San Francisco's trash and recycling company has admitted to bribing former SF Public Works Director Mohammad Nuru to the tune of $900,000, and it does so just as the federal government was charging it with conspiracy to commit honest services fraud.
Recology Inc., the larger parent company that is based in SF, has not been charged with anything, however three of Recology's subsidiaries, known as the SF Recology Group — consisting of Recology San Francisco, Sunset Scavenger Company, and Golden Gate Disposal & Recycling Company — have been charged with conspiring to bribe Nuru, who served as their regulator in city government. And the companies have agreed to a deferred prosecution deal that comes with conditions including a $36 million fine, and cooperation on the government's ongoing corruption case.
As SFist reported in July, one former Recology exec charged in the bribery scheme, former community relations manager of the SF Recology Group Paul Giusti, took a plea deal and was already cooperating with the feds. The bribes reportedly came in the form of $150,000 annual payments, paid in $30,000 installments from 2014 into 2019, to an unnamed San Francisco non-profit organization. (This may or may not be the SF Parks Alliance, but prosecutors believe the organization in question held accounts that were in Nuru's control — and a public integrity review by the SF Controller's office last year highlighted potential "pay-to-play risk" with the Parks Alliance and several other city-linked non-profits.)
Recology SF is now admitting, as part of today's deal, that Giusti made these payments, and that Giusti also funneled "$60,000 to fund Nuru’s annual DPW holiday bash from 2016 to 2019, disguised as 'holiday donations' to the Lefty O’Doul’s Foundation for Kids." These payments were revealed early on in the scandal, as Lefty O'Doul's restaurateur Nick Bovis was also being charged alongside Nuru.
"San Francisco citizens were victimized for years in a bribery scheme involving public contractors and a powerful, corrupt San Francisco public official,” said Acting United States Attorney Stephanie M. Hinds in a DOJ release. "San Francisco citizens expect and deserve honest services from its government. Today, the SF Recology Group and its parent company Recology, Inc. are taking positive steps to rectify that flagrant wrong and have committed to full cooperation in the ongoing investigation into San Francisco City Hall corruption."
As part of the deferred prosecution agreement, which is still subject to court approval, Recology SF and its affiliates are also agreeing to implement an "enhanced corporate compliance program," and provide the government with annual reports on its implementation over the next three years. Failure to comply with the conditions of the agreement could put the companies back in trouble during that three year period, otherwise the charges will be dropped.
What's not quite clear are the fates of individual executives Paul Giusti and his former supervisor, John Porter, who was also charged by the feds in April — and unlike Giusti, Porter has not taken a plea.
According to the feds, "SF Recology Group admits that Giusti made these bribes with the knowledge and approval of his supervisor Porter and, before Porter was Giusti’s supervisor, with the knowledge and approval Porter’s predecessor."
Separate from the bribery charge, Recology SF agreed in May to settle a separate issue with the city and waste-collection customers — this having to do with overcharges that they say were a clerical error they discovered themselves, though the city attorney's office kind of took credit. Under that agreement, Recology paid $7 million to the city stemming from a miscalculation of garage collection rates, and an average of $190 per ratepayer.
Photo via Recology SF