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The High Life 

Breathing in sleaziness at the rarefied and urbane levels of San Francisco political life

Wednesday, Dec 22 2004
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Just Dandy

If I owned spats and a gold-tipped walking stick, I'd have been wearing them Dec. 9. My day's schedule included a 9 a.m. meeting with Louise Renne, the former San Francisco city attorney who now sits on the city's Police Commission and on the board of Laguna Honda Hospital for the Aged With Politically Connected Offspring. She had called and asked to meet me over coffee, and I felt in an uptown frame of mind.

A private law firm she recently established, called the Public Law Group, Renne Sloan Holtzman & Sakai LLP, had filed a suit alleging financial abuse of the elderly by certain insurance brokers, some of whom I had written about in great detail. The case's allegations contained factual misstatements in some places and substituted speculative generalizations for actual evidence in others.

But incomplete legwork wasn't why I was excited to see Renne. I was simply keen to meet the S.F. Democratic Party insider known among her critics as Willie Brown's lawyer, the city attorney who didn't make a single important ethics case affecting the activities of Brown during his 1990s mayoral reign over San Francisco. That era, you will recall, launched San Francisco into the ranks of Chicago and New Orleans in the areas of patronage and allegations of corruption. The idea of sharing coffee with the living vestiges of a modern Tammany Hall seemed to me sort of, well, urbane.

When she arrived at Peet's Coffee at the Ferry Building, Renne exuded the same charm and forcefulness that news accounts give her credit for, smiling here, flattering there, while maintaining an unerring sense of purpose amid even the lightest banter. The problem was that I couldn't figure out the purpose of the meeting. After about 20 minutes of my becoming curiouser by the minute as to why, exactly, she had wanted to meet with me, she finally cut to the chase.

Renne wanted to pay me to be a part-time investigator on her insurance-broker lawsuit, apparently to benefit from knowledge I'd gained while looking into the situation as a journalist. In that moment, she made it clear why her stint as city attorney was tinged with a vague hue of sleaze that seemed so similar to the one that surrounded her political ally Willie Brown.

Had I accepted her offer, I would have been taking money from a public figure active in the very areas that I routinely cover. In the journalistic world, this is a fairly obvious no-no, a case of accepting a financial benefit from a source and, potentially, a public personage I might have reason to write about.

Such a conflict of interest would have undermined much of my coverage of San Francisco. This includes the current mayoral administration, whose transition team Renne headed; the SFPD, over which she's a commissioner; and the ongoing hangover from the public-integrity problem known as Willie Brown, who counted Renne as a political and bureaucratic ally. The list grew longer last week, as state auditors revealed scandal-plagued Secretary of State Kevin Shelley improperly diverted $220,000 in federal voting act funds to Renne's firm, which includes as a principal Jon Holtzman, the treasurer of Shelley's political campaign, and was supposed to include me as a part-time investigator and hopelessly compromised political columnist.

I have to believe Renne must have known the offer was improper: The principles surrounding conflicted interests confront most attorneys, and most all public figures, at sometime or another. I declined the offer.

"Oh, would that be seen as a conflict of interest?" she asked rhetorically, in a tone that evoked the innocence of a debutante seeing a condom for the first time.

Our conversation ended soon afterward, and over the course of that day, I think I must have washed my hands 10 times. I'd experienced the urbanity of upper-echelon San Francisco politics, and I wanted it off my skin.

Out in the Nick of Time

About a month ago, the cowboy bureaucrats at San Francisco's airport finally unloaded their contract to help run the privatized airports of Honduras, some three years after Supervisor Aaron Peskin began pressuring them to close down the crooked deal. Soon after airport officials had involuntarily rid themselves of this tawdry enterprise, one of their newly ex-associates in the Honduran airport privatization fiasco faced criminal fraud charges in connection with an unrelated deal in Trinidad. Talk about great timing.

As is often necessary when explaining the convoluted and improper dealings of San Francisco International Airport officials, I must start by backing up a bit.

Four years ago, I wrote about the activities of a group of airport officials who had improperly diverted around a million tax dollars to fund the efforts of a company set up by these airport officials to be private yet city owned. The idea behind the "private" artifice was, in theory at least, to let the city reap benefit from worldwide airport consulting by supposed experts from SFO. Because the entity was a private, for-profit firm, it also freed airport officials from having to respond to journalists' public records requests and, thus, let them do business in secret.

And, out of view of the S.F. public, the airport officials negotiated a deal to privatize the airports of Honduras with the help of an international consortium of business partners.

"What the fuck?" I asked myself upon encountering the scheme, and when the story ran Peskin asked the same question, launching a little-noticed yet dogged, long-term effort to halt the highly improper Honduras project. A little more than a month ago, a Honduran government official told me, San Francisco Airport Director John Martin agreed to the sale of S.F.'s interest in Honduras' airports to an affiliate of YVR airport in Vancouver, B.C.

About a month ago, the chief executive of Calmaquip Engineering Corp., a Florida company recruited by SFO officials to form part of the consortium to privatize Honduras' airports, was released from a Trinidad and Tobago jail on $2 million bail after he was charged with inflating the costs of an airport development project there. The project is not related to the company's work in Honduras.

According to Reuters, the Trinidadian government has also filed a separate lawsuit in Miami, charging Calmaquip officials with inflating construction and maintenance contracts through bid-rigging, bribes to corrupt officials, money laundering, and fraud.

Complaints related to the Trinidad and Tobago project do seem to evoke criticisms of the Honduran consortium in which Calmaquip was a member, and which, until a month ago, counted an affiliate of the government of San Francisco as a founding member.

Earlier this year, a former Honduran attorney general alleged to reporters that the SFO-led consortium in Honduras, known as InterAirports, had bribed government officials to improve its chances of winning an airport privatization contract in 2000 and had also bribed government officials in hopes of them waiving a $2.5 million fine levied for breach of contract. Honduras-based employees of SFO have denied the accusations, and no charges have apparently been filed.

The fine was waived a couple of months ago as part of a general contract renegotiation aimed at putting the once-SFO-led consortium on better financial footing. A bureaucrat at the San Francisco Controller's Office told me last week that they'll soon release an audit of SFO Enterprises, the private, for-profit firm SFO officials formed for the Honduras deal. If the controller's people have done their work correctly, the audit could be a real potboiler.

The Case That Should Have Gone Away

Grizzled watchers of San Francisco realpolitik will recall that the closest Louise Renne ever came to appearing to challenge Willie Brown's reign of juice politics came when FBI agents and U.S. Attorney's representatives crawled all over San Francisco's Housing Authority and airport in 1999, investigating allegations that cronies of Willie Brown associate Charlie Walker had defrauded the Section 8 subsidized-housing voucher program and a federal set-aside program granting airport construction contracts to minority-led firms.

Faced with the spectacle of multiple federal corruption investigations descending upon a metropolis where the city attorney had up to then turned a blind eye to such shenanigans, Renne's office filed suit against a company called Scott-Norman Mechanical Inc., which had allegedly used an African-American plumber from Hunters Point as a straw man in obtaining $40 million in work earmarked for minority-owned companies, press reports said.

At the time, mayoral candidate Clint Reilly said the suit "smacks more of a PR lawsuit rather than a serious acknowledgement that something terribly wrong has been going on."

The City Attorney's Office dropped the suit earlier this year, press reports said.

Information stemming from the federal investigations into airport construction contracts led Renne's successor, Dennis Herrera, to file a lawsuit last year against construction giant Tutor-Saliba Corp., alleging it had violated minority contracting rules and gouged the airport for millions of dollars in building a new international terminal. Willie Brown was quoted in news stories saying he thought the suit was a bad idea.

Mara Rosales, who had been Renne's deputy at the airport for 12 years, objected to the lawsuit, according to a contemporary press account. Fearing she'd "gone native," Herrera reassigned her, according to the San Francisco Chronicle's account of the incident. With Willie Brown's blessing, Airport Director John Martin subsequently hired Rosales to a $154,000-a-year job as the airport's deputy director.


After I'd turned down Renne's offer to accept money from her law firm, I asked her about Rosales, who entered private airport consulting practice recently.

Five years ago, Rosales signed on as the corporate secretary for SFO Enterprises, the private shell firm airport officials set up to quietly move money from city coffers to their international airport privatization scheme. In doing this, Rosales struck me as a public watchdog gone bad.

I told Renne about my impression, and asked about Rosales' role in the Honduras fiasco.

Renne told me SFO Enterprises hadn't been used to do anything illegal. But she acknowledged that deputy city attorneys who were assigned to work at SFO sometimes became cliquish with officials there.

"You know, it's funny," Renne said. "Deputy city attorneys were originally moved out to the airport years ago in order to keep a closer eye out for wrongdoing."

So did Renne attempt to move Rosales back downtown, to get her out of range of out-of-control airport bureaucrats?

There was a question of scarce office space downtown, Renne said.

So Renne would have yanked Rosales downtown, but couldn't for lack of space?

Renne deflected the question. "She's in private practice now," she said. "We're still friends."

And at that the former city attorney, the one-time chief of Mayor Gavin Newsom's transition team, the newly appointed board member for Laguna Honda Hospital, and the continuing member of the city Police Commission stood up to go.

Had I owned spats and a gold-tipped cane, I think I might have thrown them in the garbage right about then.

About The Author

Matt Smith

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