FBI raids and a recycling firm: how a promising US mayor wound up at the center of a bribery scandal

Two years ago, residents of Oakland, California, woke up to a shocking scene: their mayor’s home was being raided by the FBI. Agents were seen carrying dozens of boxes from the hilltop home of Sheng Thao, the city’s 38-year-old leader, as part of an investigation constituents would later learn alleged her participation in a pay-to-play scheme with the city’s recycling contractor.It was a stunning moment for Thao, who was elected to lead the Bay Area city in 2022 and was once seen as a promising young mayor in a city that has long grappled with economic inequality and a reputation for violent crime. Her story of growing up in a refugee family and overcoming domestic violence and homelessness to become the first person of Hmong descent to run a major US city resonated with readers confronting questions about equity and representation that came to the fore during the Covid19 pandemic, and made her the subject of glowing media profiles.As mayor, Thao revived the city’s Ceasefire violence-reduction strategy and brought in a much-needed infusion of revenue through the sale of the Oakland Coliseum sports complex. But her tenure was far from smooth. At the time of the raid she was already facing a heated recall campaign grounded in her perceived failure to address the city’s mounting public safety and homelessness crises – one that would see her ousted from office in November 2024. Two months later, Thao was indicted on federal corruption charges, and eventually replaced by longtime progressive congresswoman Barbara Lee in a special election.FBI agents carry boxes out of a home associated with Sheng Thao during a raid in Oakland, California, on 20 June 2024. Photograph: Ray Chavez/MediaNews Group/The Mercury News/Getty ImagesNow, Oakland is anxiously watching the final chapter in this political drama unfold as Thao and three co-defendents stand trial over the alleged bribery scheme. Having just concluded its fifth week of hearings, the case is rich with soap-opera-esque plot points, from an alleged beating at a recycling company’s headquarters to text threads in which co-defendants celebrated the plot that would make them “$100 million dollars richer” and touted that “money buys everything”.Proceedings are expected to conclude later this month, with Thao facing six federal counts in total. If found guilty, she could face up to 20 years in prison. To the frustration of other witnesses, Thao, who has a constitutional right not to testify, has yet to take the stand.The saga has left residents disappointed and reopened longstanding frustrations about a city that has everything it needs to thrive – a prime location on the bay, a diverse population, a burgeoning arts and culture scene, and a growing economy – but a government that struggles to deliver basic services or answer for its shortcomings.“When the news [of the FBI raids] broke, there was a wide range of feelings from the community,” said Stephanie Tran, president of the Oakland Chinatown chamber of commerce, of the fall from grace of a mayor who offered representation to Oakland’s sizeable Asian-American community. “Many were, quite honestly, just disappointed, even sad,” she said, that an Asian woman in such a high position of power was now associated with this controversy.‘People moved on’The bribery, conspiracy and fraud charges against Thao rest on claims that during her 2022 campaign, David and Andy Duong – a father and son whose family runs California Waste Solutions, the company that provides Oakland’s recycling services – paid for negative mailers attacking her rivals and promised her romantic partner, Andre Jones, a $300,000 no-show job. In exchange, prosecutors allege, Thao promised to extend the company’s multi-million-dollar city contract, appoint the Duongs’ preferred people to important municipal positions, and buy shipping containers converted into homes for unhoused people from a company the Duongs ran with a business partner.All four defendants have pleaded not guilty, with their lawyers denying the existence of any bribery scheme. Thao’s legal team did not respond to the Guardian’s request for comment.Darwin BondGraham, news editor at local non-profit media outlet The Oaklandside, said the courthouse has been frequented by members of Oakland’s political class. But when it comes to everyday Oaklanders, many just want the mess behind them. “The trial is accounting for things that happened when Oakland bottomed out during the first few years of the pandemic,” BondGraham said. “I think people moved on.”The Maze, in Oakland, is one of the largest freeway interchanges in the world. Photograph: Steve Proehl/Getty ImagesWhat many want is simple: a City Hall that fixes the potholes, answers 911 calls and acts with accountability. But in Oakland – which has faced recurring budget deficits for decades, leading to substantial staffing shortages and hundreds of millions in deferred maintenance – these basic services are not a given.Those are the sorts of core concerns that pushed Emily Wasserman, a mother of two living in the city’s Laurel neighborhood, toward local advocacy. In 2024, Wasserman was ready for change. Thao had been her councilperson for several years, and Wasserman found her ineffective. So she started volunteering with a voter education group, Empower Oakland, founded by Thao’s main rival in the 2022 election, Loren Taylor.Part of the alleged bribery scheme involves the co-conspirators sending out campaign mailers critical of Taylor in exchange for favors from Thao.While Oakland’s problems didn’t start with Thao, the failures of successive governments to address them came to a head during her post-Covid leadership. A recent report found that illegal dumping cost the city $10m more than it did a decade ago. Police responses to the most urgent calls averaged 23 minutes in 2022 and at times stretched past an hour in 2023, yet a city audit last year found Oakland has no targets for how quickly officers should respond.To Wasserman, the city’s shortcomings – and the allegations against Thao – speak to structural problems with how Oakland is governed. “One of the things that bothers me the most in our government is that there is not a lot of accountability to the general public,” she said.Sheng Thao, outside the US district court, addresses members of the news media as Tuan Ngo, founder of Asians Unite, protests in Oakland, on 17 January 2025. Photograph: San Francisco Chronicle/Hearst Newspapers/Getty ImagesIt isn’t for a lack of ideas, said Lakisha Young, founder and CEO of education non-profit The Oakland Reach. “Our city is inundated with initiatives,” she said, pointing to the many literacy, violence prevention, and affordable housing programs Oakland has approved in recent years – but that lack any formal infrastructure for tracking results. “It makes you feel like things are happening, but there is never any follow-through.”She says that if the city is serious about tackling some of its most intractable problems, like public school testing scores and children’s literacy rates, it needs to ensure that earmarked funds are used meaningfully and with oversight.“Every year our kids are behind in the same way they were behind when we had 60% less resources because we are not building an ecosystem that is accountable to measuring its results,” Young said. “When people are held accountable, different things happen.”Oakland’s challenges ‘don’t begin and end with this trial’In recent days, the trial has centered on testimonies from Mario Juarez, an alleged co-conspirator in both the bribery and mailer scandals who is cooperating with government prosecutors.Juarez claimed that shady dealings between the Duongs and city government predate Thao’s term. He alleged that in 2014, after securing Oakland’s $300m recycling contract, the Duongs gave gym bags full of cash to a revolving door of city officials, including a “sitting” councilmember.The defense has raised questions about Juarez’s credibility, suggesting that he artificially inflated expense reports and travel receipts submitted to the Duongs, and it is unclear whether Juarez will name any officials alleged to have accepted bribes. Nonetheless, his claims echo a sentiment held by many Oaklanders and articulated by Chinatown’s Tran: “The challenges that Oakland has, quite candidly, didn’t begin with this trial, and they won’t end when it’s over.”A shooting occurred at Mario Juarez’s home along Fruitvale Avenue on 28 June 2024 before the FBI raid on the Duong family. Photograph: San Francisco Chronicle/Hearst Newspapers/Getty ImagesOn 3 November, voters passed a charter reform that takes aim at some of those challenges. Known as the “strong mayor” reform, Measure EE amends the city’s governance structure – which has historically been ambiguous about whether ownership for key decisions lies with the city council or the mayor – by placing clear accountability on the leader’s shoulders. Going forward, the mayor will function as the city’s chief executive, with hiring and firing privileges as well as legislative and budgetary veto power.Supporters see it as an important step toward building accountability back into the city’s governance structure.“This will help to set the stage to address some of the longstanding challenges of how we can govern and work as a city,” echoed Wasserman.Others, like district 4 councilperson Janani Ramachandran, are less exuberant about the measure, especially in the aftermath of Thao’s indictment. “I think that the unpredictability of who Oakland might vote in as mayor is a little scary,” she said. “You can swing from someone as wildly incompetent as Sheng Thao to someone as professional and experienced as [current mayor] Barbara Lee.”For Tash Nguyen, executive director of economic equity non-profit Restore Oakland, the city’s future success rests more with the hands of its people than its politicians. To her, the political scandals matter less than the solidarity she has seen among Oakland’s residents in the past year, from forming ICE patrols to combat the federal immigration crackdown, to creating tenant unions to defend their homes against profit-driven rent surges.“Folks are showing up for each other. That’s what makes Oakland so special,” she said. “People outside of Oakland don’t know about that.”