It was their own Treasure Island.
Bored and unsupervised, five highly paid electricians working for the city of San Francisco spent years allegedly stealing from taxpayers during a remarkable binge that investigators say involved sex parties with prostitutes, moonlighting on city time and fraudulent billing to pay for their suburban lifestyles.
They allegedly charged the city hundreds of thousands of dollars for personal purchases, including BMW tires, lease payments on a truck and even remodeling a home in Contra Costa County's tony Blackhawk subdivision. The men are accused of running a private contracting business on city time, collecting government paychecks while working on unauthorized jobs and billing the costs to taxpayers as well.
They also are accused of hiring prostitutes for sexual encounters at their remote worksite on the former Navy base in San Francisco Bay and stocking a private bedroom in their office suite with liquor, condoms, Viagra and pornographic DVDs.
They were known as the Hetch Hetchy Power Crew, an elite unit named for the reservoir in Yosemite National Park that supplies the city with hydroelectric power. Their difficult, sometimes dangerous job was to maintain the city's high-voltage electrical system, especially during emergencies.
Five members of the power crew were arrested last year after a whistle-blower complained that crew leader Donnie Alan Thomas, 46, was moonlighting on city time. The men, along with two women accused of creating fake invoices to further the scheme, are awaiting trial in San Francisco Superior Court on felony charges. All have pleaded not guilty.
New insights
A never-publicized investigator's affidavit and other documents filed since the arrests offer new insights into how the city gave the power crew extraordinary autonomy - and how, under the direction of Thomas, the workers allegedly exploited that freedom to carry out a particularly brazen theft scheme.
At a time when fiscal crisis has forced deep cuts in public services throughout California, the case of the Hetch Hetchy Power Crew is a cautionary tale about how easily taxpayer dollars can be squandered without proper oversight and auditing.
As prosecutor Ana Gonzalez told a judge last year, "During the last four years of his employment, Thomas stole from the city in every conceivable way." Among the alleged thefts pulled off at Thomas' direction, according to court records, the crew:
-- Spent thousands of dollars in city funds to remodel and landscape Thomas' $1.5 million home in Blackhawk, billing the city for chandeliers, a $4,350 "classic Italian fountain" and $18,000 worth of "petrified seashore flagstone."
-- Moonlighted for other government agencies while on city time, allegedly bribing a federal employee with envelopes stuffed with thousands of dollars in cash to get electrical contracting jobs.
-- Billed taxpayers for a dizzying array of private purchases - cell phones, bar stools, a Palm Pilot, custom parts for a Ford Mustang and $880 worth of meat for a barbecue.
Four-year spree
The theft spree went on for about four years, investigators assert. By the time it was over in 2007, the workers had billed taxpayers for more than $235,000 in personal purchases and charged the city thousands more for time they had never actually worked, court records show.
Crew leader Thomas, whose annual city pay was more than $160,000, and electrician Miles Bonner, 61, who was paid more than $130,000, are charged with 41 felonies, including theft of public funds and embezzlement. Supervisor John Rauch, 70, who retired in 2005, and crew members Robert Mazariegos, 57, and Vincent Padilla, 28, each face one felony charge.
For accusations of falsifying city invoices, Jean Quiroz, 43, former vice president of a defunct city vendor called Centennial Distributors, was charged with 14 felonies; Elizabeth Bradford, 41, a saleswoman at Cole Hardware, another city vendor, was charged with 12 felonies. The defendants are free on bail.
Bonner, said defense lawyer Colin Cooper, is "a guy who's never been in trouble forever." He has been "completely cooperative and forthcoming" with the probe, Cooper said. Lawyers for the other defendants didn't respond to requests for comment.
Records show that Mazariegos also has been cooperative: He told investigators that he frequently didn't have to show up for work to collect his full $110,000-a-year salary and instead spent two days a week partying with a prostitute.
'Isolated outpost'
Susan Leal, who was general manager of the city's Public Utilities Commission at the time an anonymous tipster reported Thomas, said she was deeply discouraged by the scandal.
"But you have to fight those feelings and realize you've got to get rid of these people and they have to be prosecuted," she said in an interview. District Attorney Kamala Harris and City Attorney Dennis Herrera began a probe that led to the arrests.
Leal's successor, Ed Harrington, says the PUC has ordered a series of reforms, starting with pulling "all the people on T.I., that isolated outpost, back in the city," where they have regular contact with their managers. Thomas' direct supervisor, Marla Jurosek, was reassigned, a spokesman said. Jurosek didn't respond to an interview request.
To investigators, it was obvious that the crew's isolation made the theft scheme possible: While the crew itself was based on the island, Thomas' supervisors worked downtown and had "no idea what his job was," as one official familiar with the case put it. A contributing factor was the nature of the work - waiting for calls to fix outages or downed power lines.
Thomas grew up in Vallejo and was trained as an electrician at the old Mare Island Naval Shipyard, court records show. Before they joined the power crew, Thomas and Bonner worked at the Oakland Army Base.
For years, Bonner had moonlighted as an electrical contractor. Thomas allegedly saw possibilities in Bonner's side business, Tri Delta Electric, and devised a scheme to turn big profits doing electrical work at decommissioned military bases.
As district attorney's investigator Matt Irvine described the scheme in an affidavit, costs and materials were billed to the city, and the crew performed the outside work while on the city payroll.
Files on Thomas' computer suggest that as Tri Delta Electric, the crew began moonlighting on the city's dime in 2001. In the years that followed, they did jobs at the Oak Knoll Naval Hospital in Oakland, the Presidio of San Francisco and the Coast Guard station in Monterey and were paid more than $400,000 by other government agencies, according to the records.
Private work
Initially, "we were all nervous" about doing so much private work on city time, Bonner told investigators. Still, moonlighting took up more and more of each work day.
In his statement to investigators, Mazariegos said that between his side jobs and days off with the prostitute, he spent less than half of his workweek on city business.
Thefts and bribes were built into some projects, records show. For the Presidio job, the crew needed about $100,000 worth of wire. Investigators believe the crew bought some wire and billed it to the city and obtained more by stealing it from public agencies. Leftover wire was sold to a scrap dealer for $68,400, they believe, and some of that money allegedly went for payoffs to a federal employee who was steering contracts to the power crew.
The employee, former Presidio Trust electrician Robert Malaca, "got a kickback," Bonner told investigators: "We did a job, and we put $4,000 or $5,000 in an envelope and gave it to him." The power crew also partied with the Presidio employee - in one e-mail, Thomas reminded him to bring money to pay the strippers at Rauch's retirement party.
In an interview with California Watch, Malaca acknowledged receiving cash from the power crew but said the money was for legitimate purchases.
"Granted, they did some work for me, but I never got any kickbacks from those guys," he said. "They never even bought me lunch, that's how cheap they were."
Malaca said he was interrogated by the district attorney's investigators about his association with the power crew, and lost his job as a result.
Home remodeling
In 2003, when he was remodeling his home in Martinez, Thomas allegedly began billing the city for expensive personal purchases.
Either Quiroz at Centennial Distributors or Bradford at Cole Hardware would write up fake city invoices and take a big markup for their trouble, prosecutors allege.
And so, in June 2003, investigators say, Centennial ordered a $5,500 barbecue grill for Thomas. Quiroz is accused of splitting the purchase among 12 fake invoices for such items as an "Enerpac hydraulic machine" and a "flexible braid jumper." The city paid Centennial $9,580 - about a 75 percent markup on the alleged scam purchase.
In that way, investigators say, Thomas got himself cell phones, a Palm Pilot, custom auto accessories, a heating and air conditioning system for the Martinez house and, after he moved to Blackhawk, the fountain and fancy flagstone.
For crew members, there was one additional perk: access to the locked bedroom that had been constructed at Treasure Island adjacent to a tool room. Inside, in addition to liquor, pornographic DVDs, condoms and lubricant, investigators found Viagra prescribed to crew member Bonner. Mazariegos said the men used the room to entertain girlfriends and prostitutes.
The power crew has been reconfigured. In the first full year after Thomas' departure, the expenses the crew billed to the city decreased by $100,000, according to court records.
Hetch Hetchy Power Crew
Five electricians who worked for the city of San Francisco are accused of running a private contracting business on city time, moonlighting for other governmentagencies and billing the cost to taxpayers, according to court records. They also hired prostitutes for sex parties on their isolated work site on Treasure Island, investigators say. As part of the alleged four-year scheme, employees of two city vendors, Cole Hardware and now-defunct Centennial Distributors, are charged with falsifying invoices submitted by the crew's supervisor to remodel his home in the Blackhawk subdivision in Contra Costa County.
Source: San Francisco district attorney's office
Donnie Alan Thomas
Job: Power crew supervisor
Pay (2006): $169,691
Role: Accused of masterminding Power Crew theft scheme, billing city for more than $235,000 in personal purchases, approving unearned overtime for himself and employees, running a private business on city time.
Today: Charged with 41 felonies, including grand theft and embezzlement.
Miles Bonner
Job: High-voltage electrician
Pay (2007): $133,539
Role: Accused of conspiring with Thomas to run a private business on city time and bill the city for personal purchases. Told investigators a federal employee was given a kickback for contracting work at the Presidio, court records show.
Today: Charged with 41 felonies.
Robert Mazariegos
Job: High-voltage electrician
Pay (2006): $110,470
Role: Told investigators he collected a full city paycheck although he spent up to half his work week moonlighting or entertaining a prostitute, court records show.
Today: Charged with grand theft.
John Rauch
Job: Power crew supervisor (part time after 2005 retirement)
Pay, part time (2007): $47,328
Role: Accused of moonlighting while on city time.
Today: Charged with grand theft.
Vincent Padilla
Job: Power crew worker
Pay (2007): $80,300
Role: Accused of taking unearned overtime pay and working private jobs on city time.
Today: Charged with grand theft.
Elizabeth Bradford
Job: Cole Hardware saleswoman
Role: Accused of helping Thomas bill the city more than $47,600 in personal purchases by falsifying invoices
Today: Charged with 12 felonies including grand theft and embezzlement.
Jean Quiroz
Job: Vice president, Centennial Distributors
Role: Accused of helping Thomas bill the city more than $168,600 in personal purchases by falsifying invoices
Today: Charged with 14 felonies, including grand theft and embezzlement.
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