The head of the San Francisco Public Utilities Commission has been charged with with honest services wire fraud in a federal complaint filed Monday, part of a widening corruption scandal at City Hall.
The filing comes after the FBI reportedly raided SFPUC General Manager Harlan Kelly's San Francisco home Monday morning.
The complaint alleges that Kelly "engaged in a long-running bribery scheme and corrupt partnership with Walter Wong, a San Francisco construction company executive and permit expediting consultant who ran or controlled multiple entities doing business with the City of San Francisco." As part of the alleged scheme, "Wong provided items of value to Kelly in exchange for official acts by Kelly that benefited or attempted to benefit Wong's business ventures."
Those items allegedly included overseas airfare, hotels, free meals and jewelry.
San Francisco Supervisor Matt Haney reacted via Twitter.
In one alleged incident outlined in the complaint, Wong was seeking a multi-million dollar SFPUC contract to "to convert thousands of San Francisco city streetlights to smart LED technology," later performing "extensive repair work" on Kelly's house after bidding on the contract had ended.
Wong has pleaded guilty to conspiracies to commit honest wire services fraud and money laundering in exchange for his cooperation in the investigation.
"Public officials owe their honest services to the people of San Francisco," U.S. Attorney David Anderson said in a news release. "Bribery scams undermine our faith in City government. Our investigation into City Hall corruption will continue."
The San Francisco Chronicle said the agency served the warrant as Kelly’s children and wife, City Administrator Naomi Kelly, were home. They "removed boxes of items," the contents of which were not known.
Kelly’s attorney confirmed the raid to the paper, but declined to comment further.
"Through the course of this ongoing investigation, the FBI has uncovered a pattern of criminal activity committed by those in positions of trust," FBI Special Agent in Charge Craig D. Fair said.
The reason for the Monday raid of Kelly's home wasn’t immediately clear, however, it appeared to be connected with an ongoing corruption probe at San Francisco City Hall. Former Public Works Director Mohammed Nuru was arrested in January. He and others have since been charged with bribery in connection with the awarding of city contracts, fraud and lying to the FBI.
Mayor London Breed has come under fire for accepting gifts worth $5,600 from Nuru, an admission she made in detail following his arrest. Breed also disclosed that Nuru had repairs made on her broken car and got a rental vehicle for her.
In a statement Monday, Breed said she'd accepted Kelly's resignation, with SFPUC Deputy General Manager Michael Carlin serving as Acting General Manager while a national search begins for his replacement.
"The allegations detailed in the Federal Investigation conducted by the US Attorney's Office are disturbing and unacceptable for anyone serving in our government, let alone the leader of one of our largest departments," Breed said. "As public officials, we have to hold ourselves to the highest standard and put the public good before all else."
According to the Chronicle, "Kelly has been a target in the federal government’s investigation since at least the spring," including a subpoena accusing Kelly of demanding contracts named to several companies.
The 58-year-old Kelly, who was appointed in 2012 by former Mayor Ed Lee, is reportedly out of custody and scheduled to appear in court on December 8.
He faces a maximum of 20 years in prison and a $250,000 fine if convicted.
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