SF Public Utilities Commission Head Charged With Fraud, Resigns

On Monday, the FBI raided the home of Harlan Kelly, the General Manager of the San Francisco Public Utilities Commission (SF PUC), leading to his ultimate resignation from the position after being charged on one count of honest wire service fraud.

Kelly, who is also the husband of City Administrator Naomi Kelly, has been specifically accused of accepting bribes and being in a corrupt partnership with San Francisco construction executive and permit expediter Walter Wong.

In the FBI complaint, Wong had paid for several international trips for the Kelly family, as well as for meals, jewelry, and personal car services. While Wong and Kelly had developed a series of coded messages to hide what they were saying, other messages were blatant, such as a WeChat message from Harlan Kelly in 2016 saying “Thank you for the best family vacation ever! A little something for everyone!”

In exchange, the complaint said that Green Source Trading, LLC, a company owned by Wong’s son, would get Kelly’s backing for a San Francisco green streetlight conversion program. Wong himself noted in a guilty plea that Kelly would have helped his son win the streetlight contract and assist in some of Wong’s other dealings as well. Wong had previously been indicted on fraud and money laundering charges, and had done similar actions as exposed during the Mohammed Nuru scandal, a corruption scandal that had involved contracts and bids in San Francisco’s Department of Public Works.

After the FBI raid on Kelly’s house and being charged with one count of honest services wire fraud, Kelly resigned his post late Monday. San Francisco Mayor London Breed gave a special statement to address Kelly’s actions and the growing scandal that may now also involve his wife, accepting his resignation.

“The allegations detailed in the Federal Investigation conducted by the US Attorney’s Office are disturbing and unacceptable for anyone serving in our government, let alone the leader of one of our largest departments,” said Mayor Breed on Tuesday. “As public officials, we have to hold ourselves to the highest standard and put the public good before all else. As I’ve said from the beginning, any City employee involved in issues related to this investigation needs to cooperate and come forward with any information.”

Kelly denies charges against him

The FBI also released a statement on the Harris raid and investigation.

“The allegations against Harlan Kelly and the nine other individuals charged in this case are extremely troubling,” noted FBI Special Agent in Charge Craig D. Fair. “The citizens of San Francisco deserve nothing less than transparency, honesty, and integrity from their city officials. However, through the course of this ongoing investigation, the FBI has uncovered a pattern of criminal activity committed by those in positions of trust. The FBI is surging our resources in this investigation, and we urge anyone with information on this matter, or any other suspected public corruption, to come forward and contact the FBI.”

Harris, who had been appointed as the SF PUC General Manager by former Mayor Ed Lee in 2012, denied the charges against him on Tuesday, saying that he was not guilty.

“I am not guilty of these charges,” said Kelly. “I have devoted my entire career to public service. As many of my colleagues at the San Francisco Public Utilities Commission are aware, I had intended to retire in the next 18 months. Unfortunately, I need to leave my position now in order to defend myself, my legacy and my family.”

Legal experts have noted that, while the charges aren’t definitive and that Harris is innocent until proven guilty, the evidence against him is substantial.

“I can’t say one way or another without knowing more,” explained Bay Area criminal lawyer Doug Hirsch. “But, just based on all of this, it doesn’t look too good. You literally have messages from him thanking people for vacation bribes. It’s had to argue against that.

Naomi Kelly was not named in the FBI complaint and is still, as of Tuesday, the City and County Administrator of San Francisco. Harlan Kelly was released from custody and is expected to be in federal court on December 8th.