A tale of two lawsuits
San Francisco says it was defrauded by construction giant Tutor-Saliba, but a whistle-blower charges that city officials share the blame

By A.C. Thompson

Early next month San Francisco Superior Court Judge James Warren will hear arguments in the case formerly known as John Doe v. John Doe.

The case was filed in August 2002, but all details about this unusual legal skirmish were kept secret for more than six months, shrouded by the California False Claims Act, the state's whistle-blower statute.

The law allows private citizens to file suit against government officials for wrongdoing – typically embezzling or taking bribes – and keeps such proceedings confidential, at least initially. The idea behind all this secrecy is to protect the whistle-blower from reprisals.

The wraps came off Doe v. Doe in March 2003, when a court order sealing the case expired, revealing a man named Kevin Williams as the initiator of the lawsuit – and adding a new, previously unreported wrinkle in a long-simmering controversy.

In his suit Williams accuses San Francisco International Airport director John Martin and five other city employees of allowing three corporations, including construction giant Tutor-Saliba Corp., to defraud taxpayers during the course of the $2.9 billion expansion of the international terminal. Williams has firsthand knowledge of the airport's byzantine contracting process because he was a city employee paid to oversee a key aspect of the epic-scale construction job from 1995 to 2000.

He's not the only person who says Tutor-Saliba vacuumed cash out of public coffers. Three months after Williams filed suit, San Francisco city attorney Dennis Herrera brought his own, remarkably similar lawsuit charging Tutor-Saliba with conspiring to rip off $30 million in city public funds.

There's a key difference between the two cases, however: In Herrera's version of reality, the city had no clue about Tutor-Saliba's nefarious activities. Williams, on the other hand, says specific city staffers are partially responsible for the purported scam bonanza.

The distinction is more than semantic. If Williams is right, then perhaps those city employees should have to answer for their actions. And if city officials were aware of what was going on, Herrera will have a harder time arguing that the city was defrauded.

Management at the airport, says attorney John Scott, one of Williams's lawyers, allowed the city to be scammed, either through "negligence or collusion [with Tutor-Saliba]."

The City Attorney's Office, Scott says, "is circling the wagons to protect these people instead of investigating them."

Tutor-Saliba has steadfastly denied any wrongdoing. In a Bay Guardian interview last year, president Ron Tutor described the allegations as "too absurd even to comment on."

Herrera's suit is a declaration of war against the firm, one of the largest contractors specializing in public works jobs in the country. The City Attorney's Office is seeking $30 million, plus punitive damages, and a court order barring the company from working on any city-funded San Francisco public works jobs in the future.

According to Herrera's 56-page legal complaint, the Los Angeles County-based firm, which has ties to outgoing mayor Willie Brown and Sen. Dianne Feinstein, submitted "false and inflated pay applications to Airport," cooked its books "to hide its grossly inflated and fraudulent profits," and ran roughshod over the city's affirmative action system, which sets aside public works contracts for minority- and women-owned businesses.

In court documents, Herrera says Tutor-Saliba asked for and received innumerable contract modifications that boosted its payment from $620 million to an astronomical $980 million. Many of those changes, the city attorney claims, were designed to improperly enlarge the company's profits.

Herrera's wide-ranging attack employs a variety of legal weapons, including the federal Racketeer Influenced and Corrupt Organizations Act, a statute designed to take down organized crime outfits.

But Herrera hasn't gone after any airport staffers or other city employees who OKed the dubious contracts. "If there were any legitimate charges against these people, we would have pursued it and investigated it," city attorney spokesperson Matt Dorsey says. "Kevin Williams is not a whistle-blower and has not made any meaningful contribution to any investigation or litigation pursued by this office."

Williams lives in a different world. He says if people had only listened to him back in 1999, Tutor-Saliba would never have bilked the city.

"There were hundreds of millions in contracts approved over my objections," says Williams, who scrutinized the company's dealings with the airport from the late 1990s until 2000 for the San Francisco Human Rights Commission.

His work with the HRC took him to the airport, where he headed an affirmative action program, ensuring that a chunk of the multibillion-dollar expansion project at SFO went to minority- and women-owned businesses.

He says airport director Martin and deputy directors Tom Kardos, Earnie Eavis, and Jackson Wong are partially to blame for the Tutor-Saliba mess. He also lays blame on HRC staffer Zula Jones and former HRC director Marivic Bamba.

All have denied the allegations in court documents.

You may remember Williams from the newspapers a few years back. He's the guy at the HRC who captured headlines with a string of bombshell allegations about corruption and cronyism in the administration of Mayor Willie Brown (see "SFO Cover-up," 8/1/01).

His testimony led to criminal indictments against the HRC's Jones – later dropped in part because the Federal Bureau of Investigation raided her office without a warrant – and prompted Scott Co. of California to plead guilty to federal wire fraud charges.

While working at the airport, Williams became well acquainted with Tutor-Saliba. In 1999, Williams began telling his superiors, both publicly and privately, that white-owned corporations including Tutor-Saliba were scamming the system by using bogus "front" companies to score contracts set aside for minority- and women-owned companies.

In internal city memos obtained by the Bay Guardian, Williams claimed the firm scored contracts by listing two different black-owned construction companies as subcontractors but barred those companies from actually doing any work.

In December 1999, Williams implored Controller Ed Harrington to stop paying Tutor-Saliba until the company started playing by the rules; Harrington didn't take that step.

Williams says officials at a variety of agencies blew him off. "I reported these things to my bosses, to the Airport Commission, the Human Rights Commission," Williams recalls. "I didn't get any feedback."

Throughout 1999 he showed up at Airport Commission meetings to blast the body for giving contracts to Tutor-Saliba. In court documents Williams claims the commission, which is supposed to oversee the publicly owned airport, circumvented affirmative action requirements by approving $650 million in contracts and contract modifications without any review from the HRC.

"He was pointing out fraud, and the city continuously ignored him," says Eric Safire, another lawyer representing Williams. "They knew those companies were fronts. And if they didn't, all they had to do was read one of Kevin's memos."

SFO refused to comment on the allegations. "We don't comment on pending litigation," spokesperson Michael McCarron says.

Two lawsuits. Two versions of reality. One big mess. The intertwined suits, to lift a line from famed muckraker Jonathan Kwitny, form a complex double helix of politics and law enforcement. But at the core is a simple question: who's responsible?

These days the city seems more interested in going after Williams than in going after the people who may have played a role in the contracting quagmire at the airport.

In 2000, after testifying before a federal grand jury against Jones, his boss at the HRC, Williams was demoted and stripped of his role as a contract monitor. He's since been hit with termination proceedings – which he's fighting in court.

The city says he's been derelict in his duties. Williams thinks that's more than a little ironic.

E-mail A.C. Thompson at ac_thompson@sfbg.com.


December 24, 2003