Who might be next? San Francisco's long-running political corruption probe isn't over yet

During his swearing-in last month, San Francisco Dist. Atty. George Gascon pledged to "rein in misconduct in the public realm." He cited a San Francisco prosecution a century ago that nearly brought down a mayor.

"At some point," said the elected prosecutor, a former LAPD assistant chief, "every D.A. has to hold powerful people accountable."

Gascon's words that day provided the first hint that a long-running political corruption probe here might not be over — and that some of the city's elected officials might be under scrutiny.

Two weeks after the speech, Gascon filed bribery and money-laundering charges against three former fundraisers for Mayor Ed Lee, sending shudders through City Hall and fueling speculation about who might be next. Gascon said the investigation into local corruption was ongoing but he refused to identify potential targets.

His office asked for a protective order to keep the evidence secret, prompting San Francisco's elected public defender to question whether "the evidence is a time bomb waiting to explode."

The FBI began an undercover investigation into corruption and racketeering several years ago. It netted more than two dozen people — including former state Sen. Leland Yee, a San Francisco Democrat. Most of the accused pleaded guilty in federal court, including Yee, who was sentenced Wednesday to five years in prison.

Gascon's entry into what had been a federal matter took many lawyers in the case by surprise.

Nathan Ballard, a Democratic strategist and Lee ally, accused Gascon of having made "veiled threats against the mayor" at his inauguration as a way to get publicity.

"If the D.A. has the goods on Mayor Lee, he already would have come out with it," Ballard said. "There has never been one credibly sourced allegation of pay-to-play being brought forward."

The mayor did not attend Gascon's swearing-in, and Gascon did not attend the mayor's.

Lee's name first surfaced in the federal corruption probe when lawyers for a former Chinatown gang leader alleged in court papers that the mayor had taken bribes. The motion argued that the gang leader, who later was convicted, had been selectively prosecuted. The lawyers contended Lee had met with an undercover FBI agent, who was posing as a businessman, after the agent gave $20,000 to Lee's fundraisers.

A federal judge presiding over the case said he saw no evidence that Lee had violated the law. Lee also denied wrongdoing and said he could not even remember meeting the undercover agent. He has urged Gascon to "vigorously pursue" prosecution of his former fundraisers, a mayoral spokeswoman said.

"Based on public statement and events, it clearly would be appropriate for the mayor to follow the matter closely," said James D. Brosnahan, a prominent San Francisco lawyer who represented one of the defendants ensnared in the sting.

Lee apparently is doing just that. He spent $19,000 last year on a criminal-defense firm, according to his campaign records. A spokeswoman said the mayor retained the firm "to ensure full cooperation and appropriate communication with the government."

The legal papers filed by the gang leader's lawyers said that other elected officials had also been scrutinized.

"Is the D.A. going to go after a sitting mayor or a sitting supervisor?" asked Public Defender Jeff Adachi. "That is a very difficult proposition for any elected official to be in."

Gascon, 61, has been considered a possible future candidate for state attorney general or San Francisco mayor, though he said he has given no thought to such matters. The Cuban immigrant grew up in East Los Angeles, where his parents worked in factory jobs. After dropping out of high school and joining the Army, Gascon earned his diploma and a college degree and landed a job with the L.A. Police Department.

He rose through the ranks, becoming assistant chief and chief of operations and earning a law degree. He was police chief of Mesa, Ariz., when former Mayor Gavin Newsom appointed him to head the San Francisco Police Department. Newsom later appointed Gascon district attorney to succeed Kamala D. Harris after her election as attorney general.

Last week, Gascon and David J. Johnson, the FBI special agent in charge in San Francisco, announced the formation of a criminal task force to target corruption.

"We are really trying to stamp out corruption," Gascon said in an interview, "and it is has been going on for some time."

City Hall is paying attention.

"Everybody is waiting for the next act in this play," said elected Supervisor Aaron Peskin. "It is a question of how long it will take."

Lee, a former city bureaucrat, was catapulted into the mayor's office in 2011 when Newsom became lieutenant governor. Lee promised the Board of Supervisors he would not run for election at the end of Newsom's term if the board appointed him.

But the genial, unassuming Lee proved popular in the city and changed his mind. He has twice been elected mayor.

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Lee did not respond to a request for an interview submitted to his press office. His spokeswoman said in an email that Lee's mayoral campaigns met "the highest ethical standards," and all campaign contributions were thoroughly vetted.

"The Ethics Commission even conducted a comprehensive audit of the campaign's finances and determined there was full compliance," the spokeswoman wrote.

The Lee fundraisers who were charged are former San Francisco Human Rights Commissioner Nazly Mohajer, former commission staffer Zula Jones, and political consultant Keith Jackson. They are accused of accepting bribes from an undercover FBI agent in exchange for political access and possible future city contracts.

Jackson already had pleaded guilty to other charges in federal court and was sentenced Wednesday. Mohajer and Jones were implicated, but not charged, in federal court.

It is unclear why Gascon — and not federal prosecutors — brought the new charges. Gascon said his office and federal prosecutors have been working together to decide ""who has the more appropriate statutes to deal with the appropriate violations."

Peskin, the supervisor, described Gascon as "pretty careful" and suggested that future charges might depend on whether any of the former fundraisers implicate others.

"It really is going to be a function whether these individuals roll and whether anybody is going to drop the dime," Peskin said.

John W. Keker, a lawyer for Jones, said he sees no indication that Lee is a potential target. "Sure sounds to me like they are not going to get there," Keker said of the investigation.

Keker also downplayed the chance that the three defendants might implicate Lee.

"They are not going to do it as far as I can tell," Keker said. "I don't believe they have anything."

Although a major economic powerhouse, San Francisco has many attributes of a small town. Connections run deep at City Hall, where everyone knows everyone else.

Former Mayor Willie Brown still remains a potent force in local politics, a representative of the city's so-called moderate element, and both Lee and Gascon have been considered part of that political establishment.

Peskin said he was not surprised at allegations of corruption in City Hall.

"There are many, many city employees, department heads and elected officials who are virtuous," Peskin said. "But there also is a culture that permeates the body politic that is less than honorable."

maura.dolan@latimes.com

Twitter: @mauradolan

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Copyright © 2016, Los Angeles Times
A version of this article appeared in print on February 25, 2016, in the News section of the Los Angeles Times with the headline "San Francisco political graft probe not over - Money-laundering charges against three former fundraisers for the mayor mark the latest twist in the saga." — Today's paperToday's paper | Subscribe
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