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Controller faults DPW procurement controls; city attorney outlines prosecution and recovery priorities
Summary
A preliminary Controller assessment identified gaps in oversight at Public Works — including prequalified pools, grant practices and homelessness projects — and the City Attorney described civil investigations, potential debarments and efforts to recover illicit gains arising from federal criminal complaints tied to former DPW leadership.
The Government Audit & Oversight Committee held an extended hearing July 2 on the Controller’s preliminary public‑integrity assessment of Public Works contracting and on the City Attorney’s parallel investigations into allegations of corruption.
The Controller’s office reviewed DPW contracts from July 2017 through March 2020 and reported seven principal findings: insufficient external oversight of DPW construction procurement (DPW is not overseen by a board or commission, unlike most Chapter 6 departments); weaknesses in projects addressing homelessness that allowed bypassing of competitive procedures; inconsistent use of prequalified vendor pools without standard selection procedures; unclear guidance on grant procurement; lack of centralized monitoring and procurement system usage; a problematic "tone at the top" prioritizing cost and expediency over transparency; and gaps in gift‑restriction enforcement.
Mark Dela Rosa and Todd Rystrom summarized data: DPW had 366 contracts with a combined not‑to‑exceed of roughly $1.4 billion in the review window; the office identified 15 contracts addressing homelessness (about $24.6 million) of which 11 lacked a discernible selection process based on available files. The Controller recommended shifting final approval for certain DPW construction procurements to an official outside the department, codifying stronger controls over projects addressing homelessness, standardizing selection from prequalified pools, and expanding centralized procurement monitoring.
Deputy City Attorney Anne Pearson described the City Attorney’s work in parallel. The office is (1) developing independent civil evidence to support discipline or termination for implicated employees, (2) reviewing contractors and nonprofits for contract termination or debarment where evidence allows, and (3) seeking recovery of illicit gains. Pearson noted federal law‑enforcement tools — wiretaps, grand jury subpoenas and bank records — aided the FBI’s criminal cases but are not available to civil investigators, which constrains the city’s options until prosecutions are resolved. Where possible, the City Attorney said it will pursue contract terminations, debarment, forfeiture and legislative changes to allow suspension of contractors while criminal charges are pending.
Supervisors sought documents and promised follow‑up: they asked DPW to produce both the original and revised RFPs for the JCDecaux kiosk/toilet agreement (2015–2016) and all correspondence to bidders; DPW committed to provide those materials. The committee continued the JCDecaux agenda item pending DPW documents and continued the broader public‑integrity hearing to allow further Controller reports and City Attorney follow‑up.
