Federal prosecutors say a former California mayor received bribery payments and services in exchange for agreeing to extend a recycling contract. Now all involved are facing federal charges for bribery or fraud.
The U.S. Attorney’s Office for the Northern District of California on Jan. 17 unsealed an indictment outlining the alleged scheme. It names Sheng Thao, who became Oakland mayor in 2023 and was recalled in the November 2024 election, and California Waste Solutions CEO David Duong, among others.
Duong’s company, also known as Cal Waste Solutions, was formed in 1992 and currently provides residential recycling collection for all Oakland single-family homes. The company also provides commercial recycling collection.
Each defendant was charged with one count of conspiracy to commit bribery, one count of bribery concerning programs receiving federal funds, one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and two counts of wire fraud. Duong was also charged with one count of making false statements to government agents.
The defendants were arraigned on Jan. 17 and each pleaded not guilty, according to court records. In a press statement after Thao’s arraignment, her attorney Jeff Tsai said the indictment was “successful at grabbing headlines” and that it was “chock full of allegations, but it is not chock full of evidence.”
“The case is built on allegations from an unknown co-conspirator,” Tsai added, noting that he believes further evidence “will show that my client has committed no crimes.”
Prosecutors allege that during Thao’s campaign for mayor in 2022, she told the recycling executive she would ensure an extension of the company’s collection contract in exchange for money and campaign assistance. The recycling contract was just one of several benefits Thao allegedly pledged if Duong helped her get elected; others included a guarantee that the city would purchase housing units from another of Duong’s companies and a pledge to appoint officials selected by Duong who would be favorable to his businesses.
In return, California Waste Solutions sent $75,000 to an unidentified co-conspirator “for the purpose of designing, printing, and circulating the negative mailers in support of Thao’s campaign,” according to the indictment. Once Thao won the election, Duong and the other defendants allegedly began sending cash to Thao’s romantic partner, ultimately sending $95,000.
Once elected, prosecutors say Thao influenced the appointment of the city’s Housing and Community Development Department director, based on direction from Duong and the other defendants and after the director candidate met with the defendants at California Waste Solutions’ office. The city administrator expressed concern that the individual wasn’t experienced for the director position but ultimately made the appointment based largely on Thao’s influence, according to the complaint.
Prosecutors also say Duong sent the city a letter in June 2024 requesting a 10-year extension to its contract with California Waste Solutions. Local news outlet The Oaklandside reported that it’s not yet clear how the lawsuit will affect the recycling company and its contract with the city. The news outlet noted that the contract for residential recycling collection is currently set to run through 2035.
The legal action is the latest legal controversy involving Oakland and California Waste Solutions: In 2021, the two settled a years-long lawsuit alleging the company overcharged Oakland ratepayers.
Additionally, in 2016 CalRecycle, the state recycling authority, alleged California Waste Solutions violated container redemption laws, and ordered the company to pay millions of dollars in restitution and fines.
