Oakland Corruption Trial: FBI Agent Expected to Testify on Backdoor Dealings in City Hall
After testimony in the corruption trial involving former Oakland Mayor Sheng Thao revealed the origins of the FBI’s city hall probe, a federal agent is expected to return to the witness stand Thursday, potentially shedding new light on how the agency’s investigation unfolded.
FBI Special Agent Katherine Barclay told the court Monday the agency collected phones, tablets, computers and other physical evidence when it executed search warrants in June 2024 at the home Thao shared with her longtime romantic partner Andre Jones, as well as those of recycling executive David Duong and his son Andy Duong. The raids also included the Oakland waterfront headquarters of the Duongs’ company, California Waste Solutions. The four codefendants are facing bribery, conspiracy and fraud charges. All four have pleaded not guilty.
The FBI’s investigation began in February 2023, Barclay said, following a tip from Oakland’s Public Ethics Commission that businessman and political operative Mario Juarez, a long time ally of the Duongs, had printed campaign mailers against Thao’s opponents and was “expecting things in return” from the candidate those mailers were intended to support.
Juarez has pleaded guilty to participating in the bribery scheme and is expected to serve as the government’s star witness later in the trial.
The ethics commission’s tip led the FBI to obtain a search warrant to access Juarez’s Apple iCloud, which included a document enumerating the deal he allegedly struck with the Duongs and Thao. Prosecutors say Thao agreed that if elected, she would help extend California Waste Solutions’ recycling contract with the city of Oakland, appoint favorable city hall staffers to director-level positions and commit the city to contracting with the housing start-up, Evolutionary Homes, that Andy Duong and Juarez cofounded. In exchange, prosecutors allege, Andy and David Duong agreed to fund a negative mailer campaign against Thao’s 2022 mayoral opponents and pay $300,000 to Jones for a no-show job.
Thao’s attorneys have questioned whether those mailers actually helped Thao’s campaign, with defense attorney Jeff Tsai asking Thao’s former campaign staffer, Noah Finneburgh, during his testimony Monday if the campaign was happy about the ads when they dropped.
Finneburgh said he was unhappy with them, and that “people recognized it was an issue.”
Tsai suggested that the ad of Taylor, which was photoshopped to darken his skin, played into racist tropes against Black men and could have alienated voters Thao would have wanted to retain.
Prosecutors used Barclay’s testimony Monday to admit evidence from multiple of the defendants’ devices seized in their June 2024 raids and files extracted from them. WhatsApp messages from Andy Duong’s phone, which was confiscated from his home during the 2024 raid, appear to reveal how some of the promises prosecutors allege the codefendants made that played out once Thao took office.
In February 2023, a month after Thao’s inauguration, Juarez and Andy Duong set up a meeting at California Waste Solutions between David Duong and Larry Gallegos, a project manager in the city’s economic workforce development department at the time.
Prosecutors allege that Gallegos was one of the candidates who Thao agreed to elevate to a leadership position in Oakland City Hall at Andy Duong’s and Juarez’s request.
In messages Andy Duong and Juarez exchanged, they appear to suggest that at the meeting, Gallegos should assure David Duong that he is “on board” with supporting California Waste Solutions (CWS) if he’s ultimately appointed director of Oakland’s Department of Housing and Community Development.
“And the appointment is a direct result of the lobbying taking place,” Juarez messaged to Andy Duong.
“Of course,” Andy Duong replied. “It’s us who got him appointed.”
“CWS extension and Army Base deal are priorities,” Juarez added, saying of Gallegos, “he said he knows and he will deliver.”
In their opening statement, David Duong’s defense argued that the CWS owner didn’t know about the deal his son and Juarez allegedly made with Thao and Jones. Similarly, Thao’s defense has suggested that Thao had no knowledge of any bribery scheme promising city contracts and staff appointments — even if it was being discussed by her co-defendants.
Weeks later, on March 10, 2023, the city’s interim city administrator appointed Gallegos the deputy director of Oakland’s housing department, despite concerns from Thao’s former chief of staff, Leigh Hanson. She testified in federal court last week that she raised her concerns with the mayor that Gallegos was not qualified and believed they were on the same page, until she heard he would be appointed.
During another exchange in late March 2023, Andy Duong and Juarez appear frustrated with Thao and Jones about going over their heads to communicate with David Duong and alter the terms of their agreement, leading Juarez to send Andy Duong a copy of the “Deal Points” note that the FBI found early in its investigation laying out the alleged quid pro quo.
“We invested money,” Juarez wrote to Andy Duong on March 26. “Time. Talent.”
Later that day, Andy Duong replied to Juarez: “Aint nothing free or [sic] front cuz we did all that to help her ass win.”
After Barclay finishes her testimony, former Assistant City Administrator LaTonda Simmons and former City Administrator Jestin Johnson are expected to take the stand. Thao appointed Johnson in May 2023, and he served throughout her mayorship. He resigned from the role in May amid an unrelated text messaging scandal.
Under Oakland’s governance structure, the administrator oversees city departments and carries out most day-to-day government functions. But they are hired and fired by the mayor, who often gives input on major decisions, including hiring department heads and agreeing to significant contracts.
In his opening statement, Fine said Johnson will testify that Thao directed him to meet with David Duong multiple times and tour Evolutionary Homes’ showroom — allegedly the only homeless housing vendor she asked him to visit.
KQED’s enterprise and accountability reporter Alex Hall contributed to this report.