Some tough questions are suddenly being asked of the Daniel Lurie administration, after they awarded a contract to a very pricey vendor with connections to Lurie, snubbing a much cheaper and more highly rated competitor.
There was a very specific pattern to SF City Hall corruption scandals under Mayor London Breed. Department heads would spend lavishly on themselves with city money, or funnel that money to certain nonprofits who would in turn lavishly reward that department head. In these cases, it was the City Hall officials or the nonprofit heads who were seemingly on the take.
Now we are under the Daniel Lurie administration, and what may be his first corruption scandal looks a little different. Here we see questions about whether tech millionaires in Lurie’s orbit are getting preferential treatment in the doling out of city contracts. The SF Standard broke a story Wednesday that a vendor with connections to Lurie got a pricey contract, despite a better-rated competitor offering the same service for millions of dollars less.
Permit applications and approvals should be straightforward. That’s why we are working with OpenGov to transform San Francisco’s permitting system. Instead of filling out the same forms over and over, you’ll enter your information once and it will go to every department you… pic.twitter.com/NGk8LWbnYE
— Daniel Lurie 丹尼爾·羅偉 (@DanielLurie) August 26, 2025
Above we see Lurie in a late August tweet alongside his Housing and Economic Development head Ned Segal, who is perhaps best known as a former Twitter executive who sued Elon Musk for unpaid severance. He is hyping his new PermitSF initiative, and the software vendor called OpenGov who’d just been awarded the contract to implement it. After all, the old SF permit system was highly convoluted and onerous with multiple software platforms, and produced a countless number of permit fraud scandals.
But the new PermitSF system may be off to its own scandalous start. It just so happens that OpenGov executives are longtime Lurie donors, either to his Tipping Point nonprofit, or his mayoral campaign. Mission Local reports that OpenGov advisory board member Katherine August-deWilde (and her husband) gave $60,000 to a PAC supporting Lurie in the 2024 election, plus another $100,000 to Lurie’s inauguration. Oh, and August-deWilde also sits on the Tipping Point board of Directors.
Meanwhile, the Chronicle dug through the donations too, and found that OpenGov co-founder and CEO Zac Bookman and other OpenGov executives gave a total of $31,000 to Tipping Point over a period of years. Though a mayor’s spokesperson tells the Chronicle that these donations were from ten years ago.
This same OpenGov was co-founded by Palantir co-founder Joe Lonsdale, who gave $1 million to Elon Musk’s Trump PAC. And on OpenGov’s board of directors sits born-again Trumper Marc Andreessen of Andreessen Horowitz/a16z fame. OpenGov may provide a fine product, and it has more than 2,000 government clients. But it’s the software that Silicon Valley billionaires want your local government to be using.
And it’s not cheap. Per the Chronicle, OpenGov will cost “$1.9 million annually for software services and as much as $8 million to get the technology up and running.” It was chosen over a competitor named Clariti who the Chron says would have cost just an “estimated $528,000 for software licensing and as much as $1.4 million for implementation.”
City Hall staff who evaluated both expressed a very strong preference for the more affordable Clariti software. Lurie tried to put out the fire with them at a Wednesday afternoon all-hands meeting, right as this story was blowing up in the local media.
“We’re trying something new,” Lurie said at the meeting, according to the Chronicle. “What you all have been doing — and some of you have been here for a long time — has worked to a point. But we still have to get better … I got elected because people were tired of all the ways that we had been doing things. They wanted to see change.”
Emails obtained by the local media give insight into what that change looks like.
In one April 2 email, a month before other vendors were being sought out according to the Standard, that Segal sent to Mayor’s Office of Innovation director Florence Simon, said of OpenGov’s Zac Bookman, “Zac has been patiently waiting for the right partner :).” Yes, he put a smiley face at the end of that message.
The Standard reached out to Bookman to ask about the arrangement. That publication reports that “Bookman abruptly hung up and did not respond to The Standard’s emailed questions.”
The Chronicle had more luck reaching Simon. “I was hearing from a lot of different vendors” at the time, she said to the Chronicle. “I took all those meetings.”
A June 13 deadline for proposals came and went, and around 15 companies applied. City Hall staffers rated the more affordable Clariti product as the superior product when they whittled it down to three contenders.
“The general consensus of most testers is that Clariti is the most suitable of the 3 products,” staffers wrote on July 25, in an email obtained by the Chronicle. “There were gaps so significant in the other two products that they shouldn’t be considered.”
Staffers gave Clariti 4.42-point score on a scale of one to five, while OpenGov got a 2.88-point score.
Ned Segal now finds himself on the defensive about why the administration picked a far more expensive tool that staffers thought “shouldn’t be considered.”
“We wanted a really strong product, but also a product that would grow with the city as we rolled it out to more departments as our needs changed,” Segal told the Chronicle. He added that OpenGov being based in San Francisco was considered “an added plus.”
That’s not satisfying critics as this story blows up.
“I’m concerned that the city is being exposed to real risks of conflicts of interest, and that billionaire tech bros with connections to the mayor’s office are getting preferential treatment,” Supervisor Jackie Fielder told the Chronicle in a statement.
Meanwhile, the Standard says that “morale across departments has plummeted as a result” of the OpenGov pick. “People feel like we’re going to get run over by a train in the next few months,” one unnamed City Hall employee told the Standard. “And when it fails, they’re going to blame staff.”
That failure may already be underway. According to another unnamed employee who spoke to the Standard, OpenGov is “unlikely to meet Lurie’s goal of launching early next year.” But the Chronicle notes that “On Oct. 2, Segal signed a one-year contract with OpenGov, with a renewal option for two years.”
In other words, OpenGov may not even be working for much of its one-year contract. But some well-connected Lurie donors behind it will be getting paid by the city, regardless whether OpenGov has any technical glitches.
Image: Daniel Lurie via Facebook