SLUGs and suckers
The city is dumping millions of dollars into a troubled nonprofit. What are taxpayers getting in return?

By A.C. Thompson

Municipal government in San Francisco works in mysterious, sometimes downright baffling ways. Case in point: late last year the city awarded a $4.8 million contract to a near bankrupt nonprofit organization that, by one city agency's own assessment, had seriously botched an earlier multimillion-dollar contract.

The name of that nonprofit? The San Francisco League of Urban Gardeners, a.k.a. SLUG, a.k.a. the outfit with strong ties to former mayor Willie Brown that is now under investigation for possible criminal activity connected to last fall's mayoral election.

Three government agencies – the offices of the city attorney, the district attorney, and the secretary of state – are looking into SLUG in the wake of bombshell allegations that nine SLUG employees were pressured by the nonprofit's executive director, Jonathan Gomwalk, and former director Mohammed Nuru, to vote and campaign for Gavin Newsom. The charges against Gomwalk and Nuru, the latter a longtime Brown ally, were initially reported in the San Francisco Chronicle in January.

When we started digging through city file cabinets and interviewing SLUG insiders, we came across a deeper, seemingly more systemic problem, one revealed here for the first time.

Money for nothing

SLUG's headquarters are located in a pea green warehouse on Oakdale Avenue in an industrial quadrant of Hunters Point, right next to the whoosh and rumble of the 280 freeway. Established in 1983, the nonprofit, which maintains a network of community gardens, describes itself as an organization "that provides employment opportunities and training to individuals who are interested in gardening and the greening of our city."

But the nonprofit's biggest project has nothing to do with plants.

It's a job-training program for poor folks called the Transitional Employment Program, whose goal, according to the city, is to teach the "skills needed to become employable in the sidewalk cleaning industry."

People enrolled in it – most of them African American, and many of them on welfare – spend 30 hours a week sweeping dirty city streets for $7.50 an hour. They're the broom-pushing clean-up crews you see all over town in forest green vests and coveralls.

Like most SLUG undertakings, the program is funded almost entirely by taxpayer dollars – in this case, grants from Muni, the San Francisco Department of Human Services, and the San Francisco Department of Public Works, where Nuru, the former SLUG boss, serves as deputy director. Between 1998 and 2002 the city forked over about a million dollars a year for the program.

SLUG's top honcho is proud of the program. "I believe the program is a huge success," Gomwalk stated in an e-mail to the Bay Guardian. "It has consistently, since its inception in 1998, surpassed its stated contractual goals."

But a close examination suggests that's not entirely true. While it's undeniable that SLUG spiffed up the streets in places like Polk Gulch, its job-training efforts were far less successful, judging from internal city documents and e-mails obtained by us.

In the fall of 2002, staffers at Human Services, grappling with a shrinking budget, began scrutinizing SLUG's Transitional Employment Program. They weren't impressed.

Under the terms of the SLUG contract, only 50 percent of the people who entered the nine-month program were expected to complete it.

But SLUG couldn't even that goal: its graduation rates were hovering around 32 percent.

Judging by Human Services' calculations, SLUG graduates weren't finding a ton of success in the work world either. In fact, many got stuck with dead-end jobs that paid so poorly that the workers were eligible for welfare.

To make matters worse, the nonprofit wasn't submitting the paperwork required by the contract, which made it impossible to pinpoint how many people were getting jobs as a result of SLUG.

All this disastrous data alarmed Human Services insiders. "I believe that they are not a good employment program and are poorly managed," Dorothy Enisman, who oversees the department's welfare-to-work initiatives, stated in an October 2002 e-mail sent to another city staffer. In another e-mail from the same time period, another city worker bluntly summed up the view of the department: "Folks don't become employed as a result of the program."

There was a move in the department to axe the deal with SLUG. "SLUG is not meeting its performance goals nor its reporting goals and therefore should not be funded for fiscal year 2003/2004," opined a third Human Services staffer, in an October 2002 e-mail.

Despite the concern, the city renewed SLUG's funding, and judging from later SLUG reports, the abysmal success rates continued into 2003.

Human Services deputy director Jim Buick told us SLUG "did meet some goals but didn't meet others. There were mixed findings." He says city staffers who were worried about the program didn't have all the proper figures.

In fact, Buick argues that SLUG's done well when it comes to finding jobs for its clients; "they blow away" other programs, he said.

However, he was unable to give us any hard numbers on the subject.

Denials and disputes

Gomwalk stands up for his organization, describing it as a "successful program that has consistently met all of its performance goals," he said in an e-mail.

SLUG, he continued, offers "hope and opportunity" to "clients who too often have been made to feel hopeless and worthless" and has helped disenfranchised people "completely turn their lives around" and lead "lives as gainful, productive, tax paying citizens with healthy self esteem and dignity."

He argues that even if only a small fraction of the people who enter the program wind up with jobs, that's still a positive outcome.

But according to a former SLUG employee we interviewed, a person with extensive knowledge of the operation, the program chronically failed the folks it was supposed to serve. "Only one guy out of 8 or 10 ended up getting a job," the former employee told us. "The whole setup wasn't feasible. It took us a while to realize you can't just throw somebody in a job-training program and expect them to get a job if they can't read or write."

Still, in this person's opinion, Gomwalk "really did care about these guys. He spent a lot of one-on-one time with the guys."

Raising the 'Titanic'

SLUG has been flailing on another front as well. In June 2003 the company, buckling under a deficit of more than a million dollars – including $468,000 in unpaid federal payroll taxes – suffered a complete financial meltdown, laying off all but three workers and abandoning its contractual obligations to the city.

Just how SLUG got into such dire fiscal straits remains unclear.

In many towns public officials wouldn't dream of handing over more money to a nonprofit with such a Titanic-like history. But in December 2003, in the midst of the mayoral runoff race, the city decided to play savior to SLUG, bailing out the sinking nonprofit by giving it a new, even juicier contract. The deal will give SLUG up to $4.8 million to run the employment program through the end of 2005.

As they have in the past, Muni, Human Services, and the Department of Public Works ponied up the money. Exactly what the people of San Francisco will get for that $4.8 million remains to be seen.

E-mail A.C. Thompson

March 10, 2004