A former San Francisco Public Works manager is facing five felony charges for allegedly hiding his role in a company that reaped more than a quarter of a million dollars in no-bid contracts to provide T-shirts and other swag to San Francisco Public Works employees.
Gerald “Jerry” Sanguinetti faces five perjury counts for concealing his ties to SDL Merchandising – a company he allegedly owned and was run by his wife Gina -- as well as two misdemeanor charges of failing to disclose those ties in financial statements to the city.
Sanguinetti, who is scheduled to appear in court next month, could not be reached for comment.
“All city officials and some city employees are required to publicly disclose their personal financial interests,” said Patrick Ford, Policy and Legislative Counsel for the San Francisco Ethics Commission.
Ford stressed that he can't talk about any specific cases, including this one, but said financial disclosure forms are a key tool to hold public officials accountable.
“It’s an important safeguard,” Ford said. “The failure to file those forms or fill them out accurately creates a danger for conflict of interests.”
The District Attorney’s office says that SDL was paid $262,947 to provide DPW workers shirts and other swag between 2013 and 2019, the year Sanguinetti left the city.
SDL did not get the money directly from the city, but records obtained by NBC Bay Area’s Investigative Unit last year reveal that SDL was paid through an off-the-books account managed by the non-profit San Francisco Parks Alliance on behalf of top public works officials.
According to federal prosecutors, former Public Works Director Mohammed Nuru used the Parks Alliance account to collect bribes, including hundreds-of-thousands-of-dollars from former Recology executives who were also recently charged. Public Works managers, including Nuru, then used the funds to pay for employee parties, DPW attire for employees, company picnics, and other items, such as a treadmill for the DPW operations yard.
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Nuru has not yet entered a plea in federal court.
In a statement, Parks Alliance Director Drew Becher said the non-profit was “exploited by specific individuals within the Department of Public Works” and he supports the city’s review.
“In our work with Public Works, it was the department that raised the funds, selected the vendors, and approved all reimbursements,” Becher said. “Under the terms set by the city, SFPA had neither the authority nor the visibility to second-guess vendors chosen by Public Works.”
Between 2016 and 2018, records show, SDL got paid at least $111,000 for 14 separate purchases out of the Parks Alliance fund. Those purchases were approved by Nuru and at least one other Public Works manager, according to the financial records obtained by NBC Bay Area.
A controller’s office report last year said SDL “is owned by a former Public Works employee, who was still employed when the payments occurred” and that “absent an additional employment approval, it is inappropriate for city employees to do business with the City.”
The controller said “accounting records show payments were for shirts, caps, and other merchandise created for Public Works, but lack detail of quantity purchased to indicate whether payments were justified or reasonable.”
According to prosecutors, when one DPW employee suggested going with another vendor because SDL was charging twice as much as the competition, the employee was told: “the Director wouldn’t like that.”
“Public employees must serve the public, not use their position for their own financial gain,” said District Attorney Chesa Boudin in a statement about the charges filed by his office. “Failing to disclose financial conflicts of interests while profiting at the city’s expense violates public trust.”
Public Works officials said Thursday they are cooperating with all investigations and they expect employees to comply with ethics rules.
