It’s Payback Time at the Chronicle

by Randy Shaw on August 8, 2005

Last Thursday, FBI agents arrested eight DMV employees in Oakland in a bribery scheme involving 200 people. The same day, the FBI arrested a DBI employee for allegedly taking bribes from a developer. On Friday, the Chronicle covered the wide-ranging DMV scandal in its Bay Area section but made the single DBI arrest its front page lead story, giving it more space than it provided for the killing of 14 Marines in Iraq or the murder wave in the Western Addition. The message is clear: when the Chronicle has a chance to go after its political opponents, neither facts nor good journalism will restrain its attacks.

Gus Fallay worked at the San Francisco Planning Department from 1993-2001, when he then moved to the Department of Building Inspection. Although Fallay is alleged to have taken bribes for several years prior to working at DBI, his arrest last week led Mayor Newsom to claim that this was yet another example of widespread, longstanding institutional corruption spawned at the very act of creation of the voter-approved agency.

While the Chronicle has waged a decade long campaign against the DBI, Mayor Newsom had little interest in the agency until Joe O’Donoghue and Walter Wong backed his opponent, Matt Gonzalez, in the 2003 Mayor’s race. Since that time the Mayor has repeatedly charged the DBI with being “owned” by special interests, and Newsom’s agenda has coincided perfectly with the Chronicle’s.

Fallay’s arrest gave both the Chronicle and Newsom yet another chance to publicly attack their mutual adversary, Residential Builders Association head Joe O’Donoghue. O’Donoghue helped lead the fight in 1994 to create the Building Inspection Department (a campaign opposed by both daily papers), but further earned the papers’ wrath by campaigning for a ballot measure that took away the city’s lucrative public notice contract from the Hearst Corporation, which publishes the Chronicle.

Let’s examine the Chronicle/Newsom charge that Fallay’s arrest reflects longstanding corruption at DBI.

According to the Chronicle, Fallay allegedly took bribes throughout his eight year tenure at the Planning Department. He then took a job at DBI in 2001 which gave him no role in granting final approval in signing off projects, and allegedly continued taking bribes.

If Fallay’s conduct were as blatant as press reports claim, than the question arises why nobody seemed to notice his wrongdoing while he worked for the Planning Department. In fact, his current job has him working as much with Planning as DBI. Under these facts it is clear that Fallay’s alleged crimes preceded his tenure at DBI and was hardly spawned by a corrupt DBI environment controlled by Irish builders.

In fact, completely ignored by the Chronicle and Newsom is the lack of any connection between Fallay and either the Residential Builders Association, or any other of the “special interests” the Mayor claims has been running the DBI (As someone often included among these interests, I can say that I had never even heard of Fallay until his arrest).

Since the DBI began in 1995, less than a handful of employees have been found to have engaged in criminal behavior. In contrast, during this same period San Francisco has seen far more employees engaged in illegal conduct in the Police and Fire Departments (the current Fire Chief was the target of a domestic violence complaint), there were corruption scandals in the Controller’s Office and the Department of Human Services (renamed the Human Services Agency), we had city gardeners televised while not doing their jobs, and we had nonprofit workers under a city contract working on the Newsom mayoral campaign.

And we also have Julie Lee, a major financial backer of the Mayor who he kept as President of the Mayor’s Housing Authority Commission for months even after revelations of her role in a corruption scandal that has her facing eight felony charges. While the Mayor’s rushed to judgment of Fallay’s guilt, he argued that the judicial process should take its course before he would assess the potential guilt of his ally Julie Lee.

In none of these cases involving multiple city agencies (other than perhaps the Police Department during Fajitagate) was individual wrongdoing linked in the Chronicle or by Supervisor or Mayor Newsom to pervasive institutional corruption. This is what is commonly described as a double standard.

The ultimate irony is that Fallay could be found innocent. His attorney, Randy Knox, was unusually outspoken and specific in his client’s defense, and the fact that Fallay lacked authority to sign off on projects raises questions as to what developers were getting in exchange for the alleged bribe.

As the Chronicle was forced to report on Friday, the trial judge at Fallay’s arraignment hearing certainly did not see the DBI employee as linked to a broader corruption scandal. The judge almost laughed at the charge that Fallay was “bribed” by receiving a $6 meal, and lowered bail to half the amount offered by Knox.

The problem with bribery allegations at the DBI is that every day dozens of staff have one-to-one interactions with members of the public that can easily give rise to misunderstandings and blatantly false charges.

For example, over a decade ago the Chronicle “exposed” the arrest of a housing inspector with a long record of integrity. After the inspector’s name was dragged through the media mud, the case was dismissed when the facts clearly showed that the complainant had charged bribery after he had sought special favors that the inspector refused.

By associating individual DBI wrongdoing with institutional corruption, Mayor Newsom has done no favors for the new Director and Commissioners recently appointed for the DBI. In fact, since the FBI raid occurred only a day after Newsom declared that he had put DBI on a new course, some have suggested that the FBI timed the arrest to embarrass the Mayor.

Acting Director Amy Lee, DBI’ s top managers, and the over 200 hard-working and honest DBI employees deserve better from the Chronicle and the Mayor than being unfairly tarred with working for a corrupt enterprise.

The Chronicle has spent ten years publishing articles designed to twist, conceal, and deny the undisputed facts regarding the successful record of Department of Building Inspection whose creation it pulled out all the stops to oppose. But the historical record of the past ten years is clear: housing code enforcement has gone from a national disgrace to a national model, permit processing is dramatically more efficient, the department has gone from a money loser to becoming the city’s top revenue producer, consumer surveys consistently give DBI high marks, and the actual number of individual corruption cases are down.

Sorry, Chronicle editors, but this case is closed.




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