November 6, 2002

LAST WEEK THE California attorney general and the San Francisco city attorney sued the city's exclusive towing vendor, charging City Tow with cheating the city and the state out of millions of dollars through various schemes involving unclaimed vehicles. City Tow is the private company that for years has held the exclusive – and lucrative – contract to tow cars on behalf of San Francisco. According to the City Attorney's Office, Dimitrios McCarthy, a former City Tow employee, tipped off officials last year, prompting an investigation that culminated in last week's lawsuit.

But for years, San Francisco officials protected City Tow and prevented public oversight of its daily operations.

In April 1999 the Bay Guardian sued the city under the state's Public Records Act and the city's Sunshine Ordinance after San Francisco officials denied the paper access to audit information that City Tow was required to make available to the city – information that might have shed light on exactly the sort of problems the City Attorney's Office is now trying to rectify. But instead of supporting the public's right to know what the big vendor was doing, then-city attorney Louise Renne's office backed City Tow, insisting that the internal audit information reflected City Tow's "trade secrets" and that the public interest in keeping the records secret "clearly outweigh[ed]" the public interest in their disclosure.

Stuart Sunshine, who was then executive director of the San Francisco Department of Parking and Traffic, told the San Francisco Superior Court that the city was in the process of awarding a new towing contract and that disclosure of the documents requested by the Bay Guardian would "taint" the bidding process and harm City Tow. In May 1999, San Francisco Superior Court Judge David A. Garcia ruled in the city's favor and denied public access to the records.

Not only did the city manage to keep City Tow's audit information from the public, but also City Tow remained the city's exclusive towing vendor. The city didn't even begin the process of rebidding its exclusive towing contract until 2001 – and the first request for proposals was so badly flawed that it had to be redone.

The city is finally crafting a new request for proposals, and in the meantime, city officials have entered into a series of month-to-month extensions of the original 1994 contract.

The Bay Guardian's 1999 investigation into the private vendor's internal operations followed a critical assessment by the city Controller's Office. In September 1998, in a report titled "The City Tow: The Department of Parking and Traffic Should Rebid Its Towing Contract and Improve Its Contract Oversight," the controller criticized City Tow and the city's failure to hold the private vendor to its promises to provide meaningful information about its daily operations. Among other things, the controller found that while San Francisco annually towed more vehicles than most other cities, the city was only third in the average revenue it received per tow. The controller also noted that City Tow had never submitted a monthly activity report (concerning its daily operations and the disposition of cars it towed) to the city, as required by its 1994 contract.

At the May 6, 1999, hearing on the Bay Guardian's Public Records Act lawsuit, Judge Garcia optimistically observed that the city – faced with criticism from the controller and public oversight pressure from the Bay Guardian – might strike a harder bargain with its exclusive towing vendor in the next contract. But this never happened. Nor does it appear that the city ever bothered to use a new enforcement tool available to it in 2000, with the passage of the Sunshine Initiative. Section 67.29-7 of the city's Sunshine Ordinance required any private entity towing cars in San Francisco to maintain accurate records of its operations or face severe penalties.