San Francisco-based businessman and entrepreneur Dwayne Jones has made quite a living over the last decade, consulting on a unique city program he himself helped create.
Records show that the former mayor’s office official and his consulting firm, RDJ Enterprises, netted at least $7 million in consulting contracts after partnering with the San Francisco Public Utilities Commission in 2011 to craft the agency’s Community Benefits program, designed to give back to the communities that are home to SFPUC projects.
A key part of the Community Benefits program is its Social Impact Partnership program, which gives contractors and consultants on public projects extra credit for donating time and money to schools and non-profits. As bidders, firms can get up to a five percent boost in their overall score, based on how they pledge to volunteer and make donations over the life of the contact.
“The SFPUC has awarded 84 contracts with social impact commitments to date,” said Tracy Zhu, SFPUC Social Impact Partnership Manager, at a November meeting.
But critics are concerned that insiders like Jones have made millions of dollars consulting in the program’s first decade – more than the amount of cash that’s been distributed to schools and non-profits by the program so far, records show --and that there is little transparency on how community benefit dollars are being distributed.
So far, $6 million dollars have been spread among dozens of community organizations, with many more millions committed in coming years. On top of that, firms have contributed volunteer hours valued at more than $3 million, according to the SFPUC.
“This money was given out in the dark, with no public input, no transparency, and no oversight,” said Theresa Foglio-Ramirez, the city representative and business agent for the Laborers’ International Union Local 261.
Foglio-Ramirez says her labor organization doesn’t have a problem with the idea of giving back to the community, as long as the money “goes to where it’s supposed to.” The union has been pressing for greater transparency to expose any potential abuse.
The San Francisco Labor Council laid out their concerns with the program in an August letter to San Francisco Supervisor Gordon Mar, who called for an audit of the Community Benefits Program earlier this year. The City Controller's Office said it expects the review to begin next year.
The Marina Times first published an article detailing concerns about the program and Jones over the summer.
Much of critics’ concern revolves around the way community organization are selected as program beneficiaries. According to the SFPUC, firms use criteria provided by the agency to hand pick the organizations that get their money. The San Francisco Labor Council has been pressing for minutes from those "Joint Venture" board meetings, but the SFPUC says city staff aren't participants in that process, and therefore, they don’t have the records.
But the criticism goes beyond transparency. Some in the industry question how consultants like Jones can have consulting contracts with both the SFPUC and multiple firms the agency does business with.
In 2010, Jones left the mayor’s office, where he had overseen a grant program that came under fire for waste by a city audit, and created his consulting firm, RDJ Enterprises.
The company's website boasts testimonials from the likes of former San Francisco Mayor Ed Lee, and Juliet Ellis, the former SFPUC Assistant General Manager for External Affairs, who recently left the agency.
Since 2011, SFPUC records obtained by NBC Bay area show at least seven firms that later scored SFPUC projects say they tapped Jones and RDJ Enterprises to craft their community benefit proposals.
As a consultant, Jones has been paid at least $7.1 million by contractors to work as a community benefits consultant on five large SFPUC projects, serving as a liaison between contractors, SFPUC staff and community organizations who received cash and services, according to SFPUC records.
In 2017, Jones inked a $900,000 consulting contract with the SFPUC that tasked Jones and his company with supporting and advising the agency’s external affairs arm, including the Community Benefits Program.
Records show Jones was also closely tied in with SFPUC upper management, meeting weekly with the agency’s acting Community Benefits Director David Gray, who left the agency in 2019. Calendar invites viewed by NBC Bay Area show Jones also met frequently with Harlan Kelly, the SFPUC’s former General Manager.
The SFPUC says Jones no longer meets with the program's director and that there's language written into the RDJ Enterprises contract to prevent any potential conflicts of interest.
But critics aren’t satisfied.
“You either work for this side, or you work for that side -- but you never work both sides,” said Ali Altaha, a longtime construction manager who used to work with the SFPUC.
Jones’ apparent dual role drew the concern of critics like Altaha, who now watches the program from the sidelines, as he no longer works with the agency.
“After 30 years of being in this industry,” he said, “I see it getting from bad to worse.”
He says the SFPUC’s relationship with consultants like Jones is particularly troubling.
“I’ve seen Dwayne working for the contractors and vendors, and at the same time, he’s being paid by the city or by the San Francisco PUC as a consultant. So to me, that’s also double dipping. That’s also a conflict of interest.”
Critics also point to the fact that a non-profit with ties to Jones, the Southeast Consortium for Equitable Partnerships, has flourished under the Community Benefits Program. Records show that of the nearly 100 community organizations that have received direct financial support under the program, the Southeast Consortium has taken in the second largest sum -- nearly one out of seven dollars distributed.
Records from the California Secretary of State’s Office show Jones’ business partner, Herman Badgett, along with Jones’ wife, formed the non-profit Southeast Consortium, which is run out of same Bayview office building home to RDJ Enterprises.
The Southeast Consortium for Equitable Partnerships said both Jones’ wife and business partner left Board positions with the non-profit in June, and that neither was ever paid for their work.
In an email, Jones said he provides the non-profit free office space.
“I lease multiple units in my building as I have done for many other startup nonprofits and small businesses in the community,” Jones said. “I offer ‘free’ operating space until they have a funding base that can sustain their operations.”
Jones declined an on-camera interview request from NBC Bay Area’s Investigative Unit, but said he has no financial ties to the Southeast Consortium, and that he is scrupulous to avoid any conflicts in all the work that he does.
Jones said over the phone that his critics are simply jealous of his success. “There are haters in my neighborhood,” he said, adding that his community knowledge is critical to making the Community Benefits Program work.
According to the SFPUC, the Southeast Consortium acts as an intermediary to distribute program dollars to small community organizations. Records show, however, that more than $200,000 went directly to the Southeast Consortium.
The SFPUC declined an interview request but said in a statement:
“As a public utility, we have a responsibility to build strong, sustainable and vibrant communities in the neighborhoods we serve. Our Social Impact Partnership program helps amplify this work by inviting our private contractors to invest in our communities too. This innovative collaboration supports workforce training programs, bolsters educational initiatives and funds small business projects across our service territory."
Given all the questions about what is happening to community benefit dollars, city Supervisor Gordon Mar has joined labor groups in calling for an audit of the entire program.
The review is expected to be done early next year, he says, but stresses that the city needs answers quickly given that so many officials have been implicated in the federal corruption probe, including former General Manager Kelly, who quit soon after he was charged with allegedly accepting bribes in the federal case. Kelly has not entered a plea.
“In light of the still unfolding corruption scandal at City Hall,” Mar said, “it’s even more important now than ever that there’s proper accounting for all of the dollars being allocated and proper oversight of this program.”
The agency says it's moving to provide as much transparency as possible about the details of the program and will cooperate with the city audit scheduled for next year.
You can contact Michael Bott at firstname.lastname@example.org
You can contact Jaxon Van Derbeken at Jaxon.Vanderbeken@nbcuni.com