Contractors are big supporters of San Diego sales tax measure

The committee pushing for a half-cent sales tax increase that would go to mass transit projects has received more than $1 million from companies that internal audits by the San Diego Association of Governments concluded received massive contract increases with little oversight.

One of the companies, HNTB, was paid by SANDAG to manage the contract for the bungled South Bay Expressway toll collection project.

The company was paid nearly $5 million for the work overseeing main contractor ETAN, which was found to have faulty software that led to thousands of drivers being charged when they did not use the road.

HNTB has given nearly $400,000 to the Yes on G campaign advocating for the tax increase since the committee was established in 2021, a review of campaign finance filings by inewsource shows.

The measure would boost the county's sales tax and direct most of the money to SANDAG to fund projects.

HNTB, which did not respond to a request for comment, is not the only contractor that internal SANDAG audits said had benefited from lax agency oversight, which are now shoveling funds into the Yes on G Campaign.

HDR Engineering gave $50,000 in 2022 and another $35,000 last month, records show. Flatiron, the international construction company, gave $400,000 since 2021. WSP USA has given $100,000 to support the measure.

In October 2022 the SANDAG Office of the Independent Auditor released a report that showed each of the companies had been approved for potential increases in contracts that totaled tens of millions of dollars over the original amounts.

Auditors showed that HNTB, WSP and HDR were among the top 10 of companies with the largest dollar increases from the original contract amounts to the higher amounts. The increase ranged from 39% to 51%.

The audit was careful to say the companies did not get paid those amounts necessarily — but instead were approved to be paid up to that amount. The auditors faulted SANDAG for poor oversight of contracts, training of its employees and not having proper documentation.

The fact that Measure G money would funnel millions of dollars annually to SANDAG has created an opening for opponents of the tax hike. Proponents estimate the tax could bring in up to $350 million annually.

Miles Himmel, a spokesperson for the No on G group, said the contributions from the construction firms tainted with the financial and management oversight problems of SANDAG should alarm voters.

"To me what it looks like is kind of your typical government pay-to-play, the kind of thing people hate about government," he said. "It just kind of looks like your classic government bureaucracy, where a few people are going to make a lot of money."

Both Flatiron and HNTB are listed as committee sponsors for the Yes on G official campaign committee.

The sales tax measure would help fund a range of transit projects from carpool lanes to road repairs and expanded public transit options on buses and rail lines.

Cori Schumacher, the political director for the International Brotherhood of Electrical Workers Local 569 that is a sponsor of the committee and a major force in the Yes on G coalition, said the focus on a few contractors is misplaced.

She said the measure has the backing of community groups like Circulate San Diego, SB350 and Climate Action Campaign that worked to get it on the ballot.

"I think everyone is interested in making sure people are moving in San Diego," she said. "It is not just those folks involved, on the contractor side of things.

"Community partners are doing the work, and contributing money."

The latest filings for the Yes on G campaign showed it had raised $1.6 million this calendar year so far. Reports show last year the campaign raised just under $1 million.

The contributions from companies identified in the SANDAG audits make up nearly one-fourth of the $4.5 million the committee has raised since it launched.

Schumacher also said the No on G campaign should also be scrutinized for its conduct. A Carlsbad resident filed a complaint with the Fair Political Practices Commission dated Sept. 24 against San Diego County Supervisor Jim Desmond.

It alleges that Desmond is serving as a leader of the opposition to the measure, and that the No on G campaign should disclose it is therefore a candidate-controlled committee under the Political Reform Act.

The complaint also says the campaign received a $5,000 contribution from James Silverwood, the CEO and president of Affirmed Housing. The complaint says the company leases a Carlsbad affordable housing complex and in April, Desmond seconded a motion to commit reserve money from the No Place Like Home program to augment security at the complex.

The complaint alleges Desmond violated state law prohibiting supervisors from accepting contributions over $250 from any party that received a license, permit or other "entitlement" for one year after voting. The complaint says that prohibition extends to candidate-controlled committees.

A spokesperson for the FPPC confirmed the complaint was received but that no decision on whether to dismiss it or open an investigation has been made.

Himmel, who is also Desmond's spokesperson, brushed off the complaint.

"This is a desperate political stunt aimed at diverting attention from the real issue: voters don't want to pay more taxes, they don't trust SANDAG and a handful of insiders are set to make millions, while everyday voters are left to bear the burden," he said in a statement.

In January, the SANDAG board hired two new contractors to take over the work of HNTB and ETAN, though both companies continued to be paid until the changeover to the new vendors was made.

HNTB's contract related to the toll road expired on Sept. 30, a SANDAG spokesperson said. The company still, however, has open contracts it is working on for the agency. And SANDAG is continuing to work with ETAN.

Then in March, a report on the bungled tollway project said the agency had "suffered significant revenue loss" because of flawed software that incorrectly charged drivers for using the tollway or wrongly tabulated charges and credits to user accounts.