Day 6
—Years before federal prosecutors accused former Oakland Mayor Sheng Thao of participating in a bribery conspiracy involving the politically connected Duong family, she was privately sharing closed session details of Oakland City Council deliberations about the family’s lucrative garbage business with Andy Duong.
A recording from April 2019, played Friday during the federal public corruption trial in Oakland, captured a frantic-sounding Thao discussing Oakland’s deliberations over California Waste Solutions (CWS), including concerns raised by city officials about the company overcharging residents and potential refunds owed by the company.
The recording, recovered from a hard drive at the home of CWS executive David Duong, featured Thao, then an Oakland councilmember, describing questions raised by fellow councilmembers Loren Taylor, Dan Kalb and Noel Gallo that CWS should refund ratepayers.
“Noel, f—king Dan, and Loren kept bringing it up.” Thao said. “It was mainly Dan.”
Then-Councilmember Rebecca Kaplan, one of the biggest supporters of approving California Waste Solutions’ initially contract five years earlier, was caught off guard by the push for refunds, Thao told Andy Duong.
”Rebecca got caught up because she didn’t have an answer for it.” Thao later added, “Rebecca is concerned about the whole thing.”
Thao appeared particularly focused on Taylor’s persistent questioning and wanted then-Councilmember Larry Reid to intervene.
If Reid spoke up, “Loren will shut the f—k up,” Thao told Andy Duong. “He’s asking a lot of question sounding like he’s not going to go with it,” Thao said of Taylor regarding Kaplan’s proposed settlement.
The recording also captured Thao discussing the need to meet privately with the Duongs, away from public scrutiny.
“We don’t need people hearing us talk,” Thao said while deciding on a meeting spot in Oakland, adding, “We don’t want to be seen with you guys.”
The conversation offered jurors a revealing glimpse of Thao’s relationship with the Duongs nearly four years before she became mayor and allegedly agreed to use her office to benefit their business interests.
Thao told Duong that councilmembers were fixated on whether CWS should provide refunds. Taylor was asking “concerning questions,” she said, and appeared unwilling to accept the proposed resolution without some concessions from the company.
The recordings were among a voluminous collection of evidence introduced during the third day of testimony from FBI Special Agent Katherine Barclay, who has worked on the investigation since late 2022 or early 2023, she said Friday.
—THAO’S FINANCIAL TROUBLES WORSEN—Prosecutors also presented text messages portraying a financially distressed Thao and her longtime partner, Andre Jones, around the time the alleged conspiracy was taking shape.
On Dec. 14, 2022, Thao complained to Jones that the couple could not afford their rent and faced mounting utility bills. Their PG&E bill exceeded $1,000, while their water bill was approximately $800.
“And pay the fucking rent,” Thao instructed Jones in a text offered in court Friday.
That same day, according to evidence presented in court, Jones was pursuing a check from Mario Juarez, the political operative prosecutors allege helped broker the corrupt arrangement.
On Jan. 4, 2023, Thao again urged Jones to figure out how to pay the rent. Jones deposited a check from Juarez that day, according to the evidence.
The couple’s financial difficulties apparently continued after Thao became mayor.
On May 30, 2023, Thao told Jones the electricity had been disconnected at their home.
“Ugh, they’re wanting $6,000 to turn it back on,” she wrote.
By November 2023, Thao was still worried about utility expenses, instructing Jones to turn off lights because the bill had reached $3,000.
“I cannot pay,” Thao wrote.
—JONES’S ALLEGED NO-SHOW JOB—Federal prosecutors also continued building their case that Jones received payments from Evolutionary Homes, a company associated with the alleged conspiracy, despite performing little actual work.
Barclay testified about a roughly 100-page Evolutionary Homes group chat extending from June 2023 through January 2024.
Jones was not included, despite other participants regularly discussing the company’s efforts to secure government business.
Jones also was absent from numerous emails concerning Evolutionary Homes proposals to local governments and from a company organizational chart listing its government relations personnel, prosecutors attempted to establish.
Nevertheless, prosecutors introduced a Nov. 29, 2023, check for $35,000 issued to Jones from an Evolutionary Homes account.
However, there was some evidence of his involvement. Jones attended a September 2023 meeting in San Jose and appeared as a contact on one version of an Evolutionary Homes proposal to Santa Clara County.
The government contends Jones’s compensation was part of an arrangement to secure favorable treatment from Thao’s administration. His attorney offered the money was an advance on future sales of the modular units.
—AUNTIE PAM JOINS THE STORY—Other recordings illustrated the Duongs’ extensive relationships with Oakland politicians and their frustration that Evolutionary Homes had not secured a deal with the city.
In a January 19, 2024, conversation, Andy Duong and Oakland Councilmember Kevin Jenkins discussed local recall efforts, including Alameda County District Attorney Pamela Price and the company’s attempts to develop housing projects.
Duong complained that Thao had not delivered progress on Evolutionary Homes.
“You need to get your shit together,” Duong said of the mayor. “If you want to continue for another term, you better start acting right.”
“We want Oakland to be the first,” he added, referring to Evolutionary Home’s development ambitions.
Earlier testimony indicated that San Leandro, Berkeley, Alameda County and Santa Clara County were also pursued as potential buyers of the modular home units.
—DEFENSE PUSHES BACK—During cross-examination, Andy Duong’s attorney, Erik Babcock, sought to undermine the government’s case by emphasizing what the alleged conspiracy never produced:
Oakland never purchased any housing units, he argued, nor did the city grant the contemplated CWS contract extension.
Babcock also questioned the reliability of an Apple Note attributed to Juarez that allegedly documented the terms of the corrupt agreement.
Barclay acknowledged investigators could not determine with certainty when portions of the note had been modified.
The attorney emphasized that Juarez, who has cooperated with federal investigators, had been interviewed at least 15 times, including multiple interviews in recent weeks.
Without a recording of the alleged agreement, Babcock argued, the government was dependent on the political operative’s account.
“You have to rely on Mr. Juarez’s word,” Babcock told the witness.
The FBI agent disagreed, maintaining that other evidence supported the government’s allegations.
The trial resumes on Monday morning with cross-examination of Barclay, who has been on the stand since last Monday.
Supporters of the Duongs returned to the area outside U.S. District Court in Oakland on Friday, although their numbers had dwindled since last week. PHOTO/East Bay Insiders.
—FEDS MET WITH THAO BEFORE— Sheng Thao met with federal law enforcement agents nearly three months before the FBI raided her home in June 2024.
—Thao’s attorney, Jeffrey Tsai, disclosed the meeting in U.S. District Court on Friday morning, before jurors entered the courtroom.
—Federal authorities met with Thao on March 19, 2024, to discuss potentially allowing ICE operations in Oakland, Tsai told U.S. District Judge Yvonne Gonzalez Rogers.
—But Thao resisted, Tsai said, citing Oakland’s status as a sanctuary city.
—Tsai argued that if Thao had been involved in a criminal conspiracy with David Duong and Andy Duong, as federal prosecutors allege, she would have complied with the federal government’s request.
—ONE DOWN— Juror No. 10 was excused from the trial for personal reasons, U.S. District Judge Yvonne Gonzalez Rogers informed attorneys Friday morning.
—Earlier in the week, the judge received two notes from jurors, apparently requesting to be excused from the trial, which is expected to continue through Thanksgiving.
—A second juror also submitted a note to the judge on Friday.
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