Chronicle’s Top Ten Local Stories: What About Julie Lee?

by Randy Shaw on December 30, 2004

The Chronicle’s December 30 list of top ten local stories of the year included the scandal surrounding Secretary of State Kevin Shelley but omitted the person chiefly responsible for the politician’s problems: Housing Authority Commissioner Julie Lee. Lee, a close ally of Mayor Newsom who raised major sums for his campaign, remains a commissioner in the Newsom Administration despite misusing a $500,000 state grant engineered by Shelley for partisan political donations. Why is Lee still a city official?

The San Francisco Chronicle deserves credit for breaking the story of how political powerbroker Julie Lee secured a $500,000 state grant for a nonprofit she controlled and then funneled the funds back to Kevin Shelley in the form of campaign donations. Lee, whose San Francisco Neighbors nonprofit was supposed to use the state money for a community center, was also the beneficiary of a $1 a year lease from the city.

Since breaking the story, the Chronicle and other media have forgotten all about Lee’s wrongdoing. But the press has vigorously gone after Shelley, to the point where some media have urged him to resign.

If this were simply a case of private vs public misconduct, focusing only on Shelley would make sense. But Julie Lee remains a Commissioner for the City and County of San Francisco, in an Administration that vowed to avoid the ethical lapses of its predecessor.

Both of our daily newspapers question the Mayor on a regular basis, but neither has pressed Newsom to explain his refusal to ask Lee to resign. I recall a quote from the Mayor some time ago that he was waiting for the investigation of Lee to be completed, but the facts are already beyond dispute.

The Bush Administration has already announced plans to begin dismantling the federal housing budget, and cuts are particularly focused on public housing. It is more critical than ever that the San Francisco Housing Authority has the credibility and integrity to aggressively combat these proposed cuts.

Having Julie Lee on the Housing Authority Commission undermines the body’s ability to effectively wage this critical battle.

The main argument for public housing cuts made by influential Republican Senators like Christopher Bond of Missouri is that these bodies are financially mismanaged and do not spend money on what Congress has targeted. Bond has primarily been influenced by the notorious St. Louis Housing Authority, which has proved unable to distribute Section 8 vouchers in Bond’s home state despite allocation of funds for this purpose.

Now just imagine a delegation of Housing Authority’s lobbying Bond’s staff against cuts. If a representative of San Francisco’s Housing Authority is in the delegation, Bond’s people will wonder why funds should be given to an agency whose Commission includes a member with a track record of misusing public funds.

This analysis may seem unfair, but this is the way Bond and other Republicans have played the game. They do not want to appear as if they are hurting poor people with cuts, so they hook their arguments on “financial mismanagement.” Bond has previously argued that public housing allocations are large enough and that the problem is with the Housing Authority’s operations.

Mayor Newsom may believe that Nancy Pelosi can protect public housing funding despite our Julie Lee problem, but he is wrong. The federal housing fight will be largely decided in the Senate, and neither Feinstein nor Boxer need to fight with Julie Lee hanging around their necks.

The Mayor did not hesitate to publicly call for the resignation of former Planning Director Gerald Green, who did nothing illegal. Treating Lee differently simply creates the impression that a lower ethical standard applies to the Mayor’s friends.

Julie Lee is out of sight, but not out of mind. Mayor Newsom should start 2005 by demanding her resignation, and if she refuses, he should publicly pressure her to leave.

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Filed under: Bay Area / California

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