Joe Garofoli
Long before federal agents raided two of their Oakland homes Thursday along with the home of Mayor Sheng Thao, members of the family that controls curbside recycling in the city had become controversial political power players. As they sought connections with elected officials, they also faced accusations of wrongdoing, from improper campaign contributions to fraudulent billing.
Now, after federal agents combed through the homes of California Waste Solutions CEO David Duong and his son, Andy Duong, as well as company offices, the spotlight has intensified on their growing influence on city politics and connections to the mayor.
The Duong family is also the driving force behind the Vietnamese American Business Association, which organized and fronted the money for a trip to Vietnam last year that included Thao and members of the city’s Port Commission. The port, with an eye on boosting trade, later reimbursed the organization. David Duong is a prolific donor to both Democratic and Republican officials, political action committees and state parties across the country.
“They’re operators. They’re pretty high-profile,” said Jim Ross, a Bay Area political consultant who has not worked with the Duongs. “They’re in an industry that really depends on relationships with elected officials. They have really aligned with whoever they think can get them contracts.”
FBI agents carry a box of evidence and a battering ram out of the building during a raid on California Waste Solutions in Oakland on Thursday.
Colin Peck/Special to the ChronicleTeresa Hoang, a staff member at California Waste Solutions who is also director of the Vietnamese American Business Association, said the company was “fully cooperating” with the investigation. “We’re confident that the results (of the investigation) will show we are not doing anything unlawful or improper,” Hoang said.
Thao’s attorney, Tony Brass, said he had no information that the mayor was a target of the FBI, which has not disclosed what potential crimes it is looking into. He said that Thao will cooperate with the probe and release a statement this coming week.
“It’s unfortunate that the mayor did not receive any request for information from the authorities, because she would have responded, and she would have cooperated,” Brass said. “And now, the optics of an elected official having a search warrant executed on her residence suggests wrongdoing. I hope that everyone will reserve judgment until this can be sorted out.”
Founded in 1992, California Waste Solutions, or CWS, is owned and operated by members of the Duong family, who immigrated to San Francisco from Vietnam. It is run by siblings David Duong, its CEO; Kristina Duong, its chief financial officer; and Victor Duong, its vice president. The company does business in both Oakland and San Jose.
The Duongs escaped Vietnam during the war and settled in San Francisco, where 16 members of the family crammed into two studio apartments, according to the company’s website.
FBI agents carry boxes of evidence from a raid on California Waste Solutions in Oakland on Thursday.
Colin Peck/Special to the ChronicleDavid Duong, the oldest of his siblings, “adapted skills he learned about recycling from his parents, who owned the largest paper mill in South Vietnam before the war,” the site says. Family members collected cardboard after school until midnight for several years. Later, they were able to purchase their first recycling warehouse in West Oakland.
Thursday’s raids, though, followed a yearslong city probe into CWS.
In July 2019, the Oakland Public Ethics Commission, or PEC, the city’s independent watchdog agency, launched an investigation into allegations that CWS had been funneling illegal campaign contributions to at least five Oakland City Council candidates, including Thao, as well as City Council candidates in El Cerrito and San Jose, from 2013 through 2018. The group had begun its probe after receiving a verbal complaint about Duong that March, a PEC official said.
A month later, California’s campaign finance watchdog, the Fair Political Practices Commission, opened an investigation into Andy Duong related to laundered campaign contributions, state records show. That investigation is still not resolved.
FBI agents raid a home owned by Andy Duong on Viewcrest Court in Oakland on Thursday in connection with another raid on Oakland Mayor Sheng Thao’s home.
Jessica Christian/The ChronicleThe local investigation is also still open, PEC officials said. Court records show the investigative body attempted to interview more than a dozen people they identified as “straw donors,” or people who donated money to a candidate-controlled committee, and were then reimbursed by the true donors. Individuals and campaign committees are limited in how much money they can donate to each candidate per election cycle. An illegal way around those limits is to make the donations in the names of other people.
“The laundering scheme spans several election cycles and involves the use of multiple straw donors,” PEC investigators wrote in petitions to force the suspected straw donors to respond to their subpoenas for documents and testimony. “The authors of this scheme engaged in this activity in a deliberate effort to circumvent various restrictions on the true source and amount of campaign donations.”
The people targeted by the PEC “wholly refused” to comply with subpoenas, court filings show, prompting investigators to seek court orders to force their compliance.
PEC investigators identified at least $51,000 in suspicious donations to candidates and committees, according to a 2020 Oaklandside report on the probe. David Duong told Oaklandside in 2020 that he had done nothing wrong.
One of the alleged straw donors, Phuc Tran, is a board member of the Vietnamese Chamber of Commerce. His daughter, Jennifer Tran, is the current president and is running against Lateefah Simon to represent the state’s 12th Congressional District.
FBI agents load a box of evidence into a vehicle during a raid on California Waste Solutions in Oakland on Thursday.
Colin Peck/Special to the ChronicleTran denied any involvement in the probe Thursday and said neither she nor the Vietnamese Chamber of Commerce had been involved with planning the Vietnam trip. She told the Chronicle the raid was “distracting” from Oakland’s many challenges, including its struggles with gun violence and a shrinking budget.
Tran, who previously worked on Thao’s campaign for City Council in 2018, has since distanced herself from the mayor. “Sheng Thao, for me, represents a larger problem with the establishment and Democratic Party in terms of, you have to win by big dollars and donors,” she said.
Reached for comment Thursday, Thomas Stout, an attorney for multiple people identified as suspected straw donors by the PEC, told the Chronicle he had learned about the raids via news media and was not able to confirm whether any of his prior clients were involved.
In a 2023 meeting, the PEC said Thao’s 2023-25 budget proposal did not adequately fund their activities and would limit their ability to investigate ethical violations by city staff, including the ongoing CWS probe.
The bulk of the alleged straw donations were made around the time that CWS and Duong were embroiled in a long-running dispute with the city over allegations the company illegally upcharged customers for recycling services, collecting millions of dollars in additional profit.
According to a lawsuit filed by the Oakland City Attorney’s Office in March 2017, the company took advantage of a drafting error in its contract with the city to charge customers up to 25 times more than the agreed-upon maximum amount CWS was allowed to charge owners of multifamily units for moving bins to the street to unload. The City Attorney’s Office called the move “outrageous gouging.”
By 2020, the city estimated that CWS’ customers had been overcharged more than $5 million in total.
California Waste Solutions in Oakland was the target of a federal raid Thursday.
Colin Peck/Special to the ChronicleIn response to the city’s lawsuit, CWS’ attorneys filed a countersuit, arguing that the company “conservatively billed” its customers and that it was entitled to charge what it called “push rates” far higher than what it had actually charged its customers at that point. The city secured a $6 million settlement from CWS, which did not admit to any wrongdoing, in 2021.
The investigation and litigation did not slow the Duong family’s political pursuits.
Last August, David Duong, Thao, a member of Oakland’s Port Commission and the port’s executive director traveled to Vietnam as part of a trade delegation. Port Executive Director Danny Wan and a port staffer were also part of the delegation.
FBI agents raid California Waste Solutions in Oakland on Thursday.
Colin Peck/Special to the ChronicleThe Vietnamese American Business Association paid $12,000 a person to cover the business class flights, five-star hotel accommodations, meals and transportation for Thao, the port commissioners and staffers, according to port records.
Hoang, director of the business association, said Thursday that her group did not sponsor the trip but acted as “hosts,” fronting the money and making travel arrangements before being paid back by the port for its staff and Thao’s travel.
She said the group was a Duong family subsidiary, but separate from CWS. David Duong is the president of the business association.
Port spokesperson Marilyn Sandifur said the business association “was the organizer of the trip and were paid to do that work on behalf of the participants in the delegation.” She said she was not aware that any law enforcement agencies had reached out to the port recently.
The Bay Area Council, the region’s largest business group, was also listed as a sponsor and planner of the trip. That group’s CEO, Jim Wunderman, told the Chronicle the council was minimally involved in the planning and did not fund the trip. “We had virtually nothing to do with it except for putting our name on it,” Wunderman said, which the mayor’s office asked for “at the last minute.”
Wunderman said his group had also not been contacted by law enforcement.
Boxes of evidence are loaded into the back of an FBI vehicle during a raid on California Waste Solutions on Thursday.
Colin Peck/Special to the ChronicleLast July, David Duong was named in a warning letter issued by the FPPC. The watchdog found that a committee he is associated with, Duong Family Investments LLC, failed to disclose itself as a major donor in 2018 and warned that it could face fines of $5,000 per violation in the future.
David Duong has continued to donate heavily to political candidates and causes amid the various probes. He has donated heavily to an array of Republican and Democratic campaigns on the federal level. He and his son have also donated to local and state campaigns, including those of Attorney General Rob Bonta.
In 2024 alone, campaign filings show, David Duong has donated thousands of dollars to the campaigns of Republican Sen. Josh Hawley of Missouri and Democratic Sen. Tim Kaine of Virginia, while Duong Family Investments has given $25,000 to Take California Back, a political action committee promoting “America First candidates.”
Reach Michael Barba: michael.barba@sfchronicle.com; Susie Neilson: susan.neilson@sfchronicle.com; St. John Barned-Smith: stjohn.smith@sfchronicle.com; Chase DiFeliciantonio: chase.difeliciantonio@sfchronicle.com; Joe Garofoli: jgarofoli@sfchronicle.com.
No comments:
Post a Comment