Official’s Dual Roles Stir Worry Of Conflict

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Hydra Mendoza has for several years played a controversial dual role in San Francisco politics, acting as both a school board member and the mayor's education adviser.

It's a legal although unusual arrangement, but one that has raised ethical concerns that her loyalties may be split among her public responsibilities, her paycheck, and now, her personal life.

A handful of recent incidents involving Mendoza have failed to pass the political smell test, with ethics experts and others saying her actions have led to the unacceptable appearance of a conflict of interest or potential impropriety.

Mendoza was a key player in negotiating a $2.7 million donation last fall from the Foundation to city middle schools for iPads and other needs, bolstering Mayor Ed Lee's initiative to increase resources for city middle schools.

The money, announced publicly in October, was then processed as a nonprofit donation through the United Way of the Bay Area, where Mendoza's then boyfriend, now husband, Eric McDonnell, is the chief operating officer.

While McDonnell's organization is waiving an administrative fee that would typically come with such agreements, there was arguably the potential for future revenue. The foundation is expected to donate significantly more to the initiative – perhaps $15 million to $20 million – later this year, according to founder Marc Benioff.

Not everyone, including then-school board President Rachel Norton, initially connected the dots between Mendoza and the United Way, when the deal was announced in October.

"I was concerned when I learned about it," Norton said, adding that district lawyers cleared it, but it wasn't a board decision. "How it looked made me a little uneasy."

Board members and district leadership were assured by district lawyers that no conflict-of-interest laws were broken, given that Mendoza's husband didn't financially benefit.

4% charge

Another nonprofit agency would have charged about $100,000, or 4 percent, to process the donation, Mendoza said.

"This was about money getting into our middle schools, not about the way in which it was going to get to middle schools," she said. "I don't feel like that was odd."

The United Way charges up to 15 percent to act as a fiscal agent to process funds, but does on occasion offer the services for free, including in the case of donations for natural disasters or situations like San Francisco's that require quick, basic services for a short period of time.

In addition, United Way has partnered with Foundation in the past and is a customer of the Internet company, officials said.

Mendoza said that nonprofits considered for the job were told of the possible opportunity of business based on a future donation by Foundation, which could mean administrative fees in the millions. The ultimate contract with United Way was a one-year agreement.

"There was no financial gain for United Way," Mendoza said. "There was a potential benefit but not a guaranteed benefit."

While city, school district and ethics lawyers all agreed no conflict-of-interest laws were broken in the arrangement, it's not good government, said Jamie Court, president of Consumer Watchdog, a nonprofit advocacy organization for consumer and taxpayer issues.

"The law is there to prevent the specter of impropriety. There might not be impropriety, but it looks bad," he said. "Clearly, if her husband is getting a contract, it's a decision that affected her financial interest."

Yet Court said there is also an overarching concern based on Mendoza's positions serving the mayor and the public.

"That feels wrong even though it may not be illegal," he said. "She can't serve two masters, and that's the fundamental problem with an influential decision maker in the municipal executive branch holding the office of school board member in the representative branch."

Mendoza makes more than $130,000 a year as the mayor's education adviser.

State conflict-of-interest laws do not consider a public salary a "financial interest," allowing Mendoza to vote on school district policies or transactions connected to the mayor. Private employees would not have the same leeway.

'Spirit of the law'

"There are certainly situations where people have technically not broken the law, but violated the spirit of the law," said Fred Woocher, an attorney and legal expert in government ethics and consumer protection. "By the same token, these exceptions (for public employees) exist because they are part of the spirit of the law.

"There are certain instances that it is good for people to have overlapping interests."

Since she was elected to the board in 2006, she has recused herself only once from voting on an issue based on a potential conflict of interest with her job. In that case, the school district was suing the city over rules regarding civil servants.

In December, Mendoza declined to recuse herself from a vote to sell a vacant piece of school district land to the Mayor's Office of Housing. The issue was vetted by the district's lawyer, who ultimately cleared Mendoza to participate in the vote, which approved the district sale of land to her boss' office of housing.

Mendoza could have recused herself to remove any questions of conflict. She said she didn't want to.

"I worked on this from the day I started on the school board. Do you know how important it was to me?" she said. "To stand on the sideline of this? Really? I rely on board members to say, 'Hydra, this might look bad. Let's take a step back.' "

Mendoza has consistently said her role on the school board is independent of her job in the mayor's office – that she takes her City Hall hat off when she's acting as an elected official.

Yet the lines blur.

"The roles are so muddy and mixed up," said Margaret Brodkin, former director of the San Francisco Department of Children, Youth and Their Families, who recommended Mendoza for the City Hall job under then-Mayor Gavin Newsom, before her run for office. "I find it hard to believe that the city attorney thinks it's legal."

Mendoza, for example, could influence whom the mayor endorses for school board elections, giving her a potentially significant advantage on the board, Brodkin said.

And Mendoza currently represents the mayor's views in meetings with school district personnel related to the policies and spending of Proposition H money, a fund approved by voters in 2004 to pay for school programs related to preschool, physical education, arts, music and otherwise unfunded services.

At times, City Hall and the school district have disagreed on spending plans and at what point the city can withhold funds during bad budget years.

In such meetings, Mendoza said district staff understands she is acting as the mayor's aid, representing his position – not a board member who can hire and fire their boss, the district superintendent.

In two weeks, she will don her school board hat and vote on the district's Proposition H budget plan.

Wearing multiple 'hats'

"Is she working for the school district, is she working for the superintendent, is she working for the mayor?" said Brodkin, who is an advocacy consultant and founder of a children's fund nonprofit. "I've been at meetings where she puts on all the hats."

Mendoza, who has two children of her own, said her focus is on what's best for children.

Yet, serving the mayor is exactly the purpose of her six-figure job as a mayoral appointee, Court said.

"The duty to the mayor is her primary allegiance," he said. "How can you serve the people who elected you and the person who pays your paycheck?"

The mayor's office has backed Mendoza unconditionally.

"Hydra Mendoza is in a unique position working for both the mayor and as a school board member, and that brings with it enormous benefits, such as a closer working relationship between the city and the school district that has allowed us to do great things for students and families in San Francisco," Lee's spokeswoman Christine Falvey said in an e-mail. "It also requires a higher level of reporting and transparency and that is happening."

Jill Tucker is a San Francisco Chronicle staff writer. E-mail: [email protected]


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