The latest development in the now 18-month unfolding of both federal and local investigations into corrupt dealings at San Francisco City Hall is the arrest of a former high-ranking Department of Public Works official by the SF District Attorney's Office.
Thus far, it's been the feds who have been doing the arresting and charging in this sprawling corruption probe, many arms of which tend to point back to former head of the Department of Public Works Mohammed Nuru. Nuru was the first city official arrested in the federal investigation that dates back at least several years, and that was back in January 2020, and he has yet to have his day in court.
The latest arrest comes in connection with an alleged city employee ethics violation. Former DPW bureau manager Gerald "Jerry" Sanguinetti was arrested Wednesday and charged by DA Chesa Boudin with allegedly omitting $262,947 in income from his mandatory financial disclosures over a period of six years. The money was paid in the form of a no-bid contract for DPW merchandise — t-shirts, baseball caps, and other items that promoted Public Works as its own sort of brand — to a company ostensibly owned by Sanguinetti's wife.
As the Chronicle first reported, Sanguinetti has been charged with five felony counts of perjury and two misdemeanor counts of failure to file financial disclosure statements.
The charges bring into clearer focus one of the alleged improprieties suggested in a City Controller's audit report released in September 2020. The report was focused on potential "pay-to-play" issues with donations from private companies to city department-affiliated nonprofits — an issue that has been raised numerous times by federal prosecutors in their indictments of Nuru and his colleagues. The report suggested — and the SF prosecutors' charges appear to confirm — that the company owned by Sanguinetti's wife, SDL Merchandising, had an inappropriate financial relationship with the very department Sanguinetti worked for. Prosecutors say that SDL Merchandising received payments from the Parks Alliance for the DPW t-shirts and such, and that Sanguinetti inappropriately profited from the no-bid contract and tried to conceal that on his mandatory disclosures.
"Public employees must serve the public, not use their position for their own financial gain," Boudin said in a statement. "Failing to disclose financial conflicts of interests while profiting at the city’s expense violates public trust."
According to the charging documents, per the Chronicle, at least one Public Works employee had questioned why they were paying more than double what other vendors charged for DPW merch. The employee reportedly brought the issue to a supervisor, suggesting they change vendors, and the "supervisor allegedly indicated that 'the director wouldn’t like that,'" referring to Nuru.
Still, prosecutors say, it's not clear whether Nuru was aware that Sanguinetti had a financial interest in the merchandise company, and they're still investigating.
Yet again, though, the evidence seems compelling and points to the kind of graft and corruption that federal prosecutors have been uncovering over the last year and a half — and which has resulted in the resignations five department heads and a web of charges and plea agreements with city contractors and others.
Neither the Parks Alliance nor Nuru's attorney have yet commented on the matter.
The suggestion of inappropriate financial dealings connected to the Parks Alliance — which raises money to support both Rec & Parks and DPW — caused some drama at the Board of Supervisors back in March when the widely publicized debate over the Golden Gate Park Ferris wheel was happening. Supervisor Aaron Peskin teamed up with Richmond District Supervisor Connie Chan to try to limit the Ferris wheel contract, and both insinuated that they distrusted the Parks Alliance's involvement in the deal.
The Parks Alliance responded aggressively to Chan, sending her a letter suggesting that if she didn't retract her accusations she could kiss the funding goodbye for a park renovation in her district.
Continued tension about this with Rec & Parks General Manager Phil Ginsberg led to some extremely aggressive questioning last month at a Board meeting by Peskin, who two days later apologized generally for his behavior and said he was entering treatment for alcohol abuse.
Chan also suggested at that meeting that Ginsberg was lying about whether he had foreknowledge of the Alliance's letter to her before they sent it — and Board President Shamann Walton read part of the letter into the record at the meeting and said, "That is 100 percent a threat. It should not be tolerated."
Both the DA's Office investigation into payments to Sanguinetti's wife's company and the questioning by Chan and Peskin appear to link back to that City Controller's report, which noted, without naming Sanguinetti by name, "Absent an additional employment approval, it is inappropriate for city employees to do business with the city."
Top image: Mohammed Nuru and a volunteer wearing a Public Works TV hoodie that is one example of the merch bought by DPW in recent years. Photo: Mohammed Nuru/Twitter