Ed Lee the Mayor of San Francisco attends the 3rd Annual TechFellow Awards at SF MOMA on February 22, 2012 in San Francisco.
A little-noticed report supporting a bid by San Francisco Mayor Ed Lee to diminish the power of the city Human Rights Commission was written by a political ally whose own relationship with the commission has at times been contentious.
In her May report to the city, attorney Mara Rosales wrote that the commission was mismanaged, retaliated against whistle-blowers and did not do enough to make sure local small businesses were awarded contracts with the city, among other things.
Within two weeks of receiving Rosales’ report, Lee issued a proposal to shift the Local Business Enterprise program from the Human Rights Commission to the city administrator’s office.
While even the commission’s director does not oppose that streamlining of the city’s contracting process, Rosales’ past run-ins with the commission – both as a representative of clients seeking business with the city and as a former deputy city attorney – raise questions about her neutrality.
“This reeks of one hand washing the other,” said former Board of Supervisors President Aaron Peskin, who tangled with Rosales over airport contracting regulation. “I’m not commenting on her veracity, abilities, or professionalism. But it’s inappropriate for her to be playing this role, given her history and current conflicts.”
As a private attorney and business consultant, Rosales has continued to have interactions with the city on behalf of clients. Not long before she was hired to evaluate the Human Rights Commission, for instance, Rosales sent a letter to the commission, asking it to help one of her legal clients secure city business.
Rosales said the city report, produced under the auspices of her consulting firm, Rosales Business Partners LLC, “doesn’t have anything to do with my practice of law.” She declined to disclose whether any other clients have business pending before the commission or the city.
City Administrator Naomi Kelly emphasized that Rosales’ report was not the key factor driving the decision to consolidate the agencies. The mayor’s spokeswoman, Christine Falvey, agreed.
“As City Administrator and Public Works Director, the Mayor also has (had) first hand knowledge of how centralizing contracting could benefit the City,” Falvey wrote in an email.
From 1991 to 1996, Lee served as director of the Human Rights Commission, which for nearly three decades has overseen programs giving local business owners preference for millions of dollars in city public works contracts. The commission also has played a role in corruption investigations.
Lee’s proposal, which requires the Board of Supervisors’ approval, calls for the transfer of 28 contract compliance employees from the commission to the city administrator’s office. The change would allow contractors to deal with just one agency as they seek to comply with myriad city rules, according to Falvey.
The city’s small-business set-aside program is poised for a deluge of work, including an ongoing $4.6 billion city water system overhaul, a $1.6 billion downtown light rail tunnel and more than $1 billion in new debt for street paving, hospital construction, firehouse retrofits and a new cruise ship terminal.
The last time San Francisco launched infrastructure projects similar in scale was the late 1990s and early 2000s, when San Francisco International Airport underwent a $2.5 billion expansion. On that project, Kevin Williams, then the Human Rights Commission contract compliance officer, participated in an FBI probe of municipal corruption, and the city sued a major contractor for fraud.
As Williams recalls it, the FBI got involved after he had sought without success to expose what he believed to be phony front companies obtaining airport preferential construction contracts.
Williams said his efforts were stymied by officials aligned with former Mayor Willie Brown, including Rosales, who was then the deputy city attorney assigned to the airport.
“She fought me tooth and nail,” Williams said. “We needed to be physically there to monitor what they were doing with the contractors. But airport officials didn’t like that one bit, and they resisted.”
Rosales also resisted efforts by her boss, City Attorney Dennis Herrera, to sue airport contractor Tutor-Saliba for alleged fraud. She supported Brown’s view that the suit was too costly, both she and a Herrera representative recalled.
In the aftermath, Herrera attempted to transfer Rosales to the San Francisco Municipal Transportation Agency in 2003. Brown responded by appointing her as a deputy airport director. The city went ahead with its lawsuit, and in 2006, Tutor-Saliba ultimately agreed to a $19 million settlement without admitting wrongdoing.
Rosales recalls her relationship with Williams as cordial and characterized her disagreement with Herrera as a valid policy dispute.
Reviewing the commission
Rosales now works in private practice as an attorney. Her separate consulting company advises businesses on how to win city public works contracts.
Rosales met with Lee in January and complained that the Human Rights Commission wasn’t doing enough to help local businesses, Rosales and Lee’s office confirmed.
Three months later, the city hired Rosales for $9,500 to evaluate the commission’s effectiveness.
At the time, Rosales had been urging the Human Rights Commission to pressure a public works contractor to hire one of her clients as a subcontractor. Rosales wrote in a Dec. 23 letter to the commission that Bay Area Concretes hoped to receive $910,000 for work on a Public Utilities Commission pipeline.
Rosales said her two roles are not in conflict, and the advice in her report to Lee was intended to make the agency responsive to all local contractors, not just her clients.
Rosales’ May 14 report was especially critical of the commission’s executive director, Theresa Sparks, a transgender civil rights activist.
Sparks does “not understand or embrace the purpose of the Local Business Enterprise program and (is) not appropriately enforcing its requirements,” Rosales wrote.
In a scathing memo to Lee, obtained by The Bay Citizen through a public records request, Sparks made it clear that she did not oppose the transfer of responsibilities Rosales recommended. But she responded angrily to what she characterized as a personal attack.
“As a transgender woman, former small business owner and, now, the only transgender department head in the history of San Francisco, I know exactly what discrimination looks like,” Sparks wrote. “To suggest that I would not support a program designed to address institutionalized discrimination in contracting is both mean-spirited and absurd.”
Sparks declined to comment further on the matter. For her part, Rosales said, “I’m very sorry she thinks it was all about her.”
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This story was produced by The Bay Citizen, a nonprofit, investigative news sources in the Bay Area and a part of the Center for Investigative Reporting. Learn more at www.baycitizen.org.