Financial records obtained by The Standard reveal that San Francisco Mayor Daniel Lurie and his family previously had investments in OpenGov, a software company that received a controversial multi-million-dollar contract this month from the city.
Documents detailing the financial dealings of Lurie and his family show that as of 2020, he had at least two indirect investments in OpenGov, which was acquired last year by Cox Enterprises for $1.8 billion. Both of these investments were made through a limited partnership in the name of Lurie’s mother, Miriam “Mimi” Haas, and late stepfather, Peter Haas, the former CEO and chairman of Levi Strauss.
The investments — valued between $110,000 and $1.1 million — were directed to two venture capital firms with stakes in San Francisco-based OpenGov, which was founded by entrepreneur Joe Lonsdale and Zac Bookman, who serves as CEO. Both men have donated to Tipping Point Community, the nonprofit Lurie launched.
The Standard’s findings offer a glimpse into Lurie’s vast wealth and connections, as well as the ethical landmines that could hobble a mayor who’s an heir to the Levi Strauss fortune.
OpenGov this month signed a $5.9 million deal to revamp San Francisco’s convoluted permitting software — a project known as PermitSF — despite staff objections over the cost and quality of the technology. Lurie championed the process as an example of City Hall finally moving at the speed of business.
The Standard was first to report on the ties between the Lurie administration and OpenGov.
Charles Lutvak, a spokesperson for the mayor, said any suggestion that Lurie’s investments influenced the OpenGov contract is “absolute nonsense,” adding that Lurie put his assets in a blind trust upon taking office in January.
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“Mayor Lurie does not have a penny invested in OpenGov or any finalist for the PermitSF contract — and he never has as mayor,” Lutvak wrote in an email. “Before he was mayor, he had an investment in a fund that had an investment in a fund that had an investment in OpenGov, which he was only made aware of last week.”
The mayor’s office declined to provide answers to more than a dozen questions posed by The Standard, including how much money Lurie made from his OpenGov investments and the nature of his relationship with people involved in those deals.
The web of connections between Lurie and OpenGov has heightened concerns among city officials. Last week, Supervisor Jackie Fielder called for a public hearing into the contract, saying The Standard’s findings were “eyebrow-raising.” The Civil Service Commission is investigating whether the contract should have been reviewed by its board.
Staff across multiple city departments have raised concerns that one of Lurie’s policy chiefs, Ned Segal, steered the contract to OpenGov by using an informal procurement process to side-step other vendors. Email records obtained by The Standard show that Segal, a former Tipping Point board member, was in contact with OpenGov’s Bookman more than a month before the city began its official search for vendors.
Supervisor Connie Chan, who cosponsored Fielder’s upcoming hearing on OpenGov, said the mayor’s ties to the company show the need for a City Hall inspector general, a watchdog role that is expected to be filled in January by Assistant U.S. Attorney Alexandra Shepard.
“I think the challenge here is that we need to be innovative and efficient,” Chan said. “And then, on the other hand, are we abandoning transparency, integrity, and ethics to do that?”
Critics additionally are concerned about OpenGov’s founders’ charitable giving to Tipping Point, which Lurie ran for nearly 15 years. OpenGov’s founders, Bookman and Lonsdale, donated roughly $31,000 over the past decade, according to a Tipping Point spokesperson. One of OpenGov’s advisers, Katherine August-deWilde, who oversees the mayor’s elite advisory group Partnership for San Francisco and is a Tipping Point board member, has contributed up to $2.85 million to the nonprofit over the last decade.
OpenGov spokesperson Danielle Hoffman said all investors in the company were paid out after the Cox Enterprises acquisition early last year. The mayor and his staff signed forms declaring they had no investments in OpenGov (opens in new tab) at the time the contract was signed at the start of this month.
“With proven software and implementation expertise in local government, OpenGov is focused on helping the city of San Francisco succeed in its efforts to modernize permitting for staff, residents, and businesses,” Hoffman said in a statement.
Sean McMorris, an ethics expert with the good governance nonprofit California Common Cause, said the mayor’s unusual contracting process and past investments appear “suspicious” and add to the perception that Lurie and his staff played favorites in awarding the lucrative contract.
“If it was just a previous financial relationship, the public would still scrutinize that,” McMorris said. “But it’s not just that. It’s that, plus removing the contract from formal review, picking them over another qualified company that cost much less, and ignoring staff’s recommendation.”
Unpacking the mayor’s money
Tracking the mayor’s sprawling investments is no easy task, but his holdings can be better understood by cross-referencing records connected to his mother, his wife, and his nonprofit.
The Standard discovered Lurie’s financial ties to OpenGov through 2019 financial disclosures filed by his wife, Becca Prowda, who works as Gov. Gavin Newsom’s director of protocol. In 2020, the filings — known as Form 700s — continued to detail the couple’s stake in the Miriam and Peter Haas Investment, LP, noting close to 90 investments held by the family’s limited partnership. Prowda reported that she and Lurie owned at least 10% of the fund, which had a value between $3.3 million and $33.17 million.
Lurie’s investments are now under the control of a blind trust managed by Danielle DeLancey, his chief of staff when he led the Super Bowl 50 host committee (opens in new tab), and Parker Phillips, a wealth manager who has worked for Lurie’s family for years and whose firm is located at Levi’s Plaza on Battery Street.
DeLancey, who oversees another Lurie family investment fund called Wilmot Ventures, hung up when reached for comment by The Standard. Phillips did not return a request for comment.
Prowda’s Form 700 filings from 2019 and 2020 link Lurie and his family to OpenGov via investments from two venture firms, Glynn Capital and Formation 8, which both received money from the Haas fund.
David Latterman, a political analyst in San Francisco, expressed disappointment when informed of Lurie’s indirect financial connections to the software company tasked with solving the city’s permitting woes.
“The fact he had an investment in OpenGov is not good,” Latterman said. “It has the appearance of a thank-you note.”
The mayor’s ties to Glynn Capital, which go back years, include a gala his Tipping Point charity hosted in May 2015. David Glynn, managing partner of the firm, co-chaired the event, which featured a surprise performance by Snoop Dogg (opens in new tab). Months after the gala, one of Glynn’s funds invested in OpenGov’s Series B1 financing round, according to Pitchbook.
An internal Glynn Capital (opens in new tab) presentation confirms that the fund listed in Prowda’s Form 700s — Glynn Partners IV — had an investment in OpenGov. The firm also posted an announcement last October celebrating OpenGov’s exit from its investment portfolio (opens in new tab) following the company’s sale to Cox Enterprises. The value of the fund’s stake as of 2020 was up to $100,000.
Glynn Capital has additional connections to Lurie’s political ambitions and his former nonprofit. Tipping Point’s website shows that the venture firm has given up to $350,000 since 2016, and Glynn and his wife personally contributed about $25,000 last year to a pro-Lurie political committee.
Officials for Glynn Capital declined to comment.
Prowda in 2020 disclosed the Haas family partnership’s stake of up to $1 million in a venture fund operated by Formation 8, a since-shuttered firm launched by none other than OpenGov cofounder Lonsdale. The fund — Formation 8 Partners Fund I — is still being managed by Lonsdale’s spinoff company, 8VC, which he founded in 2015.
A spokesperson for 8VC confirmed that the fund containing the Lurie family’s 2020 investment cashed in its OpenGov stake after the company was acquired by Cox Enterprises. The spokesperson would not provide details on how limited partners were paid out.
Since the 2020 filing, Lurie and Prowda have disclosed less information regarding their assets. Form 700 disclosures list investments in ranges rather than specific amounts, and a February filing by Lurie listed the mayor’s interest in the Haas family fund simply as more than $1 million, giving just a snapshot of the family’s empire.
Eric Jaye, a consultant who served as Newsom’s political strategist when he was mayor of San Francisco, said there is “zero chance” Lurie secured the OpenGov deal for personal gain.
“But just because something is legal doesn’t make it politically wise,” Jaye said. “It paints a picture of a government that is being run by an old boys’ network.”