San Francisco audit says former tax official steered $10 million contract

San Francisco’s controller and city attorney found that former chief assistant treasurer Tajel Shah abused her position to steer a major city contract toward a friend’s company, Mechanical Orchard, in a deal tied to the overhaul of the city’s aging business tax system. The joint audit released June 23 found the misconduct crossed departmental and city ethics rules and exposed failures in the controls that were supposed to protect public contracting at City Hall.

The review, launched at the request of Treasurer José Cisneros, centered on two phases of the procurement: a 2023 discovery project and the later request for proposals to replace the system that handles business tax collection. The broader effort was a nearly $10 million contract, while the replacement contract alone was valued at $7 million and the discovery project cost $65,000. The treasurer’s office oversees tax collection for roughly 90,000 to 100,000 registered businesses.

Shah failed to disclose her personal friendship before either procurement and understated her involvement as the deals moved forward. She bypassed a competitive process by using a sole-source contract for the discovery project, shared information that other bidders did not have, and did not require staff to verify minimum qualifications. The audit also found she altered the scoring method to improve Mechanical Orchard’s ranking and added $1.7 million in undisclosed, unsubstantiated costs to competing bidders so the friend’s firm would appear cheaper and come out on top.

The office culture inside the Treasurer and Tax Collector’s department suppressed oversight and discouraged employees from raising concerns.

Shah was placed on paid leave in September 2025 after a whistleblower complaint accused her of bid-rigging and conflicts of interest. Mechanical Orchard later withdrew from the deal, and Shah left city government in late 2025 after serving as chief assistant treasurer from 2017 to 2025.