By Erin Sherbert
By Erin Sherbert
By Leif Haven
By Erin Sherbert
By Chris Roberts
By Kate Conger
By Brian Rinker
By Rachel Swan
In the summer of 1999, FBI agents raided two departments of San Francisco's city government, seizing boxes of records from the Human Rights Commission and the Housing Authority. The daily press reported that the FBI was investigating possible wrongdoing by Charlie Walker, part-time trucker and longtime legal client, friend, and political supporter of Mayor Willie Brown. The coverage by the dailies was intense, and repeatedly pointed up the connections between Walker, previously convicted of grand theft, attempted extortion, and defrauding the city's minority contracting program, and Brown, spurring the mayor to complain that the papers were making it appear he was a target of the investigation, when he was not.
Eighteen months later, Willie Brown is untouched, Charlie Walker remains uncharged, and the investigation seems to be winding down.
For all the media Sturm und Drang associated with it, the federal investigation appears to have started and stopped with relative small fry. The Human Rights Commission part of the probe, for example, seems to have run out of steam after a midlevel manager, Zula Jones, was indicted on charges she had helped a San Leandro construction firm illegally obtain tens of millions of dollars in construction contracts at the airport.
The FBI investigation of the San Francisco Housing Authority also seems to have stopped after hooking minnows -- even though public records, including the FBI's own investigative reports, contain significant evidence of wrongdoing by high-level Housing Authority officials.
Last September, a federal District Court jury found Patricia Williams, the relocation manager for the Housing Authority, guilty of taking bribes to provide subsidized housing certificates to people who were ineligible to receive them. Williams was convicted, partly, on the basis of testimony from Yolanda Jones, Walker's daughter, in a plea agreement that may spare Jones from a prison sentence. Assistant United States Attorney John H. Hemann claimed Williams was a kind of mastermind whose conviction would "correct the problems at the Housing Authority and make sure they stay corrected."
The jury that heard the government's case against Williams did not entirely agree. Although they convicted Williams of seven felony bribery counts, jurors found her innocent of the majority of the bribery charges filed against her, and several later said they saw her as a victim of circumstances, rather than a prime mover in the bribery scheme. Those jurors reached this conclusion, even though court rulings prevented them from knowing of the full extent of the connections between Jones' father and Mayor Brown, or of Walker's apparent influence at the Housing Authority.
The U.S. attorney's focus on Pat Williams as a top wrongdoer at the Housing Authority seems to be belied by a wide variety of public documents:
The U.S. Attorney's Office in San Francisco declined repeated requests for comment about its handling of the Patricia Williams and Yolanda Jones cases, and the prospects, if any, for additional prosecutions of Housing Authority employees. An FBI spokesman said he could neither confirm nor deny the existence of an ongoing investigation of the Housing Authority. Federal grand jury testimony usually is not disclosed to the public. It is, therefore, extremely difficult for outsiders to say with certainty that the probe of the Housing Authority is at an end, or to know the facts that prosecutors possessed when they made decisions about how to proceed.
Still, interviews with Housing Authority insiders and defense attorneys, a variety of news reports, and even the court statements of a federal prosecutor suggest that the conviction of Williams, a midlevel functionary, heralds the end of the federal investigation of criminal activities at the Housing Authority, leaving wide open a basic question: In using Yolanda Jones' testimony to convict Pat Williams, was the U.S. Attorney's Office pursuing a criminal mastermind, or netting a minnow as sharks swam free?
The FBI's investigation of the Human Rights Commission broke into public view in the spring of 1999, when the San Francisco Examiner began publishing a series of reports that questioned the propriety of the agency's actions in approving construction and trucking contracts awarded by the Airport Commission. As the city's chief enforcer of affirmative action laws, the Human Rights Commission can make decisions that essentially control the awarding of city contracts.
In September 1999, the San Francisco City Attorney's Office filed a lawsuit against the Scott Company of California and an African-American plumber from Hunters Point, Alvin P. Norman, accusing the contractors of creating a minority-owned front company to get preferential treatment in bids for city contracts at the airport. The U.S. Attorney's Office subsequently brought criminal charges against Zula Jones (no relation to Yolanda Jones), a senior contract compliance officer at the Human Rights Commission, alleging she had aided the Scott Company and Norman in the illegal scheme.
According to many press reports based, in part, on grand jury subpoenas, federal investigators were at one point looking into allegations that Krystal Trucking Inc., a white-owned trucking company associated with Walker, had been given unfair competitive advantages by the Human Rights Commission. But neither Krystal nor Walker has been charged, and at least one news report has suggested that Walker will not be indicted.
The FBI's August 1999 raid on the Housing Authority was inspired by allegations of bribery contained in a whistle-blower lawsuit that had been languishing in federal District Court since 1995. In that lawsuit, Carmen T. Rosales, the former head of the Housing Authority's eligibility department, which processes applications for public housing, and Michael V. Meadows, a former director of maintenance at the authority, claimed that authority executives systematically lied to HUD in applications that brought the authority tens of millions of dollars in federal grants.
The lawsuit also accused former Housing Authority Executive Director David I. Gilmore of ordering Rosales to give housing subsidies to 148 ineligible people, including someone referred to the authority by an aide to then-Mayor Art Agnos. (Agnos is currently the head of the HUD office that administers the western region of the U.S., including San Francisco.) Agnos did not return calls seeking comment for this story.
In an incendiary amendment to the lawsuit filed in early 1999, Rosales said that bribery was rife in a housing subsidy program known as Section 8 (i.e., Section 8 of the United States Housing Act of 1937). The amendment was backed by sworn depositions by Rosales and three Housing Authority eligibility clerks who testified that they had been getting phone calls -- for years -- from enraged people who claimed they had paid thousands of dollars to Yolanda Jones for public housing they had yet to receive. Rosales and the clerks said, under oath, that they had transferred the calls to Ronnie Davis, the Housing Authority's current executive director.
Within the boxes of records they seized from the eligibility office, FBI agents found several dozen fraudulent Section 8 applications. Tracy Baker, niece to O.J. Simpson, subsequently confessed to paying Yolanda Jones for housing. Her testimony led federal investigators to Jones, and then to Pat Williams. Where they, apparently, stopped.
In the fall of 1999, federal agents arrested Jones, Williams, a Housing Authority eligibility clerk, and a score of the "customers" who'd allegedly paid Jones for Section 8 certificates they did not qualify for. That indictment portrayed Jones as the ringleader of a bribery conspiracy, within which Williams played a real, but not the leading, role.
Months of interrogation by FBI agents followed. Alleged co-conspirators testified against supposed fellow schemers, and most of those who cooperated received probated sentences in return. Only Williams stood firm in refusing to plea bargain. She says that she did not go along with the demands of FBI agents that she implicate Housing Authority executives, or even Jones. Williams contends that, although she did process a few fraudulent documents, she did it to help poor people. Williams says she did not take bribes; she did not see Jones take bribes. Williams admits to accepting small gifts of money from Jones.
In return for the possibility of receiving a reduced sentence, probably probation, Jones agreed to testify that Williams was the mastermind of the bribery conspiracy. The U.S. attorney rewrote the original indictment, dropping its many references to Jones' leading role, and appointing Williams as the big fish of the conspiracy.
Williams' trial started in late August of this year. A plea-bargaining platoon of Jones' customers testified that they paid Jones for public housing, with two witnesses saying they passed relatively small amounts of cash to Williams. Jones, however, testified that she split about $70,000 in bribes with Williams.
Jones, 40, created an unforgettable figure on the stand. Six feet tall, svelte, and caustic, she often tap-tapped her long, gloss-white fingernails impatiently as she described how she and Williams operated their illegal business. Jones told the court that her official, $50,000-per-year job as a relocation clerk at the Housing Authority was a sham. She seldom showed up to work, yet high-level executives, such as Barbara Smith, director of housing development, signed off on her time cards.
The Section 8 bribery scheme started in early 1996, Jones testified, when the Housing Authority began relocating hundreds of tenants from housing projects that were about to be demolished. Jones was assigned to help Williams remove tenants as quickly as possible, and families slated for relocation were given Section 8 certificates, which allowed them to receive subsidized housing anywhere in the country. (Certificate holders pay about 30 percent of their household income in rent; the government covers the balance of the cost.)
Jones recognized the commodity value of the certificates and set out to capitalize them.
"I sold Section 8," Jones testified. "I went out and recruited people and sold Section 8. That's what I did in public housing. I would get up, see who wanted to buy it, bring it to Pat, and we would do it."
"Pat" was Patricia Williams, the manager in charge of the relocation push. Williams, 57, started at the authority in 1976, working as a secretary to various executive directors and eventually landing the position of property manager at the Potrero Hill projects -- a job she loved and did well for many years. She was kicked upstairs to the relocation department because she kept failing the multiple-choice test all property managers must pass in order to keep their jobs. ("She was nice, but not a bright candle," remembers one of her supervisors.)
The Housing Authority was in such a hurry to vacate the projects that executives decided to give Section 8 certificates to anyone who said they had lived with a relocating tenant, even if only for a few weeks. This policy was a blueprint for fraud. Jones testified that she provided her paying customers with the names and addresses of relocating tenants for use on false statements of cohabitation. Williams supposedly "verified" the false statements and issued the certificates. The prosecution, however, did not elaborate on one uncomfortable fact: Williams' bosses, including Janice Owens -- a member of a HUD-sponsored "recovery team" sent during 1996 to clean up the authority -- and Eligibility Manager Carmen Rosales, also reviewed the fraudulent statements and approved them.
The trial had its moments of absurdity.
Assistant U.S. Attorney Hemann took pains to paint Jones as a concerned mother of six who did not turn state's evidence until Williams betrayed her. Jones said she decided to testify against her partner in crime because she believed that Williams, who happens to be married to a Baptist minister, was prepared to testify against her, despite their previous agreement to "do wrong and be wrong together."
"I realized that the woman that I knew all these years to be a good church woman, go to church every Sunday, was really a liar," Jones said.
But it was Williams who had refused to testify against Jones.
Williams' defense attorneys argued, outside the presence of the jury, that Jones and her bribery conspiracy were protected at the Housing Authority by the political power of her father, Charlie Walker, the longtime mayoral associate. Hemann argued fiercely that Jones' relationships with Walker and Mayor Brown, whom Jones says is her godfather, had nothing to do with her confessed crimes, insisting that Williams was the leader of the bribery ring and that Walker's role, whatever it might have been, was irrelevant.
U.S. District Judge Charles A. Legge forbade the defense to mention Walker or Brown in cross-examining Jones, ruling that her relationships with her father and the mayor were irrelevant to the case.
Nonetheless, the jury found Williams guilty of only seven out of 26 bribery counts. They believed she conspired with Jones to sell public housing, and that she received some bribe money, but they clearly did not buy the government's case that she was the brains behind the plot. According to the San Francisco Chronicle, jury foreman Greg McGiboney said Williams "was almost as much a victim as anyone else.
"Inasmuch as we don't see her as an evil criminal, and she allowed herself to continue to be involved, she got left holding the bag."
Due to be sentenced next February, Williams faces six years in federal prison. Her attorneys are filing an appeal. When asked why she thought prosecutors chose to focus only upon her, she replied, "Somebody had to go down. I think the picture is larger than me. Once they put me in jail, the investigation will be over."
In interviews with FBI agents conducted over the course of two months, Jones described in detail how she thought up, planned, and openly solicited bribes from her circle of acquaintances in return for housing. The FBI concluded that Jones was assigned to work with Williams on relocating tenants "because it was well known in the community that Jones was Charlie Walker's daughter, [and] Jones had some credibility and notoriety which made it easier for her to do this job." According to transcripts of FBI interviews, Jones acknowledged that she used her father's restaurant, called Uncle Charlie's, in Bayview-Hunters Point, as a place to conduct her bribery business.
Jones' statements to the FBI and trial exhibits, including memos among a variety of Housing Authority staffers, indicate that higher-ups at the authority, including Smith, Owens, and Rosales, all reviewed and approved some of the paperwork connected to the Section 8 bribery scheme. This paperwork typically included driver's licenses, income tax forms, and welfare forms that had different addresses than the phony statements of cohabitation filed by Jones' "customers." In other words, a simple comparison of dates and addresses would have been sufficient to spot Jones' and Williams' handiwork.
Also, Jones told the FBI that she gave Rosales gifts because she had "help[ed] people" who were not eligible get housing assistance. The gifts supposedly included a "ten-dollar baggie of marijuana," and two tickets to a fund-raiser, sponsored by Walker, for Mayor Brown. When asked about these allegations, Rosales' attorney, Tyree Jones, said, "No comment."
Not only do Jones' FBI interviews indicate that Housing Authority executives knew of the bribery arrangement, other trial exhibits show that the higher-ups had been repeatedly informed that public housing was being sold. Depositions in the whistle-blower lawsuit filed by Housing Authority clerks, for example, contend that Executive Director Davis knew about corruption in the relocation program.
U.S. Attorney Robert Mueller declined to comment on the Williams case or the status of the FBI probes into San Francisco's city government. Both the U.S. Attorney's Office and the FBI also declined to comment on evidence in the public record of apparent high-level involvement in bribery at the Housing Authority.
Federal Public Defender Barry Portman, who observed Williams' trial and has served as a defense attorney for three decades, views the situation this way:
"If Pat Williams is the top of the Housing Authority investigation -- that's not going very far up the ladder. In my experience this is where things generally stop, they seldom go beyond middle management. The United States attorney in this district has not delivered a Mr. Big since the 1950s."
Bridgette Moore, a low-level eligibility clerk, was one of the most vocal complainers about fraud in the Section 8 program. Her deposition for the whistle-blower lawsuit alleges the agency's top officials knew about the bribery conspiracy. She helped FBI agents wade through a thousand relocation files to pick out the fraudulent ones.
In September 1999, the United States attorney charged Moore with felony conspiracy, alleging she processed some of Jones' fraudulent paperwork. By doing so, the government claimed, Moore was agreeing to be part of the conspiracy and furthering it. But high-ranking officials -- such as Smith, Owens, and Rosales -- also processed fraudulent paperwork, contends Moore's attorney, Susan Raffanti.
The case against Moore was eventually dropped, but Raffanti contends that the conspiracy theory used by the government to indict Moore could have been applied to the higher-ups.
There is an obvious contradiction between Rosales' claim to be a whistle-blower against Housing Authority wrongdoing, and her apparent role as a Housing Authority executive who signed off on paperwork related to the very bribery on which she has blown the whistle.
In December 1996, for instance, Rosales sent a memo to Davis complaining that the practice of giving Section 8 certificates to ineligible people was "bleeding the system dry." Court exhibits show that over a four-year period Rosales and other eligibility staff members repeatedly wrote memos to executive officers of the Housing Authority detailing "skullduggery" in the Section 8 program. Rosales provided the HUD inspector general with copies of these memorandums and chronologies of fraudulent acts she believed were regularly committed at the highest levels of the housing agency.
In January 1999, 10 eligibility clerks complained in a memorandum to the Housing Authority executive office. "How do we know that [Section 8] referrals from the Mayor's Office or those approved by administrators are not payoffs, whether monetary or not," the clerks wrote. "We should not have to work under such conditions. This causes a lot of stress on us."
In a recent interview, Raffanti said that "quite a few" of the Section 8 referrals came from Brown's office. She said mayoral referrals were given certificates previously set aside for victims of domestic violence.
The mayor's press office did not return calls seeking comment for this story.
Rosales' deposition in the whistle-blower lawsuit alleged that both Jones and Williams were involved in bribery, and described Walker's peripheral participation in his daughter's activities, as well as his behind-the-scenes role at the Housing Authority.
Rosales said that the granddaughter of Paula Young, an agency property manager, paid Jones $2,200 in regard to a Section 8, and Young was outraged. She called Walker to complain about the payment, Rosales testified, "and Charlie Walker made Yolanda give the money back."
In an interview, Young said the FBI asked her questions about Williams, but not about Walker. Young disputed Rosales' version of the incident, saying that she did not call Walker.
In her deposition, Rosales described the fear that kept her from going directly to the police with her accusations of bribery. "My fear was reprisal from Charlie Walker, and I don't know what type of reprisal it may have been, but I know and understand he's great friends with the mayor."
Rosales, a slight woman of Philippine heritage, described Walker's power inside the Housing Authority this way under oath: "Charlie had Ronnie Davis wrapped around -- had him wrapped around a leash; Charlie Walker was the top dog, and Ronnie was the bottom dog." Rosales added that she was told that several Housing Authority employees, including Pat Williams and Paula Young, were under Walker's "protection." She then laid out what she understands to be the "code of ethics" in the public housing underworld. "[I]f Charlie Walker does a favor for you," Rosales testified, "you don't go against the king or boss; that if you do, then you need to watch it."
In response to questions about Rosales' allegations, Walker said, in a telephone interview, "Anything I would say would be wrong. I do not know what you are talking about."
Attempts to reach Owens for comment were unsuccessful. Rosales' attorney said he instructed his client not to comment for this story.
In 1996, shortly after Willie Brown assumed office as mayor, HUD took over the daily operation of the Housing Authority, which was in such financial disarray that it could not account for the whereabouts of $12 million. One of the experts on the recovery team sent by HUD to clean up the authority was Ronnie Davis, the chief operating officer of the Cuyahoga Metropolitan Housing Authority in Cleveland, Ohio. In 1997, HUD turned the San Francisco Housing Authority back over to city control, and Brown named Davis as executive director.
Last March, the HUD Inspector General's Office released an audit of the authority's performance under Davis. The auditors concluded that Davis should be fired because he:
On the day the San Francisco audit was made public, the inspector general released an equally damning report on the Cuyahoga Housing Authority, accusing Davis and a colleague of misusing $11 million. To protect the government, the inspector general recommended nine months ago, Davis should be hit with the harshest administrative punishment possible, which, a HUD spokesman recently explained, would be tantamount to being fired and barred from working with any federally funded program for life. The inspector general also recommended that San Francisco's board of Housing Authority commissioners be punished.
Housing Authority spokesman James Van Bergen said the agency declines to comment on allegations made in connection to the whistle-blower lawsuit because of an agency policy against commenting on pending litigation. Van Bergen did, however, provide SF Weekly with a letter that, he said, shows that Ronnie Davis asked the HUD Inspector General's Office in December 1998 "to conduct an investigation into allegations of the sale of Section 8 certificates."
The special agent in charge of the inspector general's investigation, Daniel Pifer, responded this way to Van Bergen's assertion: "I've been meaning to clear this up. At no point in time did Ronnie Davis ever refer these matters to the inspector general, or have anything to do with initiating the bribery investigation. It started as a result of the whistle-blower lawsuit."
The letter Van Bergen provided SF Weekly as evidence that Davis had instigated a HUD investigation did not ask for such a probe; instead, the letter assured the HUD inspector general that the Housing Authority had "completed a review of the Section 8 Eligibility component and has found no ... improprieties."
Any decision on whether to fire, to prosecute, or to take no action against San Francisco's Housing Authority officials is the responsibility of the agency's enforcement division, which reports to HUD Secretary Andrew Cuomo.
It is possible that federal law enforcers are pursuing the multitudinous trails of possible Housing Authority corruption revealed by the Jones and Williams prosecutions, the whistle-blower lawsuit, and the inspector general's report. If they are, they are proceeding very quietly. Attorneys representing several defendants in the Housing Authority probe and sources within the authority say they have seen no indication of an ongoing investigation.
Richard Carpeneti was the president of the Housing Authority Board of Commissioners in 1995. The attorney had been appointed to the commission by Mayor Frank Jordan. Shortly after Willie Brown beat Jordan in the runoff election, Carpeneti visited the mayor-elect, along with commissioner Barbara Meskunas. Carpeneti and Meskunas, who are both now strong detractors of Brown, delivered a letter to the new mayor, detailing what they saw as severe problems at the agency.
Carpeneti says he was keenly aware of problems with the Section 8 program, but he chose to complain to Brown about the agency's abundance of patronage employees.
"I particularly mentioned Yolanda Jones," Carpeneti remembers. "I said she didn't do anything, and that it upset me having someone making that kind of money not doing anything.
"I'll never forget. He was opening Christmas cards at the time. I wasn't sure that he heard me, so I repeated it. He looked up and gave us kind of a ghost of a smile. Then he changed the subject. He just did not seem to care at all."