San Francisco has just slapped the builder of the new (but still not opened) county jail with a $125 million fraud suit -- claiming, among other things, that the company was operating at times without a valid contractor's license.

The amended suit is the latest punch in the fight between San Francisco and construction conglomerate AMEC over glitches in the new 768-bed San Bruno jail -- which is already more than a year late in opening.

"Not only did they not do the work they were contracted to do, they failed to inform us that they had criminal convictions against them and that they had their state license pulled," said City Attorney Dennis Herrera.

According to court records, AMEC has two federal convictions: one in December 2000 for improper billing on a courthouse job in St. Louis that resulted in AMEC paying a $500,000 fine, and one in March 2002 for major fraud in the billings on a U.S. Custom House building in San Francisco. The fine: $694,322.

In August 2002, the company was barred from working on federal projects for a year. Records also show that AMEC had its California license suspended from September 2003 to March 2004 because of bonding problems.

In March 2004, AMEC's London-based parent company said it was starting a "controlled exit" from projects such as the jail and high-rise construction in the U.S. market.

"They knew the gig was up -- they pulled out,'' Herrera said.

San Francisco has already taken the builder to court over construction delays -- and because 10 percent of the jail's locks don't work, the emergency alarms don't work and neither does the vent system.

AMEC declared the job completed April 8 and left a week later.

Since then, San Francisco has been paying another contractor to deal with the problems in the hopes of having the jail ready by first of next year.

AMEC spokesman Michael Jolliffe said that there had been problems with billings in other projects, but that the company had been working with the feds to clear things up.

Jolliffe added that AMEC has filed its own claim against San Francisco: $26 million for changes and extra work the city ordered on the jail, plus $8 million more for the delays that ensued.

As for working with a suspended state license?

"From our point of view, we've always believed we had a contractor's license," Jolliffe said.

"You know, from the onset of all this, we've wanted to cooperate with the city,'' Jolliffe said. "What we really want to do is sit down and get a third party to evaluate all the issues and make a recommendation on how to resolve it."

Maybe, but from the looks of the $125 million claim, San Francisco isn't buying the idea.

As for how San Francisco got into this fix in the first place?

Well, most of the company's problems came down after the jail contract was awarded.

And after that?

"This was a big multinational corporation,'' Herrera said. "Some of this was hard to dig up. I guess the city didn't have the information.''

And while the lawyers fight, the jail sits empty.

Tony's tempest: Whether it's the start of a hurricane or just another micro-twister, Treasure Island boss Tony Hall's latest fight with the mayor's office over his accounting practices has put him back into the eye of the storm.

And now there's a bit of a breeze kicking up over his old campaign practices as well.

At issue: a $3,027 payment that the "Friends of Tony Hall for Supervisor" campaign made to O'Keeffe's Inc. of San Francisco during Hall's aborted re-election run to the board last year.

Campaign records say the O'Keeffe's payment was for "TV or cable air time and production costs.''

The problem is, O'Keeffe's doesn't do TV production. And Hall's campaign didn't air any ads last year.

O'Keeffe's, it turns out, makes and installs skylights and other "architectural building products.''

It also turns out that the company owner, Bill O'Keeffe, is a neighbor of Hall's.

Did Hall -- who has already had to answer questions about spending his campaign money on meals at restaurants all over the state -- get himself a new skylight with campaign cash?

Hall says no -- the O'Keeffe's billing was simply a reporting "mistake," and the $3,027 was actually for telephone expenses, not TV ads.

"They provided me with a cell phone, which we used extensively over a period of time, and I paid them for it,'' Hall said.

That's a heck of a lot of phone calls under any plan.

O'Keeffe didn't return a call seeking comment, but Hall has no problem talking. He charged that the source of the O'Keeffe tip was none other than Mayor Gavin Newsom's office, which according to Hall is "stretching to dig up more dirt'' on him.

As for why the mayor -- who ostensibly is Hall's boss -- would be dropping dimes on Hall's old campaign bills? Well, just look at The Chronicle over the past two weeks.

The feuding started when City Controller Ed Harrington fired off a memo to Hall questioning how $187,000 in Treasure Island funds under Hall's control wound up in an undetected certificate of deposit -- without authorization from Hall's overseers on the Treasure Island Development Authority board.

Hall insisted that the account (which held rent deposits on the island) was no secret and that City Hall officials had cleared it, including Jesse Blout, Newsom's economic development director and a member of the Treasure Island board.

Blout denies he did any such thing.

Hall says the campaign questions are a "smoke screen'' to deflect attention from the real issue -- the Treasure Island board's recent vote to extend the exclusive development rights on the island for another three years to Newsom's buddy, Democratic wheeler-dealer Darius Anderson and his Kenwood Partners.

"My recommendation was not to approve it, but they didn't listen to me,'' Hall said.

Supervisor Chris Daly sure pricked up his ears at that. Daly -- no friend of Newsom, or of Hall for that matter -- knows an opening when he sees one, and has called for a hearing today on the Kenwood-Newsom-Hall deal.

No doubt, happy to let Hall and the mayor's office duke it out in public.