In December, San Francisco Mayor London Breed scrambled to cut costs across city departments in an attempt to close an exceptionally large budget deficit, which currently hovers around $800 million but could top $1 billion in a few years. In October, when the deficit was supposedly ‘only’ about $500 million, Breed sent a letter requesting city departments submit preliminary spend reduction proposals by the end of the month. “We need to ensure that every dollar our city departments spend, either directly, or through contracted parties, is done so responsibly and with accountability,” she wrote.

This is rich talk of fiscal responsibility from a mayor who's presided over record high city budgets from the start of her term in 2018 onward. The headline numbers of this spending spree are well known: a near-tripling of the Department of Homelessness and Supportive Housing’s budget, massive increases in spending on addiction-related services, and tens of millions in pandemic-era bailout programs, to name a few. But less discussed is the way Breed has quietly greenlit huge funding increases to a handful of activist-staffed city departments, including the Human Rights Commission (HRC), the Department on the Status of Women (DOSW), and the Office of Transgender Initiatives (OTI).

In 2018, when Breed assumed office, the HRC, which “works in service of the City’s anti-discrimination laws to further racial solidarity, equity, and healing,” received $4.2 million. Today, it receives just over $19 million. Similarly, DOSW, whose mission is to ensure “equality for women, girls and nonbinary people” in San Francisco now receives $18 million, up from $8.4 million in 2018. And the budget of OTI, which “advocates for and uplifts the voices and needs of transgender, gender non-conforming, intersex, and 2-spirit (TGNCI2S) San Franciscans,” has increased from around $466,000 in 2018 to around $1 million.

Politically popular rhetoric about ‘equity’ and ‘advocacy’ for the marginalized has ensured the specifics of how this windfall has been spent have gone largely unscrutinized in a city as left-leaning as San Francisco. But a closer look at these departments’ finances reveals most seem to function largely as make-work and vote-buying schemes. That is, their primary role is to provide jobs for activists and buy political support.

HRC’s Dream Keeper, which writes $200,000 checks to one-person “media companies” with almost no following and whose “Senior Home Repair Program,” funded by part of a $20 million grant, was recently found to have only repaired three homes since its inception two years ago, offers clear examples of wasteful, clientelist spending. But so too does the Office of Transgender Initiatives, which spends most of its budget on guaranteed income and rent payments offering a combined $3,200/month to around 150 “transgender and gender non-conforming people.” (Judicial Watch, a nonprofit, recently filed a lawsuit against the city on the grounds OTI's guaranteed income program violates the California Constitution's equal protection clause.)

More generally, we could say most of the money spent on these departments serves one of three interconnected purposes: (1) to provide work for activists tasked with either (2) distributing government funds to select client-constituents, incentivizing their ongoing political support or (3) manufacturing internally-directed identitarian propaganda to agitate for more government funds. We have come to call this nearly $100 million a year clientelism scheme — in which all involved actors are perversely incentivized to demand ever-increasing sums of money for themselves, and in which every dollar spent brings in more participants — San Francisco’s “DEI-industrial complex,” and outlined some of its most flagrant excesses below.

DIRECT CASH TRANSFERS

As we have said, the primary function of the city’s DEI industrial-complex is to incentivize client-constituents to support their political patrons. These incentives can include things like no-bid contracts, though often administrators favor a simpler approach: providing direct cash transfers to their target voter base. In general, these cash transfers take one of two forms. Either administrators will funnel money through identity-specific welfare schemes, or they will give it to nonprofits, which will distribute it to clients in small grants.

All three departments discussed in the introduction — the Human Rights Commission, the Office of Transgender Initiatives, and the Department on the Status of Women — have their own identity-specific welfare schemes. HRC’s operates indirectly through its subsidiary Dream Keeper Initiative, which in addition to providing “direct cash stipends” for “small or emerging Black-owned businesses,” also provides cash in the form of grants to tiny nonprofits like Clari-T Media, which got $200,000 from the program, or Both Sides of the Conversation, which got $300,000. On the other hand, OTI offers up to $3,200 a month to 145 “transgender and gender non-conforming people” through two stipend programs it runs directly:

• Guaranteed Income for Transgender People (GIFT), a program providing 55 “economically marginalized transgender people with unrestricted, monthly guaranteed income” of $1,200/month for a year-and-a-half.

• Our Trans Home SF, a housing and rental aid program for 90 “low-income transgender adults” that offers five-year subsidies of up to $2,000/month.

This year, DOSW plans to launch its own guaranteed income programs, which will offer monthly payments of unspecified amounts to “justice involved women” (e.g. those currently or formerly incarcerated) and “those from our Indigenous communities.”

These departments also funnel money to their constituents indirectly through the nonprofits they fund. A representative example is Dream Keeper’s $3 million grant to the African-American Arts and Culture Complex (AAACC), a nonprofit where, incidentally, Mayor Breed worked for over a decade, and which was recently barred from receiving state funding due to failure to submit appropriate revenue documentation. Despite renting a massive 32,000 square foot space in the heart of the Fillmore District, since this past October, AAACC has put on only one event per month — a “Season of Black Art” series showcasing the work of participants in its “cohorts of artists and entrepreneurs.”

The only programming AAACC appears to run in addition to this series is its “Ubuntu Resource Program,” which “invests in Black artists, creatives, and community members” either through “creative development cohorts” or “Radical Self-Care Quick Grants.” These quick grants are available only to those who are 18 and over, live in San Francisco and “personally identify and/or define themselves as African, African American, Afro Latino, Afro Diasporic or a member of the Black Community." They provide between $300 and $2,000 for “self-care, learning opportunities, or a creative project.” The grant guidelines specify these funds may be used for expenses ranging from “workshops and child care” to “therapy, massage, spa treatments, space reset or declutter,” or any “other programs or services not listed that the awardee deems as radical self-care.” (Yes, the San Francisco taxpayer is paying for people to get $300+ spa treatments, if they have the right skin color.)

THE ADMINISTRATORS AND THEIR PROPAGANDA

These cash transfer programs rely on steady inflows of taxpayer revenue, which the administrator-activists who staff these departments secure mainly by producing internally directed, identitarian propaganda. They are paid generously for this work; Sheryl Davis, who heads up HRC, made over $350,000 in combined salary and benefits in 2022; Kimberly Ellis, who runs DOSW, made around $280,000 in salary and benefits; and Pau Crego, who until recently ran OTI, made almost $200,000 — one-fifth of OTI’s total budget — in salary and benefits.

In general, these administrators oversee the production of either race- or gender-based propaganda directed at other city departments. HRC generally focuses on the former, largely through its subsidiary “Office of Racial Equity” (ORE), which Breed inaugurated in 2019 with an initial $600,000 investment, followed by an additional $4 million in 2020.

ORE’s stated mission is to “address structural and institutional racism in the City and County of San Francisco’s internal practices and systems and external delivery of services to the public.” To do this, it has tasked all other city departments with creating “Racial Equity Action Plans,” examining the racial composition of their workforces. ORE also has the authority to recommend “budget reductions [to other city departments] should [their racial equity] benchmarks not be met.” Every department in the city now has one of these “action plans” — from the Department of Elections, to the Planning Department, to San Francisco International Airport (SFO).

While the ‘action plans’ seem primarily designed to push for (legally questionable) race- and sex-driven hiring practices, they also serve to entrench the narrative that San Francisco, arguably the most progressive city in a state with a Democratic supermajority, is a fundamentally racist and sexist city — and thus that ongoing funding to departments like HRC, DOSW, and OTI is necessary. For example, to encourage more “inclusive identity expression,” the airport’s plan states it will “partner with OTI to begin offering Transgender Awareness Training on a quarterly basis.” And to ensure a diverse composition of its workforce, it will “use the survey tool created by [DOSW] to track the diversity of appointments to boards, commissions, and advisory committees” along with “ORE racial equity assessment tools.”

DOSW produces analogous internal propaganda along gender and sex-based lines. For instance, last year, the Department released its own “strategic plan” for a “gender equitable city government,” which involves “analyzing” the number of women in city leadership, workforce development programs and on commissions and boards, as well as on public art, streets, buildings and parks. Additionally, the plan looks to prioritize “key activities,” like the inauguration of a “Bay Area Abortion Rights Coalition,” which will be a “regional collective of municipal governments and reproductive health and justice stakeholders” — a strange idea in a state with no specific gestational limits on abortion. Unsurprisingly, one of the intended outcomes of the plan is to ensure DOSW receives more funding by positioning it “as the go-to municipal knowledge broker on policies concerning gender equity and the human rights of women, girls, and nonbinary people.”

Between HRC, Dream Keeper, DOSW, and OTI, the budget of the city’s DEI-industrial complex today hovers around $100 million. But unless major political change occurs, this number and the wasteful spending it entails, will doubtlessly increase.

Why? Because no one inside the system — from the client-constituents benefiting from “radical self-care grants” for spa treatments, to the DEI administrators making generous government salaries, to the mayor accruing virtue signaling points — has any incentive to reduce it.

— Sanjana Friedman