OAKLAND, Calif. — In October 2022, just weeks before Election Day, the polls in the race for mayor of Oakland, California, showed a dead heat.

Sheng Thao, then an Oakland City Council member running as a progressive, struggled to break ahead of her chief opponent, a council member backed by business interests.

So Thao, desperate for votes, cut a corrupt deal to secure her victory, prosecutors say.

On Wednesday, opening arguments began in the criminal trial of Thao and three co-defendants on charges of bribery and fraud. If convicted, each could face several years in prison.

“This is a case about a public official who put her power up for sale, a public official who put greed first,” Assistant U.S. Attorney Abraham Fine told jurors, motioning to Thao, who was sitting behind him in a federal courthouse in downtown Oakland. “She was powerful, but she was also corrupt, and she betrayed her oath of office by taking bribes.”

In October 2022, according to prosecutors, 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 Thao’s political rivals. If she won, the new housing company would also give her partner, Andre Jones, a sham $300,000-a-year consulting gig to cover the couple’s rent and living expenses, according to prosecutors.

In return, prosecutors say, 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,” Juarez wrote in a text to Andy Duong, whose family owns the recycling firm, as the final ballots were tallied in November 2022. Thao ultimately won the mayor’s race by fewer than 700 votes.

“Money buys everything,” Duong replied. Prosecutors quoted from the texts in court documents.

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. Last year, they brought public corruption and bribery charges against Thao, 41; Jones, 55; 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 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 Juarez’s relationship with the Duongs soured, defense lawyers say, he began making up stories to frame them for a scheme that never existed.

In their opening statements, defense lawyers emphasized that Juarez has a motive to testify against the four defendants: to secure a reduced sentence for himself.

Jeffrey Tsai, a lawyer for Thao, told jurors, “The story that has been introduced to you is pure fiction.”

None of the four defendants or their lawyers agreed to be interviewed for this article.

In court filings, prosecutors painted a different picture. Citing text messages, secretly recorded phone calls and bank records, they portrayed the deal with Thao as part of a larger campaign by the Duong family businesses to secure contracts not just in Oakland but also in several other Bay Area cities.

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 council member, Bryan Azevedo, has pleaded guilty to accepting a cash bribe from Andy Duong in exchange for helping Duong’s housing venture secure contracts with that city.

Azevedo, who is expected to testify at 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 Thao and Jones — “a distinctive modus operandi,” according to prosecutors.

Thao’s relationship with the Duongs dates back to at least 2018, when she was running for City Council. Thao, the daughter of working-class Hmong American refugees who grew up in Stockton, California, 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 Thao agreed to the quid pro quo deal, prosecutors say. The Duongs and 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 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 Juarez’s iPhone that lays out each point of the deal with 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. Duong replied: “Not missing” and “All right.” Juarez then asked if they should share it with David Duong, and Andy Duong confirmed his father already was familiar with the terms.

Defense lawyers, however, argue that the deals that Juarez laid out never came to pass, and they frame his notes and texts as the ramblings of a bombastic businessperson 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.

In Wednesday’s opening statements, they offered a different interpretation of the events described by Juarez. They said that Juarez told Thao about the negative mailer campaign, but that she didn’t agree to it as part of a quid pro quo.

They also said that Jones had a real job with the housing company, for which he had regular meetings. The prosecution has said that the payments to Jones, totaling $95,000, were for the sham job that was part of the scheme, and began shortly after Thao won the election.

The defense lawyers also said that none of their clients were aware of what Juarez was telling the others and that he used pieces of the truth to spin tales of a bribery scheme that none of them had heard of.

“You cannot agree to a deal no one told you about,” Jeff Schenk, a lawyer for David Duong, said in his opening statement.

—

This article originally appeared in The New York Times.

By Soumya Karlamangla/Jim Wilson
c. 2026 The New York Times Company