BREAKING NEWS
FBI PUBLIC CORRUPTION PROBE
—‘A DEAL IS A DEAL’—Here’s what we know following the indictments handed down this morning to former Oakland Mayor Sheng Thao, Andre Jones, David Duong and Andy Duong, the cofounders of California Waste Solutions, Oakland’s recycling franchise; and a container homes company .
—The FBI alleges Thao, Jones, and the Duongs, along with an unnamed “Co-Conspirator 1,” participated in a bribery scheme, committed wire and mail fraud, in an effort to personally benefit themselves.
—“The indictment returned by the grand jury describes a corrupt scheme in which the defendants used bribes, mail fraud, wire fraud and other illegal practices to manipulate and corruptly influence the levers of local government,” Patrick D. Robbins, First Assistant U.S. Attorney for the Northern District of California said at a press conference in San Francisco on Friday morning.
—Robbins said the investigation remains ongoing. “We continue to investigate this case. I can’t comment on any additional indictments,” he said.
—Thao, Jones, David and Andy Duong were arraigned in U.S District Court in Oakland on Friday morning.
—All four pleaded not guilty. Thao was released on $50,000 bail, according to The New York Times, is barred from leaving the area, and surrendered her passport.
—The allegations:
The Duongs used bribes to benefit their businesses, primarily through an effort to have the city purchase hundreds of container homes from the Duongs’ company.
Thao successfully urged the then-interim city administrator to appoint an interim Community and Housing Development director selected by the Duongs.
Illegal financing by the Duongs for a negative mailer campaign during the 2022 Oakland mayoral campaign that helped Thao win a close election against Loren Taylor.
Jones received $95,000 from the Duongs’ entities, and up to between $300,000 and $3 million for a no-show job.
A promise to grant California Waste Solutions’ a 10-year extension of its recycling contract with the city.
—The narrative:
—Andre Jones, Thao’s partner, received a total of $95,000 for a no-show job with entities associated with the Duongs between December 2022 and November 2023, but was promised a total of $300,000. The deal was made prior to the Election Day in November 2022. After Thao won the mayor’s race, Jones was slated to receive up to $3 million predicated on the sale of hundreds of $300,000 container homes, a deal potentially worth $30 million.
—Around March 9, 2023, about four months after the election, Thao, Jones, Andy Duong, and “Co-Conspirator 1” met at a San Leandro restaurant to finalize the new terms of their deal. They met at Bonchon, a Korean fried chicken chain located kitty corner to a McDonald’s and Pet Food Express, according to a source. The location was chosen for its seclusion outside of eyes in Oakland.
—“During the meeting, Thao proposed using the City of Oakland's emergency powers to make it easier to buy the housing units on behalf of Oakland, without needing to use a competitive bidding process,” according to the indictment.
—According to emails, reported in Thursday’s East Bay Insiders newsletter, associates of the Duongs were pitching San Leandro officials about the Evolutionary Homes concept two months earlier. City officials, including San Leandro Councilmember Bryan Azevedo, visited the company’s offices in Oakland to view prototypes of the container homes. Azevedo’s home was raided by 18 FBI agents on Wednesday. The reason for the search warrant is unknown.
—The emails also show Julie Wedge, a consultant with ties to Thao, and associated with Evolutionary Homes, provided San Leandro with a draft ordinance that would have given the city emergency powers to facilitate quick installation of container homes for unhoused individuals.
—At the March 9, 2023 meeting, Thao also discussed appointing an unnamed city employee to become Oakland’s Housing and Community Development Director. Thao called the interim city administrator about the matter. The next day, the city announced the appointment of a new interim deputy Housing and Community Development Director.
—In a recorded conversation in November 2023, Thao appears somewhat resistant to the deal she made with the Duongs. Thao told David Duong that she wasn’t ready to purchase the promised housing units, and wanted another “government entity” to order first. “The deal is the deal,” David Duong told Thao.
—“Later David Duong stated that although Thao wasn't going to ‘make the first move,’ she was going to ‘keep her promise,’” according to the indictment.
—What may come next:
—Friday’s indictment may be only the tip of the iceberg and feature a steady drip of indictments as the wider scope of the investigation becomes clear.
—The similarities with how Thao and Duongs allegedly sought to quicken the pace of approvals for the purchase and installation of the container homes in Oakland is similar to what the Duongs were pitching San Leandro officials around the same time in late 2023.
—The infamous trip to Vietnam attended by Thao and over 50 local government officials and business people makes a brief cameo in this indictment, only noting that Thao received personal benefits and amenities paid for by the Duongs.
