SF utility chief faces bribery charge. Purview included Tuolumne water and hydropower
Harlan Kelly, former general manager of the San Francisco Public Utilities Commission, faces a bribery charge related to a city streetlight contract.
He denied the accusation while resigning Monday from the post, which includes oversight of water and hydropower on the upper Tuolumne River.
The FBI filed a complaint in U.S. District Court charging Kelly with honest services wire fraud. He is accused of providing insider information on the contract in exchange for gifts that included meals, cash and a 2016 vacation in Hong Kong and China.
“I am not guilty of these allegations,” Kelly said in a statement to the San Francisco Examiner. “It is painful for me to end a 35-year career as a result of false allegations, but it is simply not possible for me to do my job to the best of my ability while also defending myself.”
Kelly, 58, is not in custody. He faces up to 20 years in prison and a fine of up to $250,000 if convicted.
His wife, City Administrator Naomi Kelly, was on the 2016 trip but has not been charged.
Hetch Hetchy system starts in Yosemite
The SFPUC provides water and sewer service to San Francisco residents and electricity for streetlights, public transit and other city operations.
Most of the water comes from Hetch Hetchy Reservoir, on the Tuolumne just inside Yosemite National Park. The Modesto and Turlock irrigation districts divert larger volumes downstream at Don Pedro Reservoir.
The complaint accused Kelly of having a “long-running bribery scheme and corrupt partnership” with Walter Wong, a construction company executive and permit expediting consultant.
Wong gave Kelly money and paid for meals and trips in an effort to obtain a contract to retrofit about 18,000 lights with energy-saving LED fixtures, the complaint said.
It added that after the 2016 trip, Kelly texted Wong, “Thank you for the best family vacation ever! A little something for everyone!”
In the end, Wong withdrew from the contract bidding. He has pleaded guilty to federal charges and has been cooperating with prosecutors.
Deputy GM takes interim role
Kelly had led the SFPUC since 2012. Deputy General Manager Michael Carlin will take over as acting GM during a national search for a replacement, Mayor London Breed said.
The allegations are “disturbing and unacceptable for anyone serving in our government, let alone the leader of one of our largest departments,” Breed said in a news release. “As public officials, we have to hold ourselves to the highest standard and put the public good before all else.”
Nearly a dozen people have now been charged in an ongoing corruption probe of City Hall that began in January with the arrest of former Public Works Director Mohammed Nuru. He resigned his post after being charged with fraud and lying to the FBI.
A slew of others, including city contractors, have faced criminal charges for allegedly participating in schemes to get favorable treatment on contracts. Multiple city department heads have been forced to resign.
The Associated Press contributed to this story.
This story was originally published December 4, 2020 at 5:00 AM.
