In October 2022, just weeks before Election Day, the polls in the race for mayor of Oakland, Calif., showed a dead heat.
Sheng Thao, then an Oakland City Council member running as a progressive, struggled to break ahead of her main opponent, a councilman backed by business interests.
So Ms. Thao, desperate for votes, cut a corrupt deal to secure her victory, prosecutors say.
This week, she and three co-defendants go on trial in federal court on charges of bribery and fraud. If convicted, each could face several years in prison.
In court filings, prosecutors detailed text messages, secretly recorded phone calls and bank records that offered a window into the behind-the-scenes methods that one family-owned business employed to try to secure contracts not just in Oakland but also in several other Bay Area cities. Opening statements are scheduled to begin on Wednesday.
In October 2022, according to prosecutors, Ms. Thao met covertly with Mario Juarez, a business partner in a new modular housing venture backed by the owners of California Waste Solutions, a recycling company that has long deployed cash in East Bay politics.
The terms were explicit, prosecutors say: The recycling company would bankroll a $75,000 mailer campaign targeting Ms. Thao’s political rivals. If she won, the new housing company would also give a $300,000-a-year consulting gig to her partner, Andre Jones, a no-show job created to cover the couple’s rent and living expenses, according to prosecutors.
In return, prosecutors say, Ms. Thao agreed that if she became mayor, she would pull strings for both companies inside Oakland City Hall and ensure that they secured multimillion-dollar contracts with the city.
“We may go to jail … but we are $100 million dollars richer,” Mr. Juarez wrote in a text to Andy Duong, whose family owns the recycling firm, as the final ballots were tallied in November 2022. Ms. Thao ultimately won the mayor’s race by fewer than 700 votes.
“Money buys everything,” Mr. Duong replied. Prosecutors quoted from the texts in court documents.
Ms. Thao was recalled in 2024 by voters frustrated with her management of the city, and neither California Waste Solutions nor its offshoot housing company got the contracts it had sought.
But prosecutors had already started looking into their connections, and last year brought public corruption and bribery charges against Ms. Thao, 41; Mr. Jones, 55; Mr. Duong, 37; and his father, David Duong, 68, the chief executive of California Waste Solutions.
All four have pleaded not guilty.
Their lawyers have argued that Mr. Juarez, who pleaded guilty to conspiracy to commit bribery and agreed to testify for the prosecution, is a serial fabricator and that there is little concrete evidence of their connection to these alleged crimes. When Mr. Juarez’s relationship with the Duongs soured, the lawyers say, he began making up stories to frame them for a scheme that never existed.
Neither the four defendants nor their lawyers agreed to be interviewed for this article.
On Tuesday, Ms. Thao and the three other defendants appeared in a federal courthouse in downtown Oakland as a judge selected jurors. The trial is expected to last seven weeks.
Prosecutors say that their case uncovers a playbook for bribery and corruption in local politics across the Bay Area involving laundered campaign cash, sham consulting jobs and kickbacks.
Mr. Juarez and Andy Duong courted other Oakland officials and had plans to pitch kickback deals for their new housing venture to members of the Berkeley City Council and the Alameda County Board of Supervisors, prosecutors say.
An investigation released in 2021 by California’s Fair Political Practices Commission also found that California Waste Solutions had made scores of illegal campaign contributions dating back years in not just Oakland but also Milpitas, Santa Clara County and San Jose, the most populous city in Northern California. No penalties have been issued in that case. The commission did not respond to further requests for comment.
In San Leandro, just south of Oakland, a former councilman, Bryan Azevedo, has pleaded guilty to accepting a cash bribe from Andy Duong in exchange for helping Mr. Duong’s housing venture secure contracts with that city.
Mr. Azevedo, who is expected to testify at Ms. Thao’s trial, also set up a company in his wife’s name to receive kickback payments. It was the same mechanism to hide payments that the Duongs used with Ms. Thao and Mr. Jones — which prosecutors called in court records “a distinctive modus operandi.”
The corruption allegations and high-profile trial have added to the challenges faced by the residents of Oakland, a city of 440,000 across the bay from San Francisco.
Oakland, long regarded as a scrappier and more affordable alternative to its famous neighbor, has in recent years battled high rates of crime and homelessness and contended with budget problems and an exodus of beloved sports teams.
Ms. Thao struggled to address those problems, prompting a campaign to recall her. In June 2024, the F.B.I. raided her house and vehicle, taking laptops, cellphones and documents. The raid supercharged the recall effort, and voters removed her in November.
Barbara Lee, a longtime member of Congress who became Oakland’s mayor last year, said she had been working to stabilize the ship.
In an interview this month, Ms. Lee said she had recently begun a city audit evaluating contracts and grants within key departments, given the allegations against Ms. Thao and the waste company. California Waste Solutions currently holds a long-term recycling contract with Oakland that expires in 2035.
Ms. Thao’s relationship with the Duongs dates back to at least 2018, when she was running for City Council. Ms. Thao, the daughter of working-class Hmong American refugees who grew up in Stockton, Calif., was seeking her first term in elected office.
Her 2018 campaign was among those into which California Waste Solutions illegally funneled money using straw donors, the Fair Political Practices Commission found in 2021. According to the commission’s report, Andy Duong would recruit friends, family members and business partners to write checks to certain candidates, and then reimburse them for their contributions.
But their dealings reached a new level in October 2022 when Ms. Thao agreed to the quid pro quo deal, prosecutors say. The Duongs and Mr. Juarez had recently formed a modular housing company whose business model relied on government contracts, and they were also interested in having their recycling contract extended, prosecutors say.
Once Ms. Thao took office in January 2023, she furthered the Duongs’ interests by pressuring city leadership to appoint a candidate favored by the family to the city’s housing department, which would handle the city’s housing contracts, prosecutors say. She also directed the city administrator to meet with David Duong and tour his modular housing factory, they say.
Prosecutors point to a note found on Mr. Juarez’s iPhone that lays out each point of the deal with Ms. Thao, including that she would get the city to purchase 300 of their modular housing units for $300,000 each and secure a 10-year extension on their recycling contract.
He then texted the note to Andy Duong and asked if he was missing anything. Mr. Duong replied: “Not missing” and “All right.” Mr. Juarez then asked if they should share it with David Duong, and the younger Mr. Duong confirmed his father already was familiar with the terms.
Defense lawyers, however, argue that the deals that Mr. Juarez laid out never came to pass, and they frame his notes and texts as the ramblings of a bombastic businessman daydreaming about expanding his influence. Oakland didn’t sign a contract with the housing venture, nor did the city approve an extension to the recycling contract with California Waste Solutions, the lawyers say.
“The government cannot point to a single document, writing or recording from Ms. Thao evidencing her knowledge of, much less participation in, the alleged bribery scheme,” her lawyers said in a brief in July.
The prosecution has argued that under federal laws, the crime is complete the moment the agreement is struck and payments are accepted. The payments to Mr. Jones, totaling $95,000, began shortly after Ms. Thao won the election.
In the weeks after the 2024 F.B.I. raid, Ms. Thao insisted that she was innocent and that she did not know why her home had been targeted. She said at the time that she knew the Duongs as prominent members of Oakland’s business community, but that they didn’t have a special relationship.
In an interview with The New York Times in Oakland City Hall in October 2024, Ms. Thao said she thought the F.B.I. had perhaps mistakenly thought she was mixed up with the Duongs because they are of Vietnamese heritage, and her last name is a common Vietnamese first name. She also compared herself to well-known figures in American history who she believed had been wrongly investigated by the F.B.I., such as Hillary Clinton and Martin Luther King Jr.
She said that the existing contract with California Waste Solutions had been approved before she was even on the City Council. She had only been mayor for a year and a half when the raid took place, and she said she hadn’t finalized any contracts in that time.
“I know for a fact I did nothing wrong. There’s been no time given to me to do anything wrong,” she said at the time.
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