SAN FRANCISCO (CBS SF) – Two San Francisco city contractors became the latest to plead guilty in connection with a City Hall corruption scandal linked to former public works director Mohammed Nuru.
According to acting Northern California U.S. Attorney Stephanie Hinds, 59-year-old Alan Varela of Orinda and 60-year-old William Gilmartin III of San Mateo both pleaded guilty Thursday to charges of conspiracy to commit honest wire services fraud. Varela and Gilmartin were the president and vice president, respectively, of a civil engineering and construction firm.
Prosecutors said the pair provided gifts and benefits to Nuru over the period of seven years to secure a lucrative public contract. The items offered to Nuru included, cash, free meals and entertainment, along with equipment for Nuru's ranch in Northern California.
"Contractors with San Francisco like Alan Varela, William Gilmartin, and their ilk are not off the radar of our San Francisco City Hall corruption investigation just because they are not public officials," Hinds said in a statement. "If you bribe a public official and our investigation uncovers it, you will face justice."
Prosecutors said Varela admitted conspiring with Gilmartin, construction company CEO Balmore Hernandez, along with others, to pay bribes and kickbacks to Nuru between 2013 and 2020. Hernandez previously pled guilty to his role in the scandal earlier this year and is cooperating with the FBI.
Varela admitted that he and his co-conspirators sought a contract to operate an asphalt recycling plant and a concrete plant. In exchange for cash and valuables, Nuru sent early drafts of the city's request for project proposals. Nuru also met with Gilmartin and Hernandez to discuss the plans over expensive dinners, according to prosecutors.
Gilmartin then compensated the former Public Works director by asking an unnamed company to award a $100,000 contract to Hernandez, who in turn used the proceeds to benefit Nuru, prosecutors said.
After winning the contract in 2015, prosecutors said Nuru continued to meet with Varela and the co-conspirators to supply more inside information. The meetings were all over meals paid by Gilmartin, which totaled $20,000, according to the plea agreement.
Varela also admitted in February 2019 that he coordinated with Gilmartin and Hernandez to deliver a tractor to Nuru's ranch, after he requested it during discussions.
Nuru was arrested in early 2020, while the asphalt recycling plant agreements were being finalized with the Department of Public Works and the Port of San Francisco.
Gilmartin has also agreed to cooperate with the FBI, according to the terms of his plea agreement. Details about the criminal conduct he admitted to remain under seal, prosecutors said.
At least a dozen people have been charged in connection with the federal probe so far.
"The investigation into San Francisco city government continues and we believe there are even more city employees and contractors who may have pertinent first-hand knowledge of the insidious corruption plaguing San Francisco," FBI Special Agent in Charge Craig Fair said in a statement.
Fair urged those who have knowledge about the corruption to come forward.
Both Varela and Gilmartin face up to 20 years in prison and a fine of up to $250,000.
Varela will be sentenced on September 16. Meanwhile, Gilmartin is scheduled to appear in court on December 2.
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