Suit claims contractor defrauded SF’s minority contracting program

The Associated Press
Monday October 21, 2002

SAN FRANCISCO – The San Francisco city attorney filed a civil lawsuit that claims one of the Bay Area’s largest mechanical contractors faked a partnership with a Filipino firm to defraud the city’s minority contracting program of $8 million. 

The lawsuit alleges that William D. Spencer, the white owner of F.W. Spencer & Son Inc. and Brisbane Mechanical Co., created a fake joint venture to help the companies’ bids for contracts on the nearly $3 billion expansion of San Francisco International Airport. 

Three of Spencer’s employees were also named in the lawsuit for allegedly helping Spencer form the bogus joint venture with Virgilio and Gerardina Talao, the minority owners of San Luis Gonzaga Construction. 

Spencer told the San Francisco Chronicle that he knew nothing about the complaint. 

The lawsuit says Spencer reported that San Luis Gonzaga Construction controlled 51 percent of a partnership with Brisbane Mechanical and that San Luis Gonzaga would perform more than half of the work. 

City Attorney Dennis Herrera said Spencer’s companies, and not San Luis Gonzaga, did all of the work on more than $8 million in contracts that the joint venture won between 1996 and 1999. The city is demanding that the money paid on those contracts be repaid. 

The three-year investigation of abuses of the minority program has focused on subcontractors, many of which worked for entities controlled by the Tutor-Saliba Corp. 

Tutor-Saliba won $841 million of work at the airport, and the city attorney is investigating the company for possible overbilling at the airport. 

In September, federal prosecutors dropped all criminal charges against a San Francisco city official and a Hunters Point plumber who were accused of defrauding a city-sponsored minority contractors program. 

Zula Jones, a contract compliance officer for the San Francisco Human Rights Commission, and plumber Alvin P. Norman Jr. were indicted in April 2000 along with three company officers from San Leandro-based, Scott Co., a white-owned mechanical contracting firm. 

Scott Co. won at least $55.1 million on the airport expansion project as a minority subcontractor to construction giant Tutor-Saliba Corp. 

In February, the firm and its vice president Robert Nurisso, 59, of Redwood City, pleaded guilty in the case. Scott Co. was ordered to pay $1.5 million in fines and restitution and Nurisso to serve six months home detention and pay an additional $500,000 restitution.