How business was done - Page 3

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.

"In the case of Marcus Armstrong, the control within the city failed and the control within Cobra failed," Harrington, now head of the San Francisco Public Utilities Commission, told the court. "We had both controls in place. If they had worked, the city would have been protected. Both failed."

Cobra is seeking damages for breach of contract (the city's failure to pay monies owed Cobra), and civil rights due process violations in connection with the city's apparent conspiracy to bar Cobra from doing further business with the city.

A business valuation expert testified Cobra Solutions was valued between $5.2 million and $8.8 million based on future lost profits from the city's debarment. With attorney fees and court costs, the city could be on the hook for as much as $10 million.

The city has subsequently established more stringent controls as it relates to the authorization of work assigned to master contractors and sub-contractors. The jury was expected to resume deliberations on Feb. 14 and deliver its verdict by week's end. Check the Politics blog for the latest.