October 23, 2002

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Willie Brown's dirty money
How alleged – and convicted – thieves helped bankroll the mayor's reelection bid.

By A.C. Thompson

DURING THE 1999 campaign cycle, Mayor Willie Brown and his close allies received $43,550 in contributions from corporations and individuals now charged with embezzling school district funds, a Bay Guardian review of public records indicates.

In one instance, prosecutors allege in court documents, $25,000 was stolen from the San Francisco Unified School District and given directly to the local Democratic Party for use in Brown's campaign. So far, none of the tainted money has been returned.

"If this money went to people running campaigns, I hope they do the right thing," school board president Jill Wynns told us. "People who received money that was stolen from the children of San Francisco should want to give it back."

In recent weeks state and federal prosecutors have brought three separate felony embezzlement cases against SFUSD staffers and companies that contract with the school system. The defendants – two corporations and seven individuals – are charged with collectively siphoning more than $1 million from school coffers.

Timothy Tronson was the first to show up in the headlines. On Oct. 9, Tronson, a former $100-an-hour SFUSD consultant, was arrested and charged with masterminding a complex scheme to steal $850,000 in school funds. Five other alleged thieves were later arraigned in that case. Then, on Oct. 15, in a related indictment, Strategic Resource Solutions, a North Carolina-based corporation under contract with the SFUSD, pleaded guilty to two counts of grand theft of school money. The company agreed to pay $1 million in fines and restitution to the school system.

A day later federal prosecutors charged U.S. Machinery, a Fremont-based company, and Dennis McQuoid, a former SFUSD official, with stealing roughly $200,000 from the district.

The indictments have received considerable press – but there's been scant notice of the connection to the mayor's campaign.

Money to Brown

The story stretches back to April 1999, when the SFUSD entered into a 22-year, $21,289,909 contract with Strategic Resource Solutions. Under the terms of the agreement, SRS was to provide a range of energy-saving services at schools across the city: installing boilers, windows, plumbing, lighting systems, and trash disposal equipment. An escrow account was set up to fund the long-term project.

Tronson, according to a 126-page affidavit attached to the district attorney's indictment brief, was authorized to write checks on the escrow account. Prosecutors contend in court documents that Tronson conspired with five others to raid the account over a period of several months, writing invoices for work that was never done and using a Santa Cruz check-cashing business to launder the money.

Those indicted with Tronson include his wife, Soodabeh Tronson; his brother-in-law Saeed Karimi; Alpha Bibbs III, the owner of a company called Covenant Enterprises; and SRS employees Gregory Gabrilson and Thomas Marnane. Charged with 22 felonies – among them grand theft, embezzlement, money laundering, and tax evasion – Tronson is facing up to 21 years in prison and more than $1 million in fines; his purported coconspirators are also looking at penitentiary time and fines.

"The allegations of misuse of government funds are very serious," said assistant district attorney David Pfeifer, the lead prosecutor on the Tronson and SRS cases. "The investigation in [the Tronson case] is ongoing, and there are other matters still under investigation at the school district."

Campaign finance records show Tronson and others charged in the case made a series of donations to Brown and to organizations that helped with Brown's 1999 campaign:

In the fall of 1998, Tronson gave $1,550 to the Alice B. Toklas Gay, Lesbian, Bisexual, Transgender Democratic Club, a group that spent at least $167,000 in soft money on Brown's behalf.

Former SRS vice president Gabrilson wrote a $500 check to Brown's reelection committee in 1999. According to prosecution documents, he asked SRS to reimburse him for the donation.

SRS in 1999 gave the Alice B. Toklas club a hefty $15,000.

Covenant Enterprises in 1999 donated $750 to the Brown committee and gave $25,000 in allegedly purloined funds to the San Francisco Democratic County Central Committee. According to the court documents, a Covenant official handed over the check at a Brown fundraiser and believed the money would be funneled into Brown's reelection campaign.

Virginia Durand-Bibbs, wife of Bibbs and co-owner of Covenant Enterprises, donated $250 to Brown's committee. (Bibbs-Durand has not been charged with any crime.)

Wade Crowfoot, current treasurer for the DCCC, said the party funneled considerable amounts of soft money into the 1999 Brown campaign. If there was money stolen and given to the committee, "it was probably spent on the mayor's reelection campaign," said Crowfoot, who did not sit on the committee at the time of the $25,000 donation. Campaign records show the DCCC poured $265,000 into the mayor's reelection effort.

Crowfoot said he wasn't sure whether the Dems would be returning the Covenant donation to the SFUSD.

Brown spokesperson P.J. Johnston argued that District Attorney Terence Hallinan's 1999 campaign was also partially funded by the DCCC and the Alice B. Toklas club. "This is ridiculous," he said. "Those are political organizations that fund a whole slate of candidates."

Asked whether the mayor may have accepted embezzled money, Johnston said, "Every campaign contribution was scrupulously examined, and only contributions that fit within the confines of the law were accepted."

SRS spokesperson Keith Poston told us the company's gift to the Alice B. Toklas club "was a legitimate contribution. There's no question about whether it came from an account it shouldn't have or anything." He said he didn't know how the club spent the money.

"Before the District Attorney's Office was ever involved, we launched our own internal investigation," Poston said, "and turned all the information over to the district attorney." E-mail A.C. Thompson at ac_thompson@sfbg.com.