For more than a decade, Palo Alto has enjoyed a mutually beneficial partnership with the Downtown Streets Team, a nonprofit that provides vital support to homeless individuals while helping to keep the city's streets clean.
The city allocates annual grants to the nonprofit, which assists homeless people by providing them with mentoring services, gift cards and housing vouchers in exchange for regular shifts maintaining downtown streets, parking garages and alleys. In addition to the grant, the city's Public Works Department signs an annual contract with the nonprofit for the maintenance work.
Now, the partnership is facing a stress test. The nonprofit has been met with a series of allegations, some dating back to 2014, of sexual harassment and a hard-drinking party atmosphere fostered by its senior executives, including CEO Eileen Richardson. Numerous employees have said they were pressured to engage in the alcohol-driven culture to qualify for raises and promotions. In at least one case, a state board found the sexual harassment complaints to be credible and required the nonprofit to pay unemployment benefits to the employee, who resigned after four years at the nonprofit.
Facing complaints from five former employees, the Downtown Streets Team board of directors hired the Law Offices of Amy Oppenheimer in August 2018 to investigate the allegations, including an episode in which Richardson allegedly made advances toward a female employee who was intoxicated and passed out at a December 2014 holiday party, according to a statement filed by former employee Zia MacWilliams.
The City Council was aware of these allegations in June, when it voted to allot $336,400 to the Downtown Streets Team through the federal Community Development Block Grant Program. While some residents, including former Human Relations Commission member Steven Lee and Stanford University law professor Michele Dauber asked the council to require the nonprofit to provide the Oppenheimer report as a grant condition, council members opted not to do so. Instead, they approved the grant with no strings attached and directed staff to engage with the nonprofit about obtaining the report before the next grant is distributed.
In approving the funding, Kou praised the nonprofit for its "noble mission" but suggested that her future support could hinge on its willingness to comply with the city's request.
"They're going to come back next year for more funding, so there's that opportunity," Kou said at the June 15 meeting.
Kniss also suggested that it would be appropriate for the city, as a major funder of Downtown Streets Team, to see the report and find some closure on the issue.
"If there was some kind of allegation against one of us, we'd like that opportunity to put that to bed."
Since that time, city staff has reached out to Downtown Streets Team on numerous occasions to obtain the report. The nonprofit has not provided it. Instead, it submitted to the city a one-page letter on Sept. 16 that purportedly summarized Oppenheimer's findings. The letter signed by Downtown Streets Team Chief Operations Officer Elfreda Strydom states that the investigation concluded that "most of the claims were completely unfounded" and that "others were greatly exaggerated."
"The allegations are many years old, and the Downtown Streets Team has made many organizational changes to ensure we are above reproach and that each employee's experience is a positive one," Strydom wrote.
City staff proceeded to inform the nonprofit that the letter is not responsive to the council's request for the Oppenheimer report and to request more information about the allegations, according to a report from the Department of Planning and Development Services. The nonprofit responded with a two-page letter that offered a few additional details about the scope of the Oppenheimer report. It did not, however, provide the report or any portions thereof.
The Oct. 15 letter stated that the Oppenheimer investigation took 11 months, involved interviews with 12 employees and culminated in a 44-page report. The answers, however, were brief and vague. When asked about the "specific charges" that Oppenheimer investigated, Strydom's letter only confirmed that the complaint came from "five former female employees with various concerns stemming from their time at DST."
The letter also stated that Oppenheimer analyzed the cases using the "preordinance of investigation" standard, which considers whether evidence on one side outweighs the evidence on the other side, according to the letter.
Styrdom noted in the second letter that the Downtown Streets Team has recently appointed a director of human resources and that the board has created an "HR governance committee to oversee all policies and procedures." The nonprofit had also sent out an online survey to all employees to assess the work environment and it had updated its policies to address some of the concerns, according to the letter.
Strydom did not specify whether any of the charges were affirmed by Oppenheimer. But at least one state panel had concluded that some of the claims have merit. In considering MacWilliams' claims, the California Unemployment Insurance Appeals Board concluded in 2018 that her allegations of sexual harassment and hostile work environment were credible. The ruling also alluded to Downtown Streets Team's failure to adequately respond of the sexual harassment allegations.
"The claimant's sworn testimony about the issue is accorded greater evidentiary weight and probative value than the sworn testimony of the employer witness which was lacking in conviction and frequently nonresponsive to questions posed to her regarding the issue of sexual harassment," the ruling stated.
Downtown Streets Team has also consistently rebuffed the city's further requests for a more comprehensive report about the sexual harassment allegations. The report from Planning and Development Services notes that the nonprofit "maintains it has been responsive to the City Council's request and transparent about the harassment allegations." The nonprofit's position, according to staff, is that "the attachments are sufficient."
The council will get to decide whether that's indeed the case. On Nov. 30, council members are scheduled to approve a three-year, $323,244 contract with Downtown Streets Team for maintaining downtown garages, sidewalks and alleyways and for providing case management services to homeless individuals.
Despite the nonprofit's refusal to provide even a redacted version of the report, City Manager Ed Shikada is recommending moving ahead with the deal. The contract is on the council's "consent calendar," which means it will get approved with no discussion unless three council members decide to pull the item off the calendar for discussion.
But simply looking past the allegations of sexual harassment against its longtime partner without receiving the evidence it had requested could prove awkward for the council, which just two weeks ago publicly reaffirmed its commitment to diversity and directed staff to hold a community summit on gender equity issues as part of a broader effort to better comply with the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), an antidiscrimination compact that the United Nations adopted in 1979.
Owen Byrd, chair of the Downtown Streets Team board, maintained at the June 15 meeting that the nonprofit "could not have taken those allegations more seriously." Byrd said that the Oppenheimer investigation found no evidence that staff was rewarded based on favoritism or socializing. He noted, however, that some of the claims from the former employees were "partially substantiated." These, he said, pertained to behavior that occurred at the 2014 holiday party.
Byrd told the council that while the nonprofit has made substantial changes to its governance structure, the former employees are dissatisfied with these steps.
"They'd like to see us dismiss our Executive Director Eileen Richardson and Program Director Chris Richardson. The board has chosen not to do so," Byrd said.
While Byrd assured the council that the issue was settled, Dauber urged council members at the June 15 meeting to demand that the nonprofit release a redacted version of the investigation report. Doing less than that, she said, "sends the message that the Palo Alto City Council does not take sexual harassment seriously and that you're happy to defer to staff recommendations even when they fall short of minimal standards for transparency and good governance."
Lee, who as a Human Relations Commission member had unsuccessfully pushed the council to demand the Oppenheimer report before releasing funds, also expressed his dismay at that meeting about the city's silence on the issue of sexual harassment at Downtown Streets Team.
"Transparency is the best disinfectant and the best way to put the allegations to bed," Lee said.