It’s still unclear why FBI agents searched the home of Oakland Mayor Shen Tao this week, but the action has brought renewed attention to a long-running investigation into the political influence and campaign finance machinations of a prominent local family.
Long-term research
The Oakland Public Ethics Commission and the state Fair Political Practices Commission have been investigating for five years allegations that executives of California Waste Solutions, namely the Duong family, used “dummy donors” to circumvent contribution limits and inflate the campaign coffers of public officials.
As federal agents removed boxes from Thao’s home on Thursday, they also executed a warrant at the offices of Cal Waste Solutions, which provides recycling services to the city of Oakland, FBI officials confirmed. Agents also searched the homes of Cal Waste Solutions’ CEO, David Duong, and his son, Andy Duong, a purchasing manager who handles public relations for the company.
The FBI has not formally charged Ms. Thao or any members of the Duong family with wrongdoing. Ms. Thao’s lawyer, Anthony J. Blass, said in an email to The Times that the mayor has no information or indication that she is the subject of a federal investigation and intends to cooperate with the investigation.
“She has nothing to hide,” Blass said. “It’s unfortunate that she had to go through the negative aspects of having a search warrant executed on her home. She would have cooperated with the investigation without this search.”
Cal Waste Solutions released a statement Saturday.
“We were extremely surprised that federal law enforcement agencies searched our home and offices on June 20,” the statement said. “We have always cooperated as good, law-abiding citizens to help law enforcement agencies carry out their missions, creating all conditions for them to effectively carry out their work. We do not believe we have committed or engaged in any illegal activity and we await the decision of law enforcement agencies.”
David Duong and Andy Duong did not respond to requests for comment.
Another blow to the city
The city of Oakland was already reeling from a series of recent reputational blemishes, but the timing is ominous to say the least. Before the investigation began, Thao was facing recall due to concerns about crime, an issue so severe that Gov. Gavin Newsom sent 120 California Highway Patrol officers to Oakland as part of a new state law enforcement campaign to address violent crime.
Major restaurant chains such as In-n-Out and Denny’s have closed local locations over safety concerns, and recent Juneteenth celebrations were marred by a shooting that left several people injured.
While the crackdown appears to be having some success — a recent Oakland Police Department report showed crime will be down 33% in 2024 compared to the same period last year — the raids have rekindled concerns about the city’s leadership.
“We don’t need this kind of attention,” said Brenda Harbin-Forte, who launched Oakland United’s campaign to reinstate Shen Tao.
She said the federal investigation is another blemish on the city.
“I think even people who were neutral on the recall will understand that we need to push for reform from the top down,” she said. The recall bill is expected to be on the November ballot.
Ethics Survey
Simon Russell, a special investigator for Oakland’s Public Integrity Commission, confirmed that the commission opened an investigation into Cal Waste Solutions in 2019.
The committee alleges in court documents that the alleged campaign money laundering occurred multiple times, with dummy donors making contributions to various committees controlled by the candidates.
The committee issued subpoenas to identify participants in the scheme, including to Phuc Hong Tran, a director of the Oakland Vietnamese Chamber of Commerce and a friend of David Duong.
After Tran failed to comply with the subpoena, lawyers for the commission and the city of Oakland sought enforcement of the subpoena in Alameda County Superior Court, detailing for the first time the scope of the investigation.
Tran did not immediately respond to a request for comment.
According to January 2020 court documents, investigators were looking into campaign contributions to Hsien Thao Pho Oakland City Council 2018 Committee, including contributions from Kim Phuong Vietnamese Cuisine, which investigators allege were laundered.
Investigators were also looking into other donations Tran made to the committees of City Council members seeking reelection in 2018.
The office has issued subpoenas to Duong family members and business associates, seeking emails, text messages and communications relating to campaign finances from 2016 through 2018, records show.
Russell did not provide details about the case but said it involved allegations of campaign money laundering. Asked whether he had been in contact with anyone from the FBI or the Department of Justice about the investigation, he said he could not comment.
Russell said the ethics committee opened an investigation into Thao in July 2022, but did not provide details.
But subpoenas, court and public records show that watchdog groups have been investigating Cal Waste Solutions and its role in Oakland politics for years, including its ties to Thao, who in 2018 became the first Hmong person elected to public office in a major U.S. city.
The rise of the family
At first glance, the Duong family’s story seems like the American Dream come true: They once owned the largest paper mill in South Vietnam before being forced to flee during the Vietnam War, according to a biography on the Cal Waste Solutions website.
The Duongs settled in San Francisco, where 16 family members were crammed into two studio apartments. For years, the family worked late into the night collecting cardboard boxes, saving up to buy a recycling shed in West Oakland.
That first warehouse has since grown into what it calls the largest recycling company in Northern California, with more than 300 employees. The company is led by three brothers: David, who is CEO; Christina, who is CFO; and Victor, who is vice president.
The Public Ethics Committee launched an investigation into allegations of dummy donations in 2019 and issued subpoenas to business associates with ties to the family.
Court documents filed by the FPPC detail how the company tried to circumvent campaign finance limits by using friends and associates to give campaign contributions to candidates, then paying them back in cash to conceal the source of the donations, according to a former business partner of Andy Duong.
“CWS was the true source of funding for at least 93 contributions to multiple local election committees,” court documents state, with the purpose of “gaining support for and increasing access to candidates.”
The donations were made in jurisdictions where the company does business or is considering doing business, according to court records.
The documents show donations were made to political candidates in Oakland, San Jose and Santa Clara counties, suggesting the investigation may extend beyond Oakland.
Investigators also suggested that Andy Duong made sure politicians knew about the company’s work.
“Duong made his determination to raise campaign funds for targeted candidates known by attending candidate fundraisers, accompanying others to campaign fundraisers, and at times hosting campaign fundraisers and providing multiple checks to committees and candidates,” the FPPC alleged.
One former business associate told investigators how Andy Duong had approached him to recruit people who could make political donations to candidates of his choice, then allegedly repaid the money from drawers stuffed with cash in his office.
The investigation is ongoing. FPPC officials did not immediately respond to a request for comment.
Thao has not spoken publicly about the investigation, but her lawyer said the mayor expects her to continue the investigation.
But critics said they would like to see Thao and other city leaders be more transparent about the ongoing investigation.
“He needs to make a statement that reassures the residents because they are worried and scared of who is going to be implicated,” said Harbin Forte, who has led the recall campaign against Tao. “What’s going to happen to the city government? The budget is due next week, where is the leadership?”
