An independent audit by the SF City Controller's Office confirms that former chief assistant treasurer Tajel Shah steered a $10 million contract to manage $2.6 billion in city business taxes to Mechanical Orchard, an AI company led by personal friends — then sought a job for her niece from a subcontractor.

San Francisco's city controller's office has confirmed in an independent audit what whistleblowers alleged and SF Standard reporting first surfaced last year: Tajel Shah, the former chief assistant treasurer for the city and county, manipulated a competitive bidding process to steer a $10 million contract to Mechanical Orchard, a company that describes itself as "AI-native" and that was led by people with whom Shah had undisclosed personal relationships.

Auditor Mark de la Rosa concluded that the treasurer and tax collector's office "solicitation process was compromised by an undisclosed friendship between the former chief assistant treasurer, Tajel Shah, and the former chief revenue officer of Mechanical Orchard," Roque Versace. Shah "abused her position's authority," the report found. The contract at issue would have had Mechanical Orchard manage $2.6 billion in city business taxes.

The procurement failure detailed in the audit is specific and documented. Shah gave Mechanical Orchard exclusive access to the results of a prior engagement with the city — information that was supposed to be shared with all bidders — then developed a scope of work that, per the audit, closely mirrored the company's own project recommendations, "nearly guaranteeing its success." The audit found that "staff managed both procurements in ways that unfairly benefited Mechanical Orchard."

Shah's family also appears to have benefited. Auditors found email records showing she contacted the CEO of Ratio PBC — a Mechanical Orchard subcontractor — to thank him for work on the city project and then ask if he could connect with her niece. Ratio PBC subsequently hired the niece. Seeking that favor, auditors wrote, was "inconsistent with the high standard of conduct" required in public procurement.

Mechanical Orchard never received the contract. The company withdrew from the process — the audit notes the timing directly: "It withdrew after The Standard contacted them for comment." Shah was placed on paid leave following the original reporting and left city employment in November. Treasurer Jose Cisneros, who requested the independent audit, accepted the findings in full. "The conduct described, directing staff to manipulate a competitive procurement process to benefit a personal associate while concealing that relationship, was wrong," Cisneros wrote in his response letter.

Auditors added a structural warning that goes beyond Shah personally: the treasurer and tax collector's office had an organizational structure that blocked staff from raising concerns, and "could improve controls to prevent or detect such actions earlier." The office has since reorganized its leadership.

What's still unconfirmed: the city controller's report itself has not been published in full as of Tuesday; the details here are drawn from a summary letter sent to the treasurer's office and reported by the SF Standard. Whether Shah or Versace face any further legal or civil exposure has not been stated publicly. And Mechanical Orchard — which walked away from $10M in taxpayer-funded business when a reporter called for comment — has not disclosed its current status or client list.