Thrift and Consequences

How a supervisor with just $42,500 in income services $1 million in mortgages

Yee did not report either loan on his April 2000 economic disclosure statement.

Although a public official is not required to disclose a loan secured by his principal place of residence, only one of Yee's loans could qualify for this exemption. Yee says that he plans to file an amended financial statement with the Ethics Commission to report at least one of the loans.

In a series of interviews, Yee responded to many questions about his personal finances, but referred detailed questions about his mortgage loans to Stearns. Stearns said the Yees hope to be candid, and therefore to be seen as a hard-working, thrifty couple who gradually saved a very large sum of money over many decades while living, rent-free, in their inherited Noe Valley home.

The Yees now are responsible for three loans -- the $400,000 equity loan on their Noe Valley home, the $500,000 loan secured by their new west-side home, and a loan connected to a $143,000 condominium they own in Berkeley. The $900,000 in loans taken out to purchase the new Sunset District home require about $62,000 in debt service each year, Stearns acknowledges. In addition, the Yees appear to owe some $11,000 a year in city property taxes on their two in-town residences, as well as tax payments on their Berkeley condo.

Stearns says Yee has been paying the $5,214 monthly installments for his two newest loans by, among other ways, dipping into his wife's savings account. Maxine Yee, a housewife, has worked sporadically during the Yees' 28-year marriage. According to Stearns, neither of the Yees is independently wealthy.

Stearns says about half of the loan payments to date were covered by $25,000 that was put aside from the principal of the Washington Mutual loan. Yee is, in effect, paying the loans back with proceeds from one of the loans, which, lending experts say, is unusual. Stearns declined to provide records showing the existence of this $25,000 fund, or any payments from it.

The balance of the monthly payments toward the loans that financed the new home are covered by Yee's salary and his wife's savings, Stearns says.

Through Stearns, the Yees provided SF Weekly with a paper trail intended to back up the spokesman's claims about the supervisor's finances. The documents provided, however, are fragmentary and, at times, not identified as belonging to either Leland Yee or his wife.

Stearns provided photocopies of $17,860 in checks the Yees wrote from August 1999 through March 2000 to World Savings Bank, apparently to service the $500,000 loan taken out at that bank. But the campaign spokesman declined to provide bank statements relating to the account on which the checks were drawn, making it impossible to determine the timing of deposits to the account, and the sources of those deposits.

Stearns also provided a photocopy of one page of an unidentified World Savings Bank passbook, which, he contends, shows that Maxine Yee has the savings necessary to cover payments on the Yees' mortgages for many months. This savings account passbook shows withdrawals totaling $17,040 from September 1999 to April 2000, and indicates a current savings balance of $50,999.

The single passbook page provided to SF Weekly is not identified as belonging to Maxine Yee. Stearns declined to show pages from the remainder of the passbook, or to reveal the dates or amounts of any deposits to the account.

Through Stearns, the Yees also provided receipts from Washington Mutual Bank showing $21,289 in payments that Stearns says went toward the $400,000 equity loan. The receipts do not indicate who made the payments. Stearns says the Washington Mutual loan is paid by check, but declined to produce canceled checks that would document payments on the loan.

In the end, the documents provided by Stearns, because they are incomplete, do not prove whether the Yees have sufficient savings to make monthly payments required by the large loans they have recently taken out. Those documents also do not give any indication of how or when such savings might have been accumulated. When SF Weekly requested documents, including tax returns, that would show the sources of the Yees' income and savings, Stearns declined, citing the Yees' concerns about privacy.

Leland and Maxine Yee married in 1972. Maxine worked as a secretary for three years while her husband got his doctorate in developmental psychology at the University of Hawaii. From 1975 to 1980, Leland Yee worked as a child psychologist for the city of San Francisco. Stearns says Yee does not remember his salary at that time. He spent the next decade as a psychologist with the Oakland Unified School District, at a $50,000 salary, followed by six years as a $70,000-a-year administrator for a community-based nonprofit corporation in Santa Clara County.

In 1996, he was elected a San Francisco supervisor, and received an annual salary of $24,000, raised recently to $37,500.

While Yee worked, his wife raised four children and ran the household. From 1984 to 1991, she owned and operated a video store in Daly City. She has not earned any money since, Stearns says.

The Yees declined to reveal how much money Maxine made -- or saved -- while running the video store. They also declined to explain why they chose to put their cash into a bank savings account, which pays very little interest, as opposed to stocks, bonds, certificates of deposit, or the investment vehicles generally used for large amounts of savings.

And so a central question remains unanswered: If the Yees have enough savings to keep paying off debts that their current income clearly cannot cover, where and when did the money originate?

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