There’s no evidence that the alleged bribery scheme between Sheng Thao and three others actually happened. The government’s case is based on the untrustworthy account of informant Mario Juarez.
That’s what defense attorney Erik Babcock tried to demonstrate in court Thursday, beginning an energetic cross-examination of FBI Special Agent Katherine Barclay during the second week of trial in the Oakland corruption case.
He ran through the promises that former mayor and her then-partner Andre Jones allegedly made in exchange for David and Andy Duongs’ bribes. The city did not ultimately extend their recycling contract, let alone purchase hundreds of tiny homes from their housing company, he confirmed with Barclay.
“There was no evidence because it did not happen, correct?” Babcock said about the housing units. Barclay conceded.
He asked her about her conversation with Juarez, a former business partner of the Duongs who’s pleaded guilty in the case and is cooperating with the government.
“He told you… ‘We made this deal with the mayor, and she was going to X, Y, and Z for us,’ correct? But X, Y, and Z never happened, did they?” Babcock said.
“That is correct,” Barclay said.
“Do you have a recording of my client and Mario Juarez discussing bribing the mayor of Oakland?” Babcock asked Barclay.
“There is no recording,” Barclay eventually said, but she adamantly disagreed with the lawyer’s insistence that the case is based mainly on Juarez’s statements.
Federal agents seized the phones and computers of Thao and the other defendants and have presented dozens of photos, videos, text threads, notes, and other data extracted from them as evidence in the case. This week, jurors sat in silence as the prosecution painstakingly entered each item into the court.
At times, jurors were treated to recordings of expletive-laden phone calls and revealing personal text messages.
Thao briefed Andy Duong on private information from the City Council’s closed session
Andy Duong arrives at court for jury selection on Oct. 13. Credit: Estefany Gonzalez for The Oaklandside
One of the most revealing phone calls was a brief chat between Thao and Andy. Years before the alleged bribery scheme commenced, the then-councilmember was feeding confidential information to the Duongs.
During the April 2019 call, which Andy recorded, Thao coaches Andy on how his family’s curbside recycling company, California Waste Solutions, should navigate litigation with the city.
Thao and Andy discuss finding a private restaurant where they can have lunch and talk about the case out of the public eye. “We really don’t want to be seen with you guys,” she explains.
During the call, Thao briefs Andy on her fellow councilmembers’ stances on the legal battle with CWS over whether they’d overcharged customers. She discloses interactions that occurred during a confidential closed-session meeting of the council and the city attorney, disparaging councilmembers who seemed to support the idea that they owe rate-payers a refund.
Then-Councilmember Dan Kalb brought up the issue, she tells Andy. Then Noel Gallo and Loren Taylor chimed in with questions and concerns.
“They’re all concerned around the fucking refund,” Thao says. “I’m hoping we can be strategic.” She tells Andy that “Rebecca,” apparently referencing Councilmember Rebecca Kaplan, didn’t know how to answer their colleagues’ questions about the refunds. So Thao pushes Andy to prepare to make a case to the council.
“Remember, he doesn’t know anything,” Thao says about Taylor, who, years later, would become her opponent in the 2022 mayoral race. “But if we don’t have answers to his questions, then fuck, we’re fucked, right?”
Andy notes that Larry Reid, a different councilmember, is likely to vote in a way that’s advantageous to CWS, but says that he won’t argue “unless he gets pissed off.” Thao agrees, adding that if Reid is vocally supportive, Taylor “will shut the fuck up. But if he’s just quiet, if he’s just a vote, then Loren will do whatever the hell he wants.” Larry Reid was one of the Duongs’ strongest political allies in Oakland, and his daughter, Treva, had worked for CWS from 2004 to 2012; she would go on to take over her father’s council seat in 2021.
At one point, Andy says they could eat at his restaurant, which would be “super private.” Andy was previously linked to an Oakland business called Music Cafe, which the city’s Public Ethics Commission alleged Andy used to funnel illegal straw donations to local politicians. State agents shut down the business in 2018 after raiding it and arresting staff for selling narcotics and sex. It’s unclear whether Andy is still referring to Music Cafe in the 2019 phone call with Thao when he references “my restaurant.”
In 2021, the city and CWS settled their lawsuit. The company agreed to refund residents $6 million. Oakland agreed to pay CWS $1.7 million to help with its operating costs.
The Oaklandside previously reported that Kaplan had suggested a significant increase in the amount Oakland would hand over to CWS in that settlement.
“It was clear to me from the discussion in the room that some councilmembers had background conversations with CWS prior to the closed session and were anticipating what would be acceptable or desirable terms,” Taylor told us in 2024. However, he noted that such discussions aren’t inherently illegal or unethical.
In 2023, Andy recorded another revealing call with Thao — which was also played for the jury. In it, she admonishes him for inviting councilmembers she doesn’t get along with, namely Treva Reid and Janani Ramachandran, to events,
“I don’t care if you guys have great relationships…you’re gonna have to fucking pick and choose, because I’m not fucking with those bitches…they make my life hard at City Hall constantly,” she tells him.
Juarez boasted that he had a ringer at City Hall
While most of the promises allegedly made by Thao and Jones to the Duongs did not come to fruition, one of the other “deal points” laid out in an iCloud note on Mario Juarez’s phone did, according to the government. That was the appointment of a Duong-friendly city staffer, Larry Gallegos, to a deputy director position in Oakland’s Housing and Community Development Department.
The prosecution asked Barclay about a text exchange between Andy and Juarez that took place in February 2023 and largely seemed to focus on wooing Gallegos.
Juarez suggests that Gallegos come have lunch at CWS with David Duong and the family.
Then he suggests, “Take Larry Gallegos to party – he is a devoted Christian- think of his sins while he parties.”
Andy Duong and former Oakland city staffer Larry Gallegos at California Waste Solutions on February 7, 2023. Credit: Government exhibit
After Andy agrees to the lunch, Juarez responds, “He needs to say that he is on board with CWS…And the appointment is the direct result of the lobbying taking place.”
“Of course,” Andy texts.
Later in the text thread, Andy writes that he wanted to meet with Gallegos first, stating, “Its us who got him appointed.”
“If you get a good vibe he should go with you to walk with Sheng and you take him,” Juarez says about a scheduled walk Thao and Andy were going to take in Chinatown.
Andy, seemingly confused, asks if Gallegos is a “maybe.” Juarez reassures him that “he is in.”
“And last I asked him point direct,” Juarez continues. “CWS extension and Army Base deal are priorities he said he knows and he will deliver.”
The prosecution hasn’t yet introduced any texts, recordings, or other evidence from Gallegos confirming these claims Juarez made about him and his intentions. Gallegos is on the government’s witness list.
Later in the same thread, Juarez says Gallegos would “resolve ABC too,” seemingly referring to ABC Security Services, a city contractor that Juarez lobbied for.
Andy asks if Gallegos had asked for the city appointment, or if Juarez wanted him specifically. Juarez explains that he wanted Gallegos because “while at the City he make sure my projects got done and grants were given to me.”
The following day, Gallegos visited CWS’ office, which Andy memorialized with a smiling selfie. It appears the Duongs had high hopes for Gallegos. In a calendar invitation a week later for a meeting between Andy and David, the subject line refers to Gallegos as the “upcoming new city administrator or director.”
Later in February, Juarez, Andy, Gallegos, and a local businessman named Stewart Chen went out to a sushi dinner, according to photos shared with the jury. Another photo seized from Andy’s phone shows the same group of men later that night at a bar with several young women.
Salacious photos come under scrutiny
Bottles of champagne and cigars from a meeting between Mario Juarez, David Duong, and Andy Duong on October 5, 2022. Credit: Screenshot of photograph from government exhibit
As the defense team has for the duration of the trial, Andy’s attorney, Babcock, tried to highlight how much the government is relying on the testimony of Juarez, a controversial character.
He also grilled the FBI agent about why certain pieces of evidence were shown to the jury.
He zeroed in on a photo appearing to show bottles of champagne and cigars at the Evolutionary Homes launch party.
“The government didn’t need to present that photo in order to prove this meeting occurred, did they?” Babcock said. The prosecution tried to stop his line of questioning, but the judge allowed it, reminding prosecutors that “you had her up there for two days.”
“The government is just gilding the lily, adding these photos — the only possible reason is prejudice against our client,” Babcock said. This time, the judge admonished him.
Over the course of the week, the defense attorneys have fought with the prosecution about several pieces of evidence, including photos from the Vietnam trip and Thao’s use of the Signal messaging app.
Jones’ attorney also filed an objection to most of Barclay’s testimony, accusing the government of presenting a “lengthy overview summary of its entire case” through the FBI agent, rather than other witnesses who “do not support their narrative and a cooperator with extraordinary credibility issues.” Judge Yvonne Gonzalez Rogers didn’t appear to buy this argument and said that if the defense doesn’t agree with her they can take it up on appeal if the case results in convictions.
Jeffrey Tsai, Thao’s defense attorney, also previewed what he plans to ask Barclay as cross-examination continues next week. He said he’ll question her about a meeting Thao had with federal agents on March 19, 2024, three months before the raids on her home.
A person engaged in a federal bribery scheme wouldn’t willfully engage with federal law enforcement, Tsai argued. Prosecutors balked at this and said that Thao’s pre-raid meeting with the government was irrelevant to the trial.
Monday will pick up with further cross-examination of the FBI witness.
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