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Singing in the Rain: Hunters Point Shipyard Enriches SF’s Most Powerful Families

San Francisco Bay View, News Feature, Ahimsa Porter Sumchai Posted: Apr 06, 2009

“No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a government decision in which he knows or has reason to know he has a financial interest.” - California Government Code Section 81002(c)

Nepotism is defined by Webster’s dictionary as political favoritism based on family relationships. In an email to the San Francisco Bay View, Laurence Pelosi verified that he was a Lennar senior executive in March of 2004 at the time San Francisco Mayor Gavin Newsom, his cousin for whom he had served as mayoral campaign treasurer, had signed the Hunters Point Shipyard Conveyance Agreement at the behest of Laurence’s Aunt Nancy Pelosi, speaker of the U.S. House of Representatives.

San Francisco Campaign and Governmental Conduct Code Section 3.212 governs political decision making involving family members and Section 3.214 requires disclosure of personal, business or professional relationships for elected officials of the City and County of San Francisco.

Laurence Pelosi is the son of Ronald Pelosi and Barbara Newsom Callan. He is Nancy Pelosi’s nephew by marriage. Laurence Pelosi was identified as the vice president of naval base acquisitions for Lennar in a program he participated in concerning the master plan for development of the southeast community held at Mission Bay in 2006.

After resigning from Lennar in May of 2004 - immediately before the shipyard conveyance legislation went before numerous City boards and commissions for approval - Laurence Pelosi joined the board of directors of the influential urban development think tank SPUR (San Francisco Planning and Urban Research) and went to work for Morgan Stanley.

Newsom, as chief executive officer of the City and County of San Francisco, took what is clearly a discretionary action by entering into the Conveyance Agreement for the Hunters Point Shipyard with the U.S. Navy. The Conveyance Agreement set a specific timetable for giving the City a portion of the shipyard - Parcel A - as well as giving commercial development rights to Lennar/BVHP, a limited liability private, non-governmental corporation.

At a Dec. 14, 2003, hearing of the San Francisco Redevelopment Commission compounded by arrests, civil rights violations and invasions on the constitutional rights of the free press, the Redevelopment Agency approved a Disposition and Development Agreement granting Lennar Corp. of Miami, a company that enjoyed annual sales of $9 billion, exclusive development rights for the shipyard.

The official transfer of Parcel A of the Hunters Point Shipyard to the San Francisco Redevelopment Agency occurred a year later, on Dec. 3, 2004, with the close of escrow for the parcel. The Hunters Point Shipyard environmental findings and redevelopment measures - 14 items including nine ordinances - were passed 9-2 by the Board of Supervisors with severely curtailed public comment on Dec. 7 and Dec. 14, 2004.

San Francisco Mayor Gavin Newsom memorialized his violations of state and local ethics laws in January of 2005 by signing into law the Hunters Point Shipyard redevelopment measures he sponsored before the Board of Supervisors and accepting, in an official ceremony, the transfer of Shipyard Parcel A from the Secretary of the Navy in exchange for one dollar!

The Hunters Point Shipyard redevelopment measures have been called the most corrupt legislative initiatives to pass successfully through San Francisco City government. This astute observation is substantiated by both the stature and sheer numbers of elected and appointed City officials, contractors and employees incriminated in readily documented civil, criminal and environmental regulatory violations and ethical conflicts of interest.

Complaints filed with the Fair Political Practices Commission, Ethics Commission, Sunshine Ordinance Task Force, the City Attorney’s Governmental Integrity Office and the offices of the U.S. Attorney have yielded little to no response to date.

The 2004 April Fool’s Day edition of the San Francisco Chronicle includes an article by Edward Epstein of the Washington Bureau detailing the signing of a legally binding Conveyance Agreement by Mayor Gavin Newsom and Navy Assistant Secretary Hansford T. Johnson to transfer Parcel A of the Hunters Point Shipyard to the City and County of San Francisco. The mayor is quoted as saying, “For the first time we have the Navy’s signature on an agreement that ensures the conveyance will begin shortly.”

According to the article, the agreement came a few weeks after the Navy sent Newsom a letter saying it was having doubts about going ahead with a January 2004 symbolic agreement that had been announced, with potentially embarrassing fanfare, in Washington by Congresswoman Nancy Pelosi, former Mayor Willie Brown and Navy Secretary Gordon England. According to the Chronicle, Newsom met in the Capitol offices of “Aunt Nancy” on March 31, 2004.

In attendance were Navy Assistant Secretary Johnson, Sens. Barbara Boxer and Dianne Feinstein and Rep. John Murtha, D-Penn., the ranking Democrat on the House Military Appropriations subcommittee, brought in by Pelosi to convince the Navy the time for delays had passed. Murtha made it clear he wanted a binding agreement signed “by Wednesday.”

The Navy signed the accord despite new concerns the Radiological Affairs Support Office raised about the safety of the property for residential development due to the release of a massive investigation into the use of radioactive materials at the shipyard from 1939 to 2003. The Historical Radiological Assessment, published in final format on Aug. 7, 2004, documents hundreds of radiation contaminated buildings, soils and drydocks and the entire storm drain and sanitary sewer system at the site of the post-World War II operations of the Naval Radiological Defense Laboratories.

On April 2, 2004, the Chronicle featured an investigation by Katia Hetter documenting the financial conflict of interest that exists between Mayor Gavin Newsom and Darius Anderson, a principle member of a development firm in negotiation with the City for a development lease on the former naval base at Treasure Island in partnership with Lennar Corp. of Miami, which had also been recently granted exclusive development rights to the former naval base at the Hunters Point Shipyard. Anderson, a principle partner in Treasure Island Community Development, held a fundraiser in his Sacramento office in March to help Newsom retire his $400,000 campaign debt.

*****

A front page story in the March 8, 2007, edition of the San Francisco Chronicle references a Feb. 16, 2007, memo written by Michael Cohen, director of Base Reuse for Mayor Gavin Newsom, that proposes the City take ownership of the Hunters Point Shipyard with the intent of accelerating the cleanup of the federal Superfund site to meet the 49ers deadline to build a new football stadium. The proposed “dirty transfer” of property from the Environmental Protection Agency’s National Priorities List would hasten development of the toxic property by removing federal, state and local government regulatory oversight of stringent health-based cleanup standards and dismantle the federal Superfund Act’s requirement for public participation in the cleanup process.

Of note, San Francisco Chronicle columnists Matier & Ross document that Speaker Nancy Pelosi’s husband, Paul Pelosi, is a partner in the new United Football League team for Northern California and is a college roommate of former NFL Commissioner Paul Tagliabue and a longtime friend of UFL head Mike Huyghue.

The resurfacing specter of Gavin Newsom’s familial, political and financial conflicts of interest in Lennar Corp.’s development projects in the city’s eastern neighborhoods brings to mind questions about the outcome of complaints filed in 2004 and 2005 over the dirty transfer of shipyard Parcel A.

Those near dormant investigations have gathered “wind in their sails” by the continued storm of controversy surrounding Lennar’s criminal negligence and reckless endangerment of public health and safety in the generation of toxic dust exposures to workers, school aged children and the predominantly African American surrounding community adjacent to the Parcel A construction site.

Additionally, the LA Times recent expose on SEIU leader James Bryant and his financial conflicts of interest with Lennar details the role Bryant played in bribing the A. Philip Randolph Institute to advance Lennar’s $5 million Proposition G campaign to gain voter approval of the Hunters Point Shipyard-Candlestick development plan as well as Bryant’s role in undermining the community benefits package promised to the struggling community by the developer.

Protecting the public health

On Nov. 7, 2000, 86.4 percent of the city’s electorate or 221,013 San Francisco voters voted yes on Proposition P, a declaration of policy supporting environmental cleanup to residential levels for the Hunters Point Shipyard.

Parcel A was transferred to the City and County of San Francisco on Dec. 3, 2004, with deed restrictions notifying future property owners of the presence of lead based paint and asbestos containing materials in buildings, residual soil contaminants and hazardous materials including inorganic persistent and bioaccumulative toxic substances, volatile organic toxic pollutants, PCBs, acids, total petroleum hydrocarbons, pesticides, toxic metals, radionuclides and polycyclic aromatic hydrocarbons, according to Article 31 of the Health Code, an ordinance adopted by the Board of Supervisors at the Dec. 14, 2004, hearing to accept the shipyard’s environmental findings.

Article 31 makes developer compliance with deed restrictions, EIR mitigation measures and other City laws mandatory and enforceable. Article 31 establishes enforcement mechanisms, including withholding or denial of permits, an order to stop work, penalties for permit violations, and mandatory administrative and civil penalties.

Article 31, adopted by the Health Commission on Nov. 16, 2004, mandates that Health and Safety Plans address the safety and health hazards of each phase of construction site operation at the shipyard and include the requirements and procedures for employee protection, including health and safety risk or hazard analysis and medical surveillance.

The Department of Public Health has failed to devise human exposure protocols for populations exhibiting health effects attributable to toxic dust, metals and hazardous substances on Parcel A documented in Article 31. The minimum exposure protocol for individuals complaining of dyspnea, chest pain, cough, fatique, weight loss or other signs of acute and chronic cardiorespiratory disease must include a baseline chest xray, CBC (Complete Blood Count) and Chemistry Panels, including liver function tests. Arsenic and lead testing should be mandatory for the childhood population even if asymptomatic. Pulmonary function tests including spirometry are standard of care.

The children and workers evaluated by the Department of Public Health following a series of documented exposures to high levels of asbestos in toxic dust at Parcel A received no laboratory testing although many were symptomic of upper and lower respiratory tract symptoms and immune disorders. The total length of time of worksite exposure to airborne toxins from Lennar’s non-compliance with legal guidelines at Parcel A reached one year in March of 2007.

Funding for the oversight and implementation of Article 31 comes from developer fees imposed on Lennar at the shipyard by the Department of Public Health for construction and excavation activities that generate more than 50 cubic yards of soil. Health Director Mitchell Katz, M.D., delegated the implementation of Article 31 to Rajiv Bhatia, M.D., director of the DPH Environmental and Occupational Division. Article 31 establishes funding for the site mitigation engineer position currently held by Amy D. Brownell, P.E.

Despite her obvious conflict of interest with the developer and lack of qualifications in medical decision making, Brownell has made numerous public and press statements minimizing the risks of exposure to toxic dust generated by the Lennar construction site on Parcel A. Brownell came under investigation by the California Board of Professional Engineers and Land Surveyors in 2007 and was removed from her permanent regulatory seat on the Hunters Point Shipyard Restoration Advisory Board by unanimous vote in January 2008.

Numerous administrative complaints and requests for investigations have been filed in response to the Parcel A transfer. A law passed by San Francisco voters in 1995 prohibits campaign contributions from anyone bidding on or negotiating for a City contract or development lease if the recipient has a say in approval of the matter.

Mayor Gavin Newsom received funds from the San Francisco 49ers in 2006 during the campaign finance report period immediately preceding negotiations between the Mayor’s Office of Economic Development and team owners. Laurence Pelosi is listed on the campaign report as his treasurer.

Supervisor Aaron Peskin was successfully reelected in November of 2004 and received $750 in campaign contributions from the sponsor of the environmental review for the Hunters Point Shipyard approved by the Board of Supervisors in December of 2004.

Peskin became president of the Board of Supervisors in January 2005 and acted in close alliance with District 10 Supervisor Sophie Maxwell to advance the corrupt development practices of Lennar in Bayview Hunters Point. The newly elected president of the San Francisco Board of Supervisors, David Chiu, received donations from Lennar during his run for office.

In August of 2004 former Ethics Commission President Robert Planthold and Ethics Department Director Mabel Ng received a letter documenting a litany of violations of ethics laws by elected and appointed officials.

On Dec. 4, 2004, Ng and all 11 members of the Board of Supervisors received a summary of violations including receipt by Planning Commission President Shelley Bell of a $100,000 donation to the board of directors of the Bayview Opera House by Lennar Corp. in the weeks preceding the Planning Commission hearing to approve the shipyard’s transfer and environmental findings. Bell, the executive director of the Opera House, did not inform members of the Opera House board of the Lennar donation, according to board member and former Supervisor Willie B. Kennedy.

The Bayview Opera House board of directors and its executive director, Planning Commissioner Shelley Bell, also served as the fiscal agent for the Bayview Hunters Point Project Area Committee, the PAC that oversees the redevelopment plan for the 1,500 acre project whose approval by City government was temporarily stalled by a legal injunction filed by the Defend Bayview Hunters Point Committee to halt its implementation.

In January of 2005, Ethics Commission investigator Richard Mo met with complainants and over the next two years received over 500 pages of hard copy and email documentation compiled by the editors of the San Francisco Bay View with assistance from Lynne Brown, Michael Boyd, Francisco Da Costa, Kevin Williams and Roland Sheppard detailing the extensive history of corruption surrounding the shipyard transfer.

In February of 2005, U.S. Attorney Andrew Cheng received documentation of violations of federal law involving Rep. Pelosi and Sen. Feinstein, whose husband, Richard Blum, has a financial interest in Catellus Developers, the master developer for the UCSF Mission Bay Campus, Lennar Corp. and numerous Bayview Hunters Point community non-profits.

Feinstein resigned from a seat on the U.S. Senate Military Construction Appropriations Committee due to conflicts of interest complaints involving her husband and has been reportedly investigated by the FBI, according to a former writer for the San Francisco Bay Guardian.

Cheng, in subsequent communications, referred the Hunters Point Shipyard redevelopment investigation to the Ethics Commission, the City Attorney’s division of governmental integrity and the San Francisco Division of the FBI but took no action at the level of the U.S. Department of Justice.

In March of 2005 the City’s Sunshine Ordinance Task Force concluded that violations of the Sunshine Act occurred during the Board of Supervisors’ enactment of the 14 measures approving development on Parcel A.

In March of 2005 the state’s Fair Political Practices Commission acknowledged receipt of complaints documenting financial conflicts of interest involving City officials and contractors. No action was taken.

In January of 2007 Congresswoman Nancy Pelosi became speaker of the U.S. House of Representatives. Her first act was a failed attempt to install Rep. John Murtha as the House majority whip in exchange for his help in the transfer of shipyard Parcel A.

This writer spoke before the Ethics Commission in the fall of 2006 publicly requesting that the stalled investigation of the Hunters Point Shipyard redevelopment measures go forward. On March 15, 2007, Ethics investigator Richard Mo is quoted as saying, “No complaint has been filed” with the Ethics Department regarding the Parcel A transfer.

On March 14, 2007, the San Francisco Bay Guardian published “The Corporation That Ate San Francisco,” a highly detailed investigation by Sarah Phelan into “a Florida based developer that controls the future of two former military bases in San Francisco and the record shows you simply can’t trust Lennar Corporation.”

The article chronicles the seven year history of financial and political conflicts of interest and the paper trail of Lennar’s connections to former Mayor Willie Brown, Speaker Nancy Pelosi and Mayor Gavin Newsom. More importantly, it documents environmental violations at the Lennar construction site on Parcel A that were, arguably, criminal in scope and stature, including deliberate efforts to conceal the health and safety risks of exposure to toxic dust containing exceedences in allowable levels of asbestos.

On Friday, March 17, 2007, Attorney Angela Alioto filed a suit in Superior Court on behalf of plaintiffs Project Manager Gary McIntyre, Community Liaison Clementine Clarke and Administrative Assistant Ceola Richardson, charging Lennar Corp. with racial discrimination and environmental racism in its operations at Parcel A of the Hunters Point Shipyard.

It represented a landmark legal action and the first known use of “environmental racism” as a legal term denoting liability by a corporate polluter operating in Bayview Hunters Point. In 2008 the case was settled.

During the spring and summer months of 2006, Lennar contractor CH2M Hill violated conditions set forth by the BAAQMD Asbestos Dust Mitigation Plan for grading, deconstruction and development activities at the shipyard site. In so doing, Lennar exposed the neighboring community, school children and shipyard workers to toxic dust with elevated levels of asbestos, particulates and other inorganic compounds. Soil analyses at the shipyard had historically yielded elevated levels of toxins including lead, manganese, chromium, nickel and arsenic.

On Aug. 7, 2008, the chief executive officer for Lennar in San Francisco, Kofi Bonner, entered into a settlement agreement with BAAQMD executive officer Jack Broadbent to pay $515,000 in civil penalties for violations of California Health and Safety Code Section 42400.

Under terms of the settlement, the air district will not seek criminal or civil penalties for violations arising from activities documented in 2006. Clause 8 of the settlement stipulates however that “the district reserves the right to take future enforcement actions arising out of violations not covered by this settlement agreement. In addition, the district reserves the right to demand increased penalties in connection with any future alleged violations.”

By November of 2008, Lennar was facing imminent bankruptcy after spending over $5 million - or $50 per vote - to pass Proposition G, a measure designed to gain support of the San Francisco electorate for the Shipyard-Candlestick Park Conceptual Plan and its transfers of state and federal lands. Lennar’s LEN stocks sank to $3.60 per share despite restructuring and partnership with CB Richard Ellis, headed by Richard Blum, husband of Senior Sen. Dianne Feinstein, principle sponsor of the Lennar-funded Proposition G campaign.

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