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Press Release

Three San Francisco Garbage Companies Admit Bribery And Pay $36 Million To Resolve Federal Investigation

For Immediate Release
U.S. Attorney's Office, Northern District of California
Recology SF Group Spent More Than $900,000 to Bribe Its Regulator, Former SF Department of Public Works Director Mohammed Nuru

SAN FRANCISCO – Three trash disposal companies that serve San Francisco, all subsidiaries of Recology Inc., were charged today in federal court with conspiracy to commit honest services fraud and have agreed to pay $36 million in criminal penalties, to revamp their corporate structure, and to cooperate fully in ongoing law enforcement and regulatory investigations, announced Acting United States Attorney Stephanie M. Hinds, Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, and Internal Revenue Service Criminal Investigation Acting Special Agent in Charge Michael Daniels.

“San Francisco citizens were victimized for years in a bribery scheme involving public contractors and a powerful, corrupt San Francisco public official,” announced Acting United States Attorney Stephanie M. Hinds.  “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.”   

“Today’s resolution is the result of years of hard work by the FBI and its partners to combat corruption in San Francisco,” said Craig D. Fair, Special Agent in Charge of the FBI San Francisco Field Office.  “While engaging in bribery, SF Recology Group prioritized money over the trust of their customers. The FBI remains committed to seeking out instances of public corruption and holding those who violate federal law accountable for their actions.”

“The significant amount of illegal kickbacks SF Recology Group paid to Mohammed Nuru demonstrates a corrupt and reprehensible cheating of the American public,” said IRS Criminal Investigation Acting Special Agent in Charge Michael Daniels.  “It is unacceptable and illegal to help yourself to public funds, but if you do, know this: IRS Criminal Investigation will be there waiting to seek justice on behalf of the citizens of San Francisco.”

The federal information filed today alleges that the companies Recology San Francisco, Sunset Scavenger Company, and Golden Gate Disposal & Recycling Company – collectively referred to as the SF Recology Group – conspired to bribe the former Director of San Francisco’s Department of Public Works (DPW), Mohammed Nuru.  The entities of the SF Recology Group are each privately-held companies of their parent company Recology Inc., which is headquartered in San Francisco (the City) and provides trash collection services for the City’s residents, businesses, and government.  During the conspiracy, Mohammed Nuru presided as Director over DPW.  DPW had an annual budget of more than $350 million and was one of San Francisco’s largest municipal operations.  Nuru had substantial influence over the SF Recology Group’s business with the City, including the ability to influence its contract rates and to approve or deny its proposed operational changes.  

The criminal investigation and prosecution against the SF Recology Group is being resolved with a deferred prosecution agreement.  In the agreement, which is subject to court approval, the SF Recology Group admits the allegations against it and that it conspired to bribe DPW Director Nuru from 2014 through January 2020, when Nuru was arrested and charged.  The SF Recology Group at the time employed Paul Giusti as its Group Government and Community Relations Manager.  Giusti reported to John Porter, the Vice President and General Manager of the Group and, before Porter assumed that position, to Porter’s predecessor. 

In the agreement, the SF Recology Group admits that Giusti and others directed a stream of benefits to Nuru, including financial contributions, services, gifts, and other things of value, in exchange for Nuru taking official actions and positions favoring the SF Recology Group’s business and contracts with the City.  The payments and benefits that the SF Recology Group provided to Nuru included the following: (1) $150,000 per year, in $30,000 installments, from 2014 through the end of 2019, to a San Francisco non-profit organization knowing that Nuru could ultimately control how the money was spent; (2) $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; (3) a job for Nuru’s son at a SF Recology Group company; (4) SF Recology Group-funded internships for Nuru’s son in the summers of 2017 and 2018 at a San Francisco non-profit on whose board Giusti served; and (5) other gifts, including a two-night stay at a New York hotel for Nuru and another high-ranking city official totaling $865.34 per room.  The 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. 

The deferred prosecution agreement requires the SF Recology Group to pay a $36 million criminal fine.  In addition to the $36 million fine, the deferred prosecution agreement obligates Recology, Inc. to fully cooperate with government investigations, to implement an enhanced corporate compliance program, and to provide annual reports to the United States Attorney’s Office on implementation and remediation. 

If Recology, Inc. or the SF Recology Group fail to completely perform or fulfill each of their obligations under the agreement during the agreement’s three year term, the U.S. Attorney’s Office can pursue criminal charges for the charged offense and other conduct.

Dates for arraignment of the SF Recology Group and further proceedings before the United States District Court have not yet been set.

Giusti and Porter were each charged earlier in this investigation.  Giusti was charged with bribery and money laundering on November 18, 2020, and he recently pleaded guilty to one count of conspiracy to bribe a local official and commit honest services fraud and agreed to cooperate with federal investigators (case # 21-0294 WHO).  On April 13, 2021, Porter was also charged with bribery and money laundering (case # CR 21-70609 MAG).  Porter’s criminal prosecution remains underway. 

The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office.  The case is being investigated by the FBI and IRS Criminal Investigation.         

Updated September 9, 2021

Public Corruption