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Graft and Gaming 

City employees are bleeding the city to death. One way is legal and the other is not.

Wednesday, Jun 10 2009
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It would be hard to imagine a more pathetic hero than Alexander Deanda, who used to manage the water-meter repair shop for the San Francisco Public Utilities Commission. The 56-year-old recent retiree is being sued by the city for allegedly taking bribes from a scrap dealer for five years until 2007.

Deanda was purportedly willing to take brazen risks for pocket change. In one gambit, he supposedly sneaked off with around 5,000 pounds of brass plumbing parts stolen from the city and had them carted to a recycling plant for a little more than $3,000.

He was also unlucky. Deanda's alleged benefactor, a former used-parts broker named Sheldon Morris, became the target of a federal investigation in 2007. As part of a recent plea bargain, Morris acknowledged to a judge that he'd paid $13,348 to Deanda to steer purchases his way.

Now Deanda is defending himself against a lawsuit that, if successful, would require him to pay the city $233,797, which is the amount of money it spent buying parts from Morris, allegedly on account of bribes. To make matters more worrisome, Deanda's attorney, Daniel Bakondi, a recent graduate of Golden Gate University School of Law, seems to envision himself as more of an artist than a legal technician: "I look at the law as a chess game with a nearly unlimited number of options [sic] of which move to make, and I wield the law with a rare creativity that is very powerful in the law," Bakondi explains on his Web site.

Seemingly faithful to his self-billing, Bakondi has mounted a truly creative defense. It includes unsupported allegations that San Francisco's Public Utilities Commission has long had a "gift policy" in which employees were allowed to accept lavish trips and other presents from suppliers; that city rules designed to prevent kickbacks were "confusing"; and that in the end, the city received "quality parts and services" from Morris and thus was not harmed.

"This is like Rod Blagojevich on steroids," said San Francisco City Attorney spokesman Matt Dorsey in reference to Deanda's apparent "when in Rome" defense. "It's not true. But even if it were, it's a nonstarter. It's not a defense. It's not a defense in third grade, and it's not a defense in a court of law."

"I think 'when in Rome' is a mischaracterization," said Bakondi, who declined a request to arrange a conversation with his client. Deanda, he says, "never accepted bribes at all."

Left unnoted by Dorsey is the undeniable, if pathetic, charm of the deposed Illinois governor whose blithe publicity tour, in which he pointed fingers at everyone save himself, earned him an offer to appear on reality TV.

In a similar vein, I believe Deanda, who didn't return a message left on his answering machine, deserves a place in our hearts as a rascal we can't help but love. He's a pitiable San Francisco antihero whose situation captures the spirit of his time. Deanda may well not have committed the crimes he's accused of. But the city attorney's account of an apparently clumsy, purportedly dishonest employee who supposedly padded his wallet by less than $3,000 per year is a story worth noting because, when it comes to milking the city for money, Deanda's alleged activities paint him as a mere minnow in a vast sea of sharks.

Other city employees may not have broken the law, as Deanda is accused of doing. But San Francisco is a company town where gaming the city for your own advantage is legal, but nonetheless deplorable.

During the current economic-disaster-era city budget cycle, San Francisco is cutting programs for the poor, addicts, the mentally ill, and the elderly. Meanwhile, it is preserving perks for overtime-gobbling firemen, money-wasting policemen, and retirement-padding bus drivers who have gamed and bloated city payrolls. Last year, 2,450 city employees each pulled in more than $140,000 per year, not counting health, retirement, and deferred compensation benefits. If the salary gamers of San Francisco's city government formed a nation, it would be Liechtenstein, the richest country per capita in the world.

These numbers don't include the hundreds of millions of dollars of city money paid to agencies with overpaid employees. Last week I spoke to a police officer who described how at least half a dozen colleagues were being paid six-figure salaries for secretarial jobs easily performed by $40,000-per-year clerks. A Muni insider explained last week how one bus driver on the verge of retirement angled to move to the more highly compensated night shift, so the bigger salary could be used as a benchmark for calculating pension benefits. Last year a group of retired firefighters obtained a settlement of nearly $1 million because they hadn't been fully reimbursed by the city for "time coming," the term for a cushy scheme Fire Department employees have arranged for themselves to pad their income. They sign up for pointless committee meetings to earn deferred time off, requiring other firefighters to fill their place, creating more empty time slots still — so that everybody can take a payout upon retirement.

Now, unions representing the police and fire departments are pressing to maintain the status quo, with the mayor apparently on their side.

Deanda, bless his soul, puts this banal-seeming largesse into brilliant perspective. When he retired last September after more than two decades employed by the city, he was earning a base pay of merely $76,596 per year. During the previous year, he put in for only 57 hours of overtime, worth $3,240 — chickenfeed in a city where it's not uncommon for employees to earn six figures in yearly overtime.

Is it any wonder things went the way they did?

He didn't game the system in the usual way, but this humble water-meter repairman allegedly used his position illegally to add a relative pittance to his income. And somehow he found federal and then city investigators breathing down his neck.

His plight raises a question rarely asked in this city: Why are so many other city employees given a wink and a nod when they siphon off city dollars in yet far more effective ways?


Deanda's alleged graft helped the city beyond merely providing a useful perspective from which to view the ways employees legally use their positions to increase their income. His alleged actions so unsettled management of the Public Utilities Commission that they conducted a top-to-bottom review of purchasing rules and created new policies under which top agency brass must approve purchases. "We've done a thorough review of purchasing and suppliers," spokesman Tony Winnicker said. "There are now fewer people who are allowed to make purchasing and supply decisions, to try to prevent these kinds of relationships and opportunities for dishonest people to take advantage of."

The PUC became aware of accusations against Deanda and now-retired maintenance and construction supervisor Gerald Lyons when they learned that federal prosecutors were making a case against Morris, who eventually confessed to bribing officials in Sonoma, Sacramento, and San Francisco, and was sentenced last month to two years and nine months in prison. Morris said he had paid officials in all three cities in exchange for lucrative contracts to sell equipment.

Winnicker said the PUC review did not ferret out additional wrongdoing beyond alleged bribe-taking and purported pilfering by Deanda and Lyons. Lyons allegedly accepted $4,575 in kickback money from Morris, and is also being sued by the city. Lyons' attorney says in a legal filing that the money was actually a loan for Lyons' ailing brother, and that it was eventually repaid.

Deanda, however, offers up a far more interesting defense. Bakondi said his client did not accept kickbacks. But even if Deanda theoretically were to have accepted $13,348 from Morris, it would have been the city's fault. Bakondi goes on to list 77 reasons. The PUC "was fully aware of, and allowed gifts from parts suppliers and others to be given to employees, including expensive gifts and trips," the lawyer wrote in a May 26 court filing. The PUC "knowingly consented to and allowed the actual gift policy and now cannot and should not be allowed to claim otherwise."

Bakondi's statement "to the tune of 'everybody does it' is unequivocally false," Winnicker said.

Bakondi also says that the city's rules drafted to prevent kickbacks are vague and intricate, and had not been explained to Deanda. "We're talking about a very complex set of rules regarding accepting gifts that San Francisco basically failed to properly follow at all," Bakondi said.

Until the end of 2006, city rules allowed employees to accept no more than $100 per year from vendors doing business with their departments. After that, employees were prohibited from accepting anything of value from vendors.

"I think it's pretty easy to understand: $100 or zero dollars," notes John St. Croix, executive director of the city's Ethics Commission.

In several conversations and e-mail exchanges, Bakondi refined his remarkable arguments. "San Francisco is blaming and suing its own loyal employees for a mess San Francisco created with its bureaucracy and confused purchasing policies," he wrote in an e-mail. "That is why we have laid out 77 separate defenses, because San Francisco caused this mess 77 different ways. Only a city could mess up this big and blame their own employees. ... San Francisco received the best quality parts and services, sometimes the only parts available, at the lowest prices, per San Francisco's own rules."

Bakondi did not offer specific evidence of a PUC gifting free-for-all, confusing rules, or any of the other supposed city missteps that could theoretically lead employees to mistakenly accept cash gifts from vendors.

But he was correct in suggesting the city has messed up. In a season of budget cuts that are punishing San Francisco's needy, the city should scrutinize the rest of its payroll with the same level of attention it's giving to charges that a water-meter repairman committed petty graft.

About The Author

Matt Smith

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