WITH DANIELA KIRSHENBAUM
Photo by Andrew McDonald
PAY-TO-PLAY BAY AREA
An abbreviated primer on how our political players
October 29, 2006
Of course serious money is at stake with the results of each
election. The proof is in the cost and the viciousness behind
and ads, and the desperate threats insisting we vote one way
or another. Now that we are in election season, it's a good time
to ask how, exactly, the connection works between money and government.
These days, if Mr. Smith wants to go to Washington - or San Francisco's
Civic Center - then he should know where the corridors of power
are. They aren't really at City Hall. As in so many other parts
of the land, that grand edifice is merely a stage for the show
of making decisions. By the time official votes are taken, the
power brokers have already gamed - and often determined - the
Sure, there is the occasional surprise. But when it comes to
the commission meetings and hearings that count - the ones on
the recurring themes of land use and development, especially -
City Hall isn't where those decisions originate. There's simply
too much money at stake to wait for citizens to read their earnest,
home-spun speeches into public record.
So if Mr. Smith is looking to confront the holders of power,
one good place to start would be the nicely appointed offices
in the Ferry Building. One of San Francisco's oldest buildings
is now a shadow City Hall; it's become a nexus for decisions designed
to maximize profits.
You may not have heard of some of the heavy hitters with Ferry
Building suites. They don't list themselves very often, and the
titles of officers are hard to find.
Inside the San Francisco Ferry Building where security is tight
and officer titles are hard to find.
Photo by Luke Thomas
There's Platinum Advisors. They share an address with Kenwood
Investments. Our source tells us that Platinum has an impressive,
framed oil portrait of Willie Brown mounted on the wall. The Willie
L. Brown Institute itself is also at that same address. As is
an outfit called Gold Coast Capital.
These groups don't sell widgets. They trade in the Big Three
of contemporary power: land, money, and entitlements. Each of
these three commodities is dependent on the other. Knowing how
to make them work together is a skill so valuable that clients
are willing to pay Platinum, Kenwood, or any outfit able to provide
the connections to provide access to top officials, to smooth
approval processes, and to line up investors.
+ + +
In order to see how this functions, let's start with the spectacular
view of Treasure Island that the Ferry Building offices have.
Treasure Island may be flat and man-made, but nonetheless it is
land with a sparkling waterfront - it might as well be over 400
acres of undeveloped gold. It is irresistible to anyone with a
nose for development and the wherewithal to make that development
Treasure Island's fate seems to be following that of the Presidio.
In 1994, the Presidio was formally transferred from the Army to
the Presidio Trust (with the edges of the site going to the National
Park Service) for "public-private" development and usage
opportunities. Three years later, the process started to transfer
Treasure Island from the Navy to the city for development. Both
transfers were initiated by former Mayor Willie Brown and Congresswoman
Nancy Pelosi. The Treasure Island transfer was completed by Pelosi
with Mayor Newsom.
Nancy Pelosi, Barbara Boxer and Gavin Newsom attend the official
of the $100 million Letterman Digital Arts Center, June 26, 2005.
Photo by Luke Thomas
The Presidio Trust, a group of well-connected citizens, was charged
with stewardship of the new national park. The Trust made a big
show of gathering public input, which it then ignored in favor
of building the absurdly gargantuan Letterman Digital Arts Center.
Letterman Digital Arts Center.
Photo by Luke Thomas
It was a perfect example of how important it is to developers
to ensure that appointments go to people who can be counted on
to make development-favorable decisions. In the case of the Presidio,
the Trust decided to transform a national park into an office
park. They also decided who got the lucrative building contracts.
For a developer, it's just the way business is done. The Presidio
continues to be stocked with new, private enterprises, and the
tussling continues over Hunter's Point.
Right now, though, the next big, exciting opportunity is Treasure
An undated aerial photo of Treasure Island.
Photo by Luke Thomas
After some very serious wrangling over control (see "more
info" below), the fate of Treasure Island rests mainly with
TIDA: the Treasure Island Development Authority. Just as with
the Presidio Trust, the people who comprise TIDA are awfully critical.
It is they who decide what gets developed and who gets to develop
it - and profit thereby.
Likewise, the person who appoints the people on TIDA and similar
boards is also a key player, for he or she must be guided to select
members who can be trusted to vote favorably to one's interests.
That's the entitlement portion of the Big Three: garnering approvals
that entitle one to development and maximize profits by upzoning
the land. (Upzoning means changing the rules to allow more profitable
development than would otherwise be allowed.).
That's why forming relationships between would-be developers
and appointing officials is crucial. Lobbyists like Platinum's
Darius Anderson and Jay Wallace specialize in building those relationships,
sometimes by finding sources of cash reserves for campaign contributions,
or occasionally hosting key fundraisers. Wallace was at one time
Pelosi's campaign manager.
When Anderson held a fundraiser a couple of years ago to retire
Mayor Newsom's campaign debt, it raised eyebrows, but it is what
lobbyists do. They specialize in creating access for themselves
and for clients with the people who make appointments, sign or
promote legislation, and grant entitlements to develop - all of
which have big profit implications.
+ + +
It's easy to conclude that clients are getting their money's
worth from Platinum and friends - especially when the client is
Platinum itself. TIDA has granted to Platinum the uncontested
contract to be the sole developer of Treasure Island. Or, to be
exact, that exclusive contract has been granted to Platinum's
new entity, Treasure Island Community Developers, with the master
plan component going to Anderson's other company, Kenwood Investments.
The entity Treasure Island Community Developers needed to be
created because giving a development contract to a lobbying firm
is like asking an ad agency to start a strip-mining operation:
it doesn't make much natural sense. Unless the ad agency can't
resist the thought of finding veins of gold in the ground, and
creates an entity for that purpose.
Considering the grand, incestuous family that is politics, maybe
it's no surprise that Platinum's development entity has been handed
the Treasure Island bounty. Given the Pelosi and Newsom history
of enthusiasm for developing the Presidio, we should hope it's
not too late to keep a close watch and short leash on Treasure
Island developments. Unfortunately, this means paying attention
to the entire family. That would include even the new president
on the Commission on the Environment, Paul Pelosi, Jr., who is
Nancy Pelosi's son and Gavin Newsom's cousin. As for TIDA itself,
all the members are appointed by the mayor; all but one is a City
Who else will benefit from the arrangement? Certainly Lennar
Corporation will. They are a partner with Platinum's Treasure
Island Community Developers. Lennar has experience developing
former military bases, and is one of the country's largest residential
By what could solicitously be called a coincidence, Laurence
Pelosi was president of acquisitions for Lennar. He is Nancy Pelosi's
nephew, and currently works as executive director of Morgan Stanley's
real estate division. As Newsom's former campaign treasurer, he
would have worked with Darius Anderson on the campaign fundraiser
for Newsom. He's not the only one: Doug Boxer, son of Senator
Barbara Boxer, is an attorney who has worked for Anderson as a
Platinum lobbyist, and has been a partner with Anderson at Kenwood
+ + +
A case could be made that without Platinum and Lennar playing
a role, there would be no financing and Treasure Island would
remain a fallow relic of an outdated military past. And without
Willie Brown, Nancy Pelosi, and Gavin Newsom creating the situation
for the necessary government entitlements, the land and the assets
would simply sit.
Or would they? Is there really no recourse other than to deliver
the choicest projects to our most skillful lobbyists? Even if
everything described here is completely legal, is it right for
our elected officials to hand over profits to their inner circle?
Are the ethical concerns greater when those profits involve our
public lands? The children of politicians are allowed to join
commissions and earn a living. But how certain are we that our
leaders and their friends and families have the public's best
interests in mind?
The other troubling problem is that we citizens get no substantial
say in the matter, even when we know what is transpiring. We may
have elected Pelosi and Newsom, but we didn't intend to cast votes
for their relatives, too. Or their friends. Or their funders.
And if there are certain players who are enriching themselves
so handily with our public property, it wouldn't hurt to have
a lot more transparency in the process.
contributed research and graphics for this report.
Political Players: Treasure Island
(click on the image below to see a larger
version of the chart)
Background on Treasure Island from U.S. Navy, click
Kenwood Investments, plans for Treasure Island, click
Lennar Corporation, a partner with Kenwood Investments to build
on Treasure Island, click
Jay Wallace of Platinum Advisors is former campaign manager for
Nancy Pelosi, click
Treasure Island on the radar (Willie Brown's) for at least a
decade (1996), click
Treasure Island on Pelosi's legislative details list (1998),
Tussle over Mayor Willie Brown's sole control over Treasure Island,
Grand Jury criticizes Willie Brown for Treasure Island politics,
Darius Anderson wins Treasure Island projects, hired former Willie
Brown protege (2001), click
Fundraising tangle for Newsom by Darius Anderson of Platinum,
who sought (and won) Treasure Island contract (2004), click
Politics + real estate or development, a frequent combination
for the elected (2004), click
Draft of financing plan between Treasure Island Development Authority
and Platinum Advisors' Treasure Island Community Development.
Tables of cash flow projections are at the end (Aug 2006), click
$100 buys a seat at breakfast club with Willie Brown, click
Background on Laurence Pelosi, click
Background on Doug Boxer, click
here and here.
Editors Note (11/14/6) : A follow-up conversation with
Paul Pelosi, Jr. reveals the following clarifications and corrections
to a chart accompanying the story Pay-to-Play Bay Area:
Laurence Pelosi and Paul Pelosi, Jr. are cousins, not step-siblings;
Nancy Pelosi is Laurences aunt, not step-aunt; the relationship
between the Pelosi and Newsom families is through marriage and
not by blood.
Paul Pelosi, Jr. is a loan officer, not a mortgage broker,
for Countrywide, which is the largest home lender in the country.
Paul Pelosi was appointed to the Commission on the Environment
by Willie Brown, not Gavin Newsom.
Finally, all are invited to a public
meeting on Treasure Island itself, to be held November 15.
Editor's Note: Views expressed by columnists
published on FogCityJournal.com are not necessarily the views or beliefs of
Fog City Journal. Fog City Journal supports free speech in all its varied forms
and provides a forum for a complete spectrum of viewpoints.