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SF Contractor Says It Lost Work to a Firm Willing to ‘Pay to Play’

An attorney for the company says they were "scapegoated" after refusing to go along with corrupt practices.

NBCUniversal, Inc.

A San Francisco contractor is now alleging that it lost millions of dollars in work with the city after it refused to engage in “pay to play” politics with a key official at the center of the federal corruption and bribery investigation.

An attorney for Synergy Project Management Inc. says the company was “scapegoated”  -- denounced by then San Francisco Supervisor London Breed and fired from a job at the demand of city Public Works Director Mohammed Nuru back in 2015—because of its refusal to go along with the backdoor system revealed by the ongoing corruption scandal.

“To make five mistakes, five mistakes where gas lines were ruptured is a real problem,” Breed said as she denounced the company at a press conference in October 2015. Synergy, she said, recklessly cut five gas lines on a single block of Haight Street. The city also blamed Synergy for crews having dangled a construction foreman down a manhole by his feet, without a safety harness. In addition, the city alleged trenches in the project were not properly shored.

While Synergy acknowledged some safety lapses, the company’s lawyer, John Knadler, insists inaccurate PG&E gas line maps were at the root of the problem. PG&E has denied that allegation, but a Public Works official said in an email to the community at the time that inaccurate maps played a role in at least two of the incidents.

“They weren’t Synergy’s fault,” Knadler said.

But then-supervisor Breed rejected that defense. “After you have made the mistake of the first gas leak, wouldn’t you do something different, if you are not sure the maps are okay?”

Months after being removed from the Haight project at the order of Nuru, Synergy appeared to be in line for a $19 million contract to improve the Van Ness corridor. But someone in the city intervened, claiming Synergy’s $19 million bid was too high and cancelled it. When the work went out to re-bid, the city received only one bidder. The eventual cost was $30 million -- $11 million more than Synergy’s offer.

“It ended up costing tax payers millions of extra dollars to have Synergy removed,” Knadler said, “and we believe that part of that contract money went to a firm that’s connected to Mohammed Nuru.”

One firm that reaped at least $2 million in 2018 work in the Van Ness project, federal officials allege, was Contractor 1. Sources identified that firm to NBC Bay Area as Azul Works Inc.

Federal authorities say Contractor 1 gifted Nuru a tractor and provided low cost labor for his Colusa County vacation home in exchange for his “behind the scenes’’ help with the Van Ness work.  Nuru, who quit his post recently, along with businessman Nick Bovis, both face wire fraud charges involving an alleged attempted bribe of a San Francisco airport commissioner in an apparent effort  to secure Bovis an airport restaurant concession.

Knadler said the swelling corruption case bolsters his suspicions all along that Synergy lost out on the Van Ness project because of its refusal to go along with the reputed “pay to play” system.

“This corruption case with Nuru shows that there was underlying corruption involved -- Synergy didn’t participate in it and that’s why Synergy became the scapegoat for some of these issues.”

But the City Attorney’s office said in a statement that Synergy is only claiming corruption after it lost a claim against the city in court, and stressing that “nowhere in any of their hundreds of pages of court filings are there pay-to-play allegations.”

The statement from Mayor Breed’s office said the “baseless” claims had already been tossed out by a federal court judge for lack of evidence -- and labeled them as “just another attempt to find a justification for their repeated failures on the job that endangered lives.”

Knadler said the court denied access to records and emails that might have been evidence of improper intervention by Nuru or Breed – and Synergy is challenging that ruling.

He says that legal setbacks aside, Synergy’s experience shows the system needs reform, because the city did not comply with contract restrictions in its ousting of Synergy in the Haight Street case.  

 “It allows the honest people to get kicked off contracts and gives an opening to other companies that may engage in this kind of pay to play behavior to take advantage of that opening,” he said. “It’s sad, it’s a sad day for San Francisco.”

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