Federal officials announced Friday that they have indicted former Oakland Mayor Sheng Thao on bribery charges, along with her longtime boyfriend and a father-son team who run the company on contract for the city’s recycling services, alleging a sprawling corruption scheme involving cash payments and campaign mailers in exchange for city contracts.
The federal charges come two months after Thao was recalled from office amid roiling voter frustrations with crime, homelessness and a sense that city government is not responsive to citizens’ needs. It was a sharp turnabout for Thao, who took office in January 2023 to heady press lauding her journey from homelessness to chief executive and celebrating her as the first Hmong American to lead a major American city.
The indictment, handed down by a grand jury at the U.S. District Court in Oakland, was filed Jan. 9 and unsealed Friday. It charges Thao; her boyfriend, Andre Jones; and two local waste company executives, David Duong and his son Andy, with bribery and conspiracy. Andy Duong was also charged with lying to federal agents.
The indictment alleges that in the weeks leading up to her election as Oakland’s mayor in fall 2022, Thao pledged to steer contracts to the Duong family’s recycling company, Cal Waste Solutions, in exchange for campaign mailers targeting her opponents and payments to her boyfriend for a “no show” job. Jones ultimately received $95,000, the indictment alleges. It also alleges that Thao promised to get the city of Oakland to buy modular housing units for the homeless from the Duong family’s housing company and to appoint people selected by the Duongs to powerful city posts.
Thao pleaded not guilty during her arraignment Friday, according to local news reports, and was released from custody on a $50,000 bond. Jones also pleaded not guilty.
“The mayor is innocent. She looks forward to the opportunity to be able to defend herself in court,” Jeff Tsai, Thao’s attorney, told the San Francisco Chronicle. “What is missing from this indictment is anything that truly indicates that the mayor had any involvement in the scheme that the government has described. We are very confident that we are going to be able to vindicate the mayor of these charges.”
In a statement Friday, Andy Duong’s attorneys called the charges against his client “baseless” and said they were “being fanned by nothing more than gossip and supposition stitched together by the fabrications and delusions of those who lack all fundamental credibility.” The statement said Duong was “the most recent in a long line of Asian Americans who unfairly are singled out and forced to pay a price for daring to be active in the political sphere.”
David Duong also denied wrongdoing.
The charges stunned Oakland’s political class. Former U.S. Rep Barbara Lee, who represented the East Bay in Congress for more than two decades and is now running for mayor in a special election in April, issued a statement calling the allegations “devastating.”
“There should be no tolerance whatsoever for secret pay-to-play schemes that erode the public trust,” she said. “City Hall must never be for sale.”
Rumors of a corruption investigation involving Thao have been swirling for months, after the FBI raided her home in June.
At the time, Thao said in a fiery news conference that she was not a target of the probe.
“I want to be crystal clear. I have done nothing wrong,” she said in a tearful speech days after FBI agents converged on her home and left with boxes. “I can tell you with confidence that this investigation is not about me.”
She also questioned the tactics of the FBI: “This wouldn’t have gone down the way it did if I was rich, if I had gone to elite private schools, or if I had come from money,” she said.
The same day Thao’s home was searched, agents executed warrants at the Oakland office of Cal Waste Solutions, as well as the homes of David and Andy Duong. The company released a statement at the time denying involvement in illegal activities.
Separate from the FBI probe, the Oakland Public Ethics Commission and the state Fair Political Practices Commission have been investigating allegations that members of the Duong family have used “straw donors” to circumvent donation limits and bolster the campaigns of local elected officials.
The indictment unsealed Friday spans 22-pages and includes numerous text exchanges that allegedly lay out the scheme — and at times contain auto-correct hijinks.
“Sheng is going to call you re $$,” a person identified as “Co-Conspirator 1” wrote to Andy Duong in October 2022, about a month before Thao was elected, according to the indictment.
Duong allegedly responded: “Lol. What money?”
“She needs,” Co-Conspirator 1 allegedly answered, adding: “I said you are committees.” A subsequent text message clarified: “committed.”
The indictment alleges that in another series of text messages in late November 2022, after Thao’s election, the two discussed fears that the scheme could come to light.
“So we may go to jail,” Co-Conspirator 1 wrote to Duong, according to the indictment. “But we are $100 million richer.”
“Money buys everything,” Andy Duong allegedly responded.