Steven T. Jones

Airbnb comes clean with San Francisco

Sasha Cuttler
-
19
Airbnb comes clean with San Francisco

Airbnb came clean this evening, sending out new terms of service drafted April 7 that customers must agree to before conducting further business starting April 30. The new agreements seem intended to address longstanding issues in San Francisco that the Guardian first raised in May 2012, and have been recently joined by other journalists in spelling out and highlighting.

In the opening of its new Terms of Service, Airbnb wrote (in all caps): “IN PARTICULAR, HOSTS SHOULD UNDERSTAND HOW THE LAWS WORK IN THEIR RESPECTIVE CITIES. SOME CITIES HAVE LAWS THAT RESTRICT THEIR ABILITY TO HOST PAYING GUESTS FOR SHORT PERIODS. THESE LAWS ARE OFTEN PART OF A CITY’S ZONING OR ADMINISTRATIVE CODES. IN MANY CITIES, HOSTS MUST REGISTER, GET A PERMIT, OR OBTAIN A LICENSE BEFORE LISTING A PROPERTY OR ACCEPTING GUESTS. CERTAIN TYPES OF SHORT-TERM BOOKINGS MAY BE PROHIBITED ALTOGETHER. LOCAL GOVERNMENTS VARY GREATLY IN HOW THEY ENFORCE THESE LAWS. PENALTIES MAY INCLUDE FINES OR OTHER ENFORCEMENT. HOSTS SHOULD REVIEW LOCAL LAWS BEFORE LISTING A SPACE ON AIRBNB.”

It seems like a good first step. Next we’ll see whether the company follows through with paying its local taxes and working with the city on legislation to legalize more of its business model in San Francisco.

Leno’s Ellis Act reform bill clears first legislative hurdle

Sasha Cuttler
-
143
Leno’s Ellis Act reform bill clears first legislative hurdle

Sen. Mark Leno’s Senate Bill 1439 — which would protect rent-controlled housing in San Francisco by amending the Ellis Act, including making property owners wait at least five years after buying a property to evict tenants under the act — cleared its first legislative hurdle today.

The Senate Transportation and Housing Committee passed the measure on a 6-4 vote, and it heads to the Senate Judiciary Committee next. The bill has strong support in San Francisco, from progressive constituencies through Mayor Ed Lee to support by leaders in the business community and tech world.

Yet the measure faces a tough road in Sacramento, where the landlord lobby and other conservative interests oppose it. “A bill that could strip San Francisco landlords of their freedom to leave the rental housing business heads to a key Senate committee next month,” the California Apartment Association wrote last month in an alert to its members.

But as Tenants Together demonstrated in a recent study of how the Ellis Act has been used in San Francisco since its passage in 1985, a legislative reaction to a California Supreme Court case upholding rent control laws, the legislation has larger been a tool used by real estate speculators to clear rent-controlled buildings of tenants. The study found that 51 percent of Ellis Act evictions took place within a year of the property being purchased, 68 percent within the first five years, and 30 percent of Ellis Act evictions were from serial evictors, often by businesses specializing in flipping properties for profit.

“California’s Ellis Act was specifically designed to allow legitimate landlords a way out of the rental business, but in San Francisco this state law is being abused by speculators who never intend to be landlords,” Leno said today in a prepared statement. “As a result, longtime tenants, many of them seniors, disabled people, and low-income families, are being uprooted from their homes and communities. The five-year holding period in my bill would prevent these devastating evictions from forever changing the face of our diverse city.” 

Yee and others indicted by federal grand jury, reinforcing criminal complaint

Sasha Cuttler
-
5
Yee and others indicted by federal grand jury, reinforcing criminal complaint

A federal grand jury has indicted Sen. Leland Yee and 28 others on charges similar to those issued in the bombshell criminal complaint by the FBI last week, the Sacramento Bee is reporting. The indictment named three additional defendants who weren’t in the original complaint: Barry Blackwell House (aka Barry Black), Zhanghao Wu, and Ton Zao Zhang.

Yee, political consultant Keith Jackson, Raymond “Shrimp Boy” Chow, and the rest of the gang face most of the same charges that they do in the complaint, with the Bee reporting that Yee faces a sentence of 125 years in prison and $1.75 million in fines.

US Attorney Melinda Haag issued a statement casting the indictment as strengthening the case against the defendants, but when the Guardian called with questions about why authorities chose to go with a criminal complaint followed by an indictment, an unusual move, a spokesperson told us, “Our office will not be making any comments on this case.”

For details on the case and a timeline of how it unfolded, read our story in this week’s Guardian.  

Federal criminal indictment of PG&E doesn’t go far enough

Sasha Cuttler
-
83
Federal criminal indictment of PG&E doesn’t go far enough

  A federal grand jury in San Francisco yesterday issued a criminal indictment against Pacific Gas & Electric for negligence in the 2010 gas pipeline explosion in San Bruno that killed eight people and destroyed an entire neighborhood. That’s significant and serious, but it also falls far short of what this rapacious company and its conniving executives — none of whom face personal criminal charges — should be facing.

The indictment and media reports on it omit key details of what happened leading up this tragic and entirely preventable explosion, buying into the fiction that there is a meaningful difference between PG&E Co., the regulated utility, and PG&E Corp., the wealthy and powerful Wall Street corporation. This is a stark example of how corporations are given all the rights of individuals, but accept few of the responsibilities, with the complicity of the political and economic systems.

The 12-count indictment focused on violation of the Pipeline Safety Act, which requires companies to maintain their potentially dangerous pipelines, including keeping detailed records and doing safety inspections that would detect flaws like the faulty weld that caused the San Bruno explosion on Sept. 9, 2010 – work the company negligently failed to perform.

But PG&E’s wanton disregard for public safety, combined with the greed and shameless self-interest of then-CEO Peter Darbee and other executives, goes far deeper than that. A report by the California Public Utilities Commission released in January 2012 found that $100 million in ratepayer funds that had been earmarked for pipeline maintenance and replacement, including this section in San Bruno, was instead diverted to executive bonuses and shareholder profits.

“PG&E chose to use the surplus revenues for general corporate purposes,” the audit said, noting that the company was flush with cash at the time and there was no good reason to neglect this required maintenance.

And in 2010, those questionable corporate purposes included spending more than $45 million to write and promote Prop. 16, a June 2010 ballot measure that would have required approval by two-thirds of voters whenever cities wanted to start community choice aggregation programs such as San Francisco’s proposed CleanPowerSF. California voters rejected that outrageous ruse by more than a 2-1 margin – so Mayor Ed Lee and his appointees were forced to kill CleanPowerSF on their own last year.

PG&E maintains the explosion was just an accident.

“San Bruno was a tragic accident. We’ve taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so,” PG&E CEO Tony Early, who was hired after the explosion, said in a prepared statement. “We want all of our customers and their families to know that nothing will distract us from our mission of transforming this 100-plus-year-old system into the safest and most reliable natural gas system in the country.”

But this “tragic accident” was foreseeable and preventable, particularly if PG&E was spending our ratepayer money on the system maintenance it was allocated for, instead of trying to fool us with a deceptive and myopic political campaign. Those were decisions made by real people, including Darbee and others, decisions that killed innocent people – and they should be held accountable. Neither this indictment nor a previous civil settlement go far enough.

PG&E’s employee union, IBEW Local 1245, continues to act as an apologist for the company executives, issuing a statement that in part says, “The federal indictment filed April 1st against the company says that PG&E willfully failed to identify and evaluate threats to its transmission pipelines. We know of nothing that would rise to the level of willful. It is possible there are things we don’t know. But based on what we do know, the company failures that led to the San Bruno explosion were not willful.”

Meanwhile, even some PG&E shareholders are siding with the company’s federal prosecution while bringing a shareholder lawsuit seeking to recover some of the diverted funds. Their high-powered attorney, Joe Cotchett, issued a statement today that said, “We welcome yesterday’s indictment by the federal grand jury of PG&E on criminal charges that it violated federal pipeline regulations. It is clear the federal government agrees with us that PG&E chose profits over safety. The indictment comes as no surprise, as it closely mirrors the detailed complaint we filed months ago against PG&E’s officers and directors, after our own extensive investigation.  The indictment states that PG&E ignored and failed to properly identify potential threats to gas pipelines, failed to gather relevant data, maintained flawed records, and as a result, was unable to accurately assess the dangers related to its lines that could have prevented the explosion. On behalf of the shareholders of PG&E, we intend to amend our complaint to add some additional facts stated in the indictment.”

“Our complaint alleges that PG&E’s executives dropped the ball and failed to implement safety measures despite numerous red flags raised by Company insiders with risk management responsibilities. We allege PG&E has already incurred charges of about $1.83 billion related to the San Bruno accident and natural gas matters. In its annual report, PG&E admitted that this criminal investigation could expose the Company to even greater losses. Our complaint also alleges that PG&E’s Board sponsored reviews of its risk management practices revealing that PG&E was in ‘crisis’ mode prior to the accident, and that, in 2007, PG&E’s newly-hired Senior Vice President of Engineering and Operations determined that the Company’s Enterprise Risk Management program ‘seems unactionable because almost everything is broken.’”

This is the company that Mayor Lee praises as a “great company that gets it,” supporting its continued monopoly control of San Francisco’s energy system and subverting a city proposal to provide renewable energy to city residents, even as the threats posed by global warming increase, as this week’s report by the United Nations Intergovernmental Panel on Climate Change warns.

This is a sick system, and something needs to change.

Will Airbnb pay its accumulated tax debt to SF?

Sasha Cuttler
-
42
Will Airbnb pay its accumulated tax debt to SF?

So now that Airbnb has agreed to start collecting and paying the transient occupany tax in San Francisco sometime this summer — finally acknowledging that’s the only workable way to meet the tax obligation it shares with its hosts — that leaves open the question of whether this $10 billion corporation intends to pay the tax debt it has accumulated for years while trying to duck its responsibility to the city.

That’s at least several million dollars that the city could really use right now. As we’ve previously reported, Airbnb commissioned and publicized a study in late 2012 claiming its San Francisco hosts collected $12.7 million from Airbnb guest in fiscal year 2011-12, meaning they should have collected and remitted to the city $1.9 million.

In early 2012, the San Francisco Tax Collector’s Office held public hearings to clarify whether the TOT applies to the short-term rentals facilitated by Airbnb and similar companies, ruling in April 2012 that the TOT does apply to those stays and that it is a “joint and several liability” shared by the hosts and Airbnb, which conducts the transaction and takes a cut.

As we also later reported, despite heavily lobbying during the hearing and being acutely aware of the outcome and its resulting tax obligation, Airbnb simply refused to comply and tack the 15 percent surcharge onto its transactions, as similar companies such as Roomorama were doing.

So if Airbnb was really being the good corporate citizen that it’s now claiming to be, it would not only start charging the 15 percent fee and sharing that money with the city, it would also cut San Francisco a check for around $4 million, or whatever the tax would be on what this growing business has collected from its guests since April 2012.

That’s at the very minimum, giving the company the benefit of the doubt that there really might have been an honest difference in opinions on whether the clear language of the tax code really applied to its transactions. But if we really wanted to be sticklers about this, Airbnb would actually owe the city millions of dollars more than that, going all the way back to its founding in 2008.

“The April 2012 regulation did not change the tax.  It provided more information about the definition of room and the merchant of record in a transaction.  We have always expected for operators to collect and remit the applicable transient occupancy tax,” Greg Kato, the policy director for the San Francisco Tax Collector’s Office, tells the Guardian, later adding that short-term stays “have always been taxable,” even in apartments.

Airbnb continues to duck questions from the Guardian, including our latest on whether it intends to pay its back tax obligation, and the Chronicle didn’t raise the issue with Airbnb. But a statement that Airbnb’s David Hantman put out on the company’s website yesterday does offer some clues about its change of heart.

After announcing plans to collect and remit the TOT in Portland last week, Hantman said he held a question-and-answer session with its hosts in San Francisco “and announced that we’ll soon be collecting and remitting taxes on behalf of our hosts in San Francisco as well.”

Note the legalistic language that continues to avoid accepting that the company is also responsible for that tax debt, not just its hosts. But it appears the company finally realized it can’t just pass the buck to its hosts.

“We have repeatedly said that we believe our community in San Francisco should pay its fair share of taxes. We know from countless discussions with our hosts that they want to pay taxes, but some of these rules are arcane and difficult to follow. Some hosts have even tried to pay taxes in San Francisco and been turned away,” he wrote.

But that statement is a deceptive one, avoiding the fact that short-term stays are actually illegal in San Francisco, violating Administrative Code Section 41A, as well as a variety of planning and zone codes that prevent tourist hotels from being located in residential areas.

That’s why Airbnb hosts have had a hard time paying their taxes, as the Guardian has repeatedly reported, not because “these rules are arcane and difficult to follow.” It’s because Airbnb’s business model isn’t legal, something that Board of Supervisors President David Chiu has been trying to create legislation to address, although negotiations have now dragged on for more than a year.

“We want to help solve this problem. We’re still working on some operational details, but our goal is to launch this program for San Francisco hosts this summer,” Hantman wrote, making the company sound helpful and oh-so-public spirited.

Given that any decent coder could probably figure out how to add a 15 percent surcharge onto Airbnb’s San Francisco transactions in less than an hour, I’m a little skeptical about the “operational details” that will drag its tax compliance out for several more months. My guess is it is trying to retain some political leverage in negotiations over the Chiu legislation.   

“We are a growing company in a new economy. We are taking this action—and initiating our entire Shared City program—as we strive to help make cities stronger, safer, more financially stable. And we’re excited to continue this pilot program in San Francisco. This city is our home and we look forward to continuing to work with everyone here to make it an even better place to live, work and visit,” was how Hantman closed his post.

Hopefully that means San Francisco can expect a $4 million check from Airbnb any day now. 

Crime and politics

Michael Redmond
-
10
Crime and politics

steve@sfbg.com

San Franciscans awoke March 26 to the surprising news that state Sen. Leland Yee (D-SF) had been arrested on federal corruption charges as part of early morning police raids targeting an organized crime syndicate based in Chinatown, along with reputed gangster Raymond “Shrimp Boy” Chow and two dozen others.

Yee had a reputation for sometimes trading votes for campaign contributions, a perception that had only gained strength in recent months as he launched his first statewide campaign, running to lead the Secretary of State’s Office, casting key votes for landlords and big industries that he refused to explain to local activists.

So in a year when two other Democratic Senators have also been stung by federal corruption and bribery probes, the televised image of Yee in handcuffs wasn’t beyond the realm of possibilities. It was surprising, but not shocking.

Yet by the mid-afternoon when the 137-page federal criminal complaint was unsealed and journalists started reading through what undercover FBI agents had discovered during their five-year criminal investigation, it read more like a sensational organized crime and espionage novel than a court document, a real page-turner that just got more wild and incredible as it went on.

timelineYeeWhat began with the FBI investigating a murder and leadership transition in the San Francisco branch of the ancient Chinese organized crime syndicate known as the Triad, led by an undercover FBI agent who had infiltrated the group, evolved into a widening investigation accusing Yee of arranging an illegal arms trafficking deal with a Muslim rebel group in the Philippines in exchange for $100,000 funneled into his campaign, on top of smaller favors that Yee allegedly did in exchange for envelopes with $10,000 in cash.

It was even worse for local political consultant Keith Jackson, a key Yee fundraiser who was also on contract with Lennar Urban for its Bayview-Hunters Point development projects, with the undercover FBI agents allegedly drawing Jackson into big cocaine deals, money laundering, bribery, and even a murder-for-hire plot. If the complaint is to be believed, Jackson seemed willing to do just about anything to enrich himself and raise money for Yee.

Meanwhile, the public image that Chow has been cultivating for himself since his 2003 release from federal prison — that of a reformed career gangster turned Chinatown civic leader, someone praised by local politicians for inspiring fellow ex-convicts to turn their lives around — was replaced the complaint’s description of a powerful “Dragonhead” overseeing a vast criminal enterprise involved in drugs, guns, prostitution, protection rackets, moving stolen booze and cigarettes, and money laundering.

“I think the whole city is in shock at the moment,” Board of Supervisors President David Chiu, who represents Chinatown and ran against Yee in the 2011 mayor’s race, told the Guardian that afternoon. “Today’s widespread law enforcement actions are incredibly disturbing. The detail and scale of the criminal activities are shocking.”

In the days that followed, Yee withdrew his candidacy for Secretary of State and was suspended by his colleagues in the California Senate. But where this wild tale of crime and corruption goes next — and who else gets implicated as these powerful and well-connected defendants look to cut deals to avoid the lengthy prison sentences they all face — is anyone’s guess.

 

THE CRIMINAL

Chow, 54, was raised a criminal, telling the History Channel’s “Gangland” that he stabbed someone in Hong Kong at the age of nine before moving to San Francisco in 1977 and getting involved in the Hop Sing Boys gang and Chinatown’s criminal underworld.

He survived the Golden Dragon Massacre, a shooting between rival Chinatown gangs that left five dead, but he was arrested in 1978 for a robbery and sent to prison for the first time, released in 1985. The next year, he was sent back to prison for attempted murder and more gang mayhem, released in 1989.

“I did time with Charles Manson, a good friend of mine. Kimball, a serial killer. I did time with a bunch of amazing people. Each person you talk to you learn something from. Ain’t no stupid people inside the prison, you can say that,” Chow told Gangland.

In 1991, a gangster named Peter Chong was sent from Hong Kong to San Francisco to extend the reach of the Wo Hop To Triad. He enlisted Chow as his right-hand man, and together they extended the reach of the Wo Hop To across the Western United States, trying to create an all encompassing gang named the Tien HaWui, “The Whole Earth Association.”

Chow was arrested again in 1995 on a variety of racketeering and other criminal charges and sentenced to 25 years in prison. But he later testified against Chong and got his sentence reduced, and he was released from federal prison in 2003.

After his release, Chow publicly claimed to go legit, working on book and movie deals about his life, as well as building connections in the political world. Chow posed for photos with then-Mayor Gavin Newsom and other local political figures.

But the latest criminal complaint said that even as Chow pretended to be moving on, he continued to make incriminating statements to the undercover agents “confirming his knowledge of and involvement in criminal activity.”

 

THE COMPLAINT

The criminal complaint alleges that “Chow is currently the Dragonhead, or leader, of the San Francisco-based Chee Kung Tong organization,” which it described as a criminal syndicate connected to Hung Mun, a criminal dynasty that began in 17th century China, “also referred to as a Chinese secret society and the Chinese Freemasons.”

It says Chow was sworn in as CKT head in August 2006, soon after the still-unsolved murder of CKT head Allen Leung. Chow’s swearing-in was reported in local Chinese media sources, so SFPD and FBI conducted surveillance there and launched an investigation.

The FBI says it began infiltrating CKT five years ago, including an undercover FBI agent dubbed UCE 4599, who in May 2010 was introduced to Chow, who “then introduced UCE 4599 to many of the target subjects.” UCE 4599 told Chow he was a member of La Cosa Nostra, the Italian mob.

In March 2012 he was inducted into CKT as a “Consultant,” the complaint alleges. It says that Jackson — a former San Francisco school board member and political consultant — had also be inducted into CKT as a “Consultant,” participating in various criminal conspiracies.

The gang members are accused of laundering money made from “illegal activities, specifically illegal gambling, bookmaking, sports betting, drugs, and outdoor marijuana grows.” They allegedly laundered $2.3 million between March 2011 and December 2013 for UCE 4599, with members collecting a 10 percent fee for doing so.

The complaint says Jackson “has a long-time relationship with Senator Yee,” and “has been involved in raising funds for” Yee’s run for mayor “and for Senator Yee’s current campaign in the California Secretary of State election.” And much of the complaint details deeds allegedly committed by Jackson and Yee.

In fact, the second person named in the complaint, right after Chow, is Yee, “aka California State Senator Leland Yee, aka Uncle Leland.”

As the complaint alleges, “Senator Yee and Keith Jackson were involved in a scheme to defraud the citizens of California of their rights to honest services, and Senator Yee, [Daly City resident Dr. Wilson] Lim, and Keith Jackson were involved in a conspiracy to traffic firearms.”

 

THE POLITICIAN

Yee and Jackson met UCE 4599 through Chow, and then Jackson allegedly solicited him to make donations to Yee’s 2011 San Francisco mayoral campaign “in excess of the $500 individual donation limit. UCE 4599 declined to make any donations to Senator Yee, but introduced Keith Jackson and Senator Yee to a purported business associate, UCE 4773, another undercover FBI agent,” who made a $5,000 donation to Yee’s mayoral campaign.

Yee had $70,000 in debt after that mayor’s race and worked with Jackson on ways to pay off that debt. “This included soliciting UCE 4773 for additional donations and in the course of doing so, Senator Yee and Keith Jackson agreed that Senator Yee would perform certain official acts in exchange for donations from UCE 4773.”

Yee allegedly agreed to “make a telephone call to a manager with the California Department of Public Health in support of a contract under consideration with UCE 4773’s purported client, and would provide an official letter of support for the client, in exchange for a $10,000 donation.”

Meanwhile, it says Jackson and Yee continued raising money for his Secretary of State race by soliciting donations from UCE 4599 and UCE 4180, another undercover agent. “They agreed that in exchange for donations from UCE 4599 and UCE 4180, Senator Yee would perform certain officials acts requested by UCE 4599 and UCE 4180.”

That included Yee issuing an “official state Senate proclamation honoring the CKT in exchange for a $6,800 campaign donation, the maximum individual donation allowed by law.” Yee allegedly did so, and it was presented by one of his staff members at the CKT anniversary celebration on March 29, 2013.

Yee and Jackson are also accused of introducing a donor to unidentified state legislators working on pending medical marijuana legislation, the donor being another undercover agent who claimed to be a medical marijuana businessman from Arizona looking to expand into California, “and in payment for that introduction, UCE 4180 delivered $11,000 cash to Senator Yee and Keith Jackson on June 22, 2013.”

In September, after making another introduction, Yee and Jackson allegedly received another $10,000 cash donation for their services. Then Jackson allegedly had an idea for getting even more money.

“Jackson told UCE 4599 that Senator Yee, had a contact who deals in arms trafficking.” Jackson then allegedly requested UCE 4599 make another donation “to facilitate a meeting with the arms dealer with the intent of UCE 4599 to purportedly purchase a large number of weapons to be imported through the Port of Newark, New Jersey.”

That deal for up to $2.5 million in weapons involved automatic weapon and shoulder-fired missiles, the complaint said, and “Senator Yee discussed certain details of the specific types of weapons UCE 4599 was interested in buying and importing.”

The complaint says that Yee expressed discomfort with how openly UCE 4180 discussed overt “pay to play” links between cash donations and official actions. “I’m just trying to run for Secretary of State. I hope I don’t get indicted,” Yee allegedly told two undercover FBI agents during a walk on June 20, 2013, urging them to be less explicit about connecting official favor with campaign donations.

“Despite complaining about UCE 4180’s tendency to speak frankly and tie payment to performance, and threatening to cut off contact with UCE 4180, Senator Yee and Keith Jackson continued to deal with UCE 4180 and never walked away from quid pro quo requests make by UCE 4180,” the complaint said. “In fact, Senator Yee provided the introductions sought by UCE 4180 and accepted cash payments which UCE 4180 expressly tied to the making of the introductions.”

Yee’s attorney, Paul DeMeester, told reporters they will contest the charges: “We will always in every case enter not guilty pleas, then the case takes on a life of its own.”

 

Joe Fitzgerald Rodriguez contributed to this report.

 

 

 

Airbnb finally agrees to pay its taxes in SF

Sasha Cuttler
-
42
Airbnb finally agrees to pay its taxes in SF

Airbnb has apparently finally agreed to pay its taxes in San Francisco. The San Francisco Chronicle is reporting that the company, long called out by Guardian articles and editorials as a tax scofflaw blatantly defying a city ruling, will start collecting and remitting the 15 percent transient occupancy tax by this summer.

Airbnb CEO Brian Chesky announced last week that it would start doing so in New York City, Portland, Ore. and other cities that take part in its vaguely defined Shared City program. That prompted us to send Chesky and other Airbnb executives an email on March 27 asking, “I’m wondering why you’re willing to collect and remit taxes in Portland, but you’ve been unwilling to do so in San Francisco, the city where you’re headquartered and where the city ruled more than two years ago that you should be doing so?”

They never responded to that inquiry, which is part of the company tactic of stonewalling the Guardian on an issue that we were the first to report over a year ago when we discovered the company was simply refusing to pay a tax bill that our reporting found amounted to nearly $2 million annually in late 2012, and probably significantly more now.

The San Francisco Tax Collector’s Office ruled in April 2012 that Airbnb should be paying the TOT on the thousands of local stays that it facilitates, and that the company and its individual hosts were jointly liable for that tax obligation. But because Airbnb’s business model violates local laws against short-term rentals, it was difficult for individual hosts to get the license they needed to collect and pay the tax.

What prompted Airbnb’s sudden change of heart? Were they feeling the pressure? The Chronicle article doesn’t really make that clear, but we’ll let you know what we hear.

Complaint against Yee includes firearms trafficking and envelopes full of cash

Sasha Cuttler
-
54
Complaint against Yee includes firearms trafficking and envelopes full of cash

The federal criminal charges filed today against Sen. Leland Yee (D-SF), local political consultant Keith Jackson, reputed Chinatown organized crime boss Raymond “Shrimp Boy” Chow, and 23 other defendants allege a vast criminal conspiracy that was penetrated by undercover FBI agents, who say they then gave Yee envelopes full of cash in exchange for official favors.

Among the many bizarre aspects of this blockbuster case, Yee stands accused of taking part in a conspiracy to illegally smuggle firearms into the country, and using those deals to help secure campaign contributions for his current campaign for Secretary of State, while he was sponsoring a trio of gun control bills that were signed into law last year.

Yee, who reportedly faces 16 years in prison for two felony counts of wire fraud and conspiracy to deal firearms without a license and to illegally import firearms, was arrested this morning during a series of early morning police raids, pleaded not guilty at his arraignment this afternoon, and was freed after posting a $500,000 unsecured bond.

Chow had a long criminal history as the admitted head of the Hop Sing gang in SF’s Chinatown, serving prison time. “Chow’s criminal history includes a guilty plea in federal court for racketeering, involving murder for hire, conspiracy to distribute heroin, arson, and conspiracy to collect extensions of credit,” the complaint notes. (You can read the full complaint here.)

Chow publicly claimed to go legit after being released from federal prison in 2006, and he has cultivated many high-profile business and political connections in San Francisco. But the 137-page criminal complaint that was unsealed today alleges that “Chow is currently the Dragonhead, or leader, of the San Francisco-based Chee Kung Tong organization,” which it describerd as a criminal syndicate connected to Hung Mun, a criminal dynasty that began in 17th century China, “also referred to as a Chinese secret society and the Chinese Freemasons.”

It says Chow was sworn in as CKT head in August 2006 after being released from federal prison, soon after the still-unsolved murder of CKT head Allen Ngai Leung. Chow’s swearing-in was reported in local Chinese media sources, so SFPD and FBI conducted surveillance there and launched an investigation.

CKT is allegedly part of Triad, an international Chinese organized crime group with ties to China and Hong Kong, and in San Francisco it is said to be comprised of Chow’s Hop Sing, a street gang with 200-300 members, and the Wah Ching gang headed by George Nieh, who was charged with a variety of crimes today.

“Nieh said he was in charge of the Wah Ching gang and Chow was in charge of the Hop Sing gang. Nieh said they used to be enemies, but banded together instead,” the complaint says, relating what they allegedly told FBI informants who had infiltrated the organization.

The FBI says it began infiltrating CKT five years ago, including an undercover FBI agent dubbed UCE 4599, who in May 2010 was introduced to Chow, who “then introduced UCE 4599 to many of the target subjects.”

Chow allegedly told UCE 4599 that he oversees all of CKT criminal enterprises, but doesn’t actively run them anymore, acting as a arbiter, or as a judge when one CKT member kills another. Nieh allegedly heads the criminal activities division and reports to Chow.

They are accused of laundering money made from “illegal activities, specifically illegal gambling, bookmaking, sports betting, drugs, and outdoor marijuana grows.” They allegedly laundered $2.3 million between March 2011 and December 2013 for UCE 4599, with members collecting a 10 percent fee for doing so.

UCE 4599 told Chow he was a member of La Cosa Nostra, an Italian mob, and in March 2012 he was inducted into CKT as a “Consultant,” the complaint alleges. It says that Jackson — a former San Francisco school board member and political consultant who has worked for Lennar Urban and Singer Associates — had also be inducted into CKT as a “Consultant,” participating in various criminal conspiracies.

The complaint says Jackson “has a long-time relationship with Senator Yee,” and “has been involved in raising funds for” Yee’s run for mayor “and for Senator Yee’s current campaign in the California Secretary of State election.” And much of the complaint details deeds allegedly committed by Jackson and Yee.

In fact, the second person named in the complaint, right after Chow, is Yee, “aka California State Senator Leland Yee, aka Uncle Leland.”

“Senator Yee and Keith Jackson were involved in a scheme to defraud the citizens of California of their rights to honest services, and Senator Yee, [Daly City resident Dr. Wilson] Lim, and Keith Jackson were involved in a conspiracy to traffic firearms,” the complaint alleges.

Yee and Jackson met UCE 4599 through Chow, and then Jackson allegedly solicited him to make donations to Yee’s 2011 San Francisco mayoral campaign “in excess of the $500 individual donation limit. UCE 4599 declined to make any donations to Senator Yee, but introduced Keith Jackson and Senator Yee to a purported business associate, UCE 4773, another undercover FBI agent,” who made a $5,000 donation to Yee’s mayoral campaign.

Yee had $70,000 in debt after that mayor’s race and worked with Jackson on ways to pay off that debt. “This included soliciting UCE 4773 for additional donations and in the course of doing so, Senator Yee and Keith Jackson agreed that Senator Yee would perform certain official acts in exchange for donations from UCE 4773.”

Yee allegedly agreed to “make a telephone call to a manager with the California Department of Public Health in support of a contract under consideration with UCE 4773’s purported client, and would provide an official letter of support for the client, in exchange for a $10,000 donation. Senator Yee made the call on October 18, 2012 and provided the letter on or about January 13, 2013,” and Jackson allegedly took the cash donation from the agent.

Meanwhile, it says Jackson and Yee continued raising money for his Secretary of State race by soliciting donations from UCE 4599 and UCE 4180, another undercover agent. “They agreed that in exchange for donations from UCE 4599 and UCE 4180, Senator Yee would perform certain officials acts requested by UCE 4599 and UCE 4180.”

That included Yee issuing an “official state Senate proclamation honoring the CKT in exchange for a $6,800 campaign donation, the maximum individual donation allowed by law.” Yee allegedly did so, and it was presented by one of his staff members at the CKT anniversary celebration on March 29, 2013.

Yee and Jackson are also accused of introducing a donor to state legislators working on pending medical marijuana legislation, the donor being another undercover agent who claimed to be a medical marijuana businessman from Arizona looking to expand into California, “and in payment for that introduction, UCE 4180 delivered $11,000 cash to Senator Yee and Keith Jackson on June 22, 2013.”

In September, after making another introduction, Yee and Jackson allegedly received another $10,000 cash donation for their services.

In August of last year, in an effort to raise more money, “Jackson told UCE 4599 that Senator Yee, had a contact who deals in arms trafficking.” Jackson then allegedly requested UCE 4599 make another donation “to facilitate a meeting with the arms dealer with the intent of UCE 4599 to purportedly purchase a large number of weapons to be imported through the Port of Newark, New Jersey…Senator Yee discussed certain details of the specific types of weapons UCE 4599 was interested in buying and importing.”

The complaint, a declaration by FBI Agent Emmanuel Pascua, does indicate that both Chow and Yee sometimes tried to declare their legitimacy to the FBI agents.

“It should be noted that throughout this investigation, Chow has made several exculpatory statements about how he strives to become legitimate and no longer participates in criminal activity,” it says.

For example, Chow has been working on book and movie deals about his life, and he would regularly make statements attempting to distance himself from CKT’s alleged criminal activities, as well as building connections in the political world. Chow posed for photos with then-Mayor Gavin Newsom and other local political figures.  

“Chow has also been portrayed in many Chinese newspapers as being involved in community affairs and has been photographed posing with local politicians and other community leaders. For example, in August of 2006, Chow was photographed hold a Certificate of Honor from the San Francisco Board of Supervisors for community service of the CKT,” it reads.

But the complaint also said that Chow continued to make incriminating statements to the undercover agents “confirming his knowledge of and involvement in criminal activity.”

The complaint says that Yee also made many exculpatory statements and expressed discomfort with how openly UCE 4180 discussed overt “pay to play” links between cash donations and official actions.

“Despite complaining about UCE 4180’s tendency to speak frankly and tie payment to performance, and threatening to cut off contact with UCE 4180, Senator Yee and Keith Jackson continued to deal with UCE 4180 and never walked away from quid pro quo requests make by UCE 4180. In fact, Senator Yee provided the introductions sought by UCE 4180 and accepted cash payments which UCE 4180 expressly tied to the making of the introductions.”

Yee’s attorney, Paul DeMeester, told reporters they will contest the charges: “We will always in every case enter not guilty pleas, then the case takes on a life of its own.”

Officials in San Francisco and Sacramento are still reeling from the allegations. “I think the whole city is in shock at the moment,” Board of Supervisors President David Chiu, who represents Chinatown and ran against Yee in the 2011 mayor’s race, told us. “Today’s widespread law enforcement actions are incredibly disturbing. The detail and scale of the criminal activities are shocking.”

California Senate President Darrell Steinberg told reporters today that he has asked for Yee’s resignation and that he plans to introduce a resolution Friday to suspend Yee and two other Democrats chargeed with political corruption, Rod Wright and Ron Calderon.

Sen. Mark Leno (D-SF), who took part in that briefing, told the Guardian, “I’m frustrated and angered on behalf of my constituents that my Senate colleagues and I are there each day to create positive changes and all of these situations are distracting…It reflects badly on a great institution.”

Guardian reporter Joe Rodriguez Fitzgerald, who contributed to this report, has been covering this case from the federal courthouse today, and we’ll have more on this unfolding story in the coming days and the next issue of the Guardian. 

Yee had a reputation for political corruption even before the federal indictment

Sasha Cuttler
-
21
Yee had a reputation for political corruption even before the federal indictment

Long before Sen. Leland Yee’s surprise arrest and arraignment on federal corruption charges today, Yee already had a reputation for, at best, political pandering and influence peddling; or at worst, corruption, a label for Yee long used in private conversations among figures in the local political establishment.

It was usually assumed to be the kind of low-level, quasi-legal corruption that is endemic to the political system: voting against one’s values and constituent interests in order to curry favor and financial contributions from wealthy special interests. In Yee’s case, his recent voting record seems to indicate that he was cultivating support from landlords and the pharmaceutical, banking, oil, and chemical industries for his current campaign for the Secretary of State’s Office.

But today’s indictment — which is expected to be released at any minute, and which we’ll detail in a separate post — seems to go much further, the culmination of a four-year FBI investigation tying Yee to notorious Chinatown gangster Raymond “Shrimp Boy” Chow, who was also arrested today. They and 24 others arrested in the case today are now being arraigned in federal court.  

The Bay Guardian has covered Yee throughout his 26-year political career, and we wrote a comprehensive profile of this controversial figure when he ran for mayor in 2011. More recently, in September, we wrote about some of his suspicious votes and refusal to offer credible explanations for them to activists he’s worked with before.

After that article, confidential sources contacted us urging us to investigate a series of strange votes Yee had cast in the last year, and we’ve been holding off on publishing that until Yee would sit down to talk to us about them. But each time we scheduled an interview with him, starting in November, he would cancel them at the last minute.

Maybe he was aware of the federal criminal investigation, or perhaps he had just decided that he not longer needed to cooperate with the Guardian as he sought statewide office, but he became increasingly hostile to our inquiries. Last month, when Yee saw San Francisco Media Co. (which owns the Guardian) CEO Todd Vogt having dinner with Board of Supervisors President David Chiu in a local restaurant, Vogt said Yee angrily accused the Guardian of being motivated by an anti-Asian bias in our inquiries and criticism, an incident that Vogt described to us as bizarre.

Guardian calls to staffers in Yee’s office, today and in recent weeks, haven’t been returned.

Yee has been a champion of sunshine (last week, the Society of Professional Journalists NorCal gave him a James Madison Freedom of Information Award for defending the California Public Records Act) and gun control, last year getting three such bills signed into law. SB 755 expands the list of crimes that would disqualify and individual from owning a gun, SB 374 prohibited semiautomatic rifles with detachable magazines, and SB 53 made background checks a requisite step in purchasing ammunition.

But he’s disappointed liberal and progressive constituencies — renters, environmentalists, seniors, students, the LGBT community — in San Francisco and beyond with most of his other votes, some of which ended up killing important legislation.

Yee voted against SB 405, which would have extended San Francisco’s plastic bag ban statewide. He also said no to regulating gasoline price manipulation by voting against SB 441, siding with the Big Oil over his constituents. And then he sided with Big Pharma in voting against SB 809, which would have taxed prescription drugs to help fund a state program designed to reduce their abuse, partially by creating a database to track prescriptions.

In addition to the Pharma-loving, ocean-shunning, oil-chugging votes Yee has cast, he has also turned a cold shoulder towards the elderly (by voting against SB 205, a bill that would make prescription font larger or, as the elderly would like to say, “readable”), the LGBTQ community (by voting against SB 761, which protects employees that use Paid Family Leave), students (by abstaining from a vote on AB 233, which would allow debt collectors to garnish the wages of college students with outstanding student loans), and tenants (by voting against the SB 510, the Mobile Home Park Conversion bill, and SB 603, which protects tenants from greedy landlords).

This year, as San Francisco’s other legislative representatives — Sen. Mark Leno and Assemblymembers Tom Ammiano and Phil Ting — announced efforts to reform the Ellis Act to address the escalating eviction epidemic in San Francisco, Yee has pointedly refused to support or even take a position on the effort.

In 2013, Yee sided with the Republican Party nine times on key votes, earning the scorn of many of his Democratic Party colleagues. Yee even voted for SCR 59, which would have created highway signs honored former Sen. Pete Knight, the late conservative Republican who authored Prop. 22 in 2000, strengthening California’s stand against same-sex marriage at the time.

Since we ran our “The real Leland Yee” article on Aug. 30, 2011, Yee has voted on 88 “key” pieces of legislation, according to the non-partisan, non-profit educational organization Project Vote Smart, and his final recorded vote has been “Yea” 80 times. He has abstained from voting six times, and has voted “Nay” just twice.

One of those votes came in response to a bill that was deemed “unnecessary” by Gov. Jerry Brown, but the other bill, SB 376, would have prohibited the harvesting and sale of shark fins in California.

In 2013, his voting record more closely aligns with Sen. Mark Wyland, a Republican from Carlsbad, than it does with any other Democrat on the Senate, finishing just ahead of Sen. Ron Calderon, the Southern California Democrat who was also indicted by the federal government on corruption charges last month after allegedly accepting bribes from an undercover FBI agent.

Throughout his legislative career, Yee has regularly supported Pacific Gas & Electric’s stranglehold on San Francisco’s energy market and benefitted from the company’s corrupting largesse. None of this may have crossed the line into actual criminal conduct — but for those familiar with Yee and his transactional approach to politics and governance, today’s indictment isn’t a huge surprise. 

Sen. Leland Yee arrested on corruption charges UPDATED

Sasha Cuttler
-
53
Sen. Leland Yee arrested on corruption charges UPDATED

 California Sen. Leland Yee (D-SF) has reportedly been arrested on corruption charges following an FBI sting and raid on his office. In addition to our 2011 profile of Yee’s checkered voting history, over the last six months we at the Guardian have also been investigating Yee’s unseemly votes and actions on behalf of monied interests, so check back later to read our findings and more on today’s unfolding actions against Yee.

UPDATE: We posted a story on Yee’s unseemly reputation and voting history here, and we’ll soon be posting details of his indictment, which is just now being unsealed.  

UPDATE: We and other journalists are still pouring through the 137-page criminal complaint against Yee and 25 other defendants, but in short it charges that Raymond “Shrimp Boy” Chow “is currently the Dragonhead, or leader, of the San Francisco-based Chee Kung Tong organization,” an organized crime syndicate involved in widespread criminal activities and money laundering. And it charges that Yee, “aka California State Senator Leland Yee, aka Uncle Leland,” helped run an illegal firearms trafficking operation along with political consultant Keith Jackson, a member of the CKT syndicate. Yee is charged with wire fraud and conspiracy to deal firearms without a license and to illegally import firearms, which is ironic given that his legislative bright spot last year was the passage of three tough gun control bills, as we discuss in our related story on his political history. 

The sordid saga of Airbnb — a $10 billion “outlaw middleman” — continues

Sasha Cuttler
-
103
The sordid saga of Airbnb — a $10 billion “outlaw middleman” — continues

SF-based Airbnb is making news again this week, from the San Francisco Chronicle following up our stories about how landlords are sending eviction notices to tenants who are breaking their leases and local laws in using the short-term rental services to national outlets trumpeting Airbnb’s estimated $10 billion in valuation, which is more than some of the biggest hotel chains.

But nobody seems to be calling out how those two things are connected, except perhaps in ValleyWag’s passing but spot-on reference to the SF-based company as an “outlaw middleman.” That’s a good label for a scofflaw company that is making buckets of money by openly flouting tenant and tax laws in San Francisco, New York City, and other cities around the world.

Meanwhile, as the City Attorney’s Office continues preparing to take legal action against Airbnb, new companies are popping up to make it even easier for residents to illegally monetize their rent-controlled apartments, such as AirEnvy.com, which encourage people to “profit from your home or apartment by renting out unused space through a full service management marketplace.”

The company charges people 18 percent to manage their Airbnb rentals, checking guests in and out, cleaning up, and whatnot. And most of its testimonials are from San Franciscans, such as Rob, who writes, “I used to spend hours managing my Airbnb, exchanging keys with guests, and cleaning. Now, Airenvy does all that for me.”

Breaking local laws against short-term rentals has never been easier! All this infuriates Janan New of the San Francisco Apartment Association, who tells the Guardian that more than 1,100 rent-control apartments are listed on Airbnb at any time, and she’s been working with landlords to identify and evict such tenants.

Yet she denies that many landlords are using Airbnb to get around rent-control laws — such short-term rentals are also usually illegal, even for owners — and told us, “If people are breaking the law on our side, I want to know who it is.”

And as this highly lucrative clusterfuck continues, Board of Supervisors President David Chiu is still mired in his year-long efforts to create a legislative remedy for all of this. But Airbnb seems to be taking its local political problems seriously, this week hiring David Owen — a well-connected former legislative aide to Chiu’s predecessor, Aaron Peskin — away from Platinum Advisors to work on public policy for the company.

Stay tuned, folks, there’s lots more to come on an issue that the Guardian started covering years ago when few were paying attention to how an illegal business model was being used to create a multi-billion-dollar company.   

Seeking technology and economic/social justice columnists

Sasha Cuttler
-
78
Seeking technology and economic/social justice columnists

The Bay Guardian is looking for a pair of new freelance writers to do separate monthly columns covering the technology industry and economic/social justice issues. The two new columns would go into a rotation we’re tentatively calling Soul of the City, along with Jason Henderson’s Street Fight column and a new environmental column by News Editor Rebecca Bowe that we’ll debut in our Earth Day issue.

For the technology column, we want someone with a deep understanding of this industry, its economic and personality drivers, and the role it could and should play in the civic life of San Francisco and nearby communities. We aren’t looking for gadget reviews or TechCrunch-style evangelizing or fetishizing of the tech sector, but someone with an illuminating, populist perspective that appeals to a broad base of Guardian readers. 

The other column, on economic and social justice issues, would cover everything from housing rights to labor to police accountability issues, with an eye toward how San Francisco can maintain its diversity and cultural vibrancy. We want someone steeped in Bay Area political activism and advocacy, but with an independent streak and fearless desire to speak truth to power.

We envision the columns running on a monthly rotation at around 1,100-1,400 words each, with the potential to sometimes run longer and to even be featured on our cover when circumstances warrant. Columns can focus on a single issue or multiple items. Pay is 10-15-cents per word depending on the depth of reporting required. We strongly encourage candidates of color, young people, and those representing communities that need a stronger voice in the local political discourse to apply.

If you’re interested, please sent your qualifications and concepts, along with one sample column and ideas for future columns, to Editor-in-Chief Steven T. Jones at steve@sfbg.com. Help us escalate this fight for the soul of the city by adding your voice to the Guardian’s mix.    

The unanswered question: How do we bridge SF’s affordable housing gap?

Sasha Cuttler
-
186
The unanswered question: How do we bridge SF’s affordable housing gap?

Nobody has a good answer to San Francisco’s most basic housing problem: How do we build the housing that existing city residents need? It was a question the Guardian has been posing for many years, and one that I again asked a panel of journalists and housing advocates on Friday, again getting no good answers.

The question is an important one given Mayor Ed Lee’s so-called “affordability agenda” and pledge to build 30,000 new housing units, a third of them somehow affordable, by 2020. And it’s a question that led to the founding 30 years ago of Bridge Housing, the builder of affordable and supportive housing that assembled Friday’s media roundtable.

“There really isn’t one thing, there needs to be a lot of changes in a lot of areas to make it happen,” was the closest that Bridge CEO Cynthia Parker came to answering the question.

One of those things is a general obligation bond measure this fall to fund affordable housing and transportation projects around the Bay Area, which Bridge and a large coalition of other partners are pushing. That would help channel some of the booming Bay Area’s wealth into its severely underfunded affordable housing and transit needs.

When I brought up other ideas from last week’s Guardian editorial for capturing more of the city’s wealth — such as new taxes on tech companies, a congestion pricing charge, and downtown transit assessment districts — Parker replied, “We’d be in favor of a lot of that.”

Yet it’s going to take far more proactive, aggressive, and creative actions to really bridge the gap between the San Francisco Housing Element’s analysis that 60 percent of new housing should be below-market-rate and affordable to those earning 120 percent or less of the area median income, and the less than 20 percent that San Francisco is actually building and promoting through its policies.

Stated another way, about 80 percent of housing we’re building is for a small minority of city residents, or the wealthy people that these developers hope to attract to the city. And we’re not building housing for the vast majority of city residents. That is a recipe for gentrification, displacement, and destruction of San Francisco as a progressive-minded city.

Parker parroted Lee and other pro-development boosters, including SPUR, in arguing that city needs to make it easier and faster for developers to build new housing of all types. “In San Francisco, we do need to expedite the [housing] entitlement process,” Parker said.

But when asked whether meeting or exceeded Lee’s housing production goals would ever bring the price of market-rate housing down to the level where someone more 120 percent of AMI — which HUD recently set at $81,550 for single San Franciscans, or $116,500 for a family of four — Parker conceded that it wouldn’t.

The bottom line for San Francisco and its overheated real estate market is we can never built our way to affordability. The only way to build housing that most people can afford is with public subsidies, and San Francisco just isn’t asking enough from its wealthy individuals, corporations, and developers to create an Affordable Housign Trust Fund that is anywhere near big enough to meet the real demand.

That kind of assertion seems radical by the standards of today’s skewed political (and online) discourse. But when I raised it to a panel that included Bridge Housing officials, members of SPUR and HOPE SF, and a panel of journalists from such pro-development outlets as San Francisco Business Times, San Francisco Magazine, SocketSite, The Registry SF, KQED, and TechCrunch (as well as the more Guardian-aligned Mother Jones), nobody had any good answers or remedies to that basic question that we’ve raised again and again.

Instead, some of the business journalists offered a more sober assessment of what’s to come than most of this city’s pro-development boosters, noting a few signs of irrational exhuberance in the local economy.

The Registry’s Vladimir Bosanac said he’s observed a recent trend of developers buying up unentitled land, indicating more optimism in the sustainability of this development boom than market conditions might warrant. Adam Koval of SocketSite, an early predicter of the last dom-com crash, also voiced sketicism in the pervasive “this time is different” faith in the tech sector, noting how realms such as gaming and online coupons are losing steam and predicting that commercial rents are plateauing.

“I think there are some real gut checks coming up,” Koval said of the tech sector and the sustainability of its growth and valuations.

Perhaps it’s also time for a gut check by Mayor Lee and others who argue that we can build our way to housing affordability without any major new efforts to capture more of the wealth now being generated in San Francisco, wealth that might not be here later if we continue avoiding the question of how to provide the housing that San Francisco needs. 

Clean Up The Plaza run by political consultant with ties to developers

Sasha Cuttler
-
168
Clean Up The Plaza run by political consultant with ties to developers

Neighborhood and progressive political activists have long been suspicious of the shadowy Clean Up The Plaza campaign and its possible connections to a massive housing development proposed for 16th and Mission streets — and the Guardian has now confirmed that developer-connected political consultant Jack Davis is playing a key role in that campaign.

Asked by the Guardian whether he is being paid by the developers — Maximus Real Estate Partners, which has submitted plans to build a 10-story, 351-unit housing complex overlooking the 16th Street BART plaza — Davis told the Guardian, “That’s between me and the IRS.”

Our exchange with Davis and Gil Chavez, a Davis roommate who runs the Clean Up The Plaza campaign, occurred yesterday outside the LGBT Center where they and three other campaign workers (who refused to speak to us) were promoting their cause and collecting signatures on petitions calling for crackdowns on the plaza before the debate inside between Assembly District 17 candidates David Chiu and David Campos.

Clean Up The Plaza has been refusing to return calls from the Guardian or other local journalists for months, and the group hasn’t filed any paperwork with the San Francisco Ethics Commission in association with its political fundraising or lobbying efforts.

Asked about the group’s relationship with the project developers, Chavez told us, “They’re in communication with us and we’re in communication with them, but they haven’t funded us.” Asked who paid for the group’s website, mailers, window signs, and other expenses, Chavez said it was him and other donors that he wouldn’t identify.

Davis has been the go-to political consultant on big campaigns backed by real estate interests in San Francisco, working on the successful mayoral campaigns of Frank Jordan, Willie Brown, and Gavin Newsom, as well as a number of high-profile development projects, including the 1996 ballot measure approving construction of AT&T Park.

He and Chavez say they live together in the neighborhood and their only motivation in running the group is improving public safety. “I’m happy to to talk about what Clean Up The Plaza is,” Davis told us. “I live at 17th and Mission and I’ve been mugged.”

But housing activist Sara Shortt of the Housing Rights Committee isn’t buying it, calling the group “a fake grassroots campaign that is misleading this community.”

“If you didn’t know Jack Davis’ history in politics in San Francisco, you might be able to take that at face value,” Shortt said of Davis’ claims to be simply a concerned citizen. “Given his ties to big developers, it’s not very believable.”

Willie Brown even heralded Davis’ return to political work two years ago in his San Francisco Chronicle column, entitled “Political consultant Jack Davis back on S.F. scene,” writing that he has returned to local political circles following a hiatus in Wales the previous few years.

“You political types, be warned. Jack Davis is back in town,” the column began, ending with, “I think that after watching from the sidelines for a while, he’s ready to return. Can’t wait to see whom he decides to work for. Stay tuned.”

Is Davis working on fake grassroots campaign designed to smooth the way for a massive gentrifying housing projects in one of the city’s last remaining neighborhoods that still welcomes poor people? Stay tuned.

San Francisco Ethics Commission Director John St. Croix told the Guardian that the group should be registered if it has raised more than $1,000 or if it is lobbying at City Hall — indeed, the group has boasted on its website of efforts to influence Campos and other city officials to increase police patrols and cleansing of the plaza — particularly if it is being paid by a third party to do so.

“If they’re lobbying, obviously we want to know,” St. Croix told us, saying that he planned to personally follow-up with the group on its activities.

Davis denies that the group is in violation of any disclosure laws, claiming it is simply a small neighborhood group, and he referred our inquiries to the group’s attorney, James Perrinello, a partner at the high-powered and politically connected law firm of Nielson Merksamer Parrinello Gross & Leoni, who hasn’t yet returned our calls.

For more on Clean Up The Plaza and other campaigns to “clean up” poor neighborhoods as a precursor to gentrification and market rate housing development — including the ongoing efforts to do so in the Tenderloin and Mid-Market areas — read next week’s Bay Guardian. 

[UPDATE 3/18: Former Guardian Editor/Publisher Tim Redmond’s 48 Hills site just posted a long report by reporter Julia Carrie Wong that includes an admission by Davis that he is indeed a paid consultant for Maximus, as well as interesting conflicting statements from Maximus and Chavez about a meeting they held. Check it out.] 

Burning the Man? Well, not exactly, at least not yet

Sasha Cuttler
-
30
Burning the Man? Well, not exactly, at least not yet

Last week’s announcement that Burning Man has become a non-profit organization got lots of uncritical coverage from the San Francisco Chronicle and other local news outlets, but the reality is the old owners are still firmly in control, as the Bay Guardian and the scrappy Burners.Me blog have been reporting.

It is true that The Burning Man Project, a nonprofit organization that founder Larry Harvey announced the creation of three years ago, is up and running and ostensibly in charge of “global cultivation of art and community,” as it put it in a March 3 blog announcement, whatever that really means.

But Black Rock City LLC continues to run the Burning Man event and control its vast revenue stream, even though it’s ostensibly been placed under the auspices and ownership of the new nonprofit, whose Board of Directors is still appointed to one-year terms by the old LLC board, which has permanent seats on the nonprofit board.

And any community accountability in that ownership arrangment is further undermined by the creation in 2010 of the ironically named Decommodification LLC, which owns the commodity that is Burning Man — its trademarks, brands, logos, etc. —  that the old LLC and the new nonprofit pays to license each year. It’s a similar setup to the old Paper Man LLC, a controversial arrangement that triggered internal lawsuits and set Burning Man down the path toward nonprofit control.

Kudos to the work of Burners.Me, which has continued critical coverage of an issue that I started covering while working on my book, The Tribes of Burning Man, but which I frankly lost the stomach to continue this watchdog role after concluding that most burners just don’t care who’s in charge or how much they make as long as the party doesn’t stop.  

Although the authority and community control of the new nonprofit may not be exactly as Harvey made it sound three years ago, his timeline is still holding fairly true: three years later, the LLC is now under the umbrella of a nonprofit, and three years from now, the LLC board members will vote on giving up control over the brands.

But Harvey is still voicing skeptisim about giving up control to the nonprofit, responding to critics of the latest move by writing, “The reason for this 3-year interval is that even we do not invest blind faith in the new non-profit’s workings, and we want to be perfectly sure that it can be relied upon, in the face of temptations that arise within any organization when dealing with power or money, to pursue the policies that we have practiced.”

How have Harvey and those around responded to these same temptations in recent years? Well, we don’t know, because they are refusing to say how much money they transferred to themselves in salaries and lump sum payments (which Harvey had frankly said three years ago they would be taking, and well in excess of the $20,000 cap that was created during an earlier controversy to limit their accumulation of equity in an event created by attendees) before placing the LLC under the nonprofit umbrella.

But Harvey did respond to critics by saying that the LLC’s finances will indeed to be opened up for public inspection for the first time later this year when the new nonprofit files its financial paperwork with the state.

“It has been asked if we intend to reveal the financial records of Black Rock City LLC. The answer is yes; that too will happen at about the same time as the Burning Man Project reveals its information—these two entities will then become a clean well-lighted suite of rooms thrown open for inspection,” Harvey wrote. “But I cannot guaranty [sic] that even this amount of disclosure will satisfy everyone. Even then, I suppose that some will look for skeletons in closets, or search for sliding walls that might conceal a dungeon.”

So I suppose that we’ll all just need to wait-and-see. And in the meantime, I’m still waiting for a call back from Marian Goodell, a Burning Man spokesperson and member of the LLC board, to address our questions, and I’ll update this post if I when I hear back.

UPDATE: Goodell confirmed our basic understanding of this transition, confirming that the transparency in the LLC’s finances and thepayouts its six board members received won’t be disclosed to the public. “There’s no need to go back, everything is going forward from January 2014,” she said in response to our question about fiscal transparency after telling us, “At the end of 2014, the financials for the 501(c)3 are revealed, and any attaching subsidiary finances.”

That means BRC LLC, but not Decommodification LLC, which is not a subsidiary to the nonprofit. Goodell said the decision hasn’t yet been made how much to pay in licensing fees, although the nonprofit has an exclusive licensing arrangement “and can set the amounts for others to use it,” such as the network on regional events that Burning Man has spawned.

As for the general concerns about who controls Burning Man, she said, “There’s never been any intention to give full control to the community.” But she said that she and the other five board members have been responsible stewards of the culture and “I’m personally very invested in the success of it. My duty is to see this into its next iteration when the founders aren’t necessary to be making the big decisions.”

 

“Are Alt Weeklies Over?” Hell no! We’re needed now more than ever.

Sasha Cuttler
-
31
“Are Alt Weeklies Over?” Hell no! We’re needed now more than ever.

The New York Times yesterday ran an insightful and widely circulated op-ed from a fellow alt-weekly editor, Baynard Woods of Baltimore City Paper, that emphasized the important role that a staff of full-time alt-weekly journalists play in urban life, a niche that neither big daily papers nor online-only outlets can replicate.

“An alt weekly has a staff of paid reporters and editors whose jobs are not only to know the city, but to love it, to hate it, and to be an integral part of it, cajoling, ridiculing, praising and skewering city officials, artists and entrepreneurs alike, while giving voices to the ‘city folk,’” Woods wrote after ruing the economic forces that have hobbled our profession and given rise to the article’s headline: “Are Alt Weeklies Over?”

As someone who has worked for four alt-weeklies in California after starting my career at daily newspapers, I can attest to the unique and valuable role that they played in each of those cities: San Luis Obispo, Monterey, Sacramento, and San Francisco. Eschewing the tired and unattainable goal of “objective journalism,” the alt-weeklies help provide a bottom-up framing of local issues and serve as a check on the dominant economic and political forces.

When I made the transition from dailies to alt-weeklies in 1995, I felt like a whole new world had been opened up for me, a feeling that I’ve heard expressed by many others in my business. Daily newspaper writers generally hew to the orthodoxy of their local Chamber of Commerce in economic coverage, while political news tends to split the difference between the two major political parties.

But in a dynamic world with major long-term problems that aren’t being addressed in a serious way — from global warming and environmental degradation to extreme wealth disparities and lack of investment in critical public infrastructure — sometimes the Chamber, the Democrats, and the Republicans are all wrong.

Saying so often falls to the alt-weekly writers and editors who can speak with a clear and true voice, and who can back up their perspective with years of diligent reporting to support it. When the Guardian says PG&E corrupts our political system, that’s not a statement of opinion, but a conclusion backed up by dozens of well-reported articles going back decades. In this instantaneous yet forgetful society we’re creating, that kind of institutional knowledge is invaluable.

That’s especially true when it comes to city life and the struggles we cover all day, every day, something that writers who strive for clicks from readers around the world can’t provide. Locally based reporters working local beats with adequate resources is essential to civic accountability.  

For example, it’s easy for us to see how the current displacement crisis will change San Francisco in unacceptable ways, and to see the echoes of previous political moments — the freeway revolts of the ‘60s, the anti-Manhattanization struggles of the ‘70s, resistance to trickle down economics in the ‘80s, warnings about the last dot-com economic cleansing in the ‘90s — in this current political moment. So we amplify the many voices crying out for reform and we’re willing to call our untrustworthy politicians and business leaders on their bullshit. We’re not afraid to call the liars “liars.”

“Alt weeklies can be harsh in their criticism, whether it’s aimed at a blowhard politician or an overrated artist. Some people say we’re too eager to charge people with selling out, with trafficking in an insular cultural elitism. But alt weeklies don’t simply delight in being mean; they are harsh because they care about the city and what goes on in it,” Woods wrote.

We at the Guardian love San Francisco, and we’re going to keep fighting for its soul — and the panopoly of inspired and inspiring people who feed that soul — with everything we’ve got, and neither the people who fund our paychecks nor those who populate our blogs are going to deter us from that mission.   

Message to techies: Identify with your community, not just your industry

Sasha Cuttler
-
75
Message to techies: Identify with your community, not just your industry

I appreciated the opportunity to address a couple hundred Yelp community managers from around the world today at the company’s San Francisco headquarters, and to deliver a message that those in the tech industry need to hear: “Be a part of your community, not just your company and industry.”

That idea obviously has a special resonance here in San Francisco, where the tensions between well-paid techies and activists concerned about increasing evictions, gentrification, and displacement have reached a fevered pitch. But it was a message that several people came up to me after the panel to say they appreciated, one that their industry would do well to heed.

Workers of all kinds have more in common with one another than any of us do with our corporate overlords and richest 1 percent of society. The young people at Yelp and other tech companies should want their cities to remain interesting, affordable, and diverse places. Ultimately, we’re all in this together, and we need to remember that cities are communities first, not simply places from which to extract wealth.

As we report in our latest issue, there have been nascent efforts to bridge the gap between tech workers and the rest of us, and I truly hope that some new leaders rise up in the tech world — workers, not just bosses and investors using manipulative media strategies — to challenge corporate power and the self-interest of venture capitalists and other tech titans. After all, the greatest promise of tech tools have always been their empowering, informing, and democratizing potential, not just their crassly commercial aspects.  

That said, my comments today were a small part of the discussion, in which I was the print representative on a media panel that included television (the hilarious Liam Mayclem, host of KPIX-TV’s “ Eye on the Bay”), radio (Joel Riddell, host of AM910’s “Dining Around with Joe Riddell”), and online (SFist Editor Brock Keeling).

We offered tips and answered questions about how best to pitch story ideas and get media coverage for their company and clients — and I was happy to offer my time and advice to fellow members of my community. 

Crooked cops

Michael Redmond
-
2
Crooked cops

steve@sfbg.com

It’s a bombshell police scandal befitting San Francisco’s restive mood, dropping at a time when simmering class tensions have been making national news, and one more example of how the poor are getting trammeled by those with power.

As politicians and tech titans were trying to make the gritty central city more welcoming to corporations and their workers three years ago, a half-dozen plain-clothed police officers were allegedly abusing poor people, illegally busting into their rooms, stealing anything that had value, forcing criminals to sell stolen drugs for them, and repeatedly telling lies in police reports.

When the targets of these abuses complained to the authorities, they were dismissed or ignored. Only when Public Defender Jeff Adachi and his investigators found and publicly revealed damning video surveillance from the targeted single-room occupancy hotels did federal authorities launch an investigation.

Adachi held press conferences in March and May of 2011 showing officers brutalizing SRO residents and leaving their rooms with laptops and other valuables that were never booked as evidence. When Greg Suhr was sworn in as police chief in April 2011, he put the officers on administrative duties, forced some to give up their weapons, changed department policies to deter cops from barging into people’s rooms without warrants or probable cause, and cooperated with the Federal Bureau of Investigation on the case.

That investigation resulted in federal grand jury indictments that were unsealed on Feb. 27, charging six SFPD cops with a variety of serious charges, including civil rights violations and conspiracies, theft, extortion, drug conspiracies, and falsification of records.

They are Officers Arshad Razzak, Richard Yick, and Raul Eric Elias, who worked in Southern Station, dealing with residents of SoMa SROs; and Sgt. Ian Furminger, Officer Edmond Robles, and Reynaldo Vargas (who Suhr says was dismissed from SFPD for unrelated reasons as the investigation got underway), who worked in Mission Station, where the drug conspiracy allegedly took place, on top of shakedowns in Mission District SROs.

All defendants are facing more than 20 years in prison (except Elias, who faces 10 years for civil rights conspiracy and one year for deprivation of rights under color of law). The Southern Station defendants are also facing $250,000 in fines. The Mission Station defendants face $1 million in fines on the drug conspiracy charges, which allegedly involved having informants sell a few pounds worth of marijuana seized by police.

Attorney Michael Rains, who represents Razzak and has been designated by the San Francisco Police Officers Association as a spokesperson for the others, told the Guardian that all the defendants had difficult undercover jobs in the murky world of informants and drug dealers.

“There was sloppiness in the reporting [in officials police reports], but sloppiness doesn’t rise to the level of criminal activity,” Rains told us, questioning the credibility of witnesses who have criminal records and the reliability and context of the video evidence.

But Suhr strongly condemned the behavior outlined in the criminal complaints, telling reporters that other SFPD officers connected to the case may still face disciplinary action and that, “My officers know I will not have dishonest cops among us.”

He called the indictments a serious blow to the SFPD, appearing to choke up with emotion.

“Our department is shaken,” Suhr, who has been with the SFPD more than 30 years, told reporters. “This is as serious a matter as I’ve ever encountered in the Police Department.”

Yet Suhr also distanced himself from scandal, telling reporters, “This conduct occurred before my time as chief.”

Most of the alleged crimes happened under former Police Chief and current District Attorney George Gascón shortly before he made that transition, one in which critics at the time raised concerns about whether he could be an effective watchdog of SFPD misconduct. That conflict of interest was what sent this case to the feds.

“It is extremely disappointing that the officers violated the trust of the community and tarnished the reputation of all the hard working men and women in uniform,” Gascón said in a press release.

During a brief press conference that afternoon, Gascón denied responsibility for the misconduct: “Anytime you have a large organization, you are going to have people who operate outside the boundaries of what is acceptable.”

Asked by the Guardian when he became aware of allegations that his officers were abusing SRO residents, he said, “We became aware at the same time everyone else did, when the videos came out.”

Gascón’s Press Secretary Alex Bastian cut the press availability off after 10 minutes so Gascón could prepare for his State of Public Safety speech that afternoon, but Bastian told the Guardian he would get answers to our questions about the office’s police accountability record.

“When appropriate, we ensure the integrity of the system is not compromised by referring cases to other prosecuting agencies. In the abundance of caution, when this case was brought to my attention, I referred the case to the federal authorities to safeguard a thorough investigation and guarantee maximum consequences,” Gascón said in a prepared response, while Bastian ignored our requests for more responsive answers to our questions.

But Adachi says these indictments are just the tip of the police misconduct iceberg, charging that police officers routinely lie in police reports and in court to justify illegal searches and other abuses of defendants who are poor or have drug problems, knowing that judges and juries tend to believe cops over criminals.

“The indictments today are a victory for ordinary San Franciscans,” Adachi told reporters, emphasizing that in addition to personally profiting from the shakedowns, these officers were also submitting false testimony in perhaps hundreds of cases, including about 100 that his office has gotten dismissed. “These allegations not only involve violations of the constitutional rights of our clients, but also lying on police records that were used to send individuals to prison based on the testimony of these officers.”

Residents and employees of the Henry Hotel, one of four SROs involved in this case, told the Guardian that the indictments are a rare repudiation of police mistreatment of SRO residents, which they say continues to the day.

“A lot of these people need help. They need guidance. They need a program. They need somebody to motivate them to go to their programs, not a fucking cop who keeps harassing them,” Jessie Demmings, a manager at the 132-room Henry Hotel on Sixth Street, told the Guardian. “They try to take that one step to go forward and then when you come outside you get greeted by a fucking cop having a bad day.”

Even though new SFPD policies prohibit officers from using passkeys to enter people’s rooms without a warrant, Demmings said it still happens. “The reason why we give the passkey is because they always threaten we’re gonna kick in the door, we gonna have a batting ram come and bust the door in,” he said.

Adachi cited his office’s long history of cases in which “officers were barging into rooms without warrants and they were lying about it in police reports.”

Cases of police abuse are handled by the city’s Office of Citizen Complaints, but its work is shrouded in secrecy, thanks to the California Peace Officers Bill of Rights, and officers rarely face serious consequences for their actions.

“We do have complaints with regard to the conduct within the SROs and we have made policy recommendations to the chief,” OCC Director Joyce Hicks told reporters at the SFPD press conference. She called the indictments “extra serious because it implicates the Fourth Amendment and people’s rights.”

Adachi said that after revealing the videos in 2011, he persuaded Mayor Ed Lee to fund two positions in his office investigating police misconduct, but the Mayor’s Office defunded those positions after a year and ignored Adachi’s calls to restore them (as well as Bay Guardian calls for comment on the issue).

“We felt like the public needs to know about this,” Adachi said of the behavior revealed by the federal investigation. “What happened today is significant, and I think it will have deterrent effect.”

Sabrina Rubakovic and Brian McMahon contributed to this report.

Feds indict SFPD cops, alleging a drug ring and shakedowns of the poor

Sasha Cuttler
-
26
Feds indict SFPD cops, alleging a drug ring and shakedowns of the poor

Federal grand juries today indicted four San Francisco Police Department officers, an SFPD sergeant, and a former SFPD officer on a variety of corruption, civil rights violations, and theft charges stemming from illegal raids on poor residents of single room occupancy hotels in San Francisco.

“Our department is shaken,” Police Chief Greg Suhr told reporters at a morning news conference. “This is as serious a matter as I’ve ever encountered in the Police Department.”

Yet Suhr also distanced himself from scandal, telling reporters, “This conduct occurred before my time as chief.” Shortly after Suhr was sworn in as chief in April 2011, he changed department policies related to the SROs, including preventing officers from using pass keys to enter the buildings without a warrant or the rooms without probable cause.

The pattern of alleged criminal behavior by SFPD officers was exposed in early 2011 by Public Defender Jeff Adachi, whose investigators found video surveillance from the Henry Hotel and other local SROs that supported defendants claims that police were shaking them down and then submitting false police reports.

“The indictments today are a victory for ordinary San Franciscans,” Adachi told reporters today, emphasizing that in addition to personally profiting from the shakedown, these officers were also submitting false testimony in perhaps hundreds of cases, including 100 that his office has gotten dismissed. “These allegations not only involve violations of the constitutional rights of our clients, but also lying on police records that were used to sent individuals to prison based on the testimony of these officers.”

Once the videos were made public, the investigation was referred to federal investigators because District Attorney George Gascon’s office had a conflict of interest, given that he had just come from serving as police chief in the SFPD, where he presided over the officers involved in this scandal.

Gascon issued a public statement saying, “I am relieved to know that the officers have been indicted after I referred the matter to federal authorities. It is extremely disappointing that the officers violated the trust of the community and tarnished the reputation of all the hard working men and women in uniform. As law enforcement, we must all work hard to ensure our agencies operate with the highest integrity and are deserving of the trust the public bestows upon us.”

Raw video of the press conference via KTVU.

His office didn’t respond to Guardian questions about his culpability in the scandal, but Gascon is likely to be asked about it when he holds a press briefing this hour. [UPDATE 5:30PM: During a brief press availability, Gascon said the indictments shouldn’t be considered a reflection of his leadership of the department: “Anytime you have a large organization, you are going to have people who operate outside the boundaries of what is acceptable.” Asked by the Guardian when he became aware of allegations that his officers were being accused of shaking down tenants in the SROs, he said, “We became aware at the same time everyone else did, when the videos came out.” The press availability was cut off after 10 minutes because Gascon was giving a State of Public Safety speech upstairs, showing up 25 minutes later, but spokesperson Alex Bastian said he would try to get answers tomorrow to Guardian questions about Gascon’s record and independence when it comes to prosecuting police abuse cases.]

Those indicted today were Officers Arshad Razzak, Richard Yick, Raul Eric Elias, and Edmond Robles, and Sgt. Ian Furminger. Also indicted was former officer Reynaldo Vargas, who was caught on videotape appearing to steal a laptop computer from a tenants in the Henry Hotel, and who Suhr said was dismissed from the SFPD before the federal investigation began.

Suhr also said that all of those involved have been on administrative duties throughout the investigation, which the SFPD cooperated with, and that some of them (he couldn’t say how many) were also required to turn in their firearms.

These indictments also don’t appear to be the end of this unfolding scandal. “There were other officers involved and they will be dealt with administratively,” Suhr said without providing details. When asked by the Guardian whether anyone in the command staff may face discipline, Suhr said “no.”

But with these six facing possibly lengthy prison terms, it will be interesting to see what they have to say about what others in the SFPD knew about their actions, which also allegedly involved running a drug ring out of Mission Station, where Furminger, Robles, and Vargas are accused of illegally seizing and selling marijuana.

Adachi wants to see this investigation continue: “It would be hard to believe that nobody who was involved in supervising these officers was aware of it.”

Feds indict SFPD officers for allegedly stealing from the poor

Sasha Cuttler
-
44
Feds indict SFPD officers for allegedly stealing from the poor

Update: Click here for the latest as this story develops.

Federal civil rights and corruption charges have been filed against several San Francisco Police Department officers in connection with a series of raids on poor people’s SRO apartments, where the officers allegedly stole property, according to a report by KTVU.

The SFPD will be holding a press conference on the indictments within the hour, following by an afternoon press conference by Public Defender Jeff Adachi, who raised the issue in 2011 after obtained video surveillance footage that appeared to show an officers taking a laptop and other property, a story we covered at the time.

Surveillance video footage from the Julian Hotel, which Adachi’s office posted to YouTube in May 2011.

“We’re pleased to see the federal government appears to be taking these civil rights violations seriously,” Public Defender’s Office spokesperson Tamara Aparton told the Guardian.

Although the officers names haven’t been released, KTVU reports that five current officers and a former officer were indicted. Officers named by Adachi in 2011 as involved in the illegal alleged activites were Ronaldo Vargas and Richard Guerrero, although the SFPD says it won’t comment on the indictments until the press conference.

So check back here later for more on this breaking story. 

Surveillance video footage from the Henry Hotel (above) and the Jefferson Hotel (below), which Adachi’s office posted to YouTube in December 2010.

1...456...76Page 5 of 76

48hills.org is the official publication of the non-profit San Francisco Progressive Media Center.
Contact us: info@48hills.org