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Attorney Claims SF Fired Her|for Uncovering Kickback Scheme

SAN FRANCISCO (CN) - The San Francisco city attorney fired his top trial lawyer after she told him about a multimillion-dollar kickback scheme involving the city's Claims Bureau, she claims in court.

Joanne Hoeper sued the City Attorney Dennis Herrera and the City and County of San Francisco, on Jan. 7 in Superior Court.

Hoeper claims that Herrera's office paid thousands of claims worth more than $19 million to property owners and plumbing companies for sewer work that was neither necessary nor the city's responsibility.

The money went to pay for damage that city-owned trees supposedly caused to sewer lines running from private property to the city's sewer system, from 2002 to 2011, Hoeper says.

Herrera's spokesman Matt Dorsey said that Hoeper was trotting out "the same baseless allegations that were independently reviewed and rejected by Santa Clara County Counsel back in July."

Dorsey referred to a review of Hoeper's claims conducted last year by the Santa Clara County Counsel's Office, which handled the review on referral from San Francisco due to potential conflicts of interest.

Santa Clara rejected all of Hoeper's claims for wrongdoing alleged to have occurred before Jan. 1, 2014 as barred by a 6-month statute of limitations. The review rejected the rest of her claims, which were for acts that occurred after Jan. 1, 2014, on the merits.

Dorsey said the characterization of Hoeper's retaliation claim is key to her case, which he called that of a fired worker who is unhappy with her former employer.

"Ms. Hoeper is not a whistleblower. She clearly has an ax to grind against her former colleagues," Dorsey said.

But Hoeper says in her lawsuit that, tipped off by an FBI agent, she began an investigation in 2011 that turned out to be the last of her nearly 20-year career as the chief trial deputy at the city attorney's office.

At first, Hoeper says, Herrera encouraged the investigation. But Hoeper claims she learned that tree roots cannot penetrate unbroken sewer lines, but simply enter already damaged lines. She claims that even if city-owned trees had damaged private sewers, the city was under no obligation to pay to fix them.

Hoeper claims the city attorney's claims bureau made it worse when it paid to replace rather than just repair the sewer lines, which are called laterals. She says the claims were for approximately $10,000 each.

"Hoeper and her team discovered that there was no legal or factual basis for the [city attorney's] Claims Bureau to have paid claims for damaged private sewers," the complaint states.

"As a result, the City paid many millions of dollars for capital improvements to private property and the plumbing companies who did the work received a windfall."

Hoeper, who left a partner position at Morrison & Foerster in 1994 to work for the city, says that as she dug deeper, she saw suspicious anomalies and patterns.

"The files were replete with false statements, inflated bills, suspiciously similar signatures and other red flags," she says in the complaint.

Hoeper claims that her investigator reported that some property owners were not even having sewer troubles before they were solicited by plumbing companies.

The plumbing companies then submitted false claims to the city attorney's claims bureau, and bureau employees knowingly paid out the claims, the complaint states. Hoeper claims that the claims bureau's assistant chief personally authorized certain claims in return for financial benefit to him and his family.

According to Hoeper, the plumbing companies took the lead, telling property owners about a nonexistent city program to replace private sewers that had been damaged by city-owned trees. The plumbers would fill out claim forms, the property owners signed and submitted them, and the city would then cut checks to the owners, she claims.

An exhibit attached to Hoeper's complaint states that when homeowners questioned the process or balked, the claims bureau assistant chief would close that claim, open a new, identical claim in the plumbing company's name and pay the plumbers directly.

"One plumbing company's sole source of income for many years appeared to be city sewer claims," Hoeper says in an exhibit attached to the complaint.

Some property owners even contacted the assistant chief of the claims bureau to voice their suspicions that the plumbing companies were involved in fraud, but he covered up their complaints, according to the exhibit.

Hoeper says that the chief of the claims bureau has a close relationship with Herrera and has played a "central role in shaping and promoting Herrera's political career."

After she confronted the assistant chief of the claims bureau with evidence of bribes and kickbacks, she says, the average property owner's claim dropped by $3,000, money she says had been finding its way into the pockets of public officials.

The next morning, Hoeper says, she was replaced as the chief trial deputy and transferred to the district attorney's office, and Herrera shut down the investigation.

"Herrera chose to protect those engaged in wrongdoing and to terminate Hoeper for reasons completely unrelated to her job performance," Hoeper says in an exhibit attached to the complaint.

Hoeper seeks reinstatement to her job as chief trial deputy, lost wages and benefits, and punitive damages for retaliation and Labor Code violations.

She is represented by Stephen Murphy, of San Francisco.

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