San Francisco after all.