In July 2019, Gail Gilman became the Political Director of the Proposition A "Affordable Housing" Bond campaign. For the prior seventeen years she was the executive director of the Community Housing Partnership (CHP). Before that, she worked for Bridge Housing. Both stand to be the chief contract awardees of Proposition A bond proceeds. Gail Gilman is also a San Francisco Port Commissioner responsible for dishing out contracts from the 2018 Port Seawall Bond.
The Libertarian Party of San Francisco has learned from a very highly placed and reliable source that Gail Gilman was pushed out of the CHP this year along with the CFO in the wake of an FBI investigation into fraud and racketeering at the organization. This involved the Section 8 Low Income Housing Tax Credit program (LIHTC). Gilman allowed the Community Housing Partnership to take eight to nine times the legally allowed tax credits at a development on 6th Street involving the Patel SRO monopoly. Moreover, the project involved no net increase in San Francisco “affordable” housing because it just swapped one down-market property for another.
As an introduction to how the tax credit program facilitates difficult-to-detect fraud, we recommend this short documentary by Frontline and NPR:
In a famous 1935 speech, General Smedley Butler said, A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. People like Gilman are allowedd to escape prosecution because things like LIHTC fraud and Proposition A are sophisticated rackets. To quote former DA Kamala Harris, "Fraud is one of those things going without consequence because one of those things that we in law enforcement especially don't like are those paper cases. Right? "
The Libertarian Party National Platform 2.7 states, "Markets are not actually Free unless fraud is vigorously combated"
To understand pay-to-play culture surrounding Affordable Housing programs, it helps to look at the boards of organizations such as the Community Housing Partnership and Bridge Housing. CHP director Chris Amos attended UPenn with Donald Trump and was formerly a manager with the Carlyle Group, a Hedge-Fund-on-steroids founded in 1987 by Reagan National Security Advisor Frank Carlucci. It’s purpose was to harness the 1986 Tax “reform” to inflate domestic real estate then shift wealth offshore. Carlucci was also a senior advisor to Strategic Planning and Analysis Corporation where City Attorney Dennis Herrera interned as a very young member of the SF Port Commission. Herrera went on to join the Maritime Administration where he worked with John Greykowski, a John McCain aide from the Keating Five and Savings And Loan scandals of which the Carlyle group was a prime beneficiary, picking up fire-sale properties from the Resolution Trust Company.
By partnering with Bridge Housing or the CHP, financiers like the Carlyle Group pay-to-play through buying influence. Although city officials take credit in approving “affordable housing” this is really just a way for private developers to take paper losses as tax deductions against their existing capital through a K-1 form. What these losses actually represent are kickbacks facilitated by partnerships with LLC “affordable housing” management companies.
Although the City and County of San Francisco might audit the CHP as a charity in and of itself so the CHP’s operations appear spiffy clean, the CHP pays rent and “fees” to LLC management companies that hold title to “Affordable” buildings. All the fraud is raked into these special purpose LLC vehicles. The LLC can pay political consultants, inflated service contracts, or engage in any number of financial shenanigans and none of these payments are ever scrutinized or reviewed by an auditor. The LLC’s board meetings are not open for public review and the LLC is not required to file publicly-inspectable tax returns like a normal nonprofit.
Last week, the White House Council of Economic Advisors released a major report on homelessness in America with a special focus on California. Although we do not agree with all of the report’s findings (especially gratuitous and unsubstantiated policy prescriptions regarding sanctuary city policies), here are the newly-published Council of Economic Advisor’s findings:
- It takes ten permanent supportive housing beds to reduce the homeless population by one person.
- Half of unsheltered Americans live in California. Even after adjusting for the state’s mild climate and high home prices, the state’s unsheltered homless less population is twice as high as expected.
- Substantial housing regulatory reform would cut San Francisco’s homeless population by 54% and Los Angeles’s homeless population by 40%
On September 24th, TruthInAccounting.org released its annual State of the States report itemizing a State debt burden of $21,800 debt burden for each taxpayer – a rating of “F.” Coercing individuals into debt for the benefit of the salesperson is a hallmark of racketeering. Practically speaking, this means any additional resources local voters throw at the housing crisis to the benefit of the “very few” insiders will be offset by state cuts in order to fund pension obligations.
This is on top of San Francisco’s already staggering $16,400 per capita debt load. Every new dollar of the $20 million thrown at so-called “educator housing” will be offset by two dollars in budget cuts to meet the SFUSD’s $41 mllion (and growing) unfunded retiree medical debt obligation. In the meantime, the DCCC’s bankster cronies and their front-company spokespersons such as Gail Gilman will take the money and run while the public is getting fleeced.
(Kamala Harris comments on white collar cases at 11:22)