SFist Feature: Funny Money

Julie Lee is a local politico who shot into city politics in 1997 by pushing the controversial Central Freeway teardown and rebuild on behalf of the Sunset. She and Shelley made friends when Shelley was representing the SF West Siiiide as a city supervisor before he entered state politics. Lee is also a Gavin Newsom supporter, having worked to consolidate his support in the more conservative Sunset district during the runoff -- and scored an invite to his wedding. Lee owns 37 properties in the Bay Area, and has done over $63 million of business in real estate transactions.

Lee's considered rather confrontational; one Brown loyalist reports that before she and Willie Brown left on a trip to China, she received a phone call from Lee saying she hoped the plane crashed and they were all killed (there was also some cursing and, the loyalist reports, some racist statements about Brown). A former friend and ally of Lee reports that she and Lee got in a fight in a bathroom concerning some negative statements that Lee made about the ally's autistic son on the radio. "If you're still talking to the radio station, something will happen to you," Lee is alleged to have said. Lee has been sued at least 12 times in San Francisco, and has sued 7 people herself.

Lee’s 30-year-old son, Andrew Lee, worked as Shelley’s aide from 2003 to 2004 (he quit and filed a workers comp claim, claiming he threw out his back moving heavy objects). You may remember Andrew Lee as one of the two Willie Brown Public Utilities Commission appointees who was rejected by Chris Daly in his one-day stint as the acting mayor while Willie was on a trip to Asia. (Andrew was the one that got to stay on the committee, but then later resigned). Andrew had also run a failed campaign for District 4 Supervisor in 2002. According to the political gossip columns, Andrew has since left politics and the Bay Area to become a comedian/musician (scroll down - the article has some other gossip on the situation that SFist won’t go into here). Andrew's preferred medium of musical expression is hip-hop - he used to be a member of a group called C-Quence, going by the handle Drew Nasty. C-Quence styles itself a hardcore Two Live Crew-esque Asian hip-hop band. The first album is titled "Rugged and Buckwild" Their press release opines: "Lock up your daughters because they're out to prove that boy bands don't wanna just hold hands anymore."

After the initial news broke, Shelley immediately stated he would put the disputed $100,000 in an escrow account and conduct an investigation. The escrow account will hold all the disputed funds and if any improprieties are found, reimbursements will be made from it. Lee hired one of the top San Francisco criminal attorneys to represent her, Cristina Arguedas (who is married to Carole Migden, the chair of the state tax Board of Equalization). The FBI has launched an investigation and has ordered that if the Neighbors Resource Center cannot prove that it spent the $120,000 on construction, it will have to return the money by today.

On Thursday more disturbing details came to light - investigators had located another questionable $50,000 donation. This $50,000 came from a new homeowner in the Sunset. In 2001, he was in the process of buying a five-bed five-bath house for $750,000 (all you open house hounds can already smell trouble down the road – no one can find even a two bed one bath in San Francisco for less than $800K). When he entered escrow, the seller, who was also his real estate agent, told him to make out the $50,000 down payment check not to her, but to Kevin Shelley. Guess who the real estate agent was? Guess where the house was? You got it – Julie Lee – and the house was next door to her real estate office.

On Thursday, the feds raided Julie Lee's office. One of Lee's employees told the Chron, "One day God will punish you for being against true things. The future will bring suffering." Duly noted.

On Friday, Newsom called for a full audit of the Neighbors Resource Center, and other supervisors are calling for her to step down as the president of the Housing Authority Commission. According to the law, though, she holds that position until 2006, and may only be removed upon a showing of cause. SFist thinks raiding public grants to support political friends is as good a cause as any.

On Saturday, the Chron reported that they had found yet another sketchy real estate transaction, totaling $30,000. In a three-way transaction (no, not that kind of three-way, you sickos), all taking place on the same day, Lee sold two properties in the Portola district to a friend for $550,000. The friend then sold one of the properties to another person for $600,000. The person who bought the $600,000 house then wrote two checks totaling $30,000 to Kevin Shelley. The person who wrote the checks has been under investigation by Shelley's office, in fact, and she told them that she had no idea she'd made a political contribution. (They fined her $1100.) Now, though, she says she made the contribution because she liked Shelley and wanted to make a donation to commemorate having gotten her U.S. citizenship, which allowed her to donate to political causes. "I feel proud because I can make a contribution some time in my life. If I have money sometime in the future, I will do it again."

Shelley then immediately placed $30,000 more into his escrow account. The total in the account is now $225,000 (some funds donated directly from Lee's personal accounts are included as well). Shelley's campaign fund had around $2 million, so the disputed amounts are about 10% of the total. Needless to say, none of this could be helping the public reputations of Mr. Shelley or Ms. Lee, both of whom have a whole lot of explaining to do.

If any of these allegations are found to be true, it seems to only affect Lee and her friends, who could face criminal prosecution and a fine of up to three times the illegal donation amount (or, in other words, around $600,000) if they're found to have deliberately tried to circumvent the California Political Reform Act. They could also potentially be sued by the attorney general, or by private parties. However, if further investigation shows that Shelley knew about this, those same penalties could potentially apply to him. Guess which state department is charged with enforcing these laws, though?

If you're still reading, you're probably the kind of person who should note that should it get that far, and we have a Nixonian resignation or impeachment of Shelley, electronic voting may manage to make its insidious way back to California (and who knows, they might not televise the alphabet pick for the next ballots either). Maybe that's what Lee and her friends are referring to when they keep saying "bad things will happen," what do you think?