S.F. prosecutors probe City Hall’s role in ‘Shrimp Boy’ case

Video: Mayor Ed Lee Responds To Allegations Of Corruption By Shrimp Boy Chow

San Francisco criminal prosecutors and the city attorney’s office have opened probes into whether the tentacles of a racketeering case involving an alleged Chinatown gang leader extend to City Hall, The Chronicle has learned.

Word of the probes came a day after attorneys for racketeering defendant Raymond “Shrimp Boy” Chow went public Tuesday with a federal court filing that sought to implicate city officials in bribery, campaign money laundering and a range of other misconduct. Their argument: Plenty of City Hall officials were engaged in wrongdoing, but they got a pass while Chow got a criminal case.

Officially, neither District Attorney George Gascón nor City Attorney Dennis Herrera is talking. “We can neither confirm nor deny the investigation,” said Gascón spokesman Alex Bastian, echoing the “no comment” from Herrera spokesman Matt Dorsey.

However, sources confirmed to us that investigations are under way, though the details — and the exact targets — are unclear. The sources spoke on condition of anonymity because they were not authorized to talk about the case.

Anonymous complaint

Ever since a federal grand jury indicted Chow, then-state Sen. Leland Yee and 27 others in April 2014 on myriad charges — everything from firearms trafficking and money laundering to murder for hire and drug distribution — questions have been raised about just how far the case might reach into City Hall.

Raymond "Shrimp Boy" Chow, is seen posing for a portrait in San Francisco in July 2007. Investigators say Chow is the leader of one of the most powerful Asian gangs in North America. Chow's gang is said to have lured state Sen. Leland Yee into its clutches through money and campaign contributions in exchange for legislative help, as Yee sought to build his campaign coffers to run for California Secretary of State. Yee and Chow were both arraigned on federal gun and corruption charges on Wednesday, March 26, 2014.

less Raymond "Shrimp Boy" Chow, is seen posing for a portrait in San Francisco in July 2007. Investigators say Chow is the leader of one of the most powerful Asian gangs in North America. Chow's gang is said to ... more Photo: Jen Siska, Associated Press Photo: Jen Siska, Associated Press Image 1 of / 7 Caption Close S.F. prosecutors probe City Hall’s role in ‘Shrimp Boy’ case 1 / 7 Back to Gallery

Several months back, an anonymous city Ethics Commission complaint was filed against former San Francisco school board President Keith Jackson — who, like Yee, has since pleaded guilty in the federal case to racketeering charges involving campaign fundraising.

According to Ethics Commission member Peter Keane, his agency began looking into the complaint but was told by “the city attorney and district attorney to just cool our part of it” while other unspecified investigations were going on.

“We can get back into it, and we probably will,” Keane said.

Sting on the mayor

The federal court documents filed by J. Tony Serra and his fellow lawyers on Chow’s behalf Tuesday confirm that the FBI made a serious run at setting up a corruption sting on Mayor Ed Lee, as well as at least two city supervisors and other city staffers and commissioners.

The mayor has not been charged in the federal case, and — despite claims by Chow’s attorneys that federal prosecutors shielded Lee from prosecution, and that the mayor accepted $20,000 in return for political favors — no evidence has been disclosed that he knew he was taking money illegally.

“I’m not bothered by the fact that people come after me,” Lee told us Wednesday. “What I have to do is make sure that I hold myself and my team and my staff accountable to comply with all the laws to make sure that we are conducting the city’s business in the right way.”

He added, “Being in public office, you have to be ready for this — and this is one of those times. But I say ‘fine’ — as long as I’m doing the right thing, there shouldn’t be anything to be afraid of.”

Asked if the FBI is still after him, the mayor replied, “I don’t think so.”

In the spotlight

The Chow attorneys’ court filing raises numerous questions about the conduct of others who have not been charged in the federal probe.

For example, FBI wiretaps reveal that former Human Rights Commission member Nazly Mohajer and a onetime agency staffer, Zula Jones, were involved in potentially illegal dealings involving an undercover federal agent posing as an Atlanta businessman looking to land business in the city.

Mohajer and Jones co-hosted a fundraiser to help the mayor retire his 2011 campaign debt. The wiretaps quoted by Chow’s attorneys indicate that Jones solicited $10,000 from the agent, despite the city’s $500 limit on individual campaign contributions.

The money was subsequently broken down into $500 checks attributed to various other people, the federal documents indicate.

‘Ed knows’

Jones is quoted in a taped conversation with the agent as saying, “Ed knows that you gave the $10,000. He also knows that we had to break the $10,000 up. ... Ed knows that you are the one who’s the big donor.”

Mohajer and Jones subsequently introduced the undercover agent to the mayor at a pair of meetings where the agent “talked about bringing private business interests and developments to San Francisco,” according to the government’s account. Afterward, the agent and Mohajer talked about setting up another $10,000 donation, the feds reported.

Neither Mohajer nor Jones could be reached for comment. Lee told us he vaguely recalled the meetings, but that they were “not distinguishable from hundreds of other meetings that I have had with people wanting to do business in the city.”

The Chow attorneys’ filing also calls into question the actions of others connected to City Hall, though many of its claims are secondhand and unsubstantiated.

Derf Butler, a politically connected businessman who worked with Jackson, is quoted as telling an FBI agent that he paid Board of Supervisors President London Breed “with untraceable debit cards for clothing and trips in exchange for advantages on contracts in San Francisco.”

Breed called the accusation bogus.

Work on a house?

Another taped phone conversation between Jackson and Butler raises questions about the conduct of the Rev. Amos Brown, a former Housing Authority Commission member and president of the local NAACP. In it, Jackson and Butler talk about Brown’s house being fixed in exchange for an undisclosed favor from then-Housing Authority boss Henry Alvarez.

Brown has called the allegations a lie.

Then there’s Sululagi Palega, manager of Muni’s community-based crime and graffiti abatement program. According to government documents, he told an undercover agent posing as a marijuana grower that he could supply him with machine guns. The agent said Palega later handed him a candy bag containing a revolver and told him, “Enjoy the candy.”

Palega is on leave from Muni for personal reasons and could not be reached for comment.

Muni spokesman Paul Rose said his agency hadn’t been contacted “by any investigative authorities, and we have no plans to do a separate investigation at this point.”