Lennar and San Francisco: a study in corruption and liability

In the early days of the Naval Radiological Defense Laboratory at the Hunters Point Shipyard, there was little knowledge of how to clean up radioactive contamination, including contaminated people. Read all about it in the SF Weekly series “Fallout” at www.sfweekly.com/webextra/fallout/index.html.

A chronology of legal, ethical and regulatory oversight violations in the dirty transfer and development of Hunters Point Shipyard Parcel A

by Ahimsa Porter Sumchai, M.D.

No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a government decision in which he knows or has reason to know he has a financial interest.” – California Government Code Section 81002

The top front page story in the March 8 San Francisco Chronicle, headlined “S.F. seeks Navy’s help in effort to keep 49ers,” refers to a memo written Feb. 16 by Michael Cohen, director of base reuse for Mayor Gavin Newsom. The memo proposes the City take ownership of the Hunters Point Shipyard with the intent of accelerating the cleanup of the federal Superfund site to meet the 49ers deadline to build a new football stadium.

The proposed dirty transfer of property from the Environmental Protection Agency’s National Priorities List would hasten development of the toxic property by removing federal, state and local government regulatory oversight of stringent health-based cleanup standards and dismantle the federal Superfund Act’s requirement for public participation in the cleanup process.

On Friday, March 17, Lennar, a private homebuilding corporation granted exclusive rights to develop the Shipyard, was sued in Superior Court by three African American executives of the company. They charge the corporation with environmental racism and allege they were demoted and told to maintain a code of silence about the health risk to workers, the community and a nearby school posed by levels of asbestos so high they mandated 15 work stoppages in the summer of 2006.

The resurfacing specter of Mayor Gavin Newsom’s familial, political and financial conflicts of interest in Lennar’s development projects in the City’s eastern neighborhoods brings to mind questions about the outcome of complaints filed in 2004 and 2005 over the dirty transfer of Shipyard Parcel A.

Those near dormant investigations have gathered “wind in their sails” by the current storm of controversy surrounding Lennar’s criminal negligence and reckless endangerment of public health and safety in the generation of toxic dust exposures to workers, school aged children and the predominantly African American surrounding community adjacent to the Parcel A construction site.

At a Dec. 14, 2003, hearing of the San Francisco Redevelopment Commission compounded by arrests, civil rights violations and encroachments on the constitutional rights of the free press, the Commission approved a Disposition and Development Agreement granting exclusive development rights for the Shipyard to Lennar of Miami, a corporation that enjoys annual sales of $9 billion.

The official transfer of Parcel A of the Hunters Point Shipyard to the San Francisco Redevelopment Agency occurred a year later, on Dec. 3, 2004, with the close of escrow for the parcel. Environmental findings and redevelopment measures for the Shipyard – 14 items including nine ordinances – were passed by the Board of Supervisors 9-2 with severely curtailed public comment on Dec. 7 and 14, 2004.

Mayor Newsom memorialized his violations of state and local ethics laws in January of 2005 by signing into law the Hunters Point Shipyard redevelopment measures he sponsored before the Board of Supervisors and accepting, in an official ceremony, the transfer of Shipyard Parcel A from the Secretary of the Navy in exchange for one dollar!

The Shipyard redevelopment measures have been called the most corrupt legislative initiatives to pass successfully through San Francisco City government. This astute observation is substantiated by both the stature and sheer numbers of elected and appointed City officials, contractors and employees incriminated in readily documented civil, criminal and environmental regulatory violations and ethical conflicts of interest.

Complaints filed with the Fair Political Practices Commission, Ethics Commission, Sunshine Ordinance Task Force, the City Attorney’s Governmental Integrity Office and the U.S. Attorney have yielded little to no response to date.

The Historical Radiological Assessment for the Hunters Point Shipyard, published in final format on Aug. 7, 2004, documents hundreds of radiation contaminated buildings, soils, drydocks and the entire storm drain and sanitary sewer system at the site of the post World War II operations of the Naval Radiological Defense Laboratory.

“For the first time we have the Navy’s signature on an agreement that ensures the conveyance will begin shortly,” announced Mayor Newsom, according to the San Francisco Chronicle of April 1, 2004.

Nepotism is defined by Webster’s dictionary as political favoritism based on family relationships. In an email to the Bay View newspaper, Laurence Pelosi verified that he was a senior executive at Lennar in March of 2004 at the time Mayor Newsom signed the Hunters Point Shipyard Conveyance Agreement at the behest of Congresswoman – now House Speaker – Nancy Pelosi.

Laurence Pelosi is Gavin Newsom’s first cousin and served as treasurer for Newsom’s first mayoral campaign. Laurence Pelosi is also the son of Ronald Pelosi and Barbara Newsom Callan. And he is Nancy Pelosi’s nephew by marriage.

Newsom, as chief executive officer of the City and County of San Francisco, took what is clearly a discretionary action by entering into the Conveyance Agreement for the Hunters Point Shipyard with the U.S. Navy. The Conveyance Agreement set a specific timetable for giving the City a portion of the Shipyard – Parcel A – as well as giving commercial development rights to Lennar/BVHP, a limited liability, private, non-governmental corporation.

The 2004 April Fool’s Day edition of the Chronicle includes an article by Edward Epstein of the Washington Bureau detailing the signing of a legally binding Conveyance Agreement by Mayor Gavin Newsom and Navy Assistant Secretary Hansford T. Johnson to transfer Parcel A of the Hunters Point Shipyard to the City and County of San Francisco.

According to the article, the agreement came a few weeks after the Navy sent Newsom a letter saying it was having doubts about going ahead with a January 2004 symbolic agreement that had been announced, with potentially embarrassing fanfare in Washington, by Rep. Nancy Pelosi, former Mayor Willie Brown and Navy Secretary Gordon England. According to the Chronicle, Newsom met in the capitol offices of his “Aunt Nancy” on March 31, 2004.

In attendance were Navy Assistant Secretary Johnson, Sens. Barbara Boxer and Dianne Feinstein and Rep. John Murtha, D-Pa., the ranking Democrat on the House Military Appropriations Subcommittee, brought in by Pelosi to convince the Navy the time for delays had passed. Murtha made is clear he wanted a binding agreement signed “by Wednesday.”

The Navy signed the accord despite new concerns the Radiological Affairs Support Office raised about the safety of the property for residential development due to the release of a massive investigation into the use of radioactive materials at the Shipyard from 1939 to 2003. The Historical Radiological Assessment, published in final format on Aug. 7, 2004, documents hundreds of radiation contaminated buildings, soils, drydocks and the entire storm drain and sanitary sewer system at the site of the post-World War II operations of the Naval Radiological Defense Laboratories.

San Francisco Campaign and Governmental Conduct Code Section 3.212 governs political decisionmaking involving family members and Section 3.214 requires disclosure of personal, business or professional relationships for elected City officials. On April 2, 2004, the Chronicle featured an investigation by Katia Hetter documenting the financial conflict of interest that exists between Mayor Gavin Newsom and Darius Anderson, a principal member of a development firm in negotiation with the City for a development lease on the former naval base at Treasure Island in partnership with Lennar of Miami, which had also recently been granted exclusive development rights to the former naval base at the Hunters Point Shipyard. Anderson, a principal partner in Treasure Island Community Development, held a fundraiser in his Sacramento office in March to help Newsom retire his $400,000 campaign debt.

This sign at the Hunters Point Shipyard warns of a “Radiologically Controlled Area”

Protecting the public health

On Nov. 7, 2000, 86.4 percent of the City’s electorate – 242,795 San Francisco voters – voted yes on Proposition P, a declaration of policy supporting environmental cleanup to residential levels for the Hunters Point Shipyard. Prop P got more votes than any other issue or candidate on the ballot. “Although Proposition P is a non-binding resolution,” said Supervisor Tom Ammiano at the time, “I consider the vote by over 200,000 residents of San Francisco a popular mandate.”

Parcel A was transferred to the City on Dec. 3, 2004, with deed restrictions notifying future property owners of the presence of lead-based paint and asbestos containing materials in buildings, residual soil contaminants and hazardous materials, including inorganic persistent and bioaccumulative toxic substances, volatile organic toxic pollutants, PCBs, acids, total petroleum hydrocarbons, pesticides, toxic metals, radionuclides and polycyclic aromatic hydrocarbons, according to Article 31 of the Health Code, an ordinance adopted by the Board of Supervisors at the Dec. 14, 2004, hearing to accept the Shipyard’s environmental findings.

Article 31 makes developer compliance with deed restrictions, EIR mitigation measures and other City laws mandatory and enforceable. Article 31 establishes enforcement mechanisms, including withholding or denial of permits, an order to stop work, penalties for permit violations and mandatory administrative and civil penalties.

Article 31, adopted by the Health Commission on Nov. 16, 2004, mandates that health and safety plans address the health and safety hazards of each phase of construction site operation at the Shipyard and include the requirements and procedures for employee protection, including health and safety risk or hazard analysis and medical surveillance.

The Department of Public Health has failed to devise human exposure protocols for populations exhibiting health effects attributable to toxic dust, metals and hazardous substances on Parcel A documented in Article 31. The minimum exposure protocol for individuals complaining of dyspnea, chest pain, cough, fatique, weight loss or other signs of acute and chronic cardiorespiratory disease must include a baseline chest xray, cbc and chemistry panels, including liver function tests, arsenic and lead testing. That testing should be mandatory for all children exposed, even if they show no symptoms of disease. Pulmonary function tests including spirometry are standard of care.

The children and workers evaluated by the San Francisco Department of Public Health following a series of documented exposures to high levels of asbestos in toxic dust at Parcel A received no laboratory testing although many had upper and lower respiratory tract symptoms and immune disorders. The total length of time of work site exposure to airborne toxins from Lennar’s non-compliance with legal guidelines at Parcel A reached one year in March of 2007.

Funding for the oversight and implementation of Article 31 comes from developer fees imposed on Lennar at the Shipyard by the Department of Public Health for construction and excavation activities that generate more than 50 cubic yards of soil. Health Director Mitchell Katz, M.D., delegated the implementation of Article 31 to Rajiv Bhatia, M.D., director of the DPH Environmental and Occupational Division. Article 31 establishes funding for the site mitigation engineer position currently held by Amy D. Brownell, P.E.

Despite her obvious conflict of interest with the developer and lack of qualifications in medical decision making, Miss Brownell has made numerous public and press statements minimizing the risks of exposure to toxic dust generated by Lennar’s construction activities on Parcel A.

Numerous administrative complaints and requests for investigation have been filed in response to the Parcel A transfer. In 1995 a law passed by San Francisco voters prohibits campaign contributions from anyone bidding on or negotiating for a City contract or development lease if the recipient has a say in approval of the matter.

Mayor Gavin Newsom received funds from the San Francisco 49ers in 2006 during the campaign finance report period immediately preceding negotiations between the Mayor’s Office of Economic Development and team owners. Laurence Pelosi is listed on the campaign report as his treasurer.

Supervisor Aaron Peskin was reelected in November of 2004 and received $750 in campaign contributions from the sponsor of the environmental review for the Hunters Point Shipyard approved by the Board of Supervisors in December of 2004. He became president of the Board of Supervisors in January 2005 and has acted in close alliance with District 10 Supervisor Sophie Maxwell to advance the corrupt development practices of Lennar in Bayview Hunters Point.

In August of 2004, former Ethics Commission President Robert Planthold and Ethics Department Director Mabel Ng received a letter documenting a litany of violations of ethics laws by elected and appointed officials.

On Dec. 4, 2004, Ng and all 11 members of the Board of Supervisors received a summary of violations, including receipt by Planning Commission President Shelley Bell of a $100,000 donation to the Board of Directors of the Bayview Opera House by Lennar in the weeks preceding the Planning Commission hearing to approve the Shipyard’s transfer and environmental findings. Bell, the executive director of the Opera House, did not inform members of the Opera House Board of the Lennar donation, according to Board member former Supervisor Willie B. Kennedy.

The Bayview Opera House Board of Directors and its executive director, Planning Commissioner Shelley Bell, also serve as fiscal agent for the Bayview Hunters Point Project Area Committee. The PAC oversees the Redevelopment Plan for the 1,500-acre project, which was stalled by a lawsuit filed by the Defend Bayview Hunters Point Committee to reinstate the referendum opposing the plan that was signed by more than 33,000 San Franciscans last year, certified by the City’s elections director and then tossed out by a City Attorney opinion.

In January of 2005 Ethics Commission investigator Richard Mo met with complainants and over the next two years received over 500 pages of hard copy and email documentation compiled by editors of the Bay View with assistance from Lynne Brown, Michael Boyd, Francisco DaCosta, Kevin Williams and Roland Shepard detailing the extensive history of corruption surrounding the Shipyard transfer.

In February of 2005, U.S. Attorney Andrew Cheng received documentation of violations of federal law involving Rep. Pelosi and Sen. Dianne Feinstein, whose husband Richard Blum has a financial interest in Catellus Developers, the master developer for the UCSF Mission Bay Campus.

The master plan for the City’s eastern neighborhoods, including the Shipyard, was discussed in a 2006 forum held at the Mission Bay campus that featured Laurence Pelosi. Pelosi is identified in the forum announcement as Lennar’s director of acquisitions for Shipyard Parcel A.

Cheng, in subsequent communications, referred the Hunters Point Shipyard redevelopment investigation to the Ethics Commission, the City Attorney’s Division of Governmental Integrity and the San Francisco Bureau of the FBI but has taken no direct action at the level of the U.S. Department of Justice.

In March of 2005, the City’s Sunshine Ordinance Task Force concluded that violations of the Sunshine Act occurred during enactment by the Board of Supervisors of the 14 measures approving development on Parcel A.

In March of 2005, the California Fair Political Practices Commission acknowledged receipt of complaints documenting financial conflicts of interest involving City officials and contractors. No follow up has occurred.

In January of 2007, Congresswoman Nancy Pelosi became speaker of the U.S. House of Representatives. Her first act was a failed attempt to install Rep. John Murtha as the House Majority Whip in exchange for his help in the transfer of Shipyard Parcel A.

In the fall of 2006, I spoke before the Ethics Commission publicly requesting that the stalled investigation of the Hunters Point Shipyard redevelopment measures go forward. On March 15, 2007, Ethics investigator Richard Mo said that “no complaint has been filed” with the Ethics Department regarding the Parcel A transfer.

On March 14, 2007, the San Francisco Bay Guardian published “The corporation that ate San Francisco,” a highly detailed investigation by Sarah Phelan into “Florida-based megadeveloper Lennar Corp.” that controls the future of two former military bases in San Francisco. The writer concludes, “Under the current system, in which Lennar seems accountable to no one except an apparently toothless Redevelopment Agency, you can’t trust Lennar to answer tough questions once it’s already won your military base.”

The article chronicles the seven-year history of financial and political conflicts of interest and the paper trail of Lennar’s connections to former Mayor Willie Brown, Speaker Nancy Pelosi and Mayor Gavin Newsom. More importantly, it documents environmental violations at the Lennar construction site on Parcel A that are, arguably, criminal in scope and stature, including deliberate efforts to conceal the health and safety risks of exposure to toxic dust containing exceedances in allowable levels of asbestos and presumably lead, arsenic and fine particulates.

On Friday, March 17, 2007, attorney and former Board of Supervisors President Angela Alioto filed a suit in Superior Court on behalf of plaintiffs Gary McIntyre, Lennar’s project manager, Clementine Clarke, in charge of Lennar’s 11 community benefits programs, and Ceola Richardson, administrative assistant, charging Lennar with racial discrimination and environmental racism in its operations at Parcel A of the Hunters Point Shipyard. It represents a landmark legal action and the first known use of “environmental racism” as a legal term denoting liability by a corporate polluter operating in Bayview Hunters Point.

Compiled with assistance from Lynne Brown, Michael Boyd, Francisco DaCosta, Kevin Williams and Roland Shepard. Contact Dr. Sumchai at (415) 835-4763 or asumchai@sfbayview.com.