Speaking at a press conference, Gascón said, “Public corruption is a crime against all of us. When government is for sale, we all suffer. These crimes initially surfaced as the result of a lengthy federal investigation, and authorities agree that this matter should be handled by local prosecutors."

At the same press conference, FBI Special Agent in Charge David Johnson called public corruption "the No.1 criminal priority for the FBI."

"This type of criminal activity erodes public confidence, undermines the strength of our democracy, and if left unchecked threatens our government," Johnson said. "It does not matter if the corruption is national or local in scope. It does not matter if it involves millions of dollars or merely hundreds. There is no level of acceptable corruption. The violation of trust is the same, as is the damage to the taxpayers."

Christine Falvey, Mayor Lee's spokeswoman, told KQED by email: "Mayor Lee is deeply disturbed by the alleged criminal activities of Mr. Jackson, Ms. Jones and Ms. Mohajer and strongly condemns them. There is absolutely no place in San Francisco for this corruption, especially in City government, and Mayor Lee urges the District Attorney and City Attorney to pursue these charges to the fullest extent."

Lingering questions about this type of corruption pointing all the way to the top of San Francisco city government went unanswered during the recent federal criminal trial of Raymond “Shrimp Boy” Chow.

And the trial’s Jan. 8 conclusion, finding Chow guilty on all 162 counts -- including racketeering and ordering the murders of two rivals -- also opened a window into potential “pay to play” politics in Lee’s administration.

Chow’s defense had planned to introduce evidence pointing to shady campaign donations fronted by an undercover FBI agent and facilitated by Lee’s fundraisers. However, under federal Judge Charles Breyer’s orders, the players who surfaced in that separate thread of the investigation were never called to the witness stand.

These would have included an undercover FBI agent posing as a mob-connected Atlanta businessman using the alias “Michael Anthony King,” and Lee himself, who according to FBI documents received thousands of dollars in illicit contributions from “King” to retire campaign debt from his 2011 mayoral run.

Although Chow’s jury did not hear the defense team's argument that the FBI improperly stopped investigating Lee, a KQED analysis of thousands of pages of court filings sheds new light on Lee’s alleged connection to illegal campaign donations from "King" in exchange for sweetheart housing development deals.

Undercover Agent Hired Keith Jackson

“King” began sending contributions to Lee after Keith Jackson, another key figure in the federal investigation, suggested it. Jackson was previously a fundraiser for Lee’s rival, state Sen. Leland Yee, in a competing mayoral campaign, and continued assisting Yee in his bid for secretary of state.

But Jackson ended up playing for several sides. “King,” who claimed to be seeking business opportunities in San Francisco real estate, hired Jackson as a consultant. At the same time, Jackson also worked as a PR consultant for Lennar, a prominent real estate developer.

Jackson was indicted along with Chow in April 2014 and pleaded guilty to racketeering after originally facing a range of serious charges, including conspiracies to commit arms trafficking, narcotics trafficking and murder for hire. Yee was also indicted and pleaded guilty to racketeering.

Jackson started working for “King" in February 2012. “Throughout his relationship with [‘King’], Mr. Jackson sought out legitimate business opportunities for [‘King’] to invest in pursuant to a $2,000 monthly consultancy agreement,” according to a court filing by Jackson’s attorney, James Brosnahan. “Among the efforts Mr. Jackson expended on [‘King’]’s behalf were … meetings with [redacted] officials about business and housing development in San Francisco.”

Lennar, Jackson’s other employer, is behind a massive mixed-use redevelopment project that will transform a large tract of land in San Francisco’s Bayview-Hunters Point neighborhood, as well as a massive development project on Treasure Island.



Following Jackson's arrest in 2014, a Lennar spokesperson told reporters that Jackson “did a very good job of helping educate residents of the Bayview about the shipyard project and providing feedback from the community.”

Jackson and “King” held numerous discussions about redevelopment projects and potential investment opportunities, court records show. In one recorded conversation, Jackson told “King” he’d been researching “how to make a profit from not-for-profit affordable housing.”

In a conversation recorded by the FBI on March 1, 2012, Jackson apparently was working to help "King" land development contracts with the city and urged “King” to donate $10,000 to Mayor Lee. (By law, the limit on individual campaign donations is $500.) On April 19, 2012, the FBI recorded Jackson requesting another $5,000 from “King” for Lee, along with an additional $5,000 after that.

As this affidavit notes, "Before and after Jackson called UCE4773 (“King”) to solicit $10,000 for Mayor Lee, he used Target Telephone 1 four times to contact [name redacted]. On April 19, 2012, following a call from Jackson to (“King”) to request $5,000 for Mayor Lee, followed by another $5,000 for Mayor Lee, Jackson used Target Telephone 1 to contact [name redacted]."





Checks Made Out to City Officials

“King’s” campaign donations to Lee were the subject of a now-infamous telephone conversation, which also took place March 1, 2012.

In that conversation, “King” spoke with former Human Rights Commission employee Zula Jones, a fundraiser for Lee. According to an FBI wiretap transcript, Jones told “King”: “You pay to play here. We got it. We know this. We are the best at this game; uh, better than New York. We do it a little more sophisticated than New Yorkers. We do it without the Mafia.”

(Jones was indicted, but not convicted, in 2000 for allegedly scheming to defraud the city’s minority contracting program.)

In the months following those conversations, “King” wrote out a series of checks. On March 2, 2012, he contributed $500 -- the legal contribution limit -- to Lee’s mayoral campaign.





He sent $5,000 for “expenses” to Nazly Mohajer, then a member of the Human Rights Commission, on April 15, 2012.





He sent another $5,000 for “expenses” to Mohajer on May 1, 2012. He also sent Jackson at least $7,000 more, over the course of four months, than Jackson’s consulting fee would have yielded -- including $5,000 for “expenses.”





Several other checks associated with the undercover agent's account were referenced but not provided in court filings, since his bank was apparently unable to find records for them.



So what did “King” expect in exchange?

Prosecutors in the Keith Jackson case claimed that “King” was promised favors in exchange for political contributions, including certification as a minority-owned and local business, which would give him advantages in winning development contracts in the city.

Businesses that win these special designations are certified by the Human Rights Commission. According to the agency’s website, “certified firms can compete more effectively on city contracts because they benefit from, among other things, city subcontracting goals set for most city contracts.”

In a conversation recorded by the FBI on May 7, 2012, “the interceptee indicated that she had received a $5,000 check for a political candidate that [“King”] had mailed earlier. In the same conversation, the interceptee indicated that she was checking on possible business for [“King”], and could do a certification for a local office right away.”

In the same conversation, the recipient told “King,” “I’m sure Keith is basically organizing some meeting for you with Lennar.”

This came six days after the undercover agent had sent one of his $5,000 checks to then-Human Rights Commissioner Nazly Mohajer.





As part of a development agreement with the city, Lennar must submit regular reports about hiring practices, and prioritize awarding contracts to local and minority-owned businesses to bolster opportunities for a disenfranchised workforce in the economically disadvantaged Bayview-Hunters Point community.

Far from being a Bayview-based local business owner, “King” represented himself to Jackson as an out-of-state businessman with ties to organized crime.

A filing from Jackson’s attorney, James Brosnahan, suggests the agent who posed as “King” was pulled from the investigation amid allegations of financial misconduct. Brosnahan also disputes the claim that Jackson promised favors in exchange for political contributions.

Mayor Lee Met with “King”

According to multiple media reports, the $20,000 “King” contributed to Lee's operatives was broken up illegally and funneled to the campaign through straw donors.

“The FBI alleged in discovery that Ed Lee took substantial bribes in exchange for favors and that … Nazly Mohajer and Zula Jones, hustled in these bribes for the mayor,” Chow’s attorneys wrote in an explosive brief that generated headlines in August 2015. “Lee, Mohajer and Jones remain unindicted.”

Lee has denied any wrongdoing, telling reporters that the federal government was unresponsive to his request for more information about the agent’s activities and whether improper donations were sent to his campaign.

Jones discussed breaking up campaign contributions to Lee in an April 17 telephone conversation with “King,” two days after King sent a $5,000 check to Mohajer, according to an FBI transcript. “Ed knows that you gave the $10,000,” Jones allegedly told “King.” And, “He also knows that we had to break the $10,000 up.”

Chow’s attorneys also highlighted an April 6, 2012, meeting between Lee and “King” at Mohajer’s Front Street office, to discuss “business opportunities in San Francisco.”

When pressed about that meeting, Lee told the San Francisco Chronicle’s Phil Matier: “I recall a lot of meetings, a lot of people three years ago. I do not recall any specific meetings with folks…Meeting people is one thing, doing something that is inappropriate is completely different, and we have always been very thorough on that.”

Lee has since purged $1,500 in donations that came directly from Jones and Mohajer from his 2011 and 2015 campaign funds and has donated the money to the city’s general fund.

A KQED analysis of campaign donation records also found $1,000 in donations from Pamela Gilmore and Rex Tabora in spring 2012, both of whom listed Jackson Consulting as their employer. It is unclear if those donations were returned.

According to a report in the San Francisco Chronicle, Gascón and City Attorney Dennis Herrera opened investigations into campaign donations involving Jackson last summer, after court documents in the Chow case revealed the donations from “King.”

Jackson and Yee are currently scheduled to be sentenced on Feb. 24. Chow is scheduled to be sentenced on March 23.