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Monday, June 1, 2009

SFPUC On the Take, Alleged Bribe-Taker Says

Posted By on Mon, Jun 1, 2009 at 3:11 PM

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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 doing business with the city -- or at least that's the claim of a retired city water-meter repairman accused of accepting $13,348 from a vendor who last week was sentenced to prison for bribing city officials.

The PUC "was fully aware of, and allowed gifts from parts suppliers and others to be given to employees, including expensive gifts and trips," claimed an attorney for Alexander Deanda, 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."

The PUC denied through a spokesman that gift-taking was widespread. Following a recently-concluded federal bribery investigation the department re-wrote purchasing rules. Now, lower-level employees such as Deanda was can no longer approve supply orders, said PUC spokesman Tony Winnicker.

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

City Attorney spokesman Matt Dorsey took Winnicker's protestations further, characterizing Deanda's tip-of-the-corruption-iceberg defense as unseemly and bizarre.

"This is like Rob Blagojevich on steroids," said Dorsey. "It's not true. But even if it were, it's a non-starter. It's not a defense. It's not a defense in third grade, and it's not a defense in a court of law."

San Francisco has sued Deanda -- along with retired maintenance and construction supervisor Gerald Lyons, and former parts supplier Sheldon Morris -- claiming that Morris paid kickbacks in exchange for Deanda and Lyons' help arranging for $233,797 in parts purchases, and that the city employees then failed to report the purported "gifts" as required by law.

Morris has confessed to bribing officials in Sonoma, Sacramento, and San Francisco, and was sentenced last week to two years and nine months in prison.

Lyons and Deanda, however, have separately rejected the city's civil demand that they repay money spent on city purchases from Morris. Lyons, for his part, has claimed that most of the $4,575 in alleged kickback money he received from Morris was actually a loan for Lyons' ailing brother. And Deanda offered up an apparent "When in Rome" defense.

Deanda's attorney, Daniel Bakondi, said that as part of his defense against the city's lawsuit he planned to provide specific examples in which businesspeople gave PUC employees gifts or trips.

"I think 'when in Rome' is a mischaracterization," said Bakondi. "He never accepted bribes at all. We're talking about a very complex set of rules regarding accepting gifts that San Francisco basically failed to properly follow at all."

When I asked how Bakondi he characterized money Deanda received via Morris, the attorney declined to  comment on that aspect of the case.

When pressed for specific examples of the PUC having "allowed gifts from parts suppliers and others to be given to employees," Bakondi responded with an e-mail: "We are in the process of investigating both the general culture and the specific acts by San Francisco, and all the defenses raised."

In a follow-up interview Bakondi added: "There are gifts we are investigating. There are specifics, which we are investigating. I can't go into it yet because the process is ongoing."

Even if Deanda were theoretically able to substantiate his claim of wider corruption in the city's water works, it might not be enough to escape charges he'd accepted banned gifts from a vendor, then failed to report them..

"With the everybody's-doing-it defense, it's not uncommon to hear it. But even if you've got 20 people all on the take, they can't all say, 'Everybody was doing it,' and then all get away with it," notes U.C. Hastings law professor David Levine.

City rules prohibit employees from accepting individual gifts worth more than $25 from suppliers, and require employees to report gifts from a supplier totaling more than $50 per year.
"No city employee is exempt from the city's fairly strict gift limits, and certainly not from their reporting requirements," said Winnicker.

Though Winnicker denies Deanda's depiction of a permissive PUC gifting policy, the federal case against Morris does seem to have unsettled agency management.

According to the U.S. Attorney's office, between 1999 and 2007 Morris paid out more than $200,000 to corrupt officials. Morris owned a business called Underground Express, which bought, sold, and recycled used municipal equipment. In Sacramento, Morris paid more than $10,000 in cash to a water distribution superintendent. In Sonoma he paid a superintendent more than $150,000. In San Francisco he gave $4,575 to Lyons and $13,348 to Deanda, a U.S. Attorney report said.

"Since then we've done a thorough review of purchasing and suppliers," said Winnicker. "There are now fewer people who are allowed to make purchasing and supply decisions, to try to prevent these kinds of relationships and opportunitites for dishonest people to take advantage of."

Winnicker said the PUC's review did not ferret out additional wrongdoing beyond Deanda and Lyons' alleged bribe taking.
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