Commission Reaction
In the midst of a carefully planned executive search, the Commission reacts to President Maxwell's humiliating capitulation.
The Fix Is In: Herrera’s SFPUC
Dennis Herrera.
Dennis Herrera

“It's Your Choice:” Behind the Scenes—the Blow by Blow—of a Public Farce

Consternation! That was the general reaction to Mayor London Breed’s April 26, 2021 “nomination” of City Attorney Dennis Herrera to succeed Harlan Kelly as General Manager of the SFPUC. While vowing to provide “clean, innovative and decisive leadership,” Herrera has no experience managing a complex water, power and sewer utility with a $1.5 billion budget. Few doubted that political intrigue propelled their deal. Less well known is how the SFPUC’s own search for a new General Manager (GM) was upended.

Former GM Harlan Kelly resigned in late November 2020 after being charged by the US Attorney for corrupt practices. Michael Carlin became Acting GM in December. By January, the SFPUC had asked the City’s Department of Human Resources (DHR) to solicit proposals from executive search firms and select capable outfits. That was done to avoid conflicts of interest since SFPUC’s own managers would likely apply for the GM position. DHR labored to identify 4 suitable firms out of 9 applicants and presented an 8-step Executive Recruitment Process at the January 26th SFPUC meeting (Item 7).

Search Steps
Human Resources set the course for a professional search for a suitable Director

At the February 23, 2021 SFPUC meeting, Commission President Sophie Maxwell indicated that The Hawkins Company “seems more diverse with women and people of color” although their professional fee was the priciest at $50,000. The Commissioners voted to hire Hawkins at a cost “not to exceed $100,000.” So far, so good.

Wresting Control of the Process

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Few doubted that political intrigue propelled their deal. Less well known is how the SFPUC’s own search for a new General Manager (GM) was upended.”

Trouble surfaced at the May 11th SFPUC meeting (Item 9 at 2:00:34). President Maxwell prefaced her update on the search for a General Manager with a jarring oration on “leadership;” “Colleagues, I want to say that I am very proud to be a part of the leadership of this agency. The leadership starts at the top of course, with the Mayor.” Her ominous pep-talk referenced “leadership” 7 more times. Then came the point; the Mayor really wanted Herrera.

Once the Mayor announced her choice, the City Attorney’s Office recused itself from advising the SFPUC on the recruitment process. Again, this avoided a conflict of interests since City Attorney Herrera, was in the running. Robert Coelho, a Santa Clara County attorney was inducted to tell the commissioners that the City Charter authorizes them to “nominate” candidates, but the Mayor makes the selection. Laughably, the 5 Commissioners – all of whom are appointed by the Mayor – were assured that they were free to choose the next steps. Despite Commissioner Maxwell’s glorification of leadership, the commissioners’ sunken faces conveyed disempowerment.

The Mayor’s public announcement of her preferred candidate sabotaged the recruitment process and deterred qualified candidates from applying. It was a done deal. The efforts to avoid conflicts of interest were for naught. Worse, a bigger conflict of interests emerged since Herrera was investigating corruption swirling through the Mayor’s entourage. On this glaring complication, the commissioners kept mum. After noting the “political reality” involved, outside attorney Coelho comforted the commissioners with a fallacy; “You control the process.” That “control” simply meant that the Mayor had to choose a winner from names submitted by the Commission. So, would the commissioners nominate Herrera or risk seeing their non-Herrera nominees rebuffed by the Mayor – along with their own re-appointments to the Commission? “The choice is yours” intoned Coelho.

Complying with a Rigged Process

...

Had the executive search proceeded without the Mayor’s meddling, it’s unlikely that Dennis Herrera would have been deemed a viable candidate. Nevertheless, the Commission gamely decided to conduct a Kabuki selection process. After all, many hours of professional time had already been expended plus fees for The Hawkins Company. So, the Commission told Hawkins to continue gathering feedback from stakeholders to determine the qualifications, experience and vision of the “ideal candidate.” But the die had been cast and the SFPUC cast aside. Candor vanished - except for a dozen public comments at the May 25th SFPUC meeting (Item 10) that challenged the selection process and Herrera’s installation.

One month after Mayor Breed nominated Herrera, the SFPUC distributed the Hawkins survey to its 2,300 employees. The memo asked for “input about the qualities and priorities of the new General Manager.” Many workers viewed the survey as pointless. Only 398 (17%) responded. The Hawkins Company also interviewed the commissioners, SFPUC executives, and outside stakeholders. The results of this “Stakeholder Engagement Process” were presented by Ms. Brett Byers on 6/8/21 (Item 17).

Sophie Maxwell
President Maxwell

It began with a feel-good recitation of SFPUC’s “Outstanding Reputation & Amazing Staff.” As for “Opportunities,” the SFPUC was “in a position to rebuild public trust.” Due to executive longevity and “insularity,” “the SFPUC could benefit from having a different perspective joining the Executive Leadership level.” One finding presaged a sinking ship scenario; “upcoming retirements in senior management positions could lead to a talent deficit.” Slyly, nothing was reported about the desired qualifications, experience and priorities of the next GM – a key goal of the Hawkins contract. The fee charged for this skimpy product – minus the actual recruitment of candidates – awaits a response to the Westside Observer’s records request.

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The City Attorney has aggressively defended officials who retaliate against whistleblowers. Herrera has demonstrated ardor, albeit costly, with this task. Recall the $7.3 million awarded to “sewer-gate” whistleblower Joanne Hoeper, Herrera’s former Chief Trial Attorney”

Finally, on 6/13/21 the Commission disclosed that after a Closed Session interview, it had “unanimously voted to forward the name of Mr. Dennis Herrera for the position of SFPUC General Manager.” So much for “leadership.” As for transparency, the commissioners did not disclose whether anyone else applied or was considered for the job. In a bombastic June 17 Press Release, Mayor Breed praised the “thorough work” in the review process “led by the 5-member oversight commission.” Next, Herrera must sign a contract with the SFPUC, resign as City Attorney, get officially appointed by Breed and confirmed by the Commission.

Why Herrera?

Dennis Herrera is a savvy manager. Unlike true outsiders, he won’t face a harrowing learning curve in the midst of a scandal or get easily bamboozled by the old guard. Unlike SFPUC insiders he’s untainted by the current corruption and at little risk of future prosecution.

Herrera has been a key player in the “Our City, Our Power” campaign to buy out PG&E and develop a City-owned electrical grid. His heading the SFPUC could advance that agenda without delay. Though touted by the Mayor as a “great champion in…protecting our environment,” his appointment is vehemently opposed by prominent environmental organizations. They argue that his May 13th, 2021 lawsuit against the State Water Resources Control Board pushes “irresponsible” water management that endangers the Tuolumne River, its fish and wildlife. Further, some decry Herrera’s failure to consult with environmental groups before filing his lawsuit – and before deciding to run the SFPUC. Herrera sought to justify his lawsuit in a Press Release and Chronicle Op-Ed. Peter Drekmeier, from the Tuolumne River Trust, penned Counter-arguments in the June 2021 Westside Observer.

Darker Perspectives

It's important to note that the downfall of the SFPUC’s Harlan Kelly and other City department heads was not solely due to the FBI and the US Attorney. The feds relied on whistleblowers who repeatedly reported misconduct. Now there’s a firestorm of scandals, one of which is destabilizing the SFPUC. Herrera has been tapped to put out the fire. Essentially, there are 3 ways to stabilize the agency; 1) root out corruption, or 2) contain the investigations, and 3) root out whistleblowers.

The City Attorney has aggressively defended officials who retaliate against whistleblowers. Herrera has demonstrated ardor, albeit costly, with this task. Recall the $7.3 million awarded to “sewer-gate” whistleblower Joanne Hoeper, Herrera’s former Chief Trial Attorney.

Preston: Letter to Herrera
Supervisor Dean Preston's inquiry to Herrera

Herrera recently reveled in “putting the city’s top watchdog at the head of the PUC.” But as Jo Hoeper warned in a February 2020 Letter to the Editor; “who will watch the watchdog.” Our “top watchdog” has trailed the FBI in investigating municipal corruption. Such investigations are awkward for insiders because corruption permeates the City Family. With Herrera atop the SFPUC while his former subordinate attorneys probe SFPUC corruption, the intensity of the investigation could be modulated (i.e. skeletons kept interred). Supervisor Dean Preston has formally inquired (see page 9) about this potential conflict of interests. By yielding his elected position and agreeing to work under the Mayor and 5 commissioners, how likely is it that Herrera will expose mayoral or Commission lapses? Similarly, coaxing Herrera out of his legal post and into the SFPUC allows Breed to appoint a new City Attorney. Whomever she appoints will be disinclined to bite her hand – even if they prevail in the election that is required to keep the job.

Multi-level machinations could be at play. Astute observers like Tim Redmond of 48 Hills, Joe Eskenazi of Mission Local, and City Hall insiders have speculated about a cascade of political rearrangements depending on whom Mayor Breed appoints as City Attorney.

Unfortunately, hinky maneuvers have implanted SFPUC’s next General Manager. Fortunately, so many eyes and ears now converge on the agency, from the FBI to whistleblowers and journalists, that Dennis Herrera’s performance will be closely monitored - and reported.

                              

Dr. Derek Kerr is a San Francisco investigative reporter for the Westside Observer Contact: watchdogs@westsideobserver.com

July 2021

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