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Accusations of corruption over parking garage contract

February 11, 2011 6:35:55 PM PST
A San Francisco small businessman is lobbing accusations of corruption and influence-peddling at city officials. It has to do with the very lucrative contracts to run the city's parking garages.

The city attorney is investigating the businessman's claim he has filed. He won the bidding to run six of San Francisco's most profitable garages, but somehow he lost the deal.

For Fred Bekele, the American dream was quite real. He immigrated from Ethiopia 30 years ago and worked his way up in the parking business.

"I was a cashier, valet attendant, you name it, and I've done everything, and then I say it's about time for me to do this and I can do this myself, said Bekele of Convenient Parking, LLC, who manages three garages for the city.

When the Municipal Transportation Agency (MTA) announced a new, open and fair bidding process, Bekele saw a chance to take his business to the next level.

"I bid. Yes, I bid," he said. "[I won] completely fair and square."

Bekele partnered with a Canadian company and won the contract, pending board approval, to manage six of the city's most profitable garages, including Civic Center, St. Mary's Square and Golden Gateway. But behind closed doors, the wheeling and dealing was about to begin.

"The companies who did not like the outcome were able to influence powerful people in the city to get this thing reversed or rejected, and that's exactly what happened," he said.

The claim that Bekele's attorneys filed against the city and county allege "unfair business practices," "retaliation," "intentional interference with contractual relationships," and more.

At the center of the controversy is the relationship between MTA executive director and CEO Nat Ford, who oversees the bidding process, and prominent San Francisco attorney Steven Kay, who also represents the 49ers. Ford told the I-Team that Kay is his personal attorney, but that they had no conversations about the parking garage contracts.

Noyes: Any conversation with Steven Kay?

Ford: Steven Kay? Not in terms of any parking contracts, he is-- he represents me as my attorney from time to time, but no involvement with the parking contracts.

No involvement? In a personal and confidential letter Kay sent Ford on behalf of another one of his clients -- Pacific Park Management, who lost the St. Mary's Square garage contract to Bekele -- Kay called the bidding an "unjust and inequitable process" and asked Ford to set aside the results.

The same day Kay sent that letter, an MTA staff member wrote an e-mail saying Ford was now discussing "rejecting [all the] proposals."

Then, there's the meeting at Kay's penthouse office on the Embarcadero, New Year's Eve 2009.

"My partner called me and told me that, you know, these other companies that are second and third place winners want to meet with us at Steven Kay's office," said Bekele.

Bekele's claim against the city and county says Kay claimed "he was given approval to mediate the meeting by Mr. Ford," and that an executive from Five Star Parking, another of the losing bidders, made a threat.

"If we don't renegotiate and give up some of the garages that we had won, they'll stall the process indefinitely and maybe even get it rejected," said Bekele.

"My client was literally told, 'We have enough juice,' and they used the term 'juice' to stop your contract," said Bekele's attorney Whitney Leigh.

Bekele refused to give up any garages, and he did, in fact, lose the contract. It looked like the vote would go well at the MTA board meeting last March. Staff still recommended that Bekele get the contract.

"We feel we at this point it would be in the best interest of everyone to go ahead with the awards at this time," said Bond Yee, MTA director of Sustainable Streets, at the March meeting.

Bekele even thanked Ford. But somehow Bekele didn't get the votes. With two "yes" and three "no" votes, the motion was not approved. One board member tells the I-Team he wasn't even sure which contract they were voting on, and that he had a hard time getting answers from Ford.

So Bekele had just one option -- return to the board one last time with his new lawyer, former president of the Board of Supervisors, Matt Gonzalez.

"I would rather not be talking about damages a year and a half from now, or two years from now, in front of a jury," Gonzalez told the board on June 15, 2010. "I would rather not take your depositions or director Ford's deposition or request documents. I think this board should reconsider what happened in this matter."

Bekele then addressed the board, saying, "I'm going to have to protect my rights and pursue legal action."

Ford finally recused himself from the garage contract process last July because of "a business relationship that may create the appearance of conflict of interest" -- Kay. But Ford sent that letter four months after Bekele lost the contract.

Noyes: Why not recuse yourself earlier, months before? At that point, the damage was done.

Ford: I don't know if there was any damage done because--

Noyes: He lost the contract.

Ford: I don't think--

Noyes: Bekele lost the contract.

Ford: We, as a staff, recommended the award of that contract.

"The agency's been accused of backroom stuff, and so we take it very seriously," said MTA board chairman Tom Nolan.

Nolan says investigators are looking into how Bekele lost the garage contract and into that meeting in Kay's office.

Nolan: Actually, I think they're still talking to people who were participants in the meeting about what did in fact happen, and you know, this is?

Noyes: Who's talking to people?

Nolan: Our people, the attorneys are talking.

Noyes: Which attorneys?

Nolan: The city attorney -- our city attorney.

Investigators at the city attorney's office say they will wrap up the case very soon.

Ford and Kay have something else in common -- former San Francisco Mayor Willie Brown. He shares office space with Kay, and Brown recruited Ford for the top spot at the MTA. The mayor tells the I-Team he had no conversations with Ford about the parking garage issue. The I-Team has called and e-mailed Kay and tried to reach executives at Pacific Park and Five Star, and has not heard back.

If you have a tip for the I-Team, send us an e-mail here or call 1-888-40-I-TEAM.


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