A former city official caught in a scandal for allegedly forging a settlement agreement with a Black transit worker found herself in the compromising position because she believed the woman’s story and thought others would not.

That’s according to a newly released letter that former Department of Human Resources manager Rebecca Sherman sent to the City Attorney’s Office when she resigned on Sept. 11 and admitted to the forgery.

The letter outlines the “terrible decisions” that led to Sherman concocting the bogus deal with transit worker Kathy Broussard, who filed a lawsuit last August alleging retaliation and discrimination.

Sherman explained that she believed many of the allegations from Broussard but was too afraid to return a finding because she thought “my recommendation would not be popular” with her bosses.

“I got the general sense that people in DHR EEO and SFMTA viewed [Broussard] as not credible, that [Broussard’s] complaint had no merit, and generally a complainer,” Sherman wrote, referring to the Equal Employment Opportunity office at DHR and the San Francisco Municipal Transporation Agency.

“My view was different,” she continued. [Broussard] was consistent in [her] statements, the prior investigation was rushed and I did not believe the record supported the conclusion — the Respondent was not credible.”

DHR released a redacted version of the letter on Friday in response to a public records request from the San Francisco Examiner.

Broussard alleges the SFMTA passed her over for promotion to Proof of Payment manager in retaliation for filing complaints against a former director for allegedly calling her the n-word, among other things.

Sherman said she made her first “terrible decision” by sharing her opinions on the matter with Broussard, who then took steps toward filing a lawsuit without Sherman having actually communicated her findings to her manager.

Sherman said she was afraid her findings “would not find consensus.”

“I froze,” she said. “I did nothing for so long and was spinning out because I was afraid to have those difficult conversations, whatever the substance.”

So she lied to Broussard and said her findings were under review while telling herself she would eventually present her conclusions to her boss Linda Simon, the director of EEO at DHR.

She ultimately drafted a settlement agreement that promised Broussard a promotion and payment of more than $500,000.

“I electronically imposed fake signatures, and sent it to [Broussard] and held it out as though it were real,” she confessed.

Broussard dismissed her lawsuit as a result.

“Obviously, since [Broussard] has not received the money, [she] is suspicious, confused, upset and while I continued to lie for awhile, there is clearly no way out other than to confess. I told [Broussard] I fucked up.”

For the Black Employee Alliance, a group of Black workers who allege that DHR sits on discrimination complaints and fails to thoroughly investigate their merits, the letter sheds light on issues at the highest levels of the department.

“Rebecca was clearly under immense pressure from DHR-EEO Director Linda Simon, who had already concluded that Kathy Broussard, an African American female employee, was a complainer; and that the discrimination and harassment Kathy experienced by her manager would not be validated,” the alliance said in a statement.

“Linda concluded prior to the new investigation that there would not be any findings in the case. This is indicative of the anti-Black racism persisting at the Department of Human Resources. As much as we are saddened by this, we understand this to be our reality as Black employees here at the City and County of San Francisco,” the statement continued.

Simon has hired an attorney who has sent cease and desist letters to individual members of the alliance, accusing them of defamation for making false statements about her being corrupt.

“To be crystal clear: Ms. Simon had no knowledge of Sherman’s actions,” the attorney for Simon wrote. “She did not condone Sherman’s actions or attempt to cover them up.”

Attorneys for Broussard have argued that The City should honor the terms of the settlement agreement because Broussard worked with Sherman in good faith. Sherman also appeared to have the authority to negotiate such a deal, the attorneys argue.

“Ms. Broussard had no reason to suspect that Ms. Sherman lacked authority or that any of the documents she was given were forged. Our investigation of this matter certainly continues,” attorneys Therese Cannata and Karl Olson said in a statement Friday.

“The City and DHR owe Ms. Broussard and the citizens of San Francisco a full apology, and the facts bear out that she is entitled to receive the compensation she was promised because of retaliation against her by her former supervisor,” the attorneys said.

They also blasted Simon for threatening to sue the alliance.

“Ms. Simon’s conduct, and her threat to sue black employees for engaging in free speech, show that the entire DHR is completely dysfunctional and incompetent and doesn’t have a clue about how to handle complaints from employees who have been subjected to persistent discrimination, including racial epithets,” the attorneys said. “Mayor Breed should act now and decisively to clean up the DHR.”

The City Attorney’s Office has agreed to allow Broussard to reinstate her lawsuit against The City but said the agreement is a fraud.

“The letter speaks for itself,” spokesperson John Cote said. “Ms. Sherman did not have the authority to enter into a settlement agreement. The City could not legally settle this lawsuit without recommendation by the City Attorney and approval by the SFMTA Board of Directors.”

DHR Director Micki Callahan has said Sherman’s actions are those of a “rogue employee” and do not represent the department as a whole.

The matter is under investigation by the District Attorney’s Office and the City Attorney’s Office.

DHR is also auditing all cases handled by Sherman.

mbarba@sfexaminer.com