The June 2014 ouster of Laguna Honda Hospital’s (LHH) Chief Operating Officer Mike Llewellyn so rattled the Department of Public Health (DPH) that the scandal was buried. As detailed in the September Westside Observer, Llewellyn was chummy with Rachel Decker, owner of the DPH-favored painting contractor William Decker Company. Cordial rapport between City officials and contractors often enhances public services — unless favoritism ensues.
In October 2013, the Controller’s Whistleblower Program was investigating complaints about the “over-utilization” of a DPH painting contractor. Controller’s records show Decker’s dominance over the other 6 DPH painting contractors during Llewellyn’s tenure. In the 5 fiscal years between 2009 and 2014, Decker pocketed $783,211, or 41% of DPH’s painting expenditures — almost twice as much as its nearest competitor, RAS Engineering. The bottom 3 contractors, M&A, Monticelli, and Arco took home 6.5%, 2.4% and 0% of the pie, respectively.
DPH records confirm the disparity. Between 11/1/10 and 10/31/13, Decker was granted a Blanket Purchase Order (BPO) authorizing $400,000 in DPH contracts. The other 6 DPH painting contactors were granted BPO’s ranging from $100,000 to $250,000, and totaling $1.2 million. Just 17 months into its 3-year BPO, Decker had already collected $396,786 – over 99% of its allocation. However, the other 6 firms garnered just $117,000 or 10% of the funds available to them. Decker’s closest rival, M&A Painting, had received 24% of its $250,000 allocation. Three of the painting contractors got nothing. No wonder somebody complained.
Perhaps Decker Co. did excellent work at lower rates than their 6 competitors. Still, the relationship between Mike Llewellyn and Rachel Decker should have sparked concerns…”
Perhaps Decker Co. did excellent work at lower rates than their 6 competitors. Still, the relationship between Mike Llewellyn and Rachel Decker should have sparked concerns, especially after DPH Director Barbara Garcia put Llewellyn in charge of all DPH facilities in late 2011. With such authority over contracts, there are many ways to indulge preferred parties.
According to the City’s Office of Contract Administration, “For general services, competitive bids are not required under $10,000.” Such small jobs need not be advertised because City departments have “complete discretion over the vendor selection process.” Records show that in the first 3 years of Llewellyn’s tenure as COO, from November 2009 through November 2012, Laguna Honda processed 54 invoices from Decker Co. totaling $448,375. Of these, 47 were for jobs costing less than $10,000. They included a $1,010 contract to paint “Mike’s safe” and a $2,210 deal listed as “Mike’s wood table refinishing.” These small contracts, awarded under Llewellyn’s watchful eye, brought in $228,667 – 51% of Decker’s Laguna Honda revenues over 3 years.
Though disapproved, big jobs can evade competitive bidding rules if broken down into multiple small jobs, each costing under $10,000. On 11/14/12 Decker Co. submitted 3 invoices at $9,996 each for 3 near-identical LHH window projects. Had this window project been treated as a single $29,988 contract it would have required competitive bidding and approval by the Office of Contract Administration.
A favored contractor could be told in advance about upcoming DPH projects, or informed about competing bids and proposals. Hefty contracts can be won with tiny under-bids. On 1/25/11 Decker Co. secured a painting job at SFGH for $30,250. Its closest competitor, RAS Engineering, had bid $30,500. When the bid results were sent to Llewellyn’s office, he notified his staff; “I will take care of that.”
Or, a painting company could be steered to work as a subcontractor under a bigger DPH contractor. The DPH pays the larger firm that then pays its painting sub-contactor. On 4/1/12 Turner Construction paid Decker’s RMD Enterprise $11,585 for 4 windows. The following month, Llewellyn received a proposal from Rossi Builders, another DPH construction contractor. On 10/22/12 Llewellyn sent Rossi’s proposal to Decker’s Office manager, who cheerfully responded, “Thank You Mike! Hope you are well!” In May 2013, Rossi Builders hired Decker as their painting sub-contractor.
When funds aren’t available, money can be pulled from other pots. For example, LHH bosses could get SFGH funds to pay for their jobs and vice versa. Given its enormous budget and major hospital rebuild projects, the DPH has many money streams that can be siphoned when needed. For example, on 9/30/10, a $3,130 Decker Purchase Order was revised because LHH’s CFO wanted to switch from “operating funds” to “project funds” to pay for maintenance services. Similarly, creative accounting may explain why Decker’s BPO balance increased from $3,214 to $14,269 between 3/1/12 and 10/17/13.
When DPH Director Barbara Garcia wanted to “expedite” the renovation of DPH Clinics in October 2013, Decker’s BPO balance was depleted, despite the mysterious boost to $14,269. Nevertheless, on 10/25/13 Rachel Decker submitted estimates to “John Lee A-Hole” to refurbish 4 Clinics for $235,062. Technically, any bids above $14,269 should have been null and void. Further, Decker’s DPH contract expired a week later and wasn’t renewed until 2/1/14. She was then granted a 3-year, $1.8 million BPO to be shared with 3 other painting contractors. On 5/2/14, the Health Commission approved new DPH maintenance jobs by the Decker Co. Therefore, Decker maintained business ties with the DPH right up to Llewellyn’s expulsion on 6/20/14.
The marginalized DPH painting contractors to whom we spoke had no comment. However, the Controller’s 2013-14 Whistleblower Program Report mentions a manager who was fired for being “romantically involved with the owner of a contractor while…in a position of authority over contracted work.” LHH insiders went along to preserve their livelihoods. Outsiders forced Barbara Garcia to address top-level misconduct that Laguna Honda honchos tolerated for years.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com
City Attorney Dennis Herrera is facing a whistleblower retaliation lawsuit from his former Chief Trial Attorney, Joanne Hoeper. After the September Westside Observer went to press, Herrera rebutted Hoeper’s claim that she was reassigned and fired for exposing a multi-million dollar scheme to replace private sewers - at taxpayer expense. Now Hoeper has refuted Herrera’s rebuttal, thus escalating the conflicting pre-litigation narratives.
Pursuing a 2011 FBI tip about shady sewer claims, Hoeper had Herrera’s blessing - until her digging implicated the heads of his Claims Bureau; Michael Haase and Matthew Rothschild. In May 2012, Hoeper told Herrera where the investigation was headed. One month later, the Claims Bureau ceased paying for private sewers, and stopped issuing no-bid contracts. Yet, Hoeper kept delving into thousands of claims that had already been paid.
In July 2012, months before launching his re-election campaign, Herrera directed his Chief Deputy, Therese Stewart, to wrap up Hoeper’s investigation. Undaunted, Hoeper delivered a 27-page “Draft Report of Investigation” (Report) on 7/18/12. Shortly thereafter, Hoeper says Herrera green-lighted her continued probing.
The next morning, Herrera replaced her as Chief Trial Attorney…Herrera then covered up her fraud allegations and failed to seek an independent audit of the Claims Bureau. In November 2013, two days after being re-elected, Herrera told Hoeper that she would be terminated. In January 2014, he kept his word.”
Hoeper briefed Stewart about a plumbing company that had filed 84 claims for $850,000, most of which had been inflated by $3,000. These $3,000 premiums reportedly ended after a citizen complained to Haase about suspected fraud and threatened to call the press. Moreover, that plumbing company abruptly stopped submitting claims – right after Hoeper alerted the Claims Bureau about the FBI’s warning. This sequence of events led Hoeper to believe that insiders “had colluded with the plumbing company to submit fraudulent and inflated claims and that Haase had then likely warned the plumbing company and tried to cover their tracks.” She then surmised that the $3,000 overpayments served as kickbacks to the Claims Bureau. Whoa!
The next morning, Herrera replaced her as Chief Trial Attorney. In August 2012, he transferred her to the District Attorney’s Office but continued her $202,000/year salary. Hoeper states that Herrera then covered up her fraud allegations and failed to seek an independent audit of the Claims Bureau. In November 2013, two days after being re-elected, Herrera told Hoeper that she would be terminated. In January 2014, he kept his word.
A contrasting narrative emerges from a 35-page by lawyers representing Herrera’s Office. Herrera argues that Hoeper is not a whistleblower and that she was fired for “sub-par performance” related to her “pugilistic style” and “refusal to be a team player” – not in reprisal for her investigation. Admittedly, he “refused to allow Ms. Hoeper to continue her scorched-earth investigation against Mr. Haase…because she had uncovered no facts to justify further investigation.”
To receive whistleblower protections, Hoeper must show reasonable cause to believe that waste, fraud, abuse or wrongdoing occurred. Herrera rejects her whistleblower status by declaring that her own investigation “turned up no evidence of a fraudulent scheme.” He quotes this snippet from her Report: “The preliminary work we have done so far has not revealed the sort of obvious patterns that could be expected if there was a scheme to steer public funds to particular plumbing contractors in return for kickbacks.” Another excerpt emphasizes that Haase was regarded as “a conscientious, hard-working and competent employee.”
Hoeper responds that Herrera selectively “misrepresents” her findings and is “deliberately misleading…in order to cover up (his) true motivations for terminating Ms. Hoeper.” She challenges Herrera to release her full Report as it is “replete with detailed examples of wrongdoing by the Claims Bureau.” She adds that Herrera’s quote about Haase was lifted from a section titled Additional Investigation is Needed that segued into “specific findings that Haase had engaged in unlawful acts.”
While Hoeper viewed the City Attorney’s handling of sewer claims as unjustified, Herrera asserts that since 1982, it’s been City policy to accept liability for residential sewers damaged by City trees. Contradicting Hoeper’s claim that SF was unique in paying for tree-damaged sewers, Herrera identifies other California cities that also reimburse homeowners for sewer repairs. Hoeper retorts that, “Under the San Francisco charter only the Board of Supervisors may set policy and only through written ordinances and resolutions.” Unlike the cities cited by Herrera, our Supervisors didn’t set a sewer policy. Therefore, Hoeper maintains that the Claims Bureau had unilaterally and illegally implemented the costly sewer policy – then abolished it after her revelations.
While Hoeper was suspicious that Haase usually knew in advance when sewer claims would be submitted and instantly approved them, Herrera contends that she didn’t understand that sewer claims were first investigated by DPW inspectors. In 2011, some 60 such sewer claims were reportedly rejected by DPW. Once approved by DPW, homeowners hired plumbers to do the work and filed a claim with the Claims Bureau. So, the Claims Bureau quickly approved sewer claims because they had already been screened by DPW. Herrera denies that homeowner complaints about sewer companies were buried, citing measures initiated by Haase to deter fraudulent claims. Herrera alleges that Hoeper “ignored or dismissed” these points and was “jumping to conclusions.”
Hoeper responds that her investigators “documented many instances in which there were no roots in the sewers” - despite the DPW inspections and approvals. Plus, she was not allowed to examine the work of DPW. She describes Haase as: misleading when interviewed, concealing citizen complaints, taking 16 discounted Giants tickets from a contractor for whom he initiated a $12,000 City sewer deal, and approving no-bid jobs for a contractor who employed his son. Herrera is portrayed as: “willing to make untrue statements about these easily provable facts in order to bolster his false narrative…”
Unfortunately, the City Attorney’s Office twice declined to release Hoeper’s investigative Report, citing attorney work-product and other confidentiality exemptions. So, we are bedeviled by contrasting interpretations of a crucial but secret document. Herrera does admit that; “The sewer investigation prompted the City to rethink this practice” and that “outdated policies were reformed and allegations against City employees were investigated and put to rest.” Hoeper’s attorney, Stephen Murphy, told us, “Jo’s investigation was shut down and her career abruptly ended only after she had uncovered huge, illegal outlays of taxpayer funds. There’s no question she was a whistleblower.”
Next, we’ll explore Herrera’s claim that Hoeper’s firing “was in the works long before she claimed…she had uncovered a kick-back scheme”
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Dept. Public Health. Contact: DerekOnVanNess@aol.com
|Favoritism in contracts with DPH is revealed in records obtained
by the Westside Observer under the Sunshine ordinance
The mysterious June 20 expulsion of Laguna Honda Hospital (LHH) Chief Operating Officer (COO) Mike Llewellyn has long roots. According to 780 pages of Llewellyn e-mails, his termination seems connected to DPH painting contractor William Decker Company/RMD Enterprise (Decker). The firm, now owned by the late founder’s daughter, Rachel M. Decker, was being investigated by the Office of Labor Standards Enforcement (OLSE) in 2011 after employees complained that Decker wasn’t paying fair wages.
OLSE enforces prevailing wage requirements in City contracts. Unlike most other City whistleblower programs, the OLSE gets results. It substantiates 65% of complaints and recovers lost wages from 90% of the companies pursued. By combating wage theft, OLSE protects vulnerable workers from exploitation, reduces their reliance on social services, and allows honest employers to compete fairly.
On 4/26/11, the OSLE contacted Llewellyn seeking information about Decker’s work at LHH and he promised to provide the records. Though he knew that OLSE was investigating Decker, Llewellyn blind cc’d his response directly to Rachel Decker. Unknown to OLSE, Llewellyn and Decker were buddies. For example, on 5/13/11 Decker sent him a FAX detailing $2,324 in repairs to her 2004 Silverado. Llewellyn responded ”Wow.” On 7/26/11 Llewellyn sent Decker an internal bulletin issued to DPH finance officers. Two months later he sent her an LHH financial report listing fund balances available for 8 vendors, without sending it to the others.
… the OSLE reached a Settlement Agreement with Decker on 2/21/12. She did not admit to any wrongdoing but agreed to pay $28,000, including $19,704 in back wages to 6 employees and $8,296 in penalties for violating the City’s prevailing wage law.”
Over the next 8 months, OLSE struggled to round up records of Decker’s work, particularly a $220,210 restoration job at DPH headquarters that included a $13,000 renovation of Health Director Barbara Garcia’s Office. A dozen exchanges occurred between OLSE and Llewellyn and his deputies; Diana Kenyon, LHH Facilities Manager, and John Lee, Buildings & Grounds Supervisor. Wherever OLSE probed, Llewellyn was made aware. When OLSE obtained Decker’s employee sign-in sheets, John Lee forwarded them to Llewellyn noting, ”thought you want to know.” Lee even blind cc’d Llewellyn on his responses to trivial inquiries about Decker.
There were other signs of Llewellyn’s pervasive interest in Decker’s affairs. On 1/12/12, OLSE asked Diana Kenyon about work done by Decker before a contract was signed. Kenyon forwarded the inquiry to Llewellyn. Staying in the background, Llewellyn coached Kenyon, ”Here is your reply” and wrote out a generic message, adding, ”CC me on the reply.” Kenyon dutifully sent her ghost-written response. But OSLE wanted specific dates, noting a ”legal discrepancy” raised by the City Attorney. Frustrated by OSLE’s persistence, Kenyon e-mailed Llewellyn, ”I don’t know what tree she is barking up now.” Six minutes later, Llewellyn forwarded the e-mail train to Rachel Decker.
On 2/7/12 Llewellyn sent his deputy John Lee a quote for a window project submitted by the Decker Co. with the message, ”Here’s your quote, let’s get it processed” – and blind cc’d Rachel Decker. One week later, Llewellyn’s deputy, Diana Kenyon, notified 3 painting contractors, including the Decker Co., of a bid walk-through. When the walk-through was rescheduled, Kenyon notified the 3 bidders. Llewellyn then forwarded that notice to Rachel Decker to make sure she got it personally. When the walk-through was delayed, Llewellyn instructed Kenyon when to reschedule the due-date for bids, then cc’d Decker – not the others.
After receiving assurances from Llewellyn that Decker’s jobs were ”won through competitive bidding,” the OSLE reached a Settlement Agreement with Decker on 2/21/12. She did not admit to any wrongdoing but agreed to pay $28,000, including $19,704 in back wages to 6 employees and $8,296 in penalties for violating the City’s prevailing wage law.
One week after the OLSE Settlement, Decker was awarded a $44,725 contract to paint DPH Accounting Offices at 101 Grove Street. However, the Accounting Office lacked the funds to cover Decker’s bid. So the DPH transferred funds from a Mental Health facilities account to pay for the job. After a lengthy set of maneuvers and approvals, to which Llewellyn was a party, funding was granted on 3/19/12. One minute later, Llewellyn forwarded the trail of Accounting Office e-mails to Rachel Decker with the emoticon, ”Funded :)”. However, it took another 3 weeks to get Decker’s newly-funded contract released. One minute after getting the OK, Llewellyn forwarded that series of Accounting e-mails to Decker, writing, ”Now you can schedule.”
On 4/18/12, Llewellyn’s Assistant, Jessica Kennedy, was trying to tie a name to a relationship. In an e-mail to Llewellyn’s deputy, John Lee, Kennedy copied an invoice with Rachel Decker’s name on it and wrote, Mystery solved. Name on invoice.” Lee rushed Kennedy’s discovery to Llewellyn, adding; ”OOOOOOOOPPPPS, I told her that she is not the one. I said Rachael is married with kids and that she is a real bitch and that you would not be with her.”
Nevertheless, when Llewellyn received a State notice about swine flu on 8/3/12, he sent it to Rachel Decker. She responded; ”Thank you for the notification. I’m afraid for my little love.” Two minutes later he replied, "I know, I get these alerts, it’s personal to me now.”
It’s intriguing that we found no personal messages in 2013 and 2014. Perhaps Decker was busy, having delivered a baby boy in Walnut Creek on 7/18/13. Perhaps communication was inhibited by the Controller’s 2013 investigation of favoritism complaints by DPH painting contractors. Or, the DPH may have withheld some.
Besides Llewellyn’s close associates, other LHH staffers knew of the Llewellyn-Decker relationship and the potential for partiality. Given the hospital’s repression of dissent, insiders stood mum as Llewellyn painted himself into a corner. Next month, we’ll explore why outsiders exposed the rot at the top of Laguna Honda Hospital.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com
It’s hard to ignore a call from the FBI. In December 2011, Joanne Hoeper, City Attorney Dennis Herrera’s Chief Trial Deputy, got that call. Homeowners were complaining about a handful of plumbing firms that solicited them to replace sewer lines – at City expense – because they were supposedly clogged by City-owned trees. However, their sewers were working fine. In some cases, there were no trees in sight.
A 20-year veteran of the City Attorney’s Office, Hoeper launched an investigation. Unhappily, it led directly into Herrera’s inner circle. Seven months later, in July 2012, her investigation was quashed, she was pulled from her post, then banished to the District Attorney’s Office for 17 months. On January 7, 2014, after turning 60, she was terminated. While acknowledging publicly that “Whistleblowers do not fare well in this world,” Hoeper felt unable to “live with myself if I didn’t speak up.” So she filed a with the Controller’s Office this June seeking re-instatement, lost wages and other damages. True to form, the Controller referred the claim to the implicated agency – the City Attorney’s Office.
Unhappily, it led directly into Herrera’s inner circle. Seven months later, … her investigation was quashed, she was pulled from her post, … after turning 60, she was terminated.”
Acting on Herrera’s behalf to avoid a conflict of interest, the Santa Clara County Counsel assessed and on July 17, 2014, partly because it “was not presented within six months after the event.” Herrera instantly fired off accusing Hoeper of knowing that her “baseless allegations were time-barred” thereby demonstrating “the vindictiveness underlying her claim.”
No word about an independent investigation. Hoeper’s attorney, Stephen Murphy, told us “The City’s response to our claim is unnecessarily hostile; the defense that the claim was untimely is also meritless because it’s a whistleblower retaliation claim. We’re preparing a lawsuit.”
A Hastings Law School graduate, Hoeper started out with Morrison & Foerster, a corporate law firm based in San Francisco. Though rising to become a partner, she was drawn to community service. Her pro bono services focused on civil rights abuses in Guatemala and Argentina. In 1994 she joined the City Attorney’s Office under Louise Renne. After Dennis Herrera was elected City Attorney in 2001, Hoeper rose to become his Chief Trial Attorney. In 2003 she was recognized as one of the “Top 50 Women Litigators in California” for prosecuting a Fortune 500 company that defrauded $4.4 million from the Unified School District. Herrera lauded her in a ; “Jo Hoeper’s legal skills, energy and dedication have made an enormous contribution to the public integrity of our City, while exacting an enormous price from those who’ve sought to cheat and defraud San Francisco taxpayers.”
Hoeper prosecuted other high-profile frauds and served as an advisor to City officials. She was named a “Northern California Super Lawyer” in 2005, 2006, 2007 and 2008, based on peer nominations and third-party evaluations of professional achievement – an honor accorded to 5% of California lawyers. She became one of Herrera’s closest advisers, a member of his 4-person Executive Team, until her 2012 investigation.
Two years later, Herrera’s Press Release disparaged her as “a disgruntled former employee, who clearly has some axes to grind against some of her former colleagues, who is expressly seeking a payout…by making reckless and unsupported charges of serious crimes in a bid to shake-down taxpayers.” What happened?
Upon receiving the FBI tip about fraudulent sewer claims, Hoeper alerted the City Attorney’s Claims Bureau that handles claims against the City. The Claims Bureau Chief, Matthew Rothschild, is a long-time political operative and fund-raiser for the Democratic County Central Committee and the Alice B. Toklas LGBT Democratic Club – and an asset for Herrera’s political campaigns. The Claims Bureau Assistant Chief, Michael Haase, reportedly assured her that dubious claims were weeded out and that there was no cause for further inquiry. Given the seriousness of the allegations and a pattern of anomalies in the claims, Hoeper also contacted the Chief of Investigations, George Cothran, who provided an investigator. Years before, as an investigative journalist, Cothran had critiqued Rothschild’s bid for a Municipal Court judgeship. ()
According to her claim, Hoeper informed Herrera that from 2002-2011, the City had paid out $19 million for several thousand claims, mostly to replace private sewers allegedly damaged by City tree roots. Oddly, the Claims Bureau paid the higher cost of replacing rather than simply repairing the sewers. Importantly, no other California City paid to replace private sewers clogged by roots. The consensus of arborists and sewer engineers was that tree roots do not cause sewer breaks. Rather, roots infiltrate already broken sewer lines. Further, the repair of private sewers is the legal responsibility of property owners – not the City.
After persuading homeowners that the City would restore their aging, supposedly damaged sewers to modern standards, plumbing company salesmen filled out the claims, had the owners sign them, and submitted them to the Claims Bureau. Within days, Hoeper noted, the City paid the property owners who then paid the contractors. If, after a claim was submitted, a property owner balked at signing the form required by the City to issue a check, the Claims Bureau would open a new claim in the name of the plumbing company – and pay it directly. Hoeper also alleges that the Claims Bureau awarded these companies no-bid contracts to fix City-owned sewers despite City rules requiring a bidding process. She concluded that millions in taxpayer dollars enhanced private properties while furnishing several plumbing firms most of their profits.
Next month, we’ll explore how Hoeper’s long-praised pursuit of fraud - when aimed inward - became a threat to the City Attorney’s Office and its Claims Bureau.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPH wrongdoing. Contact: DerekOnVanNess@aol.com or www.SFWhistleblowers.com
A flurry of anxious-joyful messages from Laguna Honda Hospital (LHH) insiders pinged our cell-phones last month. On Friday May 30th, Laguna Honda’s Chief Operating Officer (COO) Mike Llewellyn was escorted out of his office by Human Resources officials and CEO Mivic Hirose. We were told that his computer hard-drive was seized – perhaps by “the Feds”, and that the institutional police perp-walked him out of the building. Sources who insist on anonymity for fear of retaliation whispered that the computers of his deputies were also seized. However, these two were temporarily assigned his duties. A week later, LHH blocked Llewellyn’s access to every door of the buildings he had overseen. Another Laguna Honda scandal?
Our e-mail to Llewellyn on 6/4/14 received an automatic “out of office for an unspecified length of time” response. We contacted CEO Hirose, whose representative confirmed that Llewellyn had been placed on Administrative Leave on 6/2/14, but denied a raid by the Feds. We then requested any notice sent by Hirose to her staff about Llewellyn’s departure. LHH replied “no responsive records” and wouldn’t provide answers about a personnel matter. Tellingly, LHH referred further inquiries to the Department of Public Health information Officer. Taking damage-control out of the hands of LHH’s bumbling CEO is a sure sign of an erupting scandal.
…turmoil at Laguna Honda … is related to the replacement of competent managers with apparatchiks. Llewellyn’s implosion exposes the fault-lines under Laguna Honda’s occupation - and Hirose’s tenure.”
What about the computer seizures? Did Llewellyn resign? Was he fired? Who replaced him? To these questions, the DPH responded on 6/11/14, “any current personnel actions would be confidential.” At the same time, the FBI denied any interventions at LHH. Finally on 6/20/14, Human Resources confirmed that was "Llewellyn's last day of employment,˝ while the DPH divulged that CEO Hirose was “currently assuming the COO responsibilities.” Oddly, there were no documents announcing this important development until 6/25/14.
Although LHH is abuzz with gossip and rumors about Llewellyn’s downfall, informants tell us that their department managers have been tight-lipped, evasive, misleading or feigning ignorance. They seem scared. Since the ouster of the pugnacious Communications Director Marc Slavin in June 2013, and the mysterious leave of his successor, Judith Klain, a former Project Homeless Connect director, hospital communications have deteriorated under Hirose. For example, Laguna Honda’s website stagnates with bogus photos, portraits of long-gone residents and staff, and Community Events from 2011-12. The hospital’s Grapevine newsletter is gone. Even the patient newsletter, The Voice, is silent. Inarticulate in person, furtive and prone to flee when questioned by journalists, Hirose’s public statements are scripted confections. Questions about her management are viewed as threats. That’s why l’affaire Llewellyn is clamped under a cone of silence. It prompts questions about how much Hirose knew, and when, and if she didn’t know - why not?
Absent a coherent explanation for the departure of Laguna’s COO, rumors are running amok. Repeatedly however, we hear that contract bids had been leaked to a favored contractor beginning in 2010. In October 2013, the Controller’s Office investigated complaints about contracting procedures at SFGH and LHH. As of 6/16/14, however, “no restrictions have been imposed on vendors doing business at Laguna Honda” per Deputy Controller Monique Zmuda. Llewellyn’s forced resignation on 6/20/14 may be a first step.
Subordinates who describe Llewellyn as a bully, devious, and arrogant view his downfall as Karma. Still, it’s an ignominious finale for Laguna’s #2 official who earned $173,742 in 2012-13. Llewellyn emerged from the bowels of SFGH where he had toiled as an undistinguished but bossy engineer since 1991. He reached the pinnacle of his SFGH career as Maintenance Supervisor in 2006. In 2008, he was hauled into LHH as Facilities Director by a then-struggling CEO, John Kanaley, and former Health Director Mitch Katz, who wanted to stuff LHH with SFGH loyalists.
Katz had previously dispatched Kanaley, another lackluster SFGH engineer, to “kick some ass” during Laguna Honda’s revolt against the 2004 Flow Project. Predictably, CEO Kanaley found himself over his head, then felled by a stress-related heart attack in March 2009 at age 51. Katz then fingered an obeisant Mivic Hirose, an LHH Nursing Director with the requisite SFGH pedigree, to fill Kanaley’s boots. That would enable Katz to plant another SFGH acolyte - with Kanaley’s Big Daddy demeanor – within Laguna Honda’s inner circle.
In November 2009, an under-qualified Mike Llewellyn snagged the COO position “because Mitch Katz said so” according to former LHH managers. The job qualifications were reportedly shrunk to fit Llewellyn’s abilities, despite the misgivings of Selection Committee members. With Hirose’s OK, Llewellyn replaced former COO Gayling Gee, who had been forced out for protesting the closure of LHH’s Adult Day Health Care program. Before Llewellyn was installed, Hirose and Katz temporarily foisted SFGH’s clueless COO upon Laguna Honda. That fellow brashly proclaimed a “Soda Free Summer at Laguna Honda” – a paternalism that sparked outrage and an unprecedented rejection by the Residents’ Council.
Intolerant of managers who questioned his decisions, Katz boosted obsequious ones regardless of their capabilities -or ethics. That’s why John Kanaley replaced Larry Funk as CEO, and why Mivic Hirose supplanted Mary Louise Fleming as Director of Nursing in late 2004. Hirose’s servile adulation of Katz was the key to the CEO office after Kanaley’s demise, but she lacked his overbearing presence. By flanking Hirose with Mike Llewellyn as COO and Marc Slavin as Communications Director, Katz had the centurions to quell opposition to his Flow Project and cronyism.
Management turmoil at Laguna Honda since the 2004 Flow Project is related to the replacement of competent managers with apparatchiks. Llewellyn’s implosion exposes the fault-lines under Laguna Honda’s occupation - and Hirose’s tenure.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health. Contact: DerekOnVanNess@aol.com
The Department of Pubic Health (DPH), exhorted by favored contractor Health Management Associates (HMA), is using Obamacare to transform itself into a conglomerate via “integration.”
Records show that HMA promotes “integration” by breaking down “micro-cultures that have their own vision and goals.” These “need to be taken on by leadership and held accountable as a component of a unified approach to care…” HMA sees no room for organizational ecosystems and no pitfalls with mergers. “Integration” is HMA’s panacea.
This dream of “seamless integration” flopped in 1999 when the DPH set up its “Community Health Network” to entice privately-insured patients into its safety-net system. Similarly, the 2004 Flow Project imploded after San Francisco General Hospital (SFGH) tossed younger, troubled and sometimes violent patients among the frail elderly at Laguna Honda Hospital (LHH). A 4-year take-over of LHH finances by the SFGH Finance Office fizzled in 2009. Another dud was Laguna Honda’s multi-million dollar Acute Rehabilitation Unit. Designed to attract 15 insured SFGH patients – each for $4,527/day - it struggles to serve two per day because eligible patients choose to go elsewhere. Nevertheless, “integration” is prescribed for cost overruns throughout the DPH.
Reimbursement means that SF General Hospital can charge the average patient $6,716/day …Laguna Honda Hospital charges an average of $968/day, there’s economic pressure to unload non-paying SFGH patients into LHH regardless of whether they benefit from the transfer.”
SFGH, LHH and 14 City Clinics all spend more than they earn. Therefore, they rely on City taxpayer subsidies. At the center of fiscal hemorrhaging is SFGH whose operating costs comprise “more than 50% of DPH’s expenses” per the Controller’s Office. Historically, SFGH has lost millions due to sloppy billing practices. HMA now finds that busy SFGH specialty clinics like Dermatology and Psychiatry collect no revenue as they “find it too complicated to complete professional billing.” The Emergency Department is grid-locked by 10 “classic examples of dysfunction,” including a dozen Nurse Practitioners “with very poor per hour productivity.” SFGH now wants an extra 288 full-time positions costing $77 million, but “without new patient volumes to support these requests” says HMA. Such practices threaten DPH’s “survivability” under Obamacare, as explained in May’s Westside Observer.
Tighter fiscal accountability is not enough. The way out according to HMA, is to get bigger – and to “integrate.” The DPH patient census must increase from 57,000 to 85,000 in the next 5 years. Clinic doctors must increase their patient loads from 826 to 1350, even though patient satisfaction scores sink to 35%, and half the Clinics are already packed. To grow the Network, DPH must “pursue and secure managed care contracts” with Kaiser, HealthNet and Blue Shield, though none had materialized as of late 2013. For Laguna Honda, the plan is to increase “specialty services,” perhaps kidney dialysis. To manage all this, the DPH will “expedite leadership hiring” into a new layer of bureaucracy. A slew of consulting contracts will be issued, more staff will be hired and more technology purchased. According to the Mayor’s Budget Proposal for 2013-14, allocations for SFGH will rise by $225 million plus $17 million for LHH.
HMA admits that all this growth and integration “will be reducing the number of face-to-face encounters with patients,” adding that staff “must convince (patients) that changes are for them.” HMA’s “Communication Plan” also aims to “generate a groundswell of DPH staff support.” Its effectiveness will be gauged by staff Satisfaction Surveys, designed to measure “employee engagement” with the integration agenda. Unions will be persuaded that job changes are “better than layoffs.”
“Integration” struck Laguna Honda a decade ago when top LHH executives were replaced by managers bred at SFGH, after a staff revolt against the 2004 Flow Project. The next step, per HMA, is to merge Laguna Honda’s license with SFGH. Then, SFGH can pour chaos and costs into Laguna Honda without resistance. In fact, a “Joint Hospital Executive Council” is set to “facilitate integration” and “client flow.” HMA emphasizes that Laguna Honda’s “pressing needs are the integration of Rehabilitation and Psychiatry services with SFGH.” Amazingly, HMA admits that a “unique population feature” of SFGH is a “high incidence of behavioral issues.” No problem; “Moving the patients from your Behavioral Health Skilled Nursing Facility to Laguna Honda is a significant improvement from a reimbursement perspective.”
Reimbursement means that SFGH can charge the average patient $6,716/day until their illness is cured. Then payment stops. When patients cannot be quickly discharged home or to a nursing facility, they occupy “unpaid beds.” There’s a shortage of nursing home beds in the City. Since LHH charges an average of $968/day, there’s economic pressure to unload non-paying SFGH patients into LHH regardless of whether they benefit from the transfer.
One HMA report declares that: “Admission and continued stay at LHH is predicated on ongoing rehabilitation and restorative care; LHH not intended as an option for permanent housing.” In other words, long-term care is out. Paradoxically, an HMA marketing analysis envisions: “Laguna Honda will become another tool in market penetration…if seniors believe that access to Laguna Honda and other long-term care programs are assured…” There’s a problem. To increase flow from SFGH, Laguna Honda is cutting patient lengths of stay by 12% to accommodate an extra 140 referrals this year. So, the DPH is looking to “subcontract to private long-term care partners.”
Although LHH was rebuilt as a sanctuary for “Old Friends,” it’s becoming a colony for younger “hard to place” and non-paying SFGH patients. Elders in need of long-term care are burdens in the corporatized DPH marketplace. Ironically, Obamacare promotes patient choice, but Laguna Honda will only be a choice for patients referred by SFGH for short-term care.
The Department of Public Health (DPH), the City’s leviathan with 6,138 full-time positions and a $1.93 billion budget, is mating with the Affordable Care Act (ACA, Obamacare), the largest healthcare coverage program since Medicare and Medicaid in 1965. The strains and spawn of this coupling are depicted in a March 2014 Controller’s Office report titled Summary of Health Reform Readiness.
Enacted by Congress in 2010 and implemented this year, the ACA will provide health insurance for some 30 million Americans - and billions of public dollars for the commercial insurance industry. Reimbursement to hospitals, nursing homes, home care and hospice agencies will drop by $716 billion over 10 years. Instead of a single-payer system like Medicare, the ACA promises more-for-less in a corporate marketplace. While expanding MediCal coverage, the ACA mandates that individuals buy health insurance or pay tax penalties, provides subsidies to insurers, and requires businesses to cover their employees.
… DPH’s operating budget is expected to rise by 8% next year. To stay afloat, DPH would need 50% more than the $337 million General Fund bail-out provided in 2012-13. … Such alarming projections could be used to prop up SFGH at the expense of long-term care for elders…”
In order to control costs, Obamacare uses a “capitation system”: a fixed sum of money is provided for the care of each patient, regardless of the frequency or intensity of services. Currently, reimbursement is largely “fee for service” whereby payment is made for each service provided, with little incentive to reduce costs. Importantly, insured patients can choose where they want to receive their health care, thereby introducing competition.
As of January 2014, 56,000 of 84,000 uninsured San Franciscans have signed up. The big challenge for the DPH is to persuade these newly insured persons to choose DPH instead of private or non-profit providers. To do this, we are told that DPH must transform itself from the “provider of last resort” to a “provider of choice.” If patients opt to get care elsewhere, the DPH will lose money. Another challenge is to stem losses from serving a safety-net population with multiple medical and psycho-social ailments, once fee-for-service payments stop. To do this, DPH must recruit many more healthy and therefore low-cost patients. Also, it must better manage the rest - like the 5% who account for 50% of urgent/emergent care costs at San Francisco General Hospital (SFGH).
San Francisco anticipated Obamacare with its 2006 Health Care Security Ordinance that made 4,200 employers set aside $1.9 billion to cover health care expenses for 265,000 workers. And since 2007, Healthy San Francisco, a health care access program, has covered 116,000 persons who didn’t qualify for insurance programs. Despite these exploits, and its sizable resources, the DPH has outsourced expertise to adapt to Obamacare. Health Management Associates (HMA), a for-profit Michigan-based corporation, is getting $2.5 million to tutor DPH managers. We reviewed 615 pages of original HMA reports upon which the Controller’s 51 page Summary is based.
HMA principals have been embedded in DPH policy circles since being hired to salvage the notorious “Flow Project” of 2004. HMA advised against a 2006 Ballot Initiative aimed at preventing violent patients from being dumped into Laguna Honda Hospital (LHH). Asked to reform Laguna Honda’s medical services model, they recommended subordinating LHH under SFGH’s license. HMA previously collected some $700,000 as DPH consultants, and then paid then-DPH Director Mitch Katz $30,000 to work as an HMA consultant. No such cozy arrangement currently exists between HMA and DPH Director Barbara Garcia.
As in 2004, HMA and DPH want “a fully integrated delivery system” and “culture change” and this time, Obamacare is the excuse. Accordingly, in October 2013, DPH organized its San Francisco Health Network to enroll more people, speed patient flow from SFGH to LHH, rein in costs and become a provider of choice. As in 2004, this integration is largely driven by San Francisco General’s operating costs, which gobble up one-third of DPH’s annual General Fund subsidy, and more than 50% of DPH’s expenses. HMA warns: “SFGH’s ability to manage costs is imperative to the overall financial sustainability of the Network.” SFGH is too big to fail.
There’s more. Although DPH is considered a revenue-generating enterprise fund, it has run a deficit for years. And under Obamacare, DPH projects losing $131 million or 16% of its State and Federal safety-net dollars over the next 5 years. While revenues from the MediCal expansion may partially offset this loss, DPH’s operating budget is expected to rise by 8% next year. To stay afloat, DPH would need 50% more than the $337 million General Fund bail-out provided in 2012-13. That’s “an unsustainable scenario” per the Controller’s Report. Such alarming projections could be used to prop up SFGH at the expense of long-term care for elders – as we will explore next month.
In 2003, voters funded the Controller's Whistleblower Program (WBP), expecting that it would engage whistleblowers to root out fraud, waste and abuse. In response to criticism for shutting out whistleblowers, the WBP's 2012-13 Annual Report laid it out; "The Whistleblower Program does not act as an advocate for complainants in their disputes with city departments…"
Tips sent to the Whistleblower Program have fallen from 465 to 291 in the past 5 years. WBP Manager Steve Flaherty ... was "unable to determine any causality…" Perhaps the Program should look within, at how it treats whistleblowers.”
Unfortunately, reporting fraud invariably provokes "disputes" – and denials. And how do investigators tell whether tips are solid or figments of disputes? They check with implicated departments. If whistleblower claims are interpreted as "disputes" unworthy of engagement, the WBP risks acting as an advocate for respondents.
While shunning whistleblowers because "the program must conduct its investigations confidentially," the WBP closely collaborates with targeted City departments. Most complaints are referred back to them for investigation. Even in rare instances when the WBP independently conducts an investigation, department heads are fully apprised in a Confidential Memorandum that warns: "The information in this memorandum may not be discussed with or released to members of the public. "But the public does not retaliate; department managers do. Nothing in these memos reminds recipients that retaliation is prohibited. Although distributing copies of these memos is forbidden, the information they contain is shared with other managers.
The public is notified of substantiated complaints in the WBP's quarterly reports. However, complainants are told little more than their case is Closed– a slight that the 2010-11 Civil Grand Jury called "simply not welcoming or user friendly." Ominously, the WBP's 2012-13 Report withheld the number of retaliation claims filed with the Ethics Commission, after having reported 17 cases last year. Omitting retaliation claims makes it easier to ignore that none has ever been sustained.
The Annual Report also announced an "updated" online Complaint Form. The form is now so demanding that it repels tips. No complaint can be submitted without checking off: "I certify that all of the statements made in this complaint are true, complete and correct to the best of my knowledge. I understand that…the Controller may require that persons…swear to the truth of their statements by taking an oath administered by the Controller…under penalty of perjury"... Oblivious to whistleblower fears and their limited access to evidence, the WBP presumes they are scammers. Dozens of potential sources will be turned off by this bristling language.
Compare this hectoring with the way our Police Department (SFPD) engages tipsters. The preamble to the SFPD's Anonymous Tip Line states: "Crime prevention cannot be achieved by the police alone. Professional law enforcement officers must work hand-in-hand with the public…we depend heavily on your assistance…tip lines are provided for your use and convenience." Using this Tip Line is a breeze. To foster communication, there's a field for Investigative units…to text back and forth with the tipster. The SFPD also offers an Online Reporting System that requires more detailed entries. But unlike the Controller's Office, the SFPD doesn't force sources to swear they aren't liars before accepting their tips. Although false reports to the police can have serious consequences, the SFPD just welcomes tips without the fire and brimstone.
Why is the WBP complaint process so adversarial compared to the SFPD's, if both were set up to uncover wrongdoing? Well, complaints to the Controller point to government misconduct whereas tips to the Police report public misconduct. When tips about government wrongdoing are unwelcome, whistleblowers are deterred. And it works. Complaints to the WBP have fallen below 300 for the first time since 2006.
This decline prompted WBP Director, Tonia Lediju, to agree to a Complainant Satisfaction Survey at the 11/21/13 meeting of the Citizens' General Obligation Bond Oversight Committee (CGOBOC). Also announced was the launch of a Fraud Hotline Webinar Series to review best practices in the field. The one-sidedness of these teleconferences was revealed when a webinar lecturer opined about Satisfaction Surveys for hotline users, "Why don't you ask the prisoners why they don't like the Sheriff's treatment?" Programs that view whistleblowers as disgruntled losers should expect their tips to sink.
Tips sent to the Whistleblower Program have fallen from 465 to 291 in the past 5 years. WBP Manager Steve Flaherty examined external events, but was "unable to determine any causality…" Perhaps the Program should look within, at how it treats whistleblowers.
The largest generation in US history – the Baby Boomers – began turning 65 in 2011. According to the 2010 census, 110,000 (13.7%) of San Francisco's 805,000 residents were seniors. That number is expected to double over the next 20 years. Importantly, poverty rates for persons over 65 exceed the City average, and most will eventually need supportive services.
Although women comprise 49.3% of the City's residents, the majority of our seniors are women. As they age, women increasingly outnumber their male peers. In San Francisco, there were 63,000 women over age 65 compared to 48,000 men. Of these, 22,000 lived alone, twice the number of solo males. Among those 85 and older, women outnumber men by 2 to 1.
These demographics explain why, for decades, the majority of Laguna Honda Hospital residents have been elderly - and female. Although LHH served more young patients than other nursing homes, caring for elderly, disabled San Franciscans had long been its core mission. Accordingly, "Old Friends" became the emotional theme of the 1999 Proposition A campaign to rebuild the hospital. At the time, hospital records show that two-thirds of LHH residents were over 65, 52% were over 75 years of age – and 56% were women.
That changed abruptly with the notorious Flow Project of 2004-05. Laguna Honda was repurposed as a repository for non-paying SFGH patients, as well as a way-station in the Care not Cash "housing continuum". Suddenly, the Department of Public Health (DPH) introduced a new paradigm – the City's "neediest" were those who needed "psycho-social rehabilitation". Admissions from San Francisco General Hospital (SFGH) surged from 54% to 73%, flooding LHH with "hard-to-place" patients. For the first time in memory, women - and elders over 75 - became minorities at LHH. The percent of female residents plunged from 53% to 47% in 2 years.
Given the dramatic drop in elders and women served by Laguna Honda, what happens to "Old Friends" who can no longer care for themselves? Where do they go? Who checks whether the care they receive elsewhere is comparable to what the new $585 million Laguna Honda provides?”
The new population included younger, able-bodied men with aggressive behaviors and substance abuse problems that endangered others and required specialized services. They needed a highly-structured, policed environment, while LHH's elderly, physically disabled residents fared best in a home-like setting with more autonomy.
Although Mayor Gavin Newsom was forced to abort the Flow Project in 2005, the hospital's gender and age balance didn't return to its prior levels. Before the new building opened in December 2010, a revised Flow Project was launched.
For 2013, LHH reported that only 41% of the patients served were women – a record low. Notably, patients aged 65 or older are now a minority – an unprecedented 47%. Despite LHH's reporting inconsistencies and fudged data, this table outlines the demographic shifts;
*In 2013, LHH counted 1191 patients served during one year, instead of current inpatients.
Under CEO Mivic Hirose, and DPH Director Barbara Garcia, the new Flow Project favors transfers from SFGH, so other hospitals find it harder to place patients at Laguna Honda. Lifelong San Franciscans are being shipped to out-of-County nursing homes. Since SFGH serves a much lower percentage of elders than the 13.7% living in the City, the new LHH will likely serve fewer elders and women.
The infirmities of old age, including poverty, persist. The number of City nursing home beds has decreased. The DPH's own 2012 "Community Health Status Assessment" warns that; "…the population over age 75 will increase from 7% to 11% by 2030. The projected growth in San Francisco's aging population has implications on the need for more long-term care options…"
No matter. As Patrick Monette-Shaw reported in the June 2013 Westside Observer, LHH is bringing in 45 patients from San Francisco General's Mental Health Rehabilitation Facility. And in August 2013, LHH quietly deleted a long-standing safety measure from its Medical Staff Bylaws: 24-hour Sheriff's security services are no longer required when patients with a police-hold are admitted.
Given the dramatic drop in elders and women served by Laguna Honda, what happens to "Old Friends" who can no longer care for themselves? Where do they go? Who checks whether the care they receive elsewhere is comparable to what the new $585 million Laguna Honda provides?
Employee morale is a key driver of quality of care in hospitals. In April 2010, one year into the tenure of CEO Mivic Hirose, Laguna Honda Hospital (LHH) commissioned an Employee Satisfaction Survey. The results were dismal. Out of 1,350 surveys distributed, only 258 were returned. A response rate of 19% indicates apathy, mistrust, or fear of management reprisals.
One month before that survey, City employees had been rocked by mass layoff notices. Few LHH staffers were willing to convey criticism when their livelihoods were threatened. Having scrambled through administrative shake-ups, mission changes and altered plans, many felt unsettled before the December 2010 move into the new building.
The survey asked a series of questions to which staff could respond "Excellent", "Good", "Fair" or "Poor". Excellent and Good indicate satisfactory, while Fair and Poor show dissatisfaction.
Although 70% of responding staff recommended LHH for patient care, only 49% recommended working there. Just 46% were satisfied overall. Notably, a majority were dissatisfied with LHH Administration, their Supervisors, and with the hospital's response to job stress.
Not surprisingly, this Employee Satisfaction Survey, obtained via a public records request, was neither made public nor presented to the Health Commission. No remedial plan was announced and no follow-up survey was conducted. LHH did not renew its contract with the surveyor.
However, in July 2013, LHH hired the market research firm Corey, Canapary & Galanis (CC&G) to conduct a follow-up survey. In his contract proposal, VP Jon Canapary slyly promised, "We respond to the accountability and scrutiny public agencies must operate under with real-world solutions." CEO Hirose values spin, and for $11,200 can expect something more than straight data analysis. Unlike Laguna Honda's prior survey contractors, CC&G doesn't specialize in healthcare surveys. It does, however, have political polling experience, having assisted in the "Willie Brown for Mayor" campaign. Its motto is; "Ask the right questions, and you get the real answer."
…this Employee Satisfaction Survey, obtained via a public records request, was neither made public nor presented to the Health Commission. No remedial plan was announced and no follow-up survey was conducted.”
Four years after its first Employee Satisfaction Survey, LHH has had enough time to perk up staff morale. Layoff threats no longer depress hospital workers. They've had 3 years to settle into the new facility. With these situational changes, plus new, savvy surveyors who "ask the right questions," satisfaction scores are bound to improve – regardless of who's in charge.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital. Contact: DerekOnVanNess@aol.com
The scandal encircling the Georgia State Ethics Commission is a wake-up call for San Francisco*. Two top Ethics investigators were removed after inspecting Governor Nathan Deal's campaign finances. Ethics staffers were told to alter documents about the case, and met retaliation when they refused. Investigating wrongdoing can be as perilous as reporting it. Dodging tips about governmental wrongdoing can extend careers for staff and Commissioners alike.
Our own Ethics Commission (Ethics, EC) has steadfastly deterred and dismissed whistleblower complaints. Whatever triage system Ethics devised to manage its work-load, whistleblower tips moldered under the pile. Since 2004, Ethics Regulations have been serially amended to reduce risks and burdens for staff — by raising barriers for complainants.
Until reforms are implemented, justice is best served if whistleblowers obtain legal counsel, then expose misconduct publicly.”
One example is the handling of formal and informal complaints. Starting in 2006, Ethics decided to accept formal complaints only — "in writing and submitted on a form specifically provided by the Commission staff." That's posted in their How to File a Complaint guidelines. Further, formal complaints must identify "the provision(s) of law allegedly violated." Few tipsters have this legal knowledge. All other complaints, whether delivered in person, by phone, letter or e-mail are declared informal. And, we are warned, Ethics has "no obligation…to process or review informal complaints." They can be tossed. Even if complaints do reach the Factual Investigation stage, prospects are dim. There's no requirement to interview complainants — the gold standard for investigations. Instead, Ethics emphasizes an "interview of the respondent and any witnesses." The reason for this bias, as Director St. Croix admitted in 2009, is that respondents are more likely to provide "exculpatory information."
Empowering staffers at the expense of whistleblowers was a weird outcome of demands for more transparency and oversight by Commissioners Eileen Hansen and Joe Lynn in 2005. Because of confidentiality, they argued that; "the public has no assurances that staff is carrying out its mandate." In his July 2005 response, St. Croix agreed to publicly disclose dismissed and settled cases in Enforcement Summaries, and to categorize incoming complaints in his monthly Director's Report. However, St. Croix's July 2006 follow-up report, Investigations/Enforcement Review, reversed course. It lobbied for "streamlining the process" via more staff autonomy and less transparency - to ease the staff's workload! The Commission approved the plan 4 to 1 in August 2006, with Hansen dissenting and Lynn gone. Now, Ethics Regulations include goal #6; "Delegating to the Commission staffthe maximum discretion in the handling and resolution of complaints at staff level, while retaining oversight of staff activities." As explained in last month's Westside Observer, that oversight is illusory.
Given maximum discretion, staff explain How to File a Complaint on the Ethics website: "Complainants should be aware that the Ethics Commission's Regulations…provide that a person accused of a violation (the respondent) must be provided with a copy of the complaint."Reassuring? Not for whistleblowers. Plus it's disinformation. Ethics Regulations, Sec. XII.B.3, state that the Director "may provide a copy of the complaint to the respondent…if necessary to the conduct of the investigation." Importantly, the City Charter Appendix C3.699-13 requires Ethics to provide respondents with "a summary of the evidence" – not a "copy of the complaint." Big difference. A copy of a complaint can identify whistleblowers by the details given and the grammar used. Although the option of filing anonymously is offered, it comes with the off-putting proviso that Ethics staff are "not required to process or respond to anonymous complaints."
Equally inhospitable from the current Ethics brochure: Ethics "investigates complaints alleging retaliation to complaints filed with the Ethics Commission."Not so. When the Whistleblower Protection Ordinance was amended in February 2002 — as recommended by the Commission itself — Ethics took responsibility for investigating retaliation against whistleblowers who filed complaints within their own departments, as well as to the Controller, the City Attorney, the DA and the Ethics Commission. By wrongly shrinking Ethic's jurisdiction, the brochure deters retaliation complaints. Worse, Ethics staffers may be dismissing valid retaliation claims based on this misrepresentation of their duties. Maybe that's why Ethics averages just 18 investigations a year. For example, the Annual Report for 2010-11 tells us that "staff resolved 20 cases" and, "This number does not include the myriad of other cases…that are determined to not be within the jurisdiction of the Commission." By declaring most retaliation complaints out of bounds, they can be ignored or referred out — and thereby dismissed.
Another side-effect of maximum staff discretion is delayed investigations, as noted in the 2010-11 Civil Grand Jury report, San Francisco's Ethics Commission – The Sleeping Watchdog. Our complaints about tainted DPH contracts were referred, buried, exhumed, and then dismissed after 26 months. Lead Hazard Program whistleblower Rita O'Flynn (Westside Observer, May 2013) has also noted how slow-walking investigations into the statute of limitations can bar avenues for legal redress. Delays boost dismissals as complainants give up, witnesses forget, and documents are lost. After referring tips to the City or District Attorneys, St. Croix has waited up to 9 months – supposedly to avoid "duplicate law enforcement investigations." However, the passage of Proposition E in 2001 authorized Ethics to "investigate complaints before investigations by the City Attorney or District Attorney are concluded." Therefore, action by the DA or City Attorney does not prevent Ethics from investigating concurrently; political considerations may do so.
In sum, the Ethics Commission deters reporters of government wrongdoing. Until reforms are implemented, justice is best served if whistleblowers obtain legal counsel, then expose misconduct publicly.
We previously reviewed how the Ethics Commission (Ethics) “dismissed” whistleblowers, their tips, and retaliation complaints. But getting rid of whistleblower claims doesn’t stop more from rolling in, so deterrents serve to limit exposures of wrongdoing.
Commissioners are the first line of deterrence. Like a skilled courtier, Positive Resource Center CEO Brett Andrews gained an Ethics seat this June after promising the Board’s Rules Committee “to build on Commissioner Liu’s legacy.” Andrews’ adulation of said legacy was based on schmaltz rather than his own observations or Liu’s contributions. Though viewed as a phantom by Ethics watchdogs, Andrews portrayed himself as engaged. Upon resigning after just 2 years, a fawning Commissioner Dorothy Liu had showered thanks and praise on her Ethics colleagues. Their polite responses credited her with more virtues than she possessed. By reframing this flattery as legacy, Andrews offered a “go along to get along” ethos for proximity to power.
Renne labored like an elephant, and brought forth a mouse. After 6 months and 32 interviews, she issued a 5-part, 112-page “limited, preliminary review” that “did not find evidence” and could “offer no conclusions” about tainted contracts.”
When asked by Supervisor Malia Cohen to showcase his aptitude for managing controversies, Andrews shared a trifle: how he led his agency to move downtown despite staff concerns. No mention of the 3-year legal battle with his former Legal Director – and whistleblower – Jane Gelfand (SF Weekly May 22, ‘13). Since Ethics is charged with reviewing whistleblower retaliation claims, Andrews cast a pall over his candidacy by hiding his own whistleblower imbroglio. Yet, Supervisors Norman Yee, London Breed and Cohen selected Andrews over Hulda Garfolo, a knowledgeable, truth-telling Civil Grand Juror who had investigated both the Ethics Commission and the Whistleblower Program.
To safeguard public service, conflicts of interest must be disclosed and avoided. Accordingly, all Commissioners must provide a Statement of Economic Interests (SEI) to the Ethics Commission. Though installed on 6/18/13, Andrews needed nudging to file his required SEI – 4 months later. In response to our 10/14/13 Sunshine inquiry about his missing SEI, Ethics responded 2 days later: “Commissioner Andrews’ Statement of Economic Interests was not posted because he filed yesterday.” Watching will tell if Andrews’ community service and political savvy yields ethical, independent decision-making.
In February 2012, Paul Renne, husband of former City Attorney Louise Renne, was appointed to Ethics by DA George Gascon. Renne’s initial Statement of Economic Interests (SEI) showed millions invested in 63 corporate assets, income exceeding $200,000 from law firms - including the one his wife founded - plus a Golden Gateway Commons property that sold for $2.2 million in October. One year later, Renne’s SEI portfolio has bulked up from 11 to 14 pages, with 82 investments valued between $1 and $9 million. This world is far removed from 99% of whistleblowers. Despite an occasional populist stance, Renne identifies with the few who really know. He ended the contentious 9/23/13 Ethics meeting by dismissing public criticism of Ethics Director John St. Croix as “all unfounded…because it isn’t the way any of us feel who know what you’re really doing.”
Relevant too is Louise Renne’s analysis of the 2012 SF Housing Authority (SFHA) whistleblower scandal involving alleged contract-rigging, harassment and retaliation. After protesting mismanagement, SFHA attorney-whistleblowers Tim Larsen, Roger Crawford and Bill Ford were laid off. Two of them sued. In November 2012, Renne’s firm was commissioned by the SFHA to conduct an “independent investigation” as part of a 2-year contract for “As Needed Legal Services” for up to $195,000 yearly. According to the SFHA, as of late May 2013, her firm submitted 6 invoices totaling $174,560. For this payout, Renne labored like an elephant, and brought forth a mouse. After 6 months and 32 interviews, she issued a 5-part, 112-page “limited, preliminary review” that “did not find evidence” and could “offer no conclusions” about tainted contracts. How much would a full, final review cost? In contrast, an audit by the Board’s Budget Analyst cost $162,000 and found that contracts “were handled so poorly as to give an appearance of favoritism.” Renne also chose to “express no opinion about…unlawful discrimination, harassment and/or retaliation.” Just like Ethics investigations, hers found “insufficient evidence of retaliation.” Instead, she detected “discourteous and unprofessional conduct” and a single instance of “discriminatory conduct” by former SFHA Director Henry Alvarez. Having been black-balled by Louise Renne, the SFHA whistleblowers bypassed Commissioner Paul Renne et al, and took their retaliation claims directly to Superior Court.
Priorities also serve as deterrents. Initially, Ethics handled complaints on a first-come, first-served basis. Whistleblowers had a chance, even though campaign finances garnered more attention. Over time, Ethics acquired ever-increasing mandates. That’s why its resources steadily grew, from an operational budget of $157,000 with temp staffers in 1994, to $2.45 million and 18 positions in 2013. But all along, Ethics lamented its “insufficient resources.” Under-resourcing was nettlesome between 2003 and 2008 when Ben Rosenfield was the Mayor’s Budget Director. (In 2008, Rosenfield was appointed Controller and promptly cut 41% from his Whistleblower Program budget.) Several Commissioners had lobbied for more funds, to no avail. It took a 2004-05 Civil Grand Jury investigation, San Francisco Ethics Commission Budgeting and Staffing Issues, to wrangle an extra $326,000 from Rosenfield. By then, whistleblower cases were being buried. When whistleblowers arose among their staff, Ethics Directors Ginny Vida, Mabel Ng and St. Croix took it as insubordination. Fortunately, the Society of Professional Journalists gave Freedom of Information awards to Ethics whistleblowers: Joe Lynn in 2003, then Oliver Luby and Kevin de Liban in 2005.
Potential whistleblowers had gotten the message: stay away from Ethics.
As described in last month's WSO, the Ethics Commission (EC) has many ways of "dismissing" complaints, resulting in a 100% denial of Whistleblower Retaliation claims.
The City Charter requires that Ethics forward to the City and District Attorneys all complaints that appear to show a violation of Ethics laws. Similarly, Ethics can't even issue formal letters of advice without vetting by the DA and City Attorney. We can infer why whistleblower complaints are doomed by looking at the legal machinations that undermine Sunshine complaints.
In a 3/18/11 Bay Citizen story, Ethics Executive Director John St. Croix admitted that 14 of 27 Sunshine complaints "were dismissed based on advice from the City Attorney's Office…" The City Attorney has a duty to defend City officials. Since Sunshine complaints are all directed against City officials, complainants find themselves opposed by City Attorneys who coach Ethics staff. Fortunately, Ethics Regulations require the Director to send; "a monthly summary to the Commission of each complaint dismissed, including the reason for dismissal." Unfortunately, the Director and City Attorney calculate how little to share, because "such information shall comply with the confidentiality provisions of the Charter." Blunders and cover-ups are easily disguised in confidential summaries — especially bungled whistleblower investigations. Further, Commission oversight is illusory. A July 2006 Staff Report revealed that Commissioners rubber-stamped 90% of recommended dismissals. In September 2006, the Commission agreed to forego monthly reviews, and accepted a Quarterly Log of St. Croix's dismissals. In 2011, a Commissioner confided to the Grand Jury that, "the Commission should support the Executive Director in his decision to dismiss a case." Like Sunshine complaints, Whistleblower Retaliation claims fault City officials. That's why they're always dismissed. In government misconduct cases, Ethics becomes a front for the City Attorney's wangling.
Ethics Executive Director John St. Croix admitted that 14 of 27 Sunshine complaints "were dismissed based on advice from the City Attorney's Office…" The City Attorney has a duty to defend City officials. Since Sunshine complaints are all directed against City officials, complainants find themselves opposed by City Attorneys who coach Ethics staff.”
Ethics referrals to the District Attorney's Office offer little hope for whistleblowers. Our 2009 complaints about tainted Department of public Health contracts sat in the DA's Office for 9 months. After we complained, two Deputy DAs interrogated former Health Director Mitch Katz, then referred our case back to Ethics. After closing the case, the DA's Office wouldn't release any information about its findings. CitiReport's 3/8/12 article: Gascon: No Action on Ethics Sunshine Referrals described similar disregard with seven Sunshine complaints that Ethics referred to the DA from 2009 through 2011. In each case, Ethics had asked the DA "whether your office will pursue this matter." The Charter requires a response "in writing" within 10 days. Neither the DA nor Ethics could provide records of a response. Apparently, Ethics referrals to the DA are also D.O.A. – whenever citizens find fault with City officials.
The EC's drive to deny complaints also leaps from a 6/5/12 report by the Board's Budget and Legislative Analyst. Harvey Rose compared the enforcement practices of the San Francisco and Los Angeles Ethics Commissions. Here, a whopping 76% of 137 complaints were dismissed, versus just 19% of 354 in L.A. Amazed by this 4-fold discrepancy, Rose dawdled, "…more research could be done to explain the differences." No kidding. So in December 2012, we inquired of Ethics Deputy Director Mabel Ng, who attributed her higher dismissal rate to not screening complaints until "the last year or so." A 5/23/13 Staff Report elaborates, S.F. "historically initiated a formal complaint prior to conducting a preliminary review," whereas L.A. conducts a preliminary review "prior to an allegation becoming a formal complaint." If so, then L.A., with 10-times our population, must be junking most of its tips to achieve a dismissal rate 4 times lower than S.F.'s. When we asked L.A. Ethics investigator David Tristan, he denied that most complaints were written off. The SF Staff Report adds that "since 2011 staff has conducted a much more extensive preliminary review" - similar to L.A.'s system - to ensure that only credible formal complaints are "brought forward." However, Enforcement Summaries in "the last year or so" (9/12/11 to 9/24/12) still showed a 74% dismissal rate.
Our Ethics Regulations state that the Director "may dismiss the complaint if the allegations do not warrant further action." Most complaints – including retaliation complaints – are euthanized under this "preliminary review." Implementing L.A.'s "much more extensive preliminary review" - prior to investigations – will deepen the shade because fewer complaints will be investigated, and only investigated cases are publicly recorded. Will screened-out complaints be buried? There's no provision for discarding complaints, though it's been done. To manage a backlog of 45 complaints in 2004, St. Croix tossed an undisclosed number of "non-viable" cases. The 2005 Annual Report portrayed the maneuver as "closing investigations that are unlikely to be resolved."
Occasionally, the Director opens a "formal investigation." This route usually ends in dismissal too. Customarily, there's "not probable cause to believe" that any violation occurred. Then, the dismissal recommendation goes to the Commissioners. Before 2011, dismissals were automatically endorsed – unless two Commissioners wanted a Closed Session review. After the Grand Jury's lashing report, Ethics lowered the review threshold to one Commissioner's request. Alarmed by an "abdication of oversight responsibilities," the Jury also urged Commissioners to "vote on investigations recommended for dismissal." They refused. By staying a course that nullifies whistleblowers, Ethics has devolved from favoring respondents, to suppressing complainants, to abetting reprisals.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DpH wrongdoing. Contact: DerekOnVanNess@aol.com
T he City Charter directs the Ethics Commission (EC) to investigate Whistleblower Retaliation claims. Since June 1995, all have been Dead On Arrival. Diagnosing why they are dismissed is hampered by "confidentiality"; however, the notion that 100% are invalid is implausible. Like others, our retaliation complaints were dismissed, and then validated in litigation, resulting in a $750,000 settlement and mandatory training in Whistleblower Rights for Laguna Honda Hospital executives. Most likely, Ethics rejects Whistleblower Retaliation claims automatically or intentionally. We can infer how it's done by dissecting other complaint dismissals.
Such was the "culture of failure" described by the late Joe Lynn, a 5-year Ethics Officer who then served as Commissioner from 2003-2006 ... Lynn begins with "overpowering evidence of professional incompetence" among senior staff, and ends with incurious Commissioners who "get spoon-fed by staff," and a City Hall that was OK with it”
Some complaints are simply covered up. In an 11/4/08 SF Chronicle article titled; Follow the Money, former Ethics officer and whistleblower Oliver Luby recounted that when he discovered a money-laundering scheme involving City College officials in 2005, Ethics Executive Director John St. Croix instructed him to keep quiet. After the SF Chronicle exposed the scandal 18 months later, St. Croix told the SF Bay Guardian; "I don't know who dropped the ball. But at the time, we had less staff and there were a lot of things…we weren't doing." Although the College Chancellor and a deputy were convicted of illegal diversion of $150,000 in public funds, Luby was forced out of his job. His 10/2/11 CitiReport article; Ethics Case Study in Scandal: City College Money Laundering details the cover-up.
Another way to bury complaints is to copy them to those accused. That's how Ethics handled whistleblower tips from 1995 until perhaps mid-2008. In a July 2006 memo, St. Croix admitted: "Prior to a few years ago, whenever a complaint was filed, staff would send a copy of the complaint to the Respondent." Two years later, on 8/7/08, the practice officially halted when the Board of Supervisors amended the Whistleblower Protection Ordinance to prevent disclosures of source identities. Until then, as CitiReport editor Larry Bush told the Board on 9/15/08; "…any employee who blew the whistle… immediately had their name turned over to their Department by the Ethics Commission." Historically, 43% of all Ethics complaints were referred back to implicated departments, or to other agencies like the Civil Service Commission and Human Resources. Nowadays, the numbers are withheld. These referred complaints are considered dismissed. And, if Ethics doesn't investigate them, their outcomes aren't seen in published Enforcement Summaries. Such invisible, untracked referrals multiply opportunities for white-washes and reprisals.
A sure-fire way to neutralize retaliation complaints is to refer them to Human Resources. When the Board of Supervisors drafted the Expanded Protections for Whistleblowers Ordinance in 2002, it addressed retaliation as follows; "The Ethics Commission may refer matters to the Department of Human Resources with a recommendation concerning reinstatement, restitution and discipline." Ominously, those crucial last 5 words were deleted when Ordinance 29-02 passed. Instead of an independent Ethics review, cases are slipped to an agency that tolerates managerial reprisals.
Inept investigations cannot substantiate wrongdoing, so complaints get dismissed by default. Such was the "culture of failure" described by the late Joe Lynn, a 5-year Ethics Officer who then served as Commissioner from 2003-2006. In an August 2007 Fog City Journal series titled; They're Back – Ethics Resumes Meltdowns, Lynn begins with "overpowering evidence of professional incompetence" among senior staff, and ends with incurious Commissioners who "get spoon-fed by staff." Complaint denials resulted from staff's lack of investigative skills, their turning down training offers, salaries that didn't draw good investigators, and a City Hall that was OK with it. In his 2/12/09 Bay Guardian piece, Watchdog Calls for Major Reform of Ethics Commission, Lynn saw no improvement. Little has changed. Without capable sleuths, reporting retaliation is futile.
Sham investigations also ensure dismissals. For example, willful violations of the Sunshine Ordinance are referred by the Sunshine Ordinance Task Force (SOTF) to Ethics for enforcement. These have been reflexively denied since 2004 when St. Croix was hired. In a 5/7/09 Fog City Journal expose, Ethics Commission Airs its Dirty Laundry, Lynn announced, "We now understand why the Ethics Commission has dismissed each of the Task Force's 14 referrals." He provides a video wherein St. Croix admits to ignoring complainants during investigations because, "There's not a lot of exculpatory information that's involved in talking to complainants...it's generally the respondent that has to provide the information…" Interviews were reserved for accused officials and City Attorneys representing implicated Departments. SOTF members and their audio-taped Hearings were disregarded. Warranted investigations were dropped to pursue vindictive ones, belying St. Croix's "old canard of funding problems as a justification for his procedures." In sum, Ethics investigations "uncover willful violations only if the respondent decides to confess." This evidentiary standard also dooms Whistleblower Retaliation claims.
While the Sunshine Ordinance promotes public access to government records and meetings, St. Croix wanted records of Sunshine investigations kept secret. In October 2009, retired lawyer Allen Grossman successfully sued Ethics to release files on 14 dismissed Sunshine complaints. Grossman found "very little in the files by way of analysis and investigation" and some "specious reasons for dismissal." Afterwards, St. Croix's dismissals continued – albeit with shrewder, more detailed and oppositional analyses. Alarmed by ongoing denials of 18 consecutive Sunshine complaints, the 2010-11 Civil Grand Jury investigated. In San Francisco's Ethics Commission – The Sleeping Watchdog, it reported; "The Ethics Commissioners have relinquished their authority to the Executive Director concerning his recommendations for dismissal." Notoriously, Ethics dismissed 33 of 34 Sunshine complaints between October 2004 and October 2012, a record exceeded only by the 100% denial of retaliation claims.
Next month, we'll examine other ways whistleblower complaints are dismissed by Ethics, including the role of the City and District Attorneys.
Dr. Maria Rivero and Dr. Derek Kerr, as senior physicians at Laguna Honda Hospital exposed wrongdoing by the DPH. Contact: DerekOnVanNess@aol.com
On July 30, 1778, while at war against imperial Tyranny, the Continental Congress empowered whistleblowers to protect the new Republic; “Resolved, That it is the duty of all persons in the service of the United States, as well as all other the inhabitants thereof, to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.”
The genesis of our first Whistleblower Protection Act was a Revolutionary War battle in Rhode Island, aboard the US Navy warship Warren. There, ten whistleblowers – Navy and Marine officers – planned to expose the incompetence, misconduct and war crimes of Navy Commander-in-Chief Commodore Esek Hopkins. Their mission was as perilous as Hopkins was formidable. Suffocating under British occupation, the Continental Congress had recruited Hopkins to relieve General George Washington from the “plague, trouble and vexation” of unruly naval crews. Owner of a large merchant fleet, Hopkins had reaped a fortune privateering during the French and Indian War. His brother Stephen governed Rhode Island, and signed the Declaration of Independence. His son John was captain of the Warren. His flagship flew his personal standard - a rattlesnake coiled to strike, with the motto, Don’t Tread on Me.
…thirsting for revenge, upon his removal from office in January 1778, Hopkins sued all ten whistleblowers for “criminal libel,” demanding 10,000 pounds in damages. Lt. Marven and midshipman Shaw were jailed without means for legal representation.”
The imperious Commodore was both brash and indolent. Instructed by Congress to sail “directly to Chesapeak Bay in Virginia” and attack the British fleet, he sailed to the Bahamas instead. There, he successfully raided a British arms depot, but later allowed enemy frigates to escape unchallenged from U.S. waters. Raring to fight, his officers protested being anchored “in a total state of inactivity for Several Months…therein they could not Serve their Country in its defence”. Hopkins struggled to recruit sailors, who made better money with privateers than the Navy. So he enslaved British prisoners, giving them a choice to man his fleet - or be “placed in irons” and starved. His officers deplored that he “treated prisoners in the most inhuman & barbarous manner.”
On February 19, 1777, just seven months after the Declaration of Independence, the ten dissidents signed a Whistleblower Complaint: “We are ready to hazard everything that is dearest, and if necessary sacrifice our lives for the welfare of our country…We are personally well acquainted with the real character and conduct of our commander commodore Hopkins…we (are)… sincerely and humbly petitioning the honorable Marine committee that they would enquire into his character and conduct for we suppose…he has been guilty of such crimes as render him quite unfit for the publick department he now occupies...” Marine Captain John Grannis was picked to go AWOL and carry their petition from Rhode Island to Congress in Philadelphia.
At the time, there was no First Amendment to uphold freedom of speech. Whistleblower protections didn’t exist. For a country at war, insubordination was threatening. Yet, complainant Grannis was treated respectfully. He was interviewed, not arrested. A Congressional investigation was conducted without secrecy, and published:
“Have you a personal Acquaintance with Esek Hopkins, Esq?”
A:“Yes, I have had a personal Acquaintance with him since I came on board the Ship.”
Q: “Did you ever hear him say any Thing disrespectful of the Congress of the United States…?”
A:“I have heard him at different Times…speak disrespectfully of the Congress…that they were a Sett or Parcel of Men who did not understand their Business…that they were a Parcel of Lawyers Clerks, that if their Measures were followed the Country would be ruined…”
Q:“Do you know any Thing about his Treatment of Prisoners?”
A:“I was on board the Frigate Providence when…Twenty Prisoners…were…asked…whether they would do Ships Duty? They answered No….Orders from the Commodore (were) to put them in Irons, to keep them on Two Thirds Allowance…some prisoners…were forced to do Ship’s Duty by Commodore Hopkins Orders, and he refused to exchange them when a Cartel was settled and other prisoners were exchanged, but don’t know that it was their Turn. The Reason he assigned for not exchanging them was, that he wanted to have them enlist on board the Frigate.”
Q:“Commodore Hopkins is charged with being a Hindrance to the proper Manning of the Fleet. What Circumstances do you know relative to this Charge?”
A:“I think him unfit for command…his Conversation is at Times so wild and orders so unsteady that I have sometimes thought he was not in his senses…it is generally feared that his Commands would be so imprudent that Ships would be foolishly lost…The Character that Commodore Hopkins bore was a great Hindrance to me in getting Recruits.”
Q: “Had you Liberty from Commodore Hopkins or Captain Hopkins to leave the Frigate…?”
A:“No. I came to Philadelphia at the Request of the Officers who signed the Petition against Commodore Hopkins, and from a Zeal for the American Cause.”
Although notables like John Adams supported Hopkins, the whistleblowers were not demonized as disloyal or arrogant. Accordingly, on March 26, 1777, “Congress took into consideration the paper containing charges and complaints against Commodore Hopkins; Whereupon, Resolved, That Esek Hopkins be immediately, and he hereby is suspended from his command in the American Navy.”
Outraged by the “unjust and false complaints” filed by his subordinates, Hopkins retaliated. He court-martialed the petition’s “prime mover,” a Lieutenant Marven, an associate of Thomas Paine, who himself fell afoul of Congress for leaking that France was supporting the Revolution. Interrogated by both Hopkins, father and son, Marven was found guilty of signing “scurrilous papers against his Commander-in-Chief.” Expelled from the Navy, Lt. Marven became the first casualty in a 235-year epidemic of retaliatory firings. Still thirsting for revenge, upon his removal from office in January 1778, Hopkins sued all ten whistleblowers for “criminal libel,” demanding 10,000 pounds in damages. Lt. Marven and midshipman Shaw were jailed without means for legal representation. They wrote “to humbly implore the intervention of Congress” after being “arrested for doing what they then believed and still believe was nothing but their duty.” Their appeal was read before Congress on July 23rd and another investigation ensued.
On July 30, 1778, the Continental Congress passed America’s first Whistleblower Protection Act, cited above. The Founding Fathers in Congress understood the dangers of retaliation, and criminalizing whistleblowers. Despite a wartime budget crisis, and National Security concerns, they noted that the whistleblowers had protested “while in the service of the United States.” Therefore, Congress “Resolved, That the reasonable expences of defending the said suit be defrayed by the United States.” Further, the whistleblowers were furnished, without having to ask, the Commodore’s personnel file, and all records of “the proceedings of Congress upon the complaint of the petitioners against Esek Hopkins, Esq.” Armed with funds for attorneys and depositions, plus investigative files including “letters from President John Hancock and others,” they were vindicated by a Jury. Hopkins was ordered to pay Court costs. In May 1779, Congress disbursed $1,418 for the whistleblowers’ legal fees, “to be paid to Mr. Sam. Adams.” Lt. Marven was granted his Navy pension, despite his court-martial for being a detractor. A decade later, trusting that “Freedom of Speech” and the “Right to Petition” would protect the people, the Founders enshrined these principles in the First Amendment of our Constitution.
Acknowledgement: Research by Stephen M. Kohn, Esq., Director of the National Whistleblower Center (www.whistleblowers.org) inspired this article. see: whistleblowers.org/index.php?option=com_content&task=view&id=1251
A grim reality of “City Family” life is that 100% of whistleblower retaliation claims are dismissed by our Ethics Commission (Ethics; EC). The City’s Whistleblower Protection Ordinance (Article IV of the Campaign & Governmental Conduct Code) proclaims it “protects all City officers and employees from retaliation.” Since laws don’t enforce themselves, Ethics was given the job. Retaliation investigations started in June 1995. Since then, none have been sustained. The exact total is locked away. Nevertheless, a substantiation rate of zero for 18 years is statistically suspect. Whistleblower studies show that retaliation is common, with rates ranging from 22% to 90%. But in San Francisco, whistleblowers are desaparecidos and the retaliation rate is always zero. The failure to enforce the Whistleblower Ordinance makes it meaningless. It also makes it deceptive — a trap for trusting tipsters. Worse, non-enforcement forces whistleblowers to sue the City.
The roots of deception reach back to 1993 when the EC was sold to voters as a means to clean up our City government, but its architects inserted controls to protect the interests of politicians, lobbyists and City officials. For example, the original “Regulations for Investigations and Enforcement” restrained the Executive Director from overzealous prosecutions. Instead of receiving designated funding, Ethics must plead with City Hall for its annual budget. Its five Commissioners are appointed by the Mayor, Board of Supervisors, District and City Attorneys, and since 2001, the Assessor. Fawning candidates prevail. In April 2011, the Board had to fill the EC seat that “broadly represents the general public.” Dorothy Liu, an employment attorney with a large firm that represents City management, clinched the appointment by promising; “I would respect the integrity of the Board, for certain. I would be open and willing to talk to all of you about issues that need to be addressed.” Predictably, complaints that touch officials who appoint its Commissioners and approve its budget go nowhere.
The failure to enforce the Whistleblower Ordinance makes it meaningless. It also makes it deceptive — a trap for trusting tipsters. Worse, non-enforcement forces whistleblowers to sue the City.”
In a world of complainants and respondents, Ethics empathizes with the latter. Goal #3 in its Regulations is, “Protecting the privacy rights of those accused of ethics violations…” There’s no goal to protect complainants, just lip-service. At an April 2005 meeting, Executive Director John St. Croix emphasized; “confidentiality is an important issue because investigations and enforcement matters impact the lives and livelihoods of respondents.” St. Croix publicly lauds the City Attorney, whose duty is to defend City officials, as the “higher authority” in guiding Ethics decisions. Citizens who criticize his habitual dismissal of ethics complaints are labeled “believers in ‘gotcha government.” When Ethics adjudicated a Sunshine complaint against St. Croix in October 2012, citizens warned the Commissioners about conflicts of interests. Unaware that bias is ubiquitous and often sub-conscious, Commissioner Jamienne Studley, the City Attorney’s appointee, claimed immunity because; “we act with regard to City officials all the time where the situation is sensitive.” Studley explained that she examines both sides of any issue, and suffers no conflict - if the City Attorney says so - and “as long as…we feel that we have an open mind.” This respondent bias makes it easier to deny whistleblower claims. That’s one reason retaliation persists.
Building upon respondent bias, Ethics has rendered whistleblowers, and retaliation, invisible. This process started around 2004 when the Whistleblower Hotline was transferred to the Controller’s Office, and St. Croix was installed. Before then, whistleblower complaints and retaliation were openly addressed. For example, in 2001 Ethics proposed an Article IV amendment to also protect, “employees who are subject to retaliation…when they report improper or unethical conduct to their departments.” Whistleblower retaliation complaints were tallied. The percentage of whistleblower complaints was reported until 2002, and amounted to 36% - about 10 tips yearly. In late 2003, the whistleblower designation vanished from Annual Reports, and all tips were simply called complaints. Though solely responsible for adjudicating claims of whistleblower retaliation, and required to annually report types of misconduct, Ethics purged this category from its Annual Reports. Whistleblowers regained a glint of visibility in January 2006 when St. Croix introduced six categories of complaints in his monthly Director’s Report. “Whistleblower” was one of them. But the next month, it was gone, never to return.
The opacity spread even farther, in defiance of Article IV that requires Ethics to annually report: (a) “the number of complaints received”, (b)” the type of conduct complained about”, and (c) “the number of referrals…” Starting in 2004, the number of referrals to other agencies disappeared, though they had amounted to almost half of all tips. Retaliation as a “type of conduct” had been quashed. By 2005, Annual Reports deleted the count of complaints received. These still appeared in the Director’s Monthly Reports until August 2011, when the number of new complaints was replaced by the sum of pending investigations.
Once invisible, whistleblower retaliation complaints are easily buried. Rarely has Ethics provided numbers, and they don’t add up. Meeting minutes for December 2001 show that 7 whistleblower retaliation complaints had been reviewed since June 1995. That’s about one a year. Ten years later, in September 2011, St. Croix testified before CGOBOC (the oversight body for the Controller’s Whistleblower Program) that Ethics had received; “less than 20 in the 16 years we’ve been in business.” Again, one a year. He added, “When investigated, some were found not to have merit. Others could not be proven.” In other words, all were rejected. It’s intriguing, however, that among the 160 investigations listed in Ethics “Enforcement Summaries” between October 2004 and April 2013, only 2 mention retaliation. That’s just 2 in 8.5 years – a lot less than one-a-year as St. Croix implied. What happened to the others?
Clues rolled in after we protested the City’s failure to monitor whistleblower retaliation. In October 2011, Ethics agreed to report outcomes of retaliation cases to the Controller’s Whistleblower Program. Suddenly, the numbers zoomed upward. The Whistleblower Program’s 2011-12 Annual Report shows that Ethics reviewed 17 retaliation cases over 9 months. None were sustained. Amazingly, however, Ethics was now reporting 2 retaliation claims per month, instead of one per year. No explanation for this startling 20-fold increase – despite our inquiries. Only one case was investigated and noted in Ethics Enforcement Summaries for 2011-12. The other 16 were “dismissed after preliminary review.”
At the November 2012 CGOBOC meeting, Rebecca Rhine strained to downplay this surge in retaliation complaints as being;”…retaliation for any number of other activities, but not claims of retaliation for being a whistleblower.” Since the EC’s jurisdiction covers whistleblower retaliation complaints, and since the 17 retaliation cases were reported to the Whistleblower Program, why would they be anything other than whistleblower claims? Besides, “retaliation” is defined as adverse employment actions for engaging in legally protected activities – most of which involve whistle-blowing about misconduct. The spike in retaliation claims, and their relentless dismissals, must be explained.
When 71% of voters passed Proposition C in November 2003, the Controller became City Services Auditor (CSA) and took over the Whistleblower Program (SFWP). Oversight of these functions was assigned to the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). Last month, we examined some constraints placed upon CGOBOC’s mission. Here, we review the Committee’s own laxity in overseeing the Whistleblower Program.
Since 2004, CGOBOC has struggled to keep up with a slew of reports about City services, plus those from Bond Projects. Still, they stuck to quarterly meetings, squeezing in an extra one yearly to plough through the work. Only after an August 2011 scolding by civic activist Nancy Wuerfel did they vote for 6 meetings annually.
Lapses in oversight of the Whistleblower Program came to light during May 2010 media coverage of whistleblower tips, and retaliation, related to Laguna Honda’s Patient Gift Fund scandal. So in July 2010, CGOBOC devised a 3-member “Standing Committee on Audit Review” to better oversee the Whistleblower Program and CSA projects. But the 2010-11 Civil Grand Jury report; Whistling in the Dark – the San Francisco Whistleblower Program, faulted its dawdling 7 years before getting it organized. The Grand Jury characterized their oversight model as “weak” because it was dependent upon the agency it monitored, then concluded; “Clearly, CGOBOC is not an effective oversight body.” Further, it can be a stepping-stone to political office. Political ambitions can skew oversight. Both previous Chairs campaigned for Supervisor while serving the Committee.
In the past 6 months, taxpayers forfeited over $1.76 million to settle 3 whistleblower retaliation lawsuits. Why pay, when we have a Whistleblower Program, a Whistleblower Protection Ordinance, and an Ethics Commission that dismisses every retaliation complaint?”
Disinterest in whistle-blowing also impaired the Committee’s oversight. This is apparent from its 9-page Annual Reports. In the five Reports between 2003 and 2007, their role with the SFWP is covered in one sentence! For most of 2007, they forgot to assign a liaison to work with the program. The Annual Reports from 2008 through 2011 cover its work with the SFWP in one short paragraph, amounting to 2% of the text. Meeting minutes also reflect disengagement. In the 8 years between July 2004 and June 2012, it met 36 times. Ten of those meetings included briefings from the SFWP Director. But in only 3 did Committee members make comments worthy of entering the minutes. Two of these 3 discussions came after we criticized the Whistleblower Program.
Like Yin and Yang, CGOBOC’s disregard of the Whistleblower Program dove-tailed with the Program’s withholding of information from it. A tolerance for data-hoarding is most obvious in a 3-year period from 2008 through 2010 when the Committee accepted just two formal presentations by SFWP Directors. Without explanation – or opposition - the SFWP cut public reports from two to one a year in 2009, thereby reducing oversight opportunities by 50%. However, in a rare show of engagement in January 2009, Committee member Robert Muscat challenged the “mild” cases in the SFWP Annual Report, compared to “…all the kinds of activities in the City worthy of reporting and investigating.” The Committee then ordered a “more comprehensive and substantive list of complaints – and the actions taken.”
In response, a special Whistleblower report was presented in April 2009, with information never before disclosed. Of 414 complaints received in 2008, 24% had come through the 311 Customer Service Center, and 55% through the Whistleblower website. Only 13% of all complaints were substantiated. Only 42% were investigated. City departments bearing substantiated complaints were named: Public Health (16%), Recreation & Parks (11%), Public Works (11%), Parking & Traffic (9%). This degree of transparency wasn’t pursued by Committee. So, the SFWP stopped providing it. Although the Grand Jury’s activity pushed for more frequent and detailed reports, CGOBOC’s inertia allowed spotty and airy content. Vigilance had waned after Muscat’s 2009 protest. In a November 2012 replay, Jonathan Alloy panned the Whistleblower Program’s penchant for presenting pablum while excluding exhibits with information “more relevant to this Committee”.
In his July 2011 response to the Grand Jury, Controller Ben Rosenfield wrote: “an official liaison from the Citizens’ Audit Review Board…regularly receives updates and provides feedback on overall program metrics, reviews the program’s policies and procedures, and provides feedback to program staff on individual cases.” Really? Why isn’t any of this recorded in Committee minutes or Annual Reports? Notably, Rosenfield’s claim clashes with the April 2011 announcement by then-Chair, Abraham Simmons: “As you know, the Liaison has never been asked to do a review of the Program itself. This is the first time we undertook to do that.”
In her October 2011 reply to the Grand Jury, past-Chair Thea Selby defended the Committee’s oversight; “We have discussed the Whistleblower Program at over half the meetings I have attended in the last year and a half…” However, Selby had been a member since July 2009 - for 2 years and 3 months – not one and a half years. Committee agendas during her first year show just one item about the Whistleblower Program – in July 2010. That item was; “Creation of a subcommittee to facilitate review of whistleblower complaints.” That decision came after KGO-TV’s coverage of Laguna Honda’s Gift Fund abuse. Subsequently, every discussion about the SFWP was triggered by public complaints, media coverage, or Grand Jury criticisms.
CGOBOC members have generally been open to public comments, but hesitant to act, even in overseeing bonds. Since 2002, the Committee has amassed $1,080,865 to audit bond expenditures. This pile of money sat unused for ten years, according to its 2011-12 Annual Report. No independent auditors were hired. Similarly, no outside consultants were asked to assess the Whistleblower Program, although there are ways to get pro bono help. For example, its Bylaws allow for a “Special Subcommittee” composed of: “members of the Committee and/or the public.” After 8 years, no public experts have been recruited.
The Charter empowers the Committee to “recommend departments in need of comprehensive audit.” But it hasn’t even recommended a whistleblower satisfaction survey. In the past 6 months, taxpayers forfeited over $1.76 million to settle 3 whistleblower retaliation lawsuits. Why pay, when we have a Whistleblower Program, a Whistleblower Protection Ordinance, and an Ethics Commission that dismisses every retaliation complaint? CGOBOC must reclaim its mission and recommend an audit.
Given human nature, oversight is needed to keep decision-makers accountable, and to protect public interests. Article IV, Sec.4.102 of the City Charter constrains oversight bodies to work “solely through the department head” to prevent political interference. Still, oversight succeeds when it is knowledgeable, independent, and committed to public service. Surprisingly, oversight of the SF Controller’s Whistleblower Program (SFWP) was thrust upon the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). This happened when Proposition C of November 2003 authorized the Controller to act as City Services Auditor —and to run the Whistleblower Program.
…these new oversight tasks were bewildering and unwelcome. And, they came with no training, no budget and no enforcement powers. Although CGOBOC has amassed a $1.1 million budget … this money must be used to audit bonds, not the SF Whistleblower Program.”
CGOBOC itself had arisen from Proposition F in March 2002 in reaction to Laguna Honda Hospital’s over-budget, under-scope and over-time replacement bond project. The City wanted independent citizen oversight of City bond expenses. and to make sure money was spent as voters intended. But these bond-related duties were far removed from City services and whistleblowers. Nevertheless, the Charter amendment had CGOBOC: (a) function as an independent Citizens’ Audit Review Board to advise the Controller/City Services Auditor; (b) recommend departments in need of comprehensive audit; and (c) review citizen and employee complaints received through the whistleblower /complaint hotline…and the Controller’s disposition of those complaints.
Judging from CGOBOC meeting minutes, these new oversight tasks were bewildering and unwelcome. And, they came with no training, no budget and no enforcement powers. Although CGOBOC has amassed a $1.1 million budget garnered from 0.1% of bond proceeds, this money must be used to audit bonds, not the SF Whistleblower Program. While Prop F dictated that the Board of Supervisors would provide “administrative assistance” to CGOBOC, somehow all of its aid came from the Controller. For example, its Committee Assistant is the Controller’s own executive secretary. Though CGOBOC can recruit outside experts, the vetting and funding comes from the Controller. Oversight of the SFWP is limited to asking questions and hearing public comments.
At the September 2003 CGOBOC meeting, then-Controller Ed Harrington explained how Prop C would affect Committee members; “one major difference in work-load between the current bond-related responsibilities and the advisory role to the Controller would be that all reports would be coming from one source - the Controller.” Harrington added; “The purpose of an advisory committee is to have civilian oversight without taking away the independence of the Controller.” This jumbling of “oversight” and “advisory” functions allows the Whistleblower Program to pretend it has oversight, while CGOBOC ducks oversight by pointing to its advisory status.
Claiming he was not consulted when CGOBOC was picked to oversee the Whistleblower Program, Harrington explained; “the Board did not want to create another advisory committee, and this Committee has the representation that the Board wanted.” Apparently, the Board wanted “representation” rather than expertise. Of CGOBOC’s nine members, three are appointed by the Board, three by the Mayor, two by the Controller, and one by the Civil Grand Jury. But only the Controller’s appointees must have expertise – one in construction management, the other in “auditing government financial statements” – both irrelevant to whistleblower programs.
How could CGOBOC meet its mandate as an independent Review Board if it relied on the Controller for all its information and resources? At the May 2004 meeting, Harrington told Committee members that: “it would be up to them to decide how much they wanted to be involved.” That was the extent of CGOBOC’s independence. Its role was described as; “assisting the City Services Auditor by looking at the data and determining if the information is useful, providing public hearing for audit reports, and accompanying the auditors on inspections if the members so choose.” Compared to CGOBOC’s Charter mandate, this guidance cropped its oversight. The secrecy imposed on the Whistleblower Program further limited CGOBOC’s oversight, and advice.
Meeting minutes from 2004 through 2012 show CGOBOC members passively receiving information from SFWP Directors. Focused on City bonds, and meeting quarterly for two-year terms, members hardly noticed when data about the SFWP was withheld. In January 2005, over a year after the passage of Prop C, CGOBOC finally chose two members to serve as “Liaisons” to the Whistleblower Program. But minutes of the April 2006 meeting show how this oversight mechanism was hobbled; “…the City Attorney’s Office noted that two members of the Committee have volunteered to meet with staff of the Whistleblower Program, monitor its progress and report back to the Committee …the City Attorney’s Office suggests that only one member interface with staff rather than two members…”. Working solo, the Liaison couldn’t confer with anyone, other than the SFWP Director, for the next 5 years. During that time, the Liaison presented only one substantive report about the SFWP, in April 2005. CGOBOC’s constraints and the City Attorney’s meddling lasted until late 2010. That’s when the Laguna Honda Gift Fund scandal and the Civil Grand Jury investigation spurred a show of diligence and responsiveness. After we protested the solitary Liaison arrangement, CGOBOC restored a second Liaison, Regina Callan, in August 2011.
By then it was too late. John Madden had already been sworn in as Controller Rosenfield’s appointee to CGOBOC in January 2011. He was immediately hustled to volunteer as the sole Liaison to the SFWP, and to conduct an unprecedented review of the Whistleblower Program. No one objected to Madden assessing the work of his patron, Rosenfield. It would have been gauche because CGOBOC’s then-Chair Abraham Simmons, who was running for Supervisor, had publicly endorsed Rosenfield to fill Mayor Newsom’s unfinished term. Cozier still, John Madden was the City’s Assistant Controller in the late 1990s.
So at the April 2011 meeting, Madden reviewed just three investigations, each hand-picked by SFWP Director Tonia Lediju. Oblivious to selection bias, Madden praised Lediju for her help. He skipped the investigative lapses in our Laguna Honda Patient Gift Fund case; “I did look at the Audit Report in that particular case. I haven’t gone all the way back on it. I did some review.” Madden likened whistleblowers to folks who “fink on their co-workers,” then equated retaliation to “putting sand in your sandwich” or being “moved to a smaller cubicle.” The Controller’s appointee found no problems with the Controller’s Whistleblower Program.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital Contact: DerekOnVanNess@aol.com
Buried whistleblower complaints haunt the SF Controller’s Whistleblower Program (SFWP). In 2011-12, 344 complaints were “closed”, most within 3 months. Still, 18 complaint investigations lingered over 6 months, with 3 dragged out beyond one year. Each year, about a dozen cases float in Limbo past 6 months, their stranding attributed to “complexity”. Now, SFWP auditors are rushing to exhume — then close the lid — on buried tips.
Some whistleblower complaints get lost for years. For example, our tips about tainted Health Department contracts that eventually recovered $430,000 for taxpayers were punted to the Ethics Commission, the City and District Attorneys, then back to Ethics, for 26 months, even though the Controller is charged with overseeing City contracts.”
SFWP Manager Steve Flaherty jolted the 11/29/12 meeting of the Citizens’ General Obligation Bond Oversight Committee (CGOBOC), the oversight body for the SFWP; all 18 long-stalled investigations had been “closed” in a 12 week scramble. For the first time, no complaints were over 6 months old! No reason was given for this abrupt turn-around, just a slew of excuses for past delays. Stone-walling, a common delaying tactic, wasn’t mentioned. Instead, one message-point was emphasized, and echoed by Controller Rosenfield and CGOBOC member Madden: “Delays were not within the control of the Controller’s staff.” Reality got twisted in this denial of responsibility. The Controller can subpoena records, prod department heads, hire outside investigators, audit departments, and report non-compliant managers to the Board of Supervisors. Plus, the Controller must have orchestrated the speedy thaw of those 18 frozen cases.
Buried complaints are predictable because the SFWP outsources most investigations to the City departments named in the complaint. That was a key finding in the 2010-11 Civil Grand Jury report: “Whistling in the Dark – the San Francisco Whistleblower Program”. Though the City Charter requires the SFWP to “track” referred complaints, here’s what really happens: “(A complaint) goes to another department to investigate. The other department needs to get Human Resources involved, etc., etc., etc. Sometimes, the departments don’t assign the same priority that we would like…but that’s the world as it is.” Thus spoke John Madden, the Controller’s appointee to CGOBOC, and its liaison to the Controller’s Whistleblower Program.
The SFWP is also required to refer about a dozen tips annually to City agencies that have primary jurisdiction. Here again, the SFWP avidly ships cases out, seemingly indifferent to the outcomes. Some whistleblower complaints get lost for years. For example, our tips about tainted Health Department contracts that eventually recovered $430,000 for taxpayers were punted to the Ethics Commission, the City and District Attorneys, then back to Ethics, for 26 months, even though the Controller is charged with overseeing City contracts. Further, the Charter authorizes the SFWP to concurrently investigate such referred complaints. In practice, the SFWP bars concurrent investigations, supposedly to cut costs, despite abundant voter-approved funding.
Given this tendency to dispatch tips, the energetic unearthing of 18 cold-cases was amazing. The SFWP, staffed by two part-time auditors, is part of the Controller’s City Services Auditor (CSA) division. Both SFWP auditors faced more CSA duties because staffing had dropped below the usual 50 full-time jobs. CGOBOC’s Jonathan Alloy asked why the CSA had just 44 staff when 63 positions were covered by its $12.5 million budget. Rosenfield replied; “The goal is to fill the number of staff required to provide a meaningful body of work, rather than spend all the money we have because it’s available,” then promised to ramp up hiring. But overall staffing had fallen, while SFWP case closures rose from 200 last year - to 344. How did the SFWP close 70% more cases – plus 18 mummified complaints - without cutting corners?
Timely investigations are commendable, but racing to close cases doesn’t ensure quality work. That’s why military Whistleblower Programs require timeliness plus quality metrics. The SFWP hasn’t presented any quality assessments of its investigations, or of those it refers out. Its auditors have great leeway in determining the “validity” of complaints, and the adequacy of departmental investigations. When CGOBOC’s John Madden conducted the first and only review of SFWP investigations in April 2011, he opined that the 3 pre-selected cases he examined generally complied with SFWP policies and “…seemed reasonable and thorough.” While the SFWP Policies & Procedures provide good guidelines for investigations, they fail to describe, or even mention, any quality control process. That’s odd because the Charter requires the CSA to: “assess measures of effectiveness including the quality of service provided, citizen perceptions of quality, and the extent a service meets the needs for which it was created.” CSA does all this for many City services – except its own Whistleblower Program.
The 2010-11 Grand Jury delivered information that never appeared in SFWP reports, namely, whistleblower perceptions of quality. Yet, Controller Rosenfield chided the Jury’s “interviewing a small group of complainants,” without trying to “randomly sample feedback.” Ironically, the SFWP has never sampled any whistleblower feedback. CGOBOC Chair Thea Selby pointedly asked if the SFWP had surveyed any whistleblowers “to see if they…have been satisfied with the process, if not the outcome.” Rosenfield answered; “We have not. Figuring how to do it is part of the challenge – and what to do with the data that is reported back.” Well, the Controller’s CSA routinely uses survey data to improve performance and customer service. Why won’t the SFWP? By shunning whistleblower input, the Whistleblower Program has become a Procrustean agency, arbitrarily forcing informants to adjust to ill-fitting, disrespectful services.
Thwarted by City channels, some employees will seek legal redress. Data from the City Attorney and whistleblowers shows the City approved nearly $11 million in payouts for workplace harassment, discrimination and retaliation between January 2007 and January 2013. That’s about $1.8 million in taxpayer money yearly. True costs are higher due to City Attorney fees, mediation, sick leave, worker’s compensation, unemployment benefits, vocational rehabilitation, pension payments, training new hires, negative publicity, depressed workplace productivity and distracted customer service. The Whistleblower Program could abate some of these costs and damages with satisfaction surveys of whistleblowers, and quality reviews of investigations.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Dept. of Public Health. Contact: DerekOnVanNess@aol.com
“… San Francisco has a paramount interest in protecting the integrity of its government institutions. To further this interest, individuals should be encouraged to report…possible violations of laws, regulations and rules governing the conduct of City officers and employees.”
So states the City’s Campaign and Governmental Conduct Code. Yet, the SF Controller’s Whistleblower Program (SFWP) discourages whistleblowers.
Whistleblowers are the last line of defense against fraud, waste and corruption. But they face strong disincentives, including harassment, ostracism, termination, and blacklisting. That’s why the government has long used bounties to encourage informants. Realizing that government alone was over-matched by fraudsters, in 1986 Congress rejuvenated the Civil War-era False Claims Act (FCA) expressly to improve rewards for whistleblowers who sue on behalf of taxpayers. Typically, rewards range from 15% to 30% of recovered funds. FCAs prize information quality over informant motives. Seeing the success of these incentives, California became the first of 29 States to enact a FCA in 1987. Since 2005, local governments have followed suit, including New York, Chicago, Philadelphia, and Washington DC - but not San Francisco.
…the City rewards tips about citizen misconduct - never about government wrongdoing.”
The fraud-driven collapse of the U.S. financial system in 2008 pushed lawmakers to reward whistleblowers, rather than just protect them. Accordingly, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act features mandatory rewards for securities fraud whistleblowers. The Department of Justice, Internal Revenue Service, and the Securities & Exchange Commission (SEC) provide bounties to eligible informants. On 8/21/12 the SEC announced: “We are seeing high-quality tips that are saving our investigators substantial time and resources.” On 6/28/12 the Office of Special Counsel, the agency charged with protecting federal whistleblowers, gave “Public Servant of the Year” awards to three Air Force whistleblowers, proclaiming: “Whistleblowers are patriots. They possess unusual courage. They come forward because they are driven by conscience.”
Statistics published by the US Department of Justice show that rewarding informants pays. Between 1987 and 2010, the DOJ Civil Fraud Division recovered $9.03 billion without informants. But recoveries doubled to $18.17 billion with help from whistleblowers. A 2010 econometric study of corporate fraud by the University of Chicago showed that monetary rewards were the key “positive incentive” for employee whistleblowers. Rewards increased whistleblowing by 23% - without increasing frivolous claims.
While the SFWP rejects whistleblower incentives, other City agencies reward tipsters. The SF Assessor-Recorder’s “Real Estate Watchdog Program” offers bounties up to 10% of unpaid property taxes. In 2008, $59,803 was awarded to a “watchdog” whose tip brought in $1.07 million. The Department of Public Works has a “Littering, Nuisance and Graffiti Reward Fund” and publicly gives $250 to “Good Samaritans” who report taggers. Illegal dumping informants may get $500. Likewise, the Police Department offers $100,000 for solid leads in homicide cases. Reporting an illegal gun can bring $1,000. Turning in someone who sounds a false fire alarm nets $500. The Department of Public Health offers $250 rewards for tips about dog-fight trainers. The Civil Service Commission rewards police officers with one month’s salary for “heroic or meritorious conduct.” Why not whistleblowers?
Well, the 2010-2011 Civil Grand Jury did recommend “a reward system for validated high-risk whistleblower complaints with a $500 minimum or 10% of funds recovered…” This notion, that public benefit trumps whatever moral drawbacks come with rewards, roused a chorus of City Hall naysayers.
Controller Ben Rosenfield rightly asserted that City employees should report wrong-doing “as part of their jobs.” But most will not, to keep their jobs. Rosenfield warned about a “moral hazard,” that employees might delay reporting fraud in order to collect a larger reward. There’s no evidence of such scamming by City whistleblowers. Instead, the moral hazard comes from encouraging employees to not blow the whistle by denying incentives to do so - and by tolerating retaliation.
The formal responses to the Grand Jury were gems of bureaucratic resistance: “The Controller’s Office does not believe that rewards will enhance the effectiveness of the program…rewards are not a standard or recommended practice for local government whistleblower programs.” Mayor Lee responded, “the Civil Grand Jury does not provide any evidence where other jurisdictions have a reward system and where that reward system has improved the whistleblower program.” Nevertheless, since 1992 the Los Angeles County Auditor-Controller’s “Fraud Reward Program” has tendered up to $1,000 for tips toward convictions. The LA City Office of Finance “Whistleblower Program” pays up to 10% of any recovered unpaid business taxes.
At the 10/27/11 SF Government Audit & Oversight Committee hearing, Controller Rosenfield pleaded to Supervisors David Campos, David Chiu and Mark Farrell, “the unintended consequences of financial rewards are somewhat scary to us.” Along with the canard about City employees who “delay reporting a fraud until it reached a dollar-value threshold”, Rosenfield fathered another Boogeyman; city officials “who are part of the control system, whose job is to report fraud, waste and abuse,” might report violations solely to the SFWP - just to get rewards! Supervisor Farrell surpassed Rosenfield’s paranoia, calling rewards “perverse incentives.” In reality, employees whose jobs are to detect fraud, and those who are complicit in fraud, are always disqualified by government reward programs.
What went unsaid is that whistleblowers present a threat to unethical officials – and an implicit rebuke of the City’s control systems. That’s why the City rewards tips about citizen misconduct - never about government wrongdoing. Rewarding whistleblowers is taboo in circles where retaliation is more often orchestrated than experienced. As long as obedient employees are preferred over honest ones, City whistleblowers won’t be rewarded.
Fortunately, most whistleblowers aren’t driven by monetary rewards. But they do need acknowledgement and respect. The SFWP offers neither, much less incentives. One option is to offer “Public Service Awards” to whistleblowers who deliver high-value tips - and who desire such recognition. Such awards would reduce the “fink” stigma, curb retaliation, and show that the Whistleblower Program values those who justify its existence.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital. They repeatedly exposed DPH wrongdoing. Contact: DerekOnVanNess@aol.com
The SF Controller’s Whistleblower Program (SFWP) emerged after voters passed Proposition C in November 2003. Prop C authorized the Controller to function as the City Services Auditor (CSA). In turn, the CSA would manage the SFWP. Instead, the Whistleblower Program has been high-jacked and crippled.
The CSA grabs two-tenths of one percent of the City’s annual budget – about $12.5 million in 2012-13. CSA’s funding amounts to 32% of the Controller’s Office budget, and is misleadingly called the “Controller’s Audit Fund”. Records show that since 2005, CSA spent $567,210 on 21 contracts for staff training and technology services – not audits. Only $19,360 (3.4%) went to the Whistleblower Program. While the CSA grew from 4 to 7 Divisions, funding for its SFWP Division dwindled from $312,816 in 2004, to a measly $139,192 in 2012.
This change re-framed the Program’s purpose from rooting out wrongdoing to dodging risk and liability. Within this paradigm, whistleblowers bring risk, City officials are customers, and confidentiality can limit risk by hiding misgovernment and sham investigations.”
The 2003 voter pamphlet presented Prop C as a good government measure to curb City corruption. Some 15% of the Proponents’ Argument promoted the SFWP to; “…ensure that City government will be run in a clean manner, above reproach” by having “…the Controller to investigate complaints of misuse of City government funds, and improper activities by City government officers and employees.” Fully 10% of the legal text of Proposition C featured the SFWP. But if voters expected 10% or 15% of Prop C funds to go to the SFWP, they were wrong.
In its first four years, from 2004-2008, the SFWP budget averaged $256,000 yearly. That amounted to 2.5% of the $41.2 million in Prop C funds then garnered. But in the last four years, from 2008 to 2012, the SFWP budget averaged a paltry $134,000 annually - just 1.1% of the $48.4 million pumped into the Controller’s Audit Fund. Therefore, between 2008 and 2012, the CSA collected 17.5% more tax money - yet chopped its SFWP budget by 48%, compared to the prior four years.
The turning point was 2008. That year, the SFWP budget was slashed from $218,010 to $128,410 – a 41% cut. Was there a cash shortage in the Controller’s Audit Fund? Nope. Records show that $12.9 million flowed into CSA’s coffers in 2008-09, compared to $12 million the year before. And of that $12.9 million, only $9.8 million was spent. The excess $3.1 million was returned to City departments and the General Fund. So, the SFWP budget was cut by 41%, despite a $900,000 boost to the Controller’s Audit Fund - with millions to spare. Also in 2008-09, the number of complaints handled by the Program soared from 347 to 465 – a 34% jump. Why did the SFWP lose 41% of its funding in 2008, despite an increased workload?
In March 2008, Mayor Gavin Newsom replaced 17-year veteran Controller Ed Harrington with his own – and Mayor Willie Brown’s Budget Director – Ben Rosenfield. Within three months, the SFWP budget was cut by 41%. During Rosenfield’s four years, the SFWP budget collapsed to 48% below the norm in Harrington’s tenure. However, Rosenfield’s spending on CSA contracts rocketed to $542,835 versus just $24,375 spent by Harrington. Under Harrington, the SFWP handled an average of 278 complaints annually compared to 391 yearly under Rosenfield. In sum, during Rosenfield’s four years, the SFWP lost 48% of its funding and gained 41% more work. All the while, CSA’s tax revenues had increased, along with spending on outside contracts. How could this happen?
One reason is that Prop C gave the Controller carte blanche to neuter the SFWP under the cover of “confidentiality” and lax oversight. Oversight of the SFWP was assigned to the Citizens’ General Obligation Bond Oversight Committee (CGOBOC). But CGOBOC was given no budget and no enforcement powers over the SFWP. Organizationally, CGOBOC is dependent upon the Controller’s Office for information, funds and staff. As the 2010-2011 Civil Grand Jury reported; “CGOBOC depends exclusively on selected information prepared by the Controller and the City Services Auditor (CSA) – the very department that it is charged with overseeing.”
When CGOBOC met in April 2009, newly-appointed SFWP Director Tonia Lediju announced a “revamping” – without mentioning the 41% budget cut then imposed. Deceptively, the CSA’s 2009-10 Work Plan budgeted $300,000 for the SFWP. But records show that only $133,707 – less than half - was actually spent. “Revamping” had leeched 55% of the SFWP’s allocation.
In December 2010, the SFWP quietly revised its original 2005 Policy & Procedure Manual. The difference is telling. In 2005, a dozen pages were devoted to engaging and responding to whistleblowers. By 2010, the Customer Service approach had expired. Instead, the focus shifted to managing complaints, staff development, and bureaucratic processes. Both Manuals use “Complaint Flow Charts” to show how tips are processed. But they are dramatically different. The 2005 version placed the whistleblower at the center of the chart. By 2010, the whistleblower was not only removed from the center, but off the chart entirely!
The 2010 Manual adopted a corporate tone. A self-promoting Mission/Vision/Values statement includes; Service – We focus on our customers’ needs. There is even a set of “strategic planks” like Marketing – Communicating our Mission and Engaging the Public. Apart from the fact that the SFWP does not engage its whistleblower clients, the corporate model is preposterous for a two-person “Program” with a $139,000 budget. Ironically, while the Controller is charged with recommending Customer Service Plans for all City departments (Charter F1.108), the SFWP treats its customers like threats. This practice was codified by adding a one-sided “Risk-Assessment” policy: “Each complaint is…evaluated to determine the risk profile of the complaint.”
This change re-framed the Program’s purpose from rooting out wrongdoing to dodging risk and liability. Within this paradigm, whistleblowers bring risk, City officials are customers, and confidentiality can limit risk by hiding misgovernment and sham investigations.
Since 2008, the SFWP has been sapped and rendered into a clearinghouse for “risks.” Belying the Prop C sales-pitch, the SFWP side steps looting, self-dealing and retaliation.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPH wrongdoing. Contact: DerekOnVanNess@aol.com
Between 2004 and 2009, the SF Controller’s Whistleblower Program (SFWP) issued public reports every six months. Though brief, they gave examples of investigated complaints, substantiated or not. Readers could tell why some complaints were not substantiated. Starting in 2006, investigated City departments were identified. High-profile cases involving Commissioners, CEOs and even Supervisors were noted. Whistleblowers were promised confidentiality — and encouraged to identify themselves. SFWP staff would “ask follow-up questions and/or relay results of investigations.” By 2008, 57% of tipsters were providing contact information. There was a sense of public engagement.
State Senator Leland Yee asserts that whistleblower complaints are often settled and “swept under the rug.” Yee proposed Senate Bill 1336 in February 2012 to identify subjects of substantiated complaints, the action taken, and the outcomes of unsubstantiated allegations. Since then, SB 1336 has been eroded in committee and opposed by City auditors and Unions, among others. The clause requiring disclosure of unsubstantiated complaints was the first casualty. Disclosure of unsubstantiated complaint findings remains discretionary State-wide, and unobtainable in San Francisco.”
Something changed in 2009. Public reports were cut from two to one a year, and loaded with verbiage about “confidentiality.” Names of implicated City departments were replaced by generic terms like “an employee” or “a department manager.” Such generalizations can hide mismanagement in a City with some 60 departments and 30,000 employees. “Unsubstantiated” case reports were deleted, though they outnumbered substantiated ones by 2-to-1 and may have harbored scandals. For the first time, the SFWP disclosed that it had “facilitated the investigation” of 50% of all complaints. But the number of investigations independently conducted by the SFWP remains a secret.
Right after Ben Rosenfield became Controller, the 2008-09 budget for SFWP salaries, benefits and overhead was surreptitiously cut by 41%. At an April 2009 meeting, the newly-appointed SFWP Director, Tonia Lediju, reported; “The Whistleblower Program is being revamped.” Nothing more was disclosed. Likewise, annual budgets for the SFWP were never made public. In response to our public records request, the Controller’s Office compiled data showing that in fiscal years 2004 to 2008, the average annual SFWP budget was $256,300. The next four years, between 2008 and 2012, the average annual budget plunged to $134,079 – a 48% drop. During the same time frame, the flow of complaints surged from an average of 278 to 391 yearly – a 41% increase. Nobody reported how the SFWP performed with 41% more work and 48% less money. And, the SFWP refuses to conduct a whistleblower Satisfaction Survey.
In its early years the SFWP consisted of a Manager and two investigators. Now, the SFWP reportedly gets by with two half-time investigators, one of whom is also the Manager. For fiscal year 2011-12, the SFWP budget was $139,192 – a puny 1.2% of the $11.6 million allotted to the City Services Auditor. Compare this $139,192 to the $93,849 base salary for SFWP Manager Steve Flaherty in 2010-2011. That budget barely covered one full-time investigator plus 30% benefits. Fiscal starving could explain the cloddish customer service, why investigations were punted to implicated City departments, and why most complaints were “unsubstantiated.”
The secrecy of the SFWP, and the alienation of its informants, were unveiled in a May 2011 ABC-7 “I-Team” broadcast, “San Francisco Whistleblower Program Comes Under Fire”; and the July 2011 Civil Grand Jury report, “Whistling in the Dark – The San Francisco Whistleblower Program.”
In September 2011, Sunshine activist Mel Shapiro won a Superior Court ruling that San Diego’s Whistleblower Program “must disclose any report of an investigation that has been substantiated.” These events prodded the SFWP to revise its 2010-2011 Annual Report on 11/22/11. Finally, all substantiated complaints were reported. However, the names of implicated City departments were not. Quarterly reports were issued and a FAQ section was added. In a reversal of previous practice, anonymous rather than identified tips were encouraged. Anonymity can isolate informants, limit follow-up contact, and lower the odds of full investigations. The number of anonymous complaints was withheld. Nothing about the 43% of complaints deemed “unsubstantiated” was disclosed.
This level of secrecy exceeds the confidentiality granted to Whistleblower Hot-Lines by California Code 53087.6(e). While the identities of whistleblowers, witnesses and subjects are protected, State law allows Programs “to issue any report of an investigation that has been substantiated, or to release any findings resulting from a completed investigation that are deemed necessary to serve the interests of the public.” Since 2009, the SFWP has denied any public interest in knowing why so many complaints are unsubstantiated. In comparison, Santa Clara County’s “24/7 Whistleblower Program” does a better job. There, the Board of Supervisors gets twice-yearly summaries of every complaint received – including unsubstantiated ones – along with investigative findings and actions taken.
State Senator Leland Yee asserts that whistleblower complaints are often settled and “swept under the rug.” Yee proposed Senate Bill 1336 in February 2012 to identify subjects of substantiated complaints, the action taken, and the outcomes of unsubstantiated allegations. Since then, SB 1336 has been eroded in committee and opposed by City auditors and Unions, among others. The clause requiring disclosure of unsubstantiated complaints was the first casualty. Disclosure of unsubstantiated complaint findings remains discretionary State-wide, and unobtainable in San Francisco.
By October 2007, the SFWP had partnered with the City’s Customer Service Center and switched its Hotline number to 311. The sixty call-takers at the 311 Service Center receive over 7,000 calls daily. Though call-takers are trained to forward whistleblower tips to the SFWP website, they also forward minor complaints about botched City services. After the transition to 311, the average number of SFWP complaints zoomed from 263 to 391 annually — a 49% increase. Was this dramatic rise due to service complaints or whistleblower tips?
Since 2009, the SFWP has masked complaints coming from the 311 Service Center by combining them with tips that whistleblowers log directly onto the SFWP website. Importantly, the number of citizen service complaints, versus employee whistleblower tips, is no longer reported. To preserve its focus and to inform the public, the SFWP should track true whistleblower tips separately from service complaints, as before.
The SFWP has expanded “confidentiality” beyond the realm of public interest, best practices, and even its own past practices.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPW wrongdoing. Contact: DerekOnVanNess@aol.com
In 2012, the Association of Certified Fraud Examiners issued a “Report to the Nations on Occupational Fraud and Abuse.” They found that 5% of a typical organization’s revenue is lost to fraud. Government is especially vulnerable, rating second among 23 industries surveyed. Whistleblowers catch three times as many frauds as any other form of detection. Most whistleblowers are employees.
Meanwhile, the Government Accountability Project, an advocacy group providing legal aid to 5,000 whistleblowers over 35 years warns:
“You will surely suffer some level of harassment or retribution for blowing the whistle because bureaucracies instinctively tend to eliminate anything perceived as a threat. Academic studies confirm that more than 90% of whistleblowers report subsequent retaliation.”
You will surely suffer some level of harassment or retribution for blowing the whistle because bureaucracies instinctively tend to eliminate anything perceived as a threat. Academic studies confirm that more than 90% of whistleblowers report subsequent retaliation.”
Other surveys in various settings show retaliation rates between 22% and 38%, but experts agree that reprisals have increased despite laws prohibiting them. Studies show that retaliation is more likely when the reported wrong-doing involves losses over $100,000 and when the misconduct is routine. Although San Francisco’s Campaign & Governmental Conduct Code includes “Protection of Whistleblowers,” City whistleblowers are praised on paper but punished in practice.
On 7/24/2012 the City agreed to pay over $1 million to settle two whistleblower retaliation lawsuits. As reported in the May 2012 Westside Observer, 911 Call-Center supervisor Maura Moylan, and dispatcher Anne Raskin, reported supervisory misconduct within the Department of Emergency Services in 2009. Reprisals ensued and escalated. Unaware of the City’s Whistleblower Program (SFWP), they consulted a lawyer. They sued in Federal Court in October 2010 (Case # C10-04700-TEH). The City Attorney fought them every step of the way. Almost two years later, a Jury awarded them $262,000 for retaliation and harassment. The post-verdict settlement, including legal fees, was $762,000. Not included is the cost of City Attorney hours in this 2-year legal battle.
Similarly, Recreation & Parks Ranger Michael Horan received $250,000 for the retaliation he experienced. According to Matt Smith’s 7/19/12 article in The Bay Citizen, Horan had exposed favoritism and overtime abuse in the Park Patrol Division since 2008. The City’s Human Resources Department failed to fix the problems, so he went to the federal Equal Employment Opportunity Commission. The EEOC substantiated his complaints, but the City Attorney dismissed them. Horan sued in Superior Court in September 2009 (Case # CGC-09-492910), then Federal Court (Case # CV-10-01383). As in the Moylan & Raskin case, the City Attorney vigorously defended management wrongdoers against employee whistleblowers.
Perhaps retaliation was better handled when the Whistleblower Program was in the Mayor’s Office from 1989 through 1993, and initially managed by Edwin Lee. In November 1993, voters passed Prop K that authorized the Ethics Commission to investigate retaliation claims. On 2/24/1997, Lee advised the Ethics Commission that “Cases involving retaliation were treated as a high priority” – even though he had been the sole investigator. As of 12/17/2001, Ethics had reviewed 7 retaliation complaints over 6.5 years. As of July 2012, Ethics has dismissed all of approximately 17 whistleblower retaliation claims it received.
Retaliation, a primitive form of damage control, is directed at whistleblowers by their bosses. Yet, the SFWP sends most complaints right back to the department named in the complaint. Until May 2012, the SFWP didn’t even bother to track retaliation complaints. Instead, the SFWP washed its hands of retaliation by making dead-end referrals to the Ethics Commission. While monitoring retaliation would help, “reported cases of retaliation are a small fraction of actual reprisals” says Mat Stephenson, partner in the Employment Law firm of Kochan & Stephenson. The trauma of retaliation pushes most informants to give up and move on without protesting. Therefore, unethical organizations consider retaliation “cost-effective” according to Stephenson. The few who seek redress are often dismissed as “disgruntled.” Until they sue. Although potential costs for the City are significant, the Controller’s Office refuses to conduct a whistleblower retaliation survey.
Exposing wrongdoing and retaliation by a City department often points to systemic failures of governance. Wrongdoing may be entrenched in the work-place culture, or serve a hidden political agenda. Whistleblower Programs that tackle such problems threaten powerful entities and become vulnerable to retaliation themselves. They face smears, bullying, funding cuts, staffing changes, or having their mandate clipped. In other words, they are treated just like whistleblowers. The Board of Supervisors’ purge of the City’s Sunshine Task Force in May 2012 shows how risky addressing misgovernment can be. However, Programs have ways to dodge political reprisals.
Setting up a sham Whistleblower Program avoids the risks of exposing corruption. Fake Programs can lure and lull informants so they don’t air complaints publicly. The 2011 Civil Grand Jury alluded to such charades in its investigation of the SFWP: “A poor or mediocre Whistleblower Program — one that seems to be something it is not — is perhaps worse than none at all.” It’s noteworthy that in the four fiscal years between 2004 and 2008, the average annual budget for the SFWP was $256,300. In the 4 years from 2008 to 2012, under Controller Ben Rosenfield, the average annual budget plunged to $134,079, a 48% drop. That’s enough to prop up a façade, not to maintain a top-notch Program.
Colluding with other City agencies to dismiss whistleblower claims also reduces the risk of exposing misgovernment. Both the Controller’s Whistleblower Program and the Ethics Commission refer serious complaints to the City Attorney. The City Attorney has dual loyalties — and a conflict of interests. Along with reviewing allegations of governmental wrongdoing, the City Attorney has a duty to defend City officials accused of misconduct. Despite claims of erecting “ethical walls,” the likelihood of mutual back-scratching is high. Instead of protecting whistleblowers, the City Attorney is the main adversary, the reason retaliation persists.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed DPW wrongdoing. Contact: Derek Kerr
In their 2011 report “Whistling in the Dark – the San Francisco Whistleblower Program” the Civil Grand Jury warned:
“From a policy perspective, there are several issues. Most glaringly, once a complaint is filed, the whistleblower is from that point forward, essentially shut out of the entire process and left to navigate a “black hole” where further access to the investigation is denied.”
Other Whistleblower Programs are more open about the work they do. For example, the Oakland Fraud, Waste and Abuse Prevention Hotline “independently conducted 34% of the investigations.” The Los Angeles Program claims it investigates 36% of complaints independently. In San Francisco, the percent may be too small to mention.”
City whistleblowers should know that most complaints to the Controller’s Whistleblower Program (SFWP) are referred back to involved departments for investigation. The SFWP has masked the number of such referrals by asserting that complaints were “investigated or referred for investigation.” However, the 2010-2011 Civil Grand Jury revealed that the “majority of the investigations were performed by the departments listed in the complaint rather than the Whistleblower Program investigators.” Belatedly on 11/22/11, the SFWP admitted to a “majority” of cases being referred – without giving the number. The Jury concluded; “The investigation of whistleblower complaints is not independent when performed by the targeted agency or department.”
Other Whistleblower Programs are more open about the work they do. For example, the Oakland Fraud, Waste and Abuse Prevention Hotline “independently conducted 34% of the investigations.” The Los Angeles Program claims it investigates 36% of complaints independently. In San Francisco, the percent may be too small to mention.
Referring investigations to departments is reasonable for minor complaints. Indeed, most complaints received by the SFWP are gripes about City services. SFWP reports from 2006 and 2007 show that barely one-third of complaints were true whistleblower reports about fraud, waste and abuse of City resources. The Civil Grand Jury also found that just 36% were true whistleblower tips in 2009 and 2010. Nevertheless, some of the more serious complaints went back to the targeted departments. In fact, even “Medium-Risk” complaints involving sums of $10,000 to $50,000 and/or mid-level managers were sent back to the named department. The SFWP asserts that referring complaints leverages investigative resources, and that they oversee results. But conflicts of interest are also leveraged when departments probe their own misconduct.
It was the Civil Grand Jury that revealed the Department of Public Health received the most whistleblowers complaints. Since 2009, the SFWP ceased naming implicated departments, perhaps hiding wrongdoing and mismanagement. Had the SFWP conducted a Best-Practices survey, it would know that the Los Angeles Fraud Hotline identifies each department in a substantiated complaint. Further, when the LA Program refers a complaint back to a targeted department the outcomes are recorded as “Substantiated” or “Not Substantiated” or “Not Investigated” for every department. The public has a right to know these department-specific findings.
Instead, the SFWP conceals outcomes of departmental investigations by lumping all the results together. There is no way to identify City departments troubled by misconduct or mounting complaints. We don’t even know how many complaints are outsourced for investigation. What’s also kept secret is whether the SFWP conducts any investigations. The number, seriousness and outcomes of SFWP investigations should be reported, as well as those performed by targeted departments.
Such disclosures are needed if the SFWP reveals whistleblower identities upon referring complaints to City departments. In their Quarterly Report of January 20, 2012 the SFWP warned, for the first time, that they may disclose tipster identities “…to take any enforcement action” and “also can release information as part of a referral when referring any matter to another City department…” This “information” may include clues about the whistleblower. In other words, there is no confidentiality within the City network.
Conversely, records requests by whistleblowers whose complaint investigations are “closed” without explanation are denied because, “Whistleblower Program practices do not permit a complainant to waive anonymity or confidentiality for the disclosure of investigation work-product.” The SFWP has also refused to return documents that informants submitted in support of their complaint. The reason given is “to protect whistleblowers.” By this reasoning, delays, inaction and lost-records may be disguised as “work-product.” Further, the SFWB has rendered itself immune from Performance Audits, since the City’s Director of Audits, Tonia Lediju, also runs the Whistleblower Program.
Leaks in the investigative pipeline are likely to spring up during the Preliminary Review.
That’s when the SFWP screens tips for jurisdiction, “risk of loss to the City,” and level of management involved. Within five days, informants supposedly receive an acknowledgement from the SFWP. But when we reported misappropriations from the Laguna Honda Hospital Patient Gift Fund in March 2010, it took three weeks to get a response – and then only because we followed-up. We were told that the SFWP was still “determining jurisdiction.” What kind of discussions – and with whom – would take three weeks? Even with “High-Risk” complaints like ours, the SFWP review process may include contacting the Director of the implicated department. When “High-Risk” or “Medium-Risk” complaints loop back to the involved department, informants should be notified and checked for retaliation. But that doesn’t happen.
The SFWP has yet to conduct a Best Practices Survey. The Government Accountability Project (www.whistleblower.org), a national whistleblower advocacy group, compiled a set of international Best Practices. One standard is a “Credible Corrective Action Process.” This principle allows whistleblowers to comment on the charges that merited an investigation, and on whether there has been a good-faith resolution. Whistleblowers are often the most knowledgeable and concerned witnesses. The failure of the SFWP to engage its informants discredits their investigations. Whistleblowers should not be silenced in the resolution of the alleged misconduct they risked their careers to challenge.
Whistleblower Programs need solid tips from insiders who confront wrong-doing. Two major barriers for tipsters are the belief that nothing will be done, and the fear of retaliation. Trust is essential. Do whistleblowers trust the SF Controller’s Whistleblower Program (SFWP)?
Not Mercedes Hernandez-Bran. In 2004 she became the first SFWP whistleblower. As Director of Human Resources for the Juvenile Probation Department, she reported misspent funds, conflicts of interest, altered time-sheets, and the shredding of public documents. Once the City Attorney heard about her concerns, she was locked out of her office and her computer was seized. The scandal was widely covered by the Press. But like other high-profile whistleblower cases, it was invisible in the SFWP annual report. Hernandez-Bran explained:
“I reported the Chief Probation Officer for collusion and corruption, and I was laid off as a result. But not before being harassed and investigated… There are so many cases of City employees who have filed whistleblower complaints and then were targeted for layoffs. No one trusts this program. The City Attorney protects officials first, then acts against the informant.”
Another half-a-dozen cases of retaliation were described in the July 2011 Civil Grand Jury report, “Whistling in the Dark – The San Francisco Whistleblower Program.” Controller Ben Rosenfield was not moved. To date, no whistleblower retaliation surveys — or even satisfaction surveys — have been conducted, though the Controller employs dozens of auditors and analysts.
SFWP revised its 2010-2011 annual report and showed that only 16% of all complaints were substantiated. During this period, the Los Angeles program substantiated 23% of all complaints, while San Diego sustained 33%. Notably, both programs had investigated a greater share of complaints; 72% for LA and 100% for San Diego, compared to 59% for SF.”
Short of conducting a survey, whistleblower trust can be estimated from the number of complaints sent by insiders — City employees. The SFWP withholds this information. However, Oakland’s Fraud, Waste and Abuse Prevention Program reported that in 2011, “City employees generated 44% of the reports…the first time that the volume of tips…from the public exceeded those tips from employees.” A decline in employee tips should be reported to taxpayers. But the SFWP has a reason to overlook employee participation.
Over the past three years, complaints to the SFWP fell from 465 to 386 to 365, a 22% drop. Over the past 9 months, only 252 complaints came in. At this rate the fiscal year could end with another significant plunge. Likely, employee complaints are falling, too. This steady decline in participation has yet to be addressed.
A trustworthy program that focuses on serious wrongdoing will attract serious tips. From 2004 to 2007 the SFWP tried to do that. True whistleblower tips, about fraud, waste and abuse of City resources, were separated from gripes about shoddy City services. Consistently, however, true whistleblower complaints stayed around one-third of the total. Starting in 2007, whistleblower tips were merged a larger group of minor complaints pouring into the 3-1-1 call line. This mix created the illusion that the SFWP was doubly-busy responding to “whistleblower complaints” and checking malfeasance. Further, dispersing whistleblower tips in a sea of service complaints obscures the drop in claims from whistleblowers when they lose faith.
In 2011, the SFWP resumed sorting out high-value tips about major wrong-doing. The SFWP ranks incoming complaints as High-Risk, Medium-Risk and Low-Risk – depending on “the risk of loss to the City.” But the resulting risk-profiles are kept secret. High-Risk complaints involve high-level City officials and a risk of loss of $50,000 or more. Medium Risk complaints implicate mid-level managers. Low-Risk complaints involve regular employees or a sum under $10,000. Note how the risk of loss to whistleblowers has no place in this calculus.
Obviously, the higher the risk for the City, the higher the risk of buried complaints, whitewashed investigations, and retaliation for whistleblowers. Although the Civil Grand Jury found that “only high-risk” complaints were investigated by the SFWP, they did not confirm that all of them were. Potential whistleblowers need assurance that serious complaints are actually received, investigated and substantiated, not just “referred and closed.” A Whistleblower Program that acts on high-value complaints will be trusted with more of them. That’s another reason why the SFWP should immediately contact whistleblowers who submit High-Risk and Medium-Risk complaints — and again within six months — to check if they saw results or retaliation.
A program that protects tipsters will get more who identify themselves. A major provider of whistleblower hot-line services, The Network, Inc., found that requests for anonymity dropped from 78% to 48% over 20 years, as employees became comfortable with reporting. The San Diego Fraud Hotline reported that only 46% of callers in 2011 requested anonymity. In fact, the SFWP’s own 2008-2009 mid-year report disclosed that just 43% of callers were anonymous. A rise in anonymous complaints signals mistrust. Since 2009, the SFWP has withheld the rate of anonymous tips.
More important, substantiated complaints show that something is being done. This number was never disclosed — until 11/22/11 — after the public uproar over the Civil Grand Jury investigation. That’s when the SFWP revised its 2010-2011 annual report and showed that only 16% of all complaints were substantiated. During this period, the Los Angeles program substantiated 23% of all complaints, while San Diego sustained 33%. Notably, both programs had investigated a greater share of complaints; 72% for LA and 100% for San Diego, compared to 59% for SF.
In the last half of 2011, the SFWP substantiation rate climbed to 21% of all complaints. This increase is linked to a surge of investigations into 71% of all complaints, compared to an average of 51% for the prior 3 years. Something is being done – but by whom? In our next column we will explore how most complaints sent to the SFWP are quietly referred back to the same City departments named in the complaints.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health Contact: DerekOnVanNess@aol.com
On 4/11/12 a Federal Court jury awarded $262,000 to whistleblowers Jane Doe and Anne Raskin for retaliation by the City’s Department of Emergency Management.
In 2010, Doe and Raskin exposed a variety of workplace irregularities at the 9-1-1 Call Center that resulted in shunning by coworkers, invasion of privacy, intentional infliction of emotional distress, and retaliation. The City was held liable for “a failure to prevent harassment and retaliation.” ¹ This is not an isolated case.
… Davis Ja & Associates received a $1.2 million contract on behalf of Community Behavioral Health Services. That contract was revoked and the City recovered some $430,000 after whistleblowers reported a conflict of interest.”
In a scathing report titled “Whistling in the Dark – The San Francisco Whistleblower Program”, the 2010-2011 Civil Grand Jury (CGJ) noted that exposure to “bad press” and “liability from costly lawsuits” occurred “when legitimate complaints are ignored or dismissed.” Although the CGJ was unable to determine the actual cost to the City because of confidentiality conditions of the settlements, it determined: “A program that properly addresses and resolves allegations of malfeasance ‘in house’ can significantly reduce the City’s exposure.” The City’s Whistleblower Program was failing. (2)
Mayor Art Agnos started the Whistleblower Program in 1989. It fell under the Ethics Commission from 1993-2003, where it withered. After a Port corruption scandal, 71% of voters approved Proposition C that added a City Services Auditor (CSA) function to the Controller’s duties, including a reinforced Whistleblower Program. Prop C also granted the CSA 0.2% of the City budget, now $12 million annually, to audit departments, monitor City services, oversee contracts and manage the Whistleblower Program. A selling point was the claim that the Controller’s Office was politically “independent.”
Despite new management, the Controller’s Whistleblower Program has been hobbled by recurrent staff turnover, few investigators, bureaucratic secrecy, fealty to power, disregard for whistleblowers, and lax oversight.
Ironically, although the Controller’s CSA conducts innumerable audits and reviews, the Whistleblower Program itself was never assessed — until the CGJ report in July 2011. Predictably, Controller Ben Rosenfield pooh-poohed its findings. Those who exposed misgovernment — professional journalists, whistleblowers and Sunshine advocates — praised the report. Of the 14 recommendations issued by the CGJ, most were rejected by City Hall. However, in a nod to transparency, the 2010-2011 Annual Whistleblower Program report was revised. It now lists all substantiated complaints, rather than a trivial “sample.” The time taken to resolve investigations was also added.
The “Controller’s Whistleblower Complaints Program” is a misnomer. Barely one-third of the cases are true whistleblower complaints involving fraud, waste and abuse. The program primarily serves City officials, rather than whistleblowers or the public. It was designed by high-level officials to address low-level misconduct. By keeping tabs on whistleblowers and City hot-spots, embarrassing events are contained. With complaints involving high-level City officials, the program falters. These are some of the reasons why no performance audit had ever been performed, and why a Best-Practices survey has yet to be done. Although an informal survey was sent out, to date no Whistleblower Satisfaction Survey has been performed. Despite the clear connection between whistleblowing and retaliation, neither the Whistleblower Program nor the Ethics Commission bothered to track retaliation. Whistleblowers have generally felt ignored, or treated like burdens and threats.
The Controller’s Office has the money to do a better job, if public service is the goal. Instead, the Controller issues hundreds of thousands of dollars each year to private contractors under the guise of “audits” or assessments of City services. Often, such contracts support under-performing departments. Prime examples are the 2010 contract to Lumetra HealthCare Solutions for $250,000 on behalf of Laguna Honda Hospital. In 2009, Davis Ja & Associates received a $1.2 million contract on behalf of Community Behavioral Health Services. That contract was revoked and the City recovered some $430,000 after whistleblowers reported a conflict of interest. Since 2005, several contracts valued over $700,000 were awarded to Health Management Associates (HMA) to help the Department of Public Health (DPH). Meanwhile, whistleblowers reported that then-Health Director Dr. Mitch Katz was paid $10,000 a year by HMA from 2008 through 2010 – while HMA was working for the DPH. Although the Whistleblower Program received 365 complaints last year, the majority were referred back to the targeted departments for investigation, as reported by the Civil Grand Jury.
Oversight of the Whistleblower Program was also faulted by the Civil Grand Jury. The Citizens General Obligation Bond Oversight Committee (CGOBOC) has no staff or resources to monitor the Whistleblowers Program. Its sole “Committee Assistant” is the Controller’s Executive Secretary who is paid by, and reports to the Controller. Public comments critical of the Whistleblower Program are censored from its Minutes. E-mails to firstname.lastname@example.org are triaged by the Controller’s staff. CGOBOC members receive no training in whistleblower issues, and get all their information from one source – the Controller. In effect, CGOBOC is dependent upon the agency it oversees.
“Confidentiality” keeps a veil of secrecy over program operations, leaving little room for citizen oversight. Whistleblower Program reports provide scant information, making it difficult to judge whether the program is effective, impartial, or even trusted, by complainants.
In this column we plan to explore the performance of the City Whistleblower Program, local whistleblower issues, and public action to correct misgovernment. Input from City whistleblowers and good government advocates would be greatly appreciated.
Dr. Maria Rivero and Dr. Derek Kerr were senior physicians at Laguna Honda Hospital where they repeatedly exposed wrongdoing by the Department of Public Health Contact: DerekOnVanNess@aol.com
1. Case 3:10-cv-04700-TEH
On November 16, 2010 doctor Derek Kerr — a former physician in good standing at Laguna Honda Hospital for over 21 years — filed a lawsuit in SF Superior Court, alleging retaliatory termination of employment.
His lawsuit names as defendants the City and County of SF; DPH director, Dr. Mitch Katz; Laguna Honda Hospital's executive administrator, Mivic Hirose; LHH's current medical director, Colleen Riley; and others.
Photos: Dr. Maria Rivero, Dr. Derek Kerr
The five causes of action:
• Deprivation of his First Amendment freedom of speech activities;
• Deprivation of due process rights guaranteed by the Fourteenth Amendment;
• Violation of CA Govt Code §53298 that prohibits reprisals against employees who file complaints regarding gross mismanagement or a significant waste of funds, or an abuse of authority;
• Violation of CA Health and Safety Code §1432 that prohibits discrimination or retaliation against employees for initiating or participating in proceedings relating to care, services, or conditions of a long-term health facility; and
• Violation of CA Labor Code §1102.5 that prohibits retaliation against any employee for disclosing information to a government or law enforcement agency when an employee has reasonable cause to believe that the information discloses a violation of state or federal statutes, or a violation or noncompliance with a state or federal rule or regulation.
Kerr filed two whistle-blower complaints in September 2009 with his co-worker, Dr. Maria Rivero. On March 2, 2010 Kerr and Rivero filed an unrelated complaint with the SF Whistleblower Program administered by the City Controller's office, alleging mismanagement and misappropriation of funds in LHH's patient gift fund, specifically identifying Ms. Hirose as a responsible party, possibly among others.
Three days later, Kerr was informed on March 5 he was being laid off and that his employment with the City would be terminated effective June 11, 2010.
On March 15, 2010 Kerr then filed a Whistleblower Retaliation Complaint with the SF Ethics Commission alleging that his termination was in retaliation for the multiple ethics complaints he had previously submitted.
Kerr's lawsuit seeks unspecified monetary damages for lost pay, general damages, punitive damages, and other relief a court may deem proper, among other penalties.
Kerr is being represented by the SF law firm Kochan & Stephenson, which has previously represented other Laguna Honda Hospital employees, including a case recently settled against the City for $268,452.
A case management conference regarding Kerr's lawsuit has been set for March 18, 2011.