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5 Charged In SF Corruption Probe, Temporarily Barred From Receiving City Contracts

SAN FRANCISCO (BCN/CBS SF) -- Five business executives linked to widespread corruption in San Francisco city departments have been temporarily barred from doing business with the city, City Attorney Dennis Herrera said on Monday.

Nick Bovis, Florence Kong, Walter Wong, Alan Varela and William Gilmartin, as well as their respective companies, were ordered suspended from seeking or receiving any city contracts or grants while their cases remain ongoing.

All five execs have been implicated in a federal investigation that began more than a year ago and centers around high-ranking city officials like former Department of Public Works Director Mohammed Nuru and former Public Utilities Commission General Manger Harlan Kelly accepting gifts in exchange for help obtaining city contracts.

According to Herrera, the suspension orders are the first of their kind and are possible thanks to legislation passed by the Board of Supervisors and signed by Mayor London Breed in November. The legislation allows for city contractors who have been charged criminally, civilly or administratively to be suspended from receiving public funds while the case against them is ongoing.

"Now we have another tool to keep government clean, and we're going to use it," Herrera said in a statement. "Corruption will not be tolerated in our city. Crooked public officials or people who seek to bribe their way into city contracts fail our residents, erode public trust and undermine the exceptional work done by thousands of San Francisco public servants every day.

"If there is enough evidence to charge someone with a crime, they should not be receiving city grants or contracts while their case is being decided. It's that simple. This will help ensure that contractors have a level playing field, the public benefits from qualified companies, and those who try to cheat the system don't profit," he said.

Last year, federal prosecutors charged Bovis, owner of restaurant Lefty O'Douls, with wire fraud for taking part in an alleged scheme with Nuru to bribe a San Francisco International Airport commissioner. Bovis pleaded guilty to the charges in May.

Kong, a former recycling plant owner, was charged with bribery and making false statements for providing Nuru with a Rolex watch worth more than $41,000, among other gifts, in exchange for help to obtain a contract. Kong pleaded guilty to the charges and last month was sentenced to a year in prison.

Federal prosecutors charged Wong with conspiracy to commit wire fraud and he pleaded guilty to the charges in June. Prosecutors said Wong provided Kelly with gifts, including a trip to China, as Wong sought a contract from SFPUC for his company to convert the city's streetlights to smart LED technology.

Both Varela and Gilmartin, president and vice president, respectively, of an engineering and construction firm, are facing bribery charges. Prosecutors allege the pair provided Nuru with gifts since as early as 2013, including $20,000 in meals and a $40,000 tractor, in exchange for help to obtain a contract to build and operate an asphalt recycling plant.

Herrera first began his investigation into city corruption in January 2020 after Nuru was arrested and charged with wire fraud. Federal officials arrested Kelly in November and charged him with fraud as well.

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