How business was done - Page 2

Mayor Lee testifies in corruption lawsuit that could cost the city $10 million

Mayor Ed Lee (with attorney Joe Cotchett) heads for the courtroom to testify in the case.

The city completed a subsequent investigation in January 2003 that resulted in stopped payments to Cobra, contract termination, and the city's civil lawsuit filed by City Attorney Dennis Herrera against Cobra in April 2003. Following Herrera's filing against Cobra, Herrera demanded an audit of Cobra which Cobra refused, citing a conflict of interest. Herrera had previously represented Cobra in private practice before he was elected City Attorney in 2001.

A trial court ruled in that Herrera had a conflict of interest, disqualifying Herrera and his office from participating in the Cobra case, a ruling later upheld by the California Supreme Court. Yet the suit alleges Herrera and his office continued to supply work to various City agencies and to effectively prevent Cobra from doing further business with city. By withholding the $2 million Cobra was owed by the City, COIT was able to disbar Cobra from entering into master contract agreements with the city, claiming Cobra was fiscally "non-responsible," according to court testimony.

Blackwell, in her testimony at trial, said the determination of Cobra's non-responsibility was used as a "pretext" for Cobra's disbarment, a procedure that should have triggered a hearing to allow Cobra to defend itself against debarment. That never happened.

An FBI investigation into Armstrong's kickback scheme resulted in Armstrong pleading guilty to mail fraud, wire fraud, and obstruction of justice in July 2003. No criminal charges were ever brought against Cobra Solutions or Telecon and yet the city's outside law firm, Cotchett, Pitre & McCarthy LLP, which tried the case on behalf of the city, held on to the city's allegation of fraud committed by Cobra and Telecon throughout the case and trial until closing arguments on Feb. 9.

In his closing arguments, attorney Ara Jabagchourian made no mention of Telecon, effectively dropping the city's claims against Telecon, and constricted the city's damage claims against Cobra. He asked the jury to award the city up to $266,000, money paid to Cobra for work authorized and signed-off by the city, via Armstrong, for breaching a provision in the contract agreement between the city and Cobra that requires the master contractor to "supervise" sub-contractors.

But Cobra's lawyers — the firm of Gonzalez & Leigh, which includes former Board of Supervisors President Matt Gonzalez, who took a leave from his current job as deputy public defender to consult on the case — says it is the city that should pay for fatally harming a business without just cause.

"The City and City Attorney's office falsely accused Cobra and Telecon of stealing $2.4 million dollars from the City, destroying these companies and ruining the lives of good, decent people who were the victims of a city tech official who should not have been hired in the first place," said attorney Whitney Leigh. "Then the City Attorney made it worse, flatly defying an order disqualifying the City Attorney's Office and instead driving efforts to run Cobra and Telecon out of business just because Cobra raised the issue of the conflict of interest. I've been unable to find any case in which an attorney has so flagrantly ignored a disqualification order."

Herrera can't comment on the case, but his office previously told the Guardian, "Immediately upon discovery of Cobra's role, the office screened Herrera off from further involvement in the investigation and all matters related to it in accordance with a stringent ethical screening policy Herrera established when he took office."

The-City Controller Ed Harrington, who exerted significant influence over contract awards and debarment proceedings as chair of COIT, conceded in court testimony that internal controls failed to detect Armstrong's scheme.


Some one should investigate the no-bid contracts for the ESS Voting Systems and the additional no-bid contract on the now Sequoia Voting Systems purchased by Ed Lee, and used by San Francisco's Department of Elections for years. If my memory serves me well, each of these two shady approximately $10 million deals cost the taxpayers of San Francisco, about a $20 million dollar total hit. Rumor has it that there were more than a hand full of $500,000 payoffs to multiple players. Since both of these high-tech computer voting systems used the corrupt central tabulation unit as the single point where all the votes were set by manual input, it's pretty clear that Ed Lee and his staff may be in on wholesale elections tampering.

The ESS and Sequoia Voting Systems have since been exposed as dirty systems wide open to computer fraud, and manual over-rides in methods and process that deliver crooked results, as the votes of the voters are not even what are delivered as results. Since these corrupt systems were purchased by Ed Lee and his high tech swindle operation, and these systems successfully drove years of election tampering and fraudulent results, the elections for years are now suspect. Clearly the Administrations of Mayor Brown, Mayor Newsom and now under Mayor Ed Lee ran illegal voting operations, and crooked elections. The fact that the voters were swindled out of their votes is a much more serious set of felonies than simply stealing a few million here and there and destroying people in the process. I remember Kamala Harris's comment when she endorsed and introduced Chris Cunnie on his campaign opener, last 2011: "elections are blood sport to us here in San Francisco, and we play for keeps."

Posted by Paul Currier on Feb. 15, 2012 @ 2:20 am

This is the new standard being set by all those screaming for the head of a certain 'city official' named in another case. Maybe all those 'suspected' of involvement in this one should take a leave of absence until ALL aspects of the case have been exhaustively investigated and they have been cleared of any complicity or malfeasance.

Posted by Patrick Monk. RN on Feb. 15, 2012 @ 10:07 am

Let's ask the US Attorney to investigate contracts awarded by Ed Lee under the Brown and Brown/Newsom administrations and leave the cannabis clubs alone. I can almost guarantee some indictments if she would only look.

Posted by Guest on Feb. 15, 2012 @ 10:17 am

Is this really City and County of San Francisco vs. Cobra Solutions and Telecon, or is it Cobra Solutions and Telecon v. City and County of San Francisco. I believe that Cobra is the Plaintiff in the case to be decided today, but, not being a lawyer, I'm not sure whether there might be reason for it to have the same name as the City's suit against Cobra and Telecon.

Posted by Guest Ann Garrison on Feb. 17, 2012 @ 9:11 am

We talked about this a bit at the Project Censored book talk for its Censored 2012 Yearbook at Modern Times last night. Mirkarimi-Lopez news eclipsed all other San Francisco news for more weeks than I kept track of. Coverage of Ed Lee's involvement in a fraud and corruption scandal doesn't compare. Neither does coverage of Gascón's indictment of Go Lorrie's Vans and its top employees for absentee voter fraud.

Posted by Guest Ann Garrison on Feb. 17, 2012 @ 12:03 pm

media would just cover things to suit the agenda of the far right, I mean far left, we would all live in a Utopian Nirvana. The citizens would know better what to be "outraged" at, if the media covered abortion... I mean GMO foods... I mean Obama's birth certificate... I mean Israel... I mean we should all live like they do in European Greece. It does get confusing figuring out what to be indignant over.

If the media just suited the biases of the correct group we could end injustice, defeat the manarchy, promote the correct racialism, smash the illuminati, free Mumia, stop chem trails, promote oneness and usness, stamp out fast food, ban smokers from planet earth, create wellness and an era of good feelings.

Sadly today all the citizens are too duped by, far right wingers, I mean far left wingers, the mainstream press, or was it George Soros, or is it Koch brothers, or is it the ghost of Adolph Coors?

Posted by sure on Feb. 17, 2012 @ 12:59 pm

Yeah, watch out guys! ; )

Posted by Guest on Feb. 17, 2012 @ 4:25 pm

Very typical. Point out any potential problems with San Francisco Goverment and how it conducts its business and the City Attorney will sue you. I think it is done in the hopes that a settlement will result in you releasing any and all claims against the City. Kinda like being "leaned" on by the Mob.

Posted by roflynn on Mar. 26, 2012 @ 10:56 am