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Top Breed Appointee Failed To Disclose Potential Conflict on Amazon Project
Tuesday, May 17, 2022

Top Breed Appointee Failed To Disclose Potential Conflict on Amazon Project

The head of San Francisco’s Office of Economic and Workforce Development failed to disclose her recent employment with a nonprofit that has dealings with the city as required by law, raising new questions about her involvement in negotiations over a new Amazon delivery center.

The omissions in disclosure forms filed by OEWD Director Katie Sofis came to light after The Standard revealed in late January that she signed a memorandum of understanding (MOU) with Amazon that governs negotiations for the proposed 7th St. delivery center project. The existence of the MOU caught organized labor, community groups and some city supervisors by surprise.

Sofis, whom Mayor London Breed appointed last spring, admitted in an interview with The Standard that she erred on her Form 700, a “statement of economic interest” that local government officials must file with the city’s Ethics Commission. Sofis said it was a “misunderstanding” and that she would file a new Form 700.

Before accepting the OEWD job, Sofis led SFMade, a nonprofit founded in 2010 that advocates for local manufacturing. As CEO, Sofis reported $249,192 in total compensation in 2020, according to the nonprofit’s most recent IRS filings. 

SFMade is headquartered at 150 Hooper St. in Showplace Square. The building is located directly across the street from 900 Seventh St., which Amazon purchased from trash-hauler Recology for $200 million in December 2020 with the aim of building a delivery hub.

Sofis, while still at SFMade, said after the purchase was announced that she was “excited” about the company’s arrival. “We hope to find ways to collaborate with Amazon and look forward to exploring ways that Amazon could more directly serve our local manufacturing sector,” she told the San Francisco Chronicle.

Sofis’ Form 700 reported no stake in real property, no investments in stock and no jobs that had dealings with the city. 

“As a completely new government employee, when I filed my very first Form 700, I didn’t really understand on day one of starting here, I didn’t really understand for me what was the obvious: I was supposed to list my just recently resigned employment with SF Made on my Form 700,” Sofis said. She added that she had since “firewalled” herself off from dealings with SFMade.

The MOU between the city and Amazon calls for the two parties to negotiate a “public benefits package,” and for Amazon to reimburse the city for costs up to $250,000. The city and Amazon say such agreements are routine and note that Amazon had a public meeting in November to provide information and answer questions about the proposed delivery hub.

Sofis told The Standard that she had “deliberately stayed out of” the substantive negotiations with Amazon and would continue to leave Anne Taupier, OEWD’s development director, responsible for dealing with the company. 

Public records on file with the California Secretary of State show Sofis as the CEO of 150 Hooper, Inc., the nonprofit that owns SFMade’s 50,000-square-foot building. Other filings made with the IRS list Sofis as the organization’s treasurer. 

In a statement to The Standard, Jeff Cretan, Mayor Breed’s spokesperson, said that Sofis resigned from her positions at 150 Hooper, SFMade and PlaceMade—another related nonprofit—before she began working for the city.

It’s not immediately clear why the organizations did not file updated paperwork with the state after Sofis’ resignation. SFMade did not respond to requests for comment.

Sofis’ close ties to organizations that will be affected by Amazon’s presence in the city present the appearance of a conflict of interest, said Board of Supervisors President Shamann Walton.

“I think it is very troubling that she is negotiating behind closed doors and has a connection to that very space,” said Walton, who represents the area.

Sofis acknowledged the issue but rejected any suggestion that there were conflicts of interest that could affect her judgment. She also said no one raised any concerns about her recent status with 150 Hooper. 

“It just got missed, that’s all I can offer up,” she said.

In a follow-up statement to The Standard, Sofis said: “I came to this role at OEWD and to the City because of my experience and track record for the past 20 years working to elevate the needs of small and diverse locally owned businesses and the San Francisco residents they employ. In doing this work, I have always been and will remain committed to building a city government that is fair, transparent, equitable and deeply responsive to the needs of community.”

Soft Spots in Ethics Laws

Under state ethics law, if a public employee has received any income from an organization doing business with the public agency in question, that employee has to recuse themselves, said Robert Stern, a co-author of the state’s Political Reform Act. 

But the law is silent on softer “connections” such as personal relationships or recent employment. 

Stern said that Sofis’ prior involvement with SFMade “raises questions. And so certainly anybody who is against these negotiations will raise these questions.”

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The situation also exposes what one lawmaker said is a loophole in local ethics law.

City law prohibits a former public employee from contacting their “former department to influence a government decision on behalf of any other person” for a period of one year unless that person obtains a waiver. However, there is no prohibition on contact in the reverse order.

Supervisor Aaron Peskin said the law should be updated “to go both ways.”

“We only amend those laws when we see a reason to do it, and this is certainly a good reason to do it,” said Peskin, who argued that signing the MOU is exactly the type of squishy situation Sofis should have recused herself from.

Sofis told The Standard that she has had no contact with SFMade regarding city business since her appointment, on the advice of the City Attorney. 

However, Sofis’ subordinates at OEWD have been contacting her old organization. A Sept. 9 email obtained via a public records request shows Jon Lau, OEWD’s project manager for the Amazon deal, writing to Johnny Jaramillo, the executive director of Place Made, to arrange a meeting with an Amazon representative. 

Lau said he was “looking to connect with light industrial tenants” separately from the “pre-submittal Town Hall” that Amazon conducted via Zoom that was open to the general public in November. 

“The Amazon team has been offering smaller briefings on the proposal to key stakeholder groups,” Lau wrote, suggesting a meeting with a group of paintless dent repair businesses.

“Sounds awesome, thanks Jon!” Jaramillo replied. 

Jaramillo did not reply to an email seeking comment.

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