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Crisis at the Taxi Commission

Executive Director Fired, Then Rehired
After Mayor Replaces Commissioners

Cab companies have long pushed their weight around at the Taxi Commission — but for once they pushed too hard.
Under intense pressure from companies and permit holders, the commission defied Mayor Gavin Newsom and dismissed its Executive Director, Heidi Machen. The decision was made in the early morning of June 28 after an eight-hour meeting, including a three-hour closed session on the executive director’s dismissal.
The mayor, who employed Machen as an aide when he was a member of the Board of Supervisors and hired her for the commission position, shot right back. He replaced two commissioners who voted for Machen’s ouster and said he wanted her reinstated.
On July 25, the reconstituted commission voted to let him to do that. Meeting in closed session, it approved nominees for the position and forwarded their names to the mayor. Although the names of the nominees were not made public, Machen’s was among them, because by the end of the week the mayor had reappointed her.

Resistance to enforcement

Shortly after Machen was appointed to the job last August, she clashed with all the city’s cab companies over their failure to file confidential financial reports required by law. On account of the missing reports, a Health Department study crucial to a taxi driver health plan could not be completed. Machen demanded and got company compliance with the requirement.
Soon after, Machen angered permit holders by taking steps to regulate and enforce their driving requirement. At her office’s request, the commission passed new rules governing waivers of the requirement for medallion holders who were unable to drive a cab. In line with a City Attorney’s opinion on the subject, the rules allowed limited waivers for permit holders with recoverable conditions, but not for drivers whose disability was permanent.
Machen also hired an auditor whose duties included investigating violations of the driving requirement and other taxi laws and regulations. Previously, the Police Department’s Taxi Detail was in charge of driving requirement audits and investigations. Some permit holders, fearful of increased scrutiny, were up in arms over an innocuous memo detailing how to fill out a waybill.
Machen later clashed with cab companies over an audit of American Cab. The company has been accused of gate overcharges. (See pp. 4-5.) None of this endeared Machen to the powers that be in the taxi industry.

Commission staffer accused

In the meantime, permit holders connected with the Permit Drivers Association (PDA) were investigating one of Machen’s staffers, Tristan Bettencourt.
Machen brought Bettencourt to the commission office from the Water Transit Agency, where both had worked. He was also an old friend and former housemate. As senior administrative analyst, he was second in charge of the department.
In 1989, Bettencourt pleaded “no contest” to a felony burglary charge involving a person who had been in his taxi. Despite the conviction, he continued to drive at Yellow Cab, serving his sentence in a work furlough program. He left Yellow in 2000. Years later, the charge was dismissed under a provision of law allowing persons who have completed their sentences and have not since been charged with other crimes to clear their record.
According to a news report on KGO-TV (Channel 7) that aired the evening before the commission’s vote on whether to recommend Machen to the mayor for reappointment, Bettencourt, using the alias “Alan Roth,” was also convicted of grand larceny the year before. Other accusations relate to alleged bad-faith dealings in computer equipment in the 1990’s.
Bettencourt — who disputes many of the charges made against him — announced at the July 25 commission meeting that he was resigning his position, effective the following day.

All-out attack

Bettencourt’s past gave opponents a handle to attack Machen. Yellow Cab executive Jim Gillespie, who is head of the San Francisco Taxicab Association, went to the mayor in an attempt to have Machen and Bettencourt dismissed. But the mayor backed the executive director.
The irony is that Gillespie has a past of his own. In 1989, at almost exactly the same time as Bettencourt’s burglary charge was in court, Gillespie was convicted of five felony counts of securities fraud and related charges. He claims his involvement was unknowing.
Machen later initiated charges against Gillespie for failing to comply with the Proposition K driving requirement. Gillespie claimed that company managers were traditionally exempt from the requirement and the charges amounted to retribution. Machen countered that the law at the time contained no exemption for managers. She said she was acting on driver complaints and that Gillespie was targeted because he had previously been admonished for failure to comply with the requirement.
Meanwhile, PDA members were demanding Machen’s and Bettencourt’s ouster at meeting after meeting of the Taxi Commission.
A turning point came in April with the death of Taxi Commission President Arthur Jackson. Ignoring a request from the mayor to delay a vote for a replacement, the commission elected cab company representative Martin Smith, a rabid opponent of Machen’s, as president.
Smith had some serious baggage when he came onto the commission. He was appointed by Mayor Willie Brown in a political juggling act to provide a fourth vote in favor of the children of a deceased medallion holder, Georgette Welch. With Smith’s help, the Welch children succeeded in getting hold of their mother’s eight permits.
Previously, Smith had been barred from operating a shuttle company under state license on account of numerous violations of state laws and regulations while he headed Yellow Airport Express. The chief investigator for the California Public Utilities Commission called it “one of the most outrageous cases we’ve ever seen.”

Controlling the commission

Cab companies have long wielded powerful influence at the commission. But with Smith’s election, the presidency was in their hands, and hospitality industry representative Patricia Breslin, a staunch cab company ally, remained as vice-president.
Smith immediately began using and abusing his authority to control the commission’s agenda and run its meetings in favor of company and permit holder interests. But he was reportedly aware of the mayor’s support of Machen, and had given assurances that he would not try to oust her.
In late June, however, Smith made a surprise appearance at the Taxi Commission office and in Machen’s absence demanded that her dismissal be placed on an already-prepared agenda for the next meeting. That was a clear violation of the City Charter, which prohibits commission members from dealing with department staff except through the director. Nonetheless, Smith got the item on the June 27 agenda. In his campaign against Machen, Smith could count on Breslin and Mary McGuire, who remained in the commission’s labor seat despite the fact that she had become a permit holder. After receiving her medallion, she increasingly voiced support for permit holder positions — especially their desire to keep their medallions for life once they could no longer drive. That put her at odds with the City Attorney, the Court of Appeal, the voters of San Francisco and prior decisions of the commission itself.
Machen’s opponents only needed a fourth vote, and they got it from Michael Kwok, the senior/disabled representative. Its other two members, cab driver representative Paul Gillespie (no relation to Jim) and Min Paek, representing the general public, supported Machen.
The matter was heard behind closed doors, but before the session began dozens of speakers addressed the commission. A large throng of friends and supporters from the general public spoke of Machen’s ability and integrity. UTW representatives and other drivers also spoke in Machen’s favor, while cab companies and permit holders continued their attacks.
Despite spending three hours in closed session, the commission never gave Machen an opportunity to personally defend herself. As the deliberations were confidential, it may never be known what swayed Kwok’s vote.
The mayor’s reaction was immediate and decisive. He expressed support for Machen and vowed to replace commissioners who voted against her. All the commissioners’ terms had expired, so he was free to replace them at will.
In the following days he made three commission appointments: Malcom Heinicke took the seat left vacant by Jackson’s death; Tom Oneto replaced McGuire; and Richard Benjamin replaced Smith. (See p.2.) Machen supporters Gillespie and Paek were reappointed.