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Politics & Policy

City blasts SF environment head for appearance of ‘pay to play,’ says Recology tried to influence her with $25K donation

Debbie Raphael at the offices of San Francisco's Department of Environment on Thurs. August 24, 2017. | Getty Images

A newly released report blasted San Francisco’s top environment official for running a department with a “poor ethical climate” and creating the appearance of “pay to play” by soliciting badly timed donations from trash-hauling giant Recology.

The report found that Department of the Environment Director Debbie Raphael, who resigned Thursday, should have known better than to ask Recology for donations shortly before signing contracts with the firm. It also faulted her department for failing to be forthcoming with investigators and withholding information about at least one of the donations.

Regardless of whether the donations influenced contract decisions, the report found they “undermine public trust in the department’s decisions, create the appearance of a company making gifts to favorably influence department decisions that would directly benefit them, increase fraud risk and reflect poor management decision-making.”

The Controller’s Office released the report Friday following a months-long investigation into Raphael with the City Attorney’s Office. The report came a day after she became the eighth official to resign in the wake of the City Hall corruption scandal and three days after The Standard first reported that Raphael asked Recology for a $25,000 donation shortly before awarding the firm a lucrative contract.

Records show Recology gave the donation in early 2015 to help pay for a series of Earth Day events. A couple of months later, the department awarded Recology a contract to haul San Francisco’s waste to a landfill owned by the firm in Solano County.

The report found that Raphael should have known Recology intended to influence her with the $25,000 donation. Investigators cited an email former Recology executive Paul Giusti sent Raphael calling the donation a “business development opportunity.”

“This correspondence supports a finding that Recology intended to influence Director Raphael’s official decision-making power,” the report found. “Although the general goal of fundraising for the Earth Day event was appropriate, she should have at least been suspicious of Recology’s intent given the finalization of the [contract].”

The report also found that Raphael signed a hazardous waste contract in 2019 less than a month after soliciting a $6,400 donation. The department later refunded the donation after the scandal broke.

On Thursday, Mayor London Breed appointed Tyrone Jue as acting head of the department. Jue said in a statement Friday that the department was reviewing the report and was "committed to making any improvements necessary to enhance transparency and restore the public's trust."

Recology has been one of the biggest players in the scandal surrounding former Public Works head Mohammed Nuru. The U.S. Attorney’s Office has accused two former Recology executives, Giusti and John Porter, of bribing Nuru with donations from the firm. The firm has also admitted to overcharging ratepayers nearly $95 million and three of its local companies are under a deferred prosecution agreement.

A Recology spokesperson, Robert Reed, noted in a statement to The Standard on Friday that the environment department awarded the 2015 contract after soliciting bids through a competitive process.

"Since then, we have taken substantial steps to appoint new leadership, strengthen our internal controls, and significantly modify our approach to community engagement," Reed said.

He also said that the firm has not made any charitable donations at the request of city officials since agreeing not to do so in a settlement last year.