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S.F. City Administrator Naomi Kelly takes leave of absence amid City Hall corruption scandal – San Francisco Chronicle

City Administrator Naomi Kelly took a voluntary six-week leave of absence Wednesday, two days after federal prosecutors revealed a bribery case against her husband, former San Francisco Public Utilities Commission chief Harlan Kelly.

Naomi Kelly has not been charged with a crime. But the criminal complaint against her husband alleges she attended a 2016 family vacation that federal investigators believe was intended as a bribe for Harlan Kelly.

First appointed by then-Mayor Ed Lee in 2012, Naomi Kelly is now the fifth city department head to either stand down or resign from their post amid a tangled City Hall corruption scandal that continues to grow.

In a letter she sent Wednesday to Mayor London Breed, Kelly said she had decided to take the leave to “focus on my family and especially on my two children, who have been devastated by public accusations.”

Kelly went on to defend her integrity, and said the allegations and public speculation were “based on the word of a liar,” referring to Walter Wong, a construction company executive and permit consultant who has pleaded guilty to his own role in a pay-to-play scheme and has since implicated Harlan Kelly, according to federal investigators.

Breed said Deputy City Administrator Ken Bukowski will assume the role of acting city administrator, according to a statement provided to The Chronicle.

“While Naomi has not been charged with any crimes, managing our COVID response while still delivering basic city services requires the full focus of all of our departments,” Breed said, adding that the city administrator’s office has been central to the city’s coronavirus efforts.

“As a city, we need to work to address issues raised by this investigation and to implement necessary reforms in order to ensure the public’s trust in our city government.”

Naomi Kelly is the top nonelected official in San Francisco, overseeing 25 departments, approximately 2,700 employees and an annual budget of nearly $750 million.

“My focus is on the important work of supporting my family at this time,” she said in an email to her staff reviewed by The Chronicle.

Naomi Kelly’s letter to Breed announcing her leave of absence represents her first public statement since the U.S. attorney’s office announced the wire fraud charge against her husband on Monday.

In the letter, Naomi Kelly takes direct aim at Wong, whose cooperation with investigators played a key role in building a case against Harlan Kelly. Wong has pleaded guilty to conspiracies to commit honest services fraud and money laundering.

While the prosecutors did not accuse Naomi Kelly of wrongdoing, Wong’s reported statements and a probe of the Kellys’ bank records suggested she may have misled investigators who interviewed her about the alleged bribes.

According to the criminal complaint against Harlan Kelly, FBI investigators interviewed Naomi Kelly in June regarding expenses the couple paid during a family trip to Hong Kong in 2016.

Wong at the time was bidding on a lucrative contract to upgrade city streetlights, and came along on the trip, court records state. In interviews with investigators, Wong said he paid for nearly all of the Kellys’ trip in exchange for unfair bidding advantages from Harlan Kelly.

The tab included the Kellys’ hotel bill, meals, jewelry and airfare that Wong reimbursed later, the complaint alleges.

Naomi Kelly reportedly told the FBI that she paid Wong a lot of money for the trip, though investigators said they found little evidence in the couple’s bank account to support that statement.

In her letter, Naomi Kelly called Wong a “disgraced and desperate man, who deceived many good people for many years and is now scrambling to use his manipulative skills to buy his freedom in the last years of his life.”

“I will put my credibility up against his any day,” she said. “And, rest assured, I will ensure that the truth is told for the sake of my family, my community, and my city.”

Naomi Kelly said she will leave her work in the hands of her “very excellent staff,” and that she had always acted ethically and fully supported the investigation into public corruption.

Harlan Kelly is charged with one count of honest services wire fraud. Breed accepted his resignation Monday. Brian Getz, an attorney for Harlan Kelly, denied the allegations on Monday and vowed to take the case to trial.

Megan Cassidy is a San Francisco Chronicle staff writer. Email: [email protected] Twitter: @meganrcassidy

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