Profiles in Corruption

by Peter Schweizer

  Publicly, Harris claimed that the problem was that the police should be focused on arresting “street-level pimps and johns.” In a statement, Harris claimed that there had been “no arrests” of either. The San Francisco Police Department was incredulous. “That’s an outright lie,” said police investigator Joe Dutto. There were fifty to seventy johns arrested every month.93

  Harris then argued that the problem was that the doors for the private booths at the clubs were not legal and that the Department of Building Inspection should deal with them. Ken Harrington, a top building inspector, fired off a snarky memo requesting the very precise parameters of the “job” they were to do to satisfy the DA. Apparently flabbergasted that his office was responsible (not the cops), he stated, “The next thing, she’ll be blaming the gunshot homicide rate on us for not enforcing the city’s lead abatement ordinance.”94

  Harris’s strange objections to prosecuting prostitution cases connected to these raids have a possible explanation. The owner of both the Market Street and New Century theaters was a company called Déjà Vu. An owner of Déjà Vu, Sam Conti, had a long history with Willie Brown. Conti had first hired Brown as his defense attorney back in 1977. They remained friends. At Conti’s 2009 funeral, Brown delivered a videotaped eulogy.95

  Harris’s handling of this simple vice matter would set up questions about her prosecutorial conduct as it related to powerful political allies and friends. While she was prepared to throw the book at those with no connections to her, those with links to her or her powerful allies would often get charges dropped. It was selective enforcement of the law, hardly what one could call “blind justice.”

  Kamala Harris entered the San Francisco attorney general’s office facing a whole host of issues beyond priest sexual abuse and strip clubs; among them was the rampant corruption that had become so common under her ex-boyfriend and political sponsor, Willie Brown. During the bitter campaign, Terence Hallinan had publicly stated that Harris would be unwilling to bring corruption charges against allies and friends of Willie Brown because they were still too close.96 Her record as a prosecutor would prove him correct.

  Willie Brown appointed Hector Chinchilla, a real estate lawyer, as head of the San Francisco Planning Commission shortly after he became mayor. The planning commission has enormous power in San Francisco in determining which projects proceed and which do not. Chinchilla, sensing an opportunity, hired himself out as a consultant to developers who were seeking city planning permits from his commission. Over the course of the next several years, he took in $181,000 from developers.97 The corruption case seemed clear. Developers told city officials that they had been told that if they hired Chinchilla he would “run interference” regarding opposition to their development. Reportedly, “Chinchilla performed anything needed on the project.”98

  In 2002, then-prosecutor Terence Hallinan had charged Chinchilla with seven misdemeanor ethics laws violations. “We do regard it as a major corruption case and indicative of what is going on in San Francisco,” he said at the time. “It is very disturbing that that kind of atmosphere is pervading in San Francisco.”99

  Given how close Chinchilla was to Willie Brown, the case “roiled City Hall.” Barely eight months in office, after a judge dismissed some charges, Harris dropped all remaining charges against Chinchilla.100

  It would not be the only case of Harris dropping the criminal charges of a Willie Brown ally. Even in instances where fraud directly threatened public safety, Harris struck legal deals with the friends and allies of Willie Brown. Consider the case of Ricardo Ramirez. Ramirez ran a cement and concrete company called Pacific Cement. As of 2003, a full one-third of the public works projects in San Francisco used Pacific.101

  Ramirez was a colorful but ruthless player in the construction business. He liked to wear $500 cowboy boots and roamed around the city in a $100,000 Mercedes-Benz. He threw lavish parties with Mariachi bands and tossed around a lot of campaign cash. Having given almost $100,000 to politicians over the previous eight years made him a “well-connected political player” in San Francisco. Those contributions often went to the Willie Brown machine and were not always legal. In 1997, state officials found that Ramirez had illegally contributed $2,000 to Brown’s 1995 mayoral campaign.102 His ties to Brown went beyond financial contributions. Ramirez was reportedly friends with Brown, but he also hired connected officials like Jim Gonzalez, who worked as a lobbyist for Ramirez. Longtime Willie Brown buddy Charlie Walker was also a close friend.

  Ramirez might have gone down in the annals of San Francisco political history only as a contractor greasing palms to get city contracts, but he also cut dangerous corners threatening San Francisco public safety. Ramirez was using inferior and cheaper recycled concrete on major projects like the Golden Gate Bridge, parking garages, and light-rail projects. These were massive projects where structural integrity was key: the half-mile stretch of the Bay Bridge’s western approach; the parking garage at Golden Gate Park; a wastewater treatment plant in nearby Burlingame; and the Municipal Railway’s Third Street light-rail project. The projects required solid concrete, but Ramirez was actually using inferior recycled concrete, which contains recycled debris rather than hard rock. Prone to water penetration, recycled concrete is more likely to crack and to wear quickly. Recycled concrete is acceptable for decorative work, but for major load-bearing projects like roads or bridges, it is considered unsafe.103

  Ramirez’s company was able to keep up the scam for a while, but it eventually caught up with him. Public works agency officials went public with the fact that Ramirez’s company had defrauded them. Strangely, Ramirez never faced charges for delivering substandard concrete. Instead, Harris’s office settled for a plea deal involving a single environmental count, illegally storing waste oil at one of his production facilities. To avoid jail time, he agreed to a year in home detention and payment of $427,000 in fines and restitution.104

  City officials were mystified. Tony Anziano, an official with the state agency Caltrans who was in charge of the Bay Bridge approach project, said the agency had been defrauded by Ramirez and his company. According to the San Francisco Chronicle, Anziano “said that Caltrans had always cooperated with prosecutors and that he couldn’t explain why they hadn’t pursued charges.”105

  Harris and her office refused to offer an explanation as to why they were going so light on Willie Brown’s friend and donor. “Harris’ office had no explanation for why it dropped the concrete case,” noted the Chronicle.106

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  Kamala Harris’s signature program as San Francisco district attorney was called Back on Track—a program designed to give first-time drug offenders an opportunity to avoid a criminal record. If they participated in and successfully passed through the program, their drug record was wiped clean.107

  Harris would tout the program as enormously successful. “Back on Track is an innovative initiative that has achieved remarkable results,” she said in 2009 as she prepared her run for California attorney general. “It has dramatically reduced recidivism—the re-offense rate—among its targeted population (nonviolent, first-time, low-level drug offenders).” She boasted that fewer than 10 percent of Back on Track graduates in San Francisco had reoffended, but those numbers were highly deceptive in that they only reflected those who graduated. During the first four years of her program, for example, they kicked out almost half of those chosen for the program. The real recidivism rate was likely much higher.108

  The program was also fraught with other problems that Harris was hoping the public would ignore. Those included were not just nonviolent, first-time offenders who had committed a single drug offense. Some were illegal immigrants and violent criminals such as Alexander Izaguirre. Izaguirre had gone through the program even though he had two arrests (instead of just one) within eight months. One for selling cocaine, the other for a purse snatching. Given those facts, it is unclear how Izaguirre even got enrolled. More, Izaguirre was one of at least seven illegal immigr
ants who were signed up. The problem was that the job-training program that Harris had enrolled him in was training him for jobs that he could not legally hold given his immigration status.109

  One night, while he was still in the program, Izaguirre went to San Francisco’s exclusive Pacific Heights neighborhood and committed a particularly brutal crime. Amanda Kiefer was walking down the street when Izaguirre snatched her purse and jumped into a waiting SUV. Rather than drive off, the SUV sped toward Kiefer to run her down. Kiefer jumped on the hood and saw Izaguirre and the driver laughing. The driver slammed on the brakes throwing Kiefer to the ground. The impact fractured her skull. Blood was oozing from her ear.110

  Kiefer would later ask why he was even in the program. “If they’ve committed crimes and they’re not citizens, then why are they here? Why haven’t they been deported?”111

  Harris did not offer an explanation. Instead, she simply explained that enforcing federal immigration law was not her job.112 Never mind that her oath of office required her to enforce the laws of the state of California and to protect and defend the Constitution of the United States.

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  Harris has a habit of dealing with problems by covering them up.

  In 2009, Harris set her ambitions higher and announced her bid for California attorney general. She enjoyed the backing of the San Francisco establishment, Willie Brown, and won a very tight 2010 race against Republican Steve Cooley, who was the Los Angeles County district attorney at the time. In the end, Harris won by fewer than 75,000 votes, or less than 1 percent, out of more than 9.6 million votes cast in the election.113

  The pattern of selective enforcement of laws continued during her tenure as attorney general. Beyond the move to Sacramento and the new job, Harris also became romantically involved with Los Angeles attorney Douglas Emhoff. The two met on a blind date set up by a close friend of Harris. They were engaged in March 2014. By August, they were married. It was a private ceremony presided over by her sister, Maya. Guests were sworn to secrecy.114

  Emhoff has practiced corporate law most of his career and specializes in defending corporations facing charges of unfair business practices and entertainment and intellectual property law matters.115 He established his own boutique firm in Los Angeles, but was later tapped to become the partner-in-charge at the Los Angeles office of Venable LLP, an international law firm with offices around the country.116 As partner-in-charge, Emhoff was involved in all cases coming out of the office. Venable’s clients included a parade of corporations who had matters sitting on Kamala Harris’s desk. The fate of many of those cases is further evidence of the selective nature of the way she has exercised power, often for the benefit of friends, family, and those with whom they have financial ties.

  Nutritional supplement companies have faced a myriad of legal actions over the years about what critics claim are exaggerated statements about the effectiveness of their products. This would seem to be a natural area for Harris to use her powers as attorney general and as a self-professed consumer advocate.

  Indeed, in 2015 the attorneys general from fourteen other states, including New York, launched an effort to investigate nutrition companies on the grounds of false advertising and mislabeling. They claimed, “Many products contained ingredients that were not listed on their labels and that could pose serious health risks.” Harris, who had a history of working with these AGs on other issues, did not participate.117

  At the same time that these states were pursuing the nutritional supplement issue, the Obama administration’s Department of Justice (DOJ) was also going after dietary supplement producers, charging them with exaggerated claims about their products “that are unsupported by adequate scientific evidence.”118 Their targets included General Nutrition Corporation (GNC), Herbalife, AdvoCare International, Vitamin Shoppe, Walgreens, and others.

  The Federal Trade Commission (FTC) opened an investigation into Herbalife in March 2014.119 In California, Harris’s attorney general’s office had received more than seven hundred complaints about Herbalife.120 In July 2016, the FTC won a $200 million settlement against Herbalife.121 But Harris never even investigated the company.

  Something very strange occurred in this instance when it came to Harris’s handling of the matter. The Los Angeles Times noted her conspicuous failure to participate in the action.122

  It is worth noting that those corporations in question all happened to be clients of her husband’s law firm, Venable LLP. GNC, Herbalife, AdvoCare International, Vitamin Shoppe, and others were represented by Venable.123 Indeed, her husband’s office had only months earlier, in January, represented Walgreens in a case involving false advertising claims. Though the lawsuit was dismissed, the possibility of another class action case remained.124

  Herbalife was one of Venable’s large clients, paying the firm for thousands of hours of legal work.125 Herbalife had been the subject of a standing court order since 1986 concerning its advertising claims and practices.126 Critics point out that Harris declined to enforce those standing court orders.127

  As Harris was deciding on how to deal with the Herbalife matter, the company’s lobbying firm threw her a fund-raiser. On February 26, 2015, the Podesta Group, which specifically represented Herbalife, held a luncheon fund-raiser for Harris in Washington, D.C.128

  In 2015, prosecutors from Harris’s own attorney general’s office based out of San Diego sent her a long memorandum arguing that Herbalife needed to be investigated. They also requested additional resources to probe further into the company and its practices. Harris declined to investigate or provide the resources—and never offered a reason.129

  By August 2015, Venable LLP promoted Emhoff to managing director of the West Coast operations.130

  This was not the only case in which Harris exercised her prosecutorial powers selectively. Those with the right connections avoided legal scrutiny even in generally clear-cut cases. Governor Jerry Brown was a Harris political ally and endorsed her candidacy for the U.S. Senate.131 Brown’s sister, Kathleen, joined the board of Sempra Energy in June 2013. In 2015 and 2016, the company suffered “the biggest methane gas leak from a well blowout in US history.” For more than one hundred days gas streamed out of the company’s well. The culprit was a corroded metal lining that had ruptured after long-term exposure to groundwater.132 It was a major environmental failure by the company. As attorney general, Harris often took on environmental cases with gusto. In this case, Harris’s office refused to investigate the matter.133

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  Political power creates leverage opportunities when a politician wants something from someone.

  The Daughters of Charity owned several hospitals in California that were struggling and at risk of being shut down. The charity wanted to sell those hospitals to another nonprofit chain in the hopes of preserving them to serve the local communities in which they were based. The matter required a simple approval by California attorney general Kamala Harris as required by state regulations. A powerful union, United Healthcare Workers West (UHW), threatened to “blow up the deal” by offering to support her bid for the U.S. Senate if she would stymie the sale, and further, threatened to spend it on an opponent if she would not.134

  Founded in Paris in 1633, the Daughters of Charity is dedicated to serving the poor. By the nineteenth century, the order was in the United States and eventually began opening hospitals. As of 2002, the Daughters of Charity Health System (DCHS) consisted of six California hospitals. The system found itself in difficult financial conditions in 2014.135 The charity was facing serious economic challenges in the changing world of health care. The nonprofit hospital chain had suffered an operating loss of $146 million, so they opened up the sale of the hospitals for a competitive bidding process that lasted thirteen months and brought in more than two hundred bids. Daughters of Charity selected a bid from Prime Healthcare Services for $843 million. The choice was simple, as Prime Healthcare’s was the only bid that promised to honor a $250 million unfunded pension fo
r 17,000 current and former employees; maintain the facilities for at least five years, ensuring that communities would not immediately close money-losing hospitals; commit $250 million in capital expenditures; and maintain the existing union contracts with employees. Prime Healthcare had a history of good performance in these circumstances. Over the previous fifteen years, they had acquired thirty-five hospitals around the United States that were either bankrupt or in deep financial trouble and had managed to save every one of them.136

  As California attorney general, Harris spent lots of time deciding which legal cases to bring and how to defend the state in court. She also had a role in providing regulatory approval. Which meant, of course, leverage over companies.

  One of her regulatory responsibilities was the Non-Profit Hospital Transfer Statute, which meant she needed to approve such transactions as the Prime Healthcare acquisition of Daughters of Charity. Not only had the Daughters of Charity Hospital voted in favor of Prime’s bid as the “best and only” option to keep the hospitals open, but also a broad coalition of groups supported Prime Healthcare’s proposal. The California National Organization for Women and the California State Conference of the National Association for the Advancement of Colored People (NAACP) supported the bid. So, too, did newspapers like the San Francisco Chronicle and the Los Angeles Times. Indeed, the California Nursing Association (CNA), which represented 90,000 registered nurses in California, came out in support.137

  But powerful political allies of Harris’s did not like the deal. In particular, the Service Employees International Union (SEIU), UHW’s parent union, was strongly opposed. The union was a longtime backer of Harris and she coveted their support as she looked to run for the U.S. Senate in 2016. During her 2010 and 2014 elections for attorney general, SEIU and UHW had donated more than $204,000. (In 2014, they were her leading campaign contributor.) They also provided millions more through political action committees. Executives involved in the deal heard that the SEIU was promising Harris $25 million through SEIU COPE, the national political action committee, if she squelched the deal.138