Vanessa Hua

By Erin Podlipnik

› news@sfbg.com

It would be hard for the James Madison Award judges to overlook a scoop that brought down a top elected state official or the dedication of a reporter who spent her free evening hours sifting through nonprofit organization tax forms and making photocopies of anything she could get her hands on.

San Francisco Chronicle reporter Vanessa Hua began with a tip from a loyal source in the San Francisco Asian community, then spent three and a half months following the paper trail that led to a story exposing campaign finance fraud orchestrated by Julie Lee, a top Democratic Party fund-raiser, a mayoral appointee to the San Francisco Housing Authority, and founder of the Neighborhood Resource Center (NRC).

Through documents obtained under the California Public Records Act, Hua was able to show how Lee laundered public funds and other money into Kevin Shelley's 2002 campaign for secretary of state. The scandal unfolded during a series of stories, triggering an official probe that ultimately forced Shelley to resign in disgrace.

The story took off after Hua found a grant line item stating that, in 2002, Shelley helped set aside $500,000 for the NRC to build a community center in the Sunset District. The center was never built. Hua and her longtime colleague Christian Berthelsen, now a Los Angeles Times reporter, started making record requests and collecting bank, tax, and real estate records, community center invoices, and anything that would track the money and names of people involved.

"There is this investment in time when going through records where you think 'Is this going to lead anywhere?' " Hua told the Guardian. "But the records are very important because you never know how they will work together to tell you something."

As the reporters received packages of documents that seemed to be missing some key filings, Hua became suspicious. There was no trace of the $500,000 grant in three years of tax files, and in four years Lee had not even applied for a construction permit for the supposed community center.

Based on bank transactions, an online database maintained by the secretary of state, and information received from the State Controller's Office, five suspicious donations to the Shelley campaign were found. Around the same time, Lee paid the donors a comparable sum for their alleged work with the community center.

Real estate records and follow-up interviews further showed that Lee had illegally funneled $125,000 in public funds and coerced real estate clients into donating to the Shelley campaign.

"Working on this story was engaging because Vanessa really gets you excited," Berthelsen told us. "She will make 50 phone calls just to get one fact correct, because that's the kind of reporter she is."

Lee has been indicted by a federal grand jury for fraud, witness tampering, and embezzlement, and by the state for forgery and grand theft. Both cases are in the pretrial hearing stage but will be moving forward later this year.

Hua hopes her success on this story sends a hopeful message to other reporters: "I hope this shows that this type of reporting can be done at the local level by beat reporters." *