Real Clear Investigations: The order beneath the chaos in San Francisco

Marcio Jose Sanchez

Real Clear Investigations has a good story today about the Tenderloin district in San Francisco and why it is such a chaotic mess. While tourists visiting the city might see sidewalks full of homeless people, drug dealers on every corner and shoplifting, all of this is in fact a fairly well-organized black market. RCI breaks down the players and their roles in making it work.

Crowded onto its street corners and inside the tents congesting the sidewalk, countless petty criminals play their roles in a structured and symbiotic criminal enterprise. Its denizens fall into four main groups: the boosters, typically homeless and addicted, who steal from local stores; the street fences who buy the stolen merchandise; the dealers who sell them drugs for the money they make from the fences; and, at the top of the stack, the drug cartel that supplies the dealers and the wholesale fences that resell the goods acquired by street fences. Each has a role to play in keeping the machine moving, and the police know exactly how to disrupt it.

RCI reports the drug dealers are often young men, frequently of Honduran descent (They are called “Hondos” on the street). They are smuggled into the country and forced to work off their debt to the cartel. But that debt is usually paid off in a matter of weeks. The men continue dealing because they can make $1,000 a day doing it.

Then there are the homeless people who serve as “boosters.” There job is to steal enough retail merchandise to feed their daily habit. Sometimes the fences give them shopping lists of what they’re looking for.

Boosting is “basically a job” for addicts, said Lieutenant Kevin Domby of the California Highway Patrol. To fuel their addiction, boosters need to bring in up to $60 daily. Since they usually get a dollar or two per item, no matter the value of whatever they’re stealing, they have to steal as many as 60 items a day…

Like drug use and drug dealing, shoplifting has been effectively decriminalized in San Francisco, and some chains have reduced their presence in the city. California’s Proposition 47, passed in 2014, reduced shoplifting of less than $950 in goods from felonies to misdemeanors. On top of that reduction in severity, Boudin scaled back prosecution of these crimes.

The homeless boosters take the stolen goods to a fence. There’s a symbiotic relationship here because the fences are dependent on the boosters for product and the dealers are dependent on the cash paid to the boosters to sell their drugs. This leads to a level of cooperation with dealers telling the homeless where to find the fences and the fences telling them where to find dealers. But the street level fences are just the front line of a much larger operation.

The fences at the wholesale level amass $100,000 to $200,000 worth of merchandise each day, which they sell to a “diverter.” The diverter repackages the stolen goods in counterfeit packaging and sells the products online. Nationally, just five diverters dominate the trade in stolen merchandise from the national drug store chains. Those five companies sell more than $20 million in product a year.

Wholesale fences also sell their goods to fences overseas. Consumer electronics are often shipped to Vietnam or China to be sold in black markets there. Luxury accessories are sent to Russia.

Everyone who is part of this process knows how it works. The police and local authorities know how it works. But for the most part nothing is done. Now former DA Chesa Boudin once said there was no way the city could arrest its way out of the problems in the Tenderloin but not arresting or prosecuting the boosters, dealers and fences just gives them carte blanche to operate. So long as they can make money/buy drugs and have basically nothing to fear from authorities the behavior will continue. And the sense that both locals and tourists have that the city is no longer in control of its own streets will continue as well.