Findings released on the San Francisco Department of the Environment’s relationship with Recology and lack of compliance with ethics rules

 San Francisco, CA (April 8, 2022) —  The Controller’s Office has released a public integrity assessment report on the relationship with San Francisco Department of the Environment’s (SF Environment) and Recology (a privately held waste management company that provides refuse services to residential and commercial customers) and the department’s lack of compliance with ethics rules.

Our assessment highlights repeated non-compliance by SF Environment employees with ethics rules designed to eliminate real and perceived risks of pay-to-play relationships. From our review and investigation, many of these issues pre-date SF Environment Director Deborah Raphael but have continued during her tenure. Regardless of whether these acts ultimately influenced contract award decisions, they undermine public trust in the department’s decisions, create the appearance of a company making gifts to favorably influence department decisions that would directly benefit them, increase fraud risk, and reflect poor management decision-making. Several findings were especially concerning:

  • Director Raphael solicited and accepted donations from Recology before signing two contracts with Recology, creating the appearance of pay-to-play.
  • SF Environment did not proactively disclose Recology’s donations to Friends of SF Environment, as required by the Mayor’s Executive Directive 20-01 to cooperate with the City Attorney’s and Controller’s Offices’ joint public integrity investigation.
  • SF Environment’s senior management narrowly construed document requests during the investigation, resulting in withholding information about Recology’s $25,000 donation.

Recology’s relationships and interactions with City departments has been the subject of past assessments in September 2020 and April 2021. Since 2020, two Recology employees Paul Giusti and John Porter have been federally charged with theft of honest services fraud and money laundering for bribing former Public Works Director, Mohammed Nuru, in exchange for official action. Recology settled with the U.S. Attorney’s Office for $36 million for which it admitted to bribing Mr. Nuru and funneling more than $150,000 a year to Public Works through non-city organizations “to obtain Nuru’s official assistance with [Recology’s] business.” Recology also settled with the San Francisco City Attorney’s Office for more than $100 million for errors related to refuse rate collection revenues.

 

Download the full report here.

View the press release. 

 

Public Integrity Infographic SF Environment

 

What happens next?

Our review of inadequate policies and procedures that were exposed by the federal criminal charges against Mohammed Nuru and other city employees and contractors will continue, with future assessments on Recology’s refuse rates, the procurement and award of the landfill disposal agreement, procurement at the San Francisco Public Utilities Commission, and citywide ethics reporting. The need for additional assessments will be determined as the investigation progresses.

 

Tips

Investigators from the Controller’s Office consider every allegation of wrongdoing raised by city employees and members of the public. To report suspected public integrity abuses related specifically to the Mohammed Nuru investigation, please contact the Public Integrity Tip Line. You can provide information by:

All tips may be submitted anonymously and will remain confidential. Reports to this tip line, as well as tips to the Controller’s whistleblower hotline, are critical to the City’s ability to fight abuses and lapses of public integrity by city employees and contractors. As provided for by the San Francisco Charter, the Controller’s Whistleblower Program ensures complaints are investigated by departments with the appropriate jurisdiction and independence from the alleged wrongdoing.   

Information on city payments, searchable by department and vendor, are available on the Controller’s public transparency website at openbook.sfgov.org. Anyone may file any allegation of improper or illegal public activity with the City’s Whistleblower Program at sfcontroller.org/whistleblower-program. That program, administered by the Controller’s Office, often partners with the City Attorney’s Office on investigations.

 

For questions, please contact City Controller Ben Rosenfield at ben.rosenfield@sfgov.org.

For all press inquiries, please contact Communications Manager Alyssa Sewlal at alyssa.sewlal@sfgov.org.

 

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About the Office of the Controller

The Controller's Office works to ensure the City's financial integrity and to promote efficient, effective, and accountable government. We strive to be a model for good government and to make the City a better place to live and work. The Controller's Office is responsible for governance and conduct of key aspects of the City's financial operations, including operating the City's financial systems and issuing its financial procedures, maintaining the City's internal control environment, processing payroll for city employees, managing the City's bonds and debt portfolio, and processing and monitoring the City's budget. The department audits and produces regular reports on the City's financial and economic condition and the operations and performance of city government.