Florence Kong and affiliates will pay restitution and ethics penalties and will be barred from receiving City contracts
SAN FRANCISCO (January 23, 2024) — City Attorney David Chiu today announced a proposed civil settlement worth $750,000 with Florence Kong, who pled guilty to bribing former Public Works Director Mohammed Nuru. As part of a global settlement with the City, Florence Kong and three of her former companies will repay $640,500 received under contracts with the City, plus pay $109,500 in penalties for ethics violations. Florence Kong and at least one affiliated company will be prohibited from doing business with the City for five years, the maximum term allowed under the law.
“This settlement sends a strong message that those who undermine our contracting processes will have to pay for those actions,” said City Attorney Chiu. “I am proud of our attorneys and investigators for securing such a significant settlement that fully resolves this matter. To her credit, Ms. Kong cooperated with our investigation, took responsibility for wrongdoing, and was eager to rectify past harms.”
Kong Settlement
As a part of the federal criminal investigation following the arrest of former Public Works Director Mohammed Nuru, Florence Kong pled guilty on October, 8, 2020, to bribery and lying to the FBI. Kong admitted that she bribed former Public Works Director Mohammed Nuru in exchange for preferential treatment in City procurement decisions. Kong has already served a prison sentence of one year and one day and paid a criminal fine of $95,000.
On March 1, 2021, the City Attorney suspended Florence Kong and her affiliated companies, SFR Recovery and Kwan Wo Ironworks, from bidding on or receiving City contracts. The proposed settlement will debar Florence Kong, SFR Recovery, and a third affiliated company, Kin Wo Construction, Inc., until March 1, 2026.
While the City suspended Kwan Wo Ironworks along with Kong on March 1, 2021, Kwan Wo has severed all ties with Kong. Kwan Wo will remain suspended until March 1, 2024, or until the full $750,000 settlement amount has been paid. Per the City’s Administrative Code, the time served under suspension will count towards the term of debarment.
The City Attorney submitted the proposed settlement to the Board of Supervisors today. The Board of Supervisors and the Mayor must approve the settlement in order for it to become final.
Background
Debarment is an administrative enforcement procedure that authorizes the City to ban contractors from applying for or receiving City contracts for up to five years. In 2020, the Mayor and Board of Supervisors passed legislation introduced by former City Attorney Dennis Herrera to allow the City to immediately suspend contractors accused of misconduct in a separate proceeding, such as a criminal case. Suspension bars a contractor from receiving City funds while the separate proceeding is resolved. The City Attorney’s Office used this new public integrity tool to suspend Kong and affiliated entities in 2021.
The Kong settlement stems from the joint public integrity investigation launched by the City Attorney and Controller in January 2020 shortly after federal prosecutors criminally charged former Public Works Director Mohammed Nuru. The investigation has examined a variety of potential legal and policy violations, including improper gifts to City employees and allegations that companies with City contracts funneled money through nonprofits to fund City programs and events.
Nuru left City employment after federal prosecutors filed charges against him. He later pled guilty to honest services wire fraud and was sentenced to seven years in federal prison. Several other high-ranking City employees have subsequently resigned, including then-Department of Building Inspection Director Tom Hui. Evidence uncovered by the City Attorney’s Office showed Hui had accepted improper gifts, violated City law by giving preferential treatment to a developer and to permit expediter Walter Wong, and abused his official position to help his son and his son’s girlfriend obtain City jobs. Tom Hui has not been charged with a crime.
In June 2020, former Fix-It Team Director Sandra Zuniga was charged with money laundering in connection with the bribery scandal. She was subsequently fired based on misconduct uncovered in the City Attorney’s administrative investigation. Former Public Utilities Commission Director Harlan Kelly resigned in November 2020 after federal prosecutors charged him with fraud. In 2023, a jury found Kelly guilty of committing bank and wire fraud. He is scheduled to be sentenced on February 27, 2024. His wife, then-City Administrator Naomi Kelly, resigned in January 2021. Naomi Kelly has not been charged with a crime.
Former Director of the Department of the Environment Debbie Raphael resigned in 2022 after an investigation revealed she had solicited donations from garbage company Recology while awarding the company a lucrative contract. Debbie Raphael has not been charged with a crime. Raphael agreed to pay $4,000 in ethics penalties stemming from gifts she accepted from Recology and a nonprofit that raised money for her department.
Wing Lok “Walter” Wong and his companies W. Wong Construction Co., Inc., Green Source Trading, LLC, and Alternate Choice, LLC, agreed not to do business with the City for five years as part of a negotiated settlement with the City worth $1.7 million.
The City Attorney has actively utilized its authority to suspend or debar unethical contractors to ensure they are not awarded City contracts. A full list of suspended and debarred contractors can be found here.
Tips
Any member of the public may report allegations of improper or illegal public activity to the City’s Whistleblower Program at sf.gov/whistleblower-program. That program, administered by the Controller’s Office, often partners with the City Attorney’s Office on investigations.
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