Whereas it’s nonetheless unclear why FBI brokers raided the house of Oakland Mayor Sheng Thao this week, the motion has solid a renewed highlight on a years-long probe into the political affect — and marketing campaign finance machinations — of 1 outstanding native household.
An extended-running probe
For 5 years, the Oakland Public Ethics Fee and the state Honest Political Practices Fee have been investigating allegations that executives at California Waste Options, particularly members of the Duong household, used “straw donors” to avoid donation limits and fill the marketing campaign coffers of public officers.
On Thursday, as federal brokers walked out with containers from Thao’s house, brokers additionally executed warrants on the Oakland workplace of Cal Waste Options, which supplies recycling providers to town, FBI officers confirmed. Brokers additionally searched the houses of the corporate’s chief govt, David Duong; and his son, Andy Duong, a buying agent who’s accountable for the corporate’s public relations.
The FBI has not formally accused Thao or members of the Duong household of wrongdoing. Thao’s legal professional, Anthony J. Brass, informed The Occasions in an electronic mail that the mayor has no data or indication that she is the topic of the federal inquiry, and that she is prepared to cooperate with investigators.
“She has nothing to cover,” Brass mentioned. “It’s unlucky that she has needed to endure the dangerous optics of getting this search warrant executed on her house. She would have cooperated with this investigation with out the necessity for this search.”
Cal Waste Options issued an announcement on Saturday.
“We have been very shocked by the federal legislation enforcement’s search of our houses and workplace on June 20,” the assertion mentioned. “To assist facilitate the legislation enforcement companies in finishing up their duties, we, nearly as good residents who at all times obey the legislation, have cooperated, and supplied each doable situation for the legislation enforcement company to carry out their work successfully. We consider that we have now not engaged in or dedicated any unlawful actions and are awaiting the choice of the legislation enforcement company.”
David and Andy Duong didn’t reply to requests for remark.
One other hit for town
For Oakland, a metropolis already reeling from a spate of current popularity hits, the timing is inauspicious to say the least. Earlier than the raid, Thao was going through a recall fueled by issues over crime — an issue so pronounced it prompted Gov. Gavin Newsom to deploy 120 California Freeway Patrol officers to Oakland as a part of a brand new state legislation enforcement marketing campaign to handle violent crime.
Massive chain eating places resembling In-n-Out and Denny’s have closed native places, citing security issues. A current Juneteenth celebration was marred by a taking pictures that left a number of individuals wounded.
Whereas the crackdown appears to be displaying some outcomes — current reviews from the Oakland Police Division present a 33% discount in crime in 2024, in contrast with the identical time final 12 months — the raids have renewed issues concerning the metropolis’s management.
“That is the sort of consideration we don’t want,” mentioned Brenda Harbin-Forte, who launched the Oakland United to Recall Sheng Thao effort.
The federal inquiry, she mentioned, is one other stain on town.
“I believe individuals who have been on the fence concerning the recall will now perceive that we have to clear home from prime down,” she mentioned. The recall measure is predicted to be on the November poll.
Ethics probe
Simon Russell, a particular investigator with Oakland’s Public Ethics Fee, confirmed that the company has an investigation into Cal Waste Options that began in 2019.
The fee has claimed in court docket paperwork that the alleged election finance laundering scheme spanned a number of cycles and concerned straw donors making contributions to totally different candidate-controlled committees.
In an effort to determine contributors of the scheme, the fee issued subpoenas, together with one to Phuc Hong Tran, board member of the Oakland Vietnamese Chamber of Commerce and good friend of David Duong.
When Tran failed to answer the subpoena, the fee and the Oakland metropolis legal professional sought to implement it in Alameda County Superior Court docket, detailing for the primary time the scope of their investigation.
Tran didn’t instantly reply to a request to remark.
The January 2020 court docket doc confirmed that investigators have been marketing campaign contributions made to the Sheng Thao For Oakland Metropolis Council 2018 committee, which included donations from Kim Huong Vietnamese Delicacies that investigators mentioned have been laundered.
Investigators have been additionally different contributions Tran made to the committees of council members searching for reelection in 2018.
The company has issued subpoenas to members of the Duong household and enterprise associates — searching for emails, texts and communications relating to marketing campaign donations between 2016 and 2018, data present.
Russell declined to offer particulars on the case, however mentioned it concerned allegations of marketing campaign cash laundering. He mentioned he had no remark when requested if the company had been in touch with officers with the FBI or the Division of Justice relating to the investigation.
The ethics fee additionally has an investigation into Thao that was opened in July 2022, Russell mentioned, although he declined to supply specifics.
However subpoenas and court docket and public data present that watchdog teams had been Cal Waste Options and its function in Oakland politics for years. That features the corporate’s relationship with Thao, who in 2018 grew to become the primary Hmong particular person to be elected to workplace in a serious U.S. metropolis.
A household’s rise
The story of the Duong household, at first look, appears a realization of the American dream. The household at one level owned the biggest paper mill in South Vietnam, however was compelled to flee through the Vietnam Battle, in response to a biography on the Cal Waste Options web site.
The Duongs settled in San Francisco, 16 family members cramming into two studio residences. For years, members of the family collected cardboard till midnight — saving up till they purchased a recycling warehouse in West Oakland.
That first warehouse has since grown into the self-proclaimed largest recycling firm in Northern California, with greater than 300 workers. It’s headed by three siblings: David, the chief govt; Kristina, the chief monetary officer; and Victor, the vp.
The Public Ethics Fee opened its investigation into the alleged straw donor donations in 2019, issuing subpoenas for enterprise associates linked to the household.
Court docket paperwork filed by the FPPC element how, in response to a former enterprise affiliate of Andy Duong, the corporate allegedly tried to avoid marketing campaign contribution limits — utilizing associates and associates to make marketing campaign contributions to political candidates, after which reimbursing them with money to hide the place the donations have been coming from.
“CWS was the true supply of no less than 93 contributions to a number of native marketing campaign committees,” the court docket document reads, with the aim being “to curry favor with candidates and supply extra entry to candidates.”
The contributions have been made, in response to court docket data, in jurisdictions the place the corporate was doing or trying to do enterprise.
Contributions have been made to political candidates in Oakland, San José and Santa Clara County, the doc alleges, suggesting the inquiry may develop past Oakland.
Investigators additionally steered Andy Duong made positive that the corporate’s efforts have been recognized to politicians.
“Duong ensured the focused candidates have been conscious of his dedication to boost cash for his or her marketing campaign by attending candidate fundraisers, bringing people to marketing campaign fundraisers, at instances internet hosting marketing campaign fundraisers, offering the committees and candidates with a number of checks,” the FPPC alleged.
One former enterprise affiliate informed investigators how Andy Duong allegedly approached him to recruit individuals who may make political contributions to his chosen candidates, after which reimburse the cash from a drawer stuffed with money at his workplace.
The inquiry continues. FPPC officers didn’t instantly reply to a request for remark.
Thao has not spoken publicly concerning the investigation, however her legal professional mentioned the mayor expects to proceed to do her work.
However critics mentioned they want Thao and different metropolis leaders can be extra clear concerning the ongoing inquiries.
“It is advisable to say one thing to reassure your residents as a result of they’re nervous and scared about who can be swept up on this,” mentioned Harbin-Forte, who has led the recall effort towards Thao. “What’s going to occur to our metropolis authorities? We now have a funds deadline subsequent week, the place’s the management?”