It looks like federal investigators have snagged a slightly bigger fish in the unfolding SF City Hall corruption scandal that began with the January arrest of former Department of Public Works head Mohammed Nuru, and it's an executive at longtime San Francisco waste management vendor Recology.
Paul Giusti, Recology's former Group Government & Community Relations Manager, has been charged with multiple counts of bribery and money laundering in what the FBI says was a long-term scheme to curry favor with the city — and in particular with Nuru. As KPIX reports, the charges were announced Wednesday afternoon by U.S. Attorney for the Northern District David Anderson, IRS Criminal Investigation Special Agent in Charge Kareem Carter, and FBI Special Agent in Charge Craig D. Fair — and you can read the full complaint here.
According to Mark Twitchell, Special Agent with IRS Criminal Investigations, Giusti provided multiple favors and gifts to Nuru through various means, often around the time that Recology was coming up for a contract renewal or needed a new approval from the City of San Francisco. And the feds say the charges against Giusti are based on "various meetings and intercepted communications" obtained by the FBI.
In one instance from 2018 described in the criminal complaint, Giusti allegedly provided a $20,000 gift to Nuru to throw the DPW holiday party, disguised as a "holiday donation" to the Lefty O'Doul's Foundation for Kids. (Back in February we learned that this was one form of palm-greasing that the City Attorney's Office was investigating, namely the funding of these holiday parties through private donations that were being paid through the foundation managed by restaurateur Nick Bovis, who was arrested alongside Nuru in January.) The Chronicle reports via the complaint that the DPW holidays parties grew more and more elaborate between 2016 and 2019, ultimately costing upwards of $52,000.
The complaint also alleges that Giusti set Nuru's son up with a job at Recology, and when the company found out about the favor and let the son go, Giusti went on to get him a Recology-funded internship at a non-profit. And in another instance cited in the complaint, Giusti allegedly arranged to pay for the funeral of a DPW employee, laundering the payment through a non-profit.
The total amount of the bribes, according to the complaint, was $1 million.
"In return for these bribes, Nuru helped Recology obtain garbage fee increases approved by the City but paid by an unsuspecting public," Twitchell writes in the complaint. "As our investigation continues, each charge sheds new light on the ways and means of City Hall corruption."
Giusti now becomes the ninth individual charged in the growing scandal, which has also brought charges to Nuru's longtime girlfriend and head of the Mayor's "Fix-It" team, Sandra Zuniga, and former DPW employee turned city contractor Balmore Hernandez.
The owner of another waste management company, Florence Kong — who owned a construction debris recycling firm that contracted with the city — took a plea deal last month, along with Hernandez. And a pair of local businessmen have been charged with seeking a backroom deal from Nuru to build an asphalt recycling plant in the city.
In total, according to one estimate, Nuru was responsible for doling out $10.5 million in city contracts with little or no oversight. This scandal inspired this election's Prop B, which passed, and which will establish both a separate city department from Public Works to oversee street cleaning, and establish for the first time a citizen commission to oversee how Public Works contracts are awarded.
Anderson has repeatedly stressed that the federal probe would be ongoing and would continue to seek charges relating to City Hall corruption.
"Following the money is key in a case like this," said IRS Agent Carter in a statement on the charges against Giusti. "The defendant used non-profit organizations to layer complex financial transactions in an attempt to conceal the payments to a city official. IRS CI will continue to work with our law enforcement partners to ensure that any individual or company involved in this scheme shall be held accountable for their actions and not go unpunished."
Giusti makes a court appearance next week, on November 23, and he faces as much as 30 years in prison.