Tuesday, December 1, 2020

Former San Francisco Recology exec accused of funneling $1m in bribes to ex-public works director Nuru

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Federal prosecutors charged a former San Francisco executive at waste management company Recology with bribery and concealing money laundering Wednesday, saying he funneled more than $1 million to Mohammed Nuru over the span of several years in an attempt to curry favor with the ex-Public Works director.

The charges against Paul Giusti, 64, represent the latest development in an investigation into corruption at San Francisco City Hall. Nuru was arrested in January on fraud charges after he was accused of bribing an airport commissioner and lying to the FBI.

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Authorities said it was the job of Giusti, who worked as the government relations manager for Recology’s San Francisco office, to make Nuru happy as the company attempted to negotiate rate increases for garbage collection. Nuru played a key role in the process as Public Works director.

Prosecutors said Nuru helped Recology obtain the fee increases, which were “approved by the city but paid by an unsuspecting public.”

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“Mohammed is the Director of DPW who ultimately signs off on our rates,” one unnamed Recology executive said in an email included as part of the criminal complaint against Giusti. “Needless to say, keeping him happy is important.”

The Chronicle could not reach Giusti for comment. A Recology spokesman said Giusti was fired in June after the company concluded that he “failed to live up to the ethical standards to which Recology holds itself.”

“Recology has not been charged with any wrongdoing, and has continued to cooperate with all government investigations,” Robert Reed, the company’s spokesman, said in a statement.

One way that Giusti and Recology sought to satisfy Nuru, federal officials said, was by providing a temporary job for Nuru’s son in 2015, 2016 and 2017, corresponding with the rate-increase application process. Nuru’s son, who is not named in the Giusti complaint, was later fired. A person involved in the decision told investigators it was because executives thought it would look bad for the company to employ the son of its regulator, according to federal officials.

Subsequently, Giusti allegedly sought to provide Nuru’s son an internship at an unnamed nonprofit where Giusti served on the board of directors. At that position, Nuru’s son was paid $18 an hour — $2 more than his supervisor. Despite the fact that his position required working with children, Nuru’s son did not complete fingerprint scans until nearly a month after he started working, officials said.

In 2018, Nuru’s son was reprimanded by his supervisor for telling children to “shut up,” and getting physical with a child, grabbing his arm and twisting it to the point where his hand “cracked,” authorities said.

Officials said Nuru’s son continued working with the nonprofit after that incident. The nonprofit sent Giusti an invoice for $14,000, which he allegedly arranged for Recology to pay.

Federal officials allege that Giusti used nonprofits like the Lefty O’Doul’s Foundation as an intermediary to funnel money from Recology to Nuru and Public Works. The pattern is a familiar one: Federal officials and the city attorney’s office have both signaled their respective investigations are probing the ways in which money might have flowed from contractors doing business with the city, to nonprofits and then to city departments, who may have used the money to pay for things like holiday parties and picnics.

Giusti, prosecutors said, also arranged for Recology to provide Nuru “with a continuous stream of additional money and benefits over a period of several years,” including contributions to the Public Works annual holiday party, which were disguised as charitable contributions to the Lefty O’Doul’s Foundation, a nonprofit children’s charity run by restaurateur Nick Bovis.

Bovis was arrested with Nuru and accused of attempting to bribe an airport commissioner for favorable treatment as they sought a concession for a chicken restaurant at San Francisco International Airport. Bovis agreed to plead guilty to felony charges and cooperate with federal investigators in May.

Prior to 2016, the Public Works holiday party was a “casual affair” for department employees, according to the complaint. Beginning that year, Nuru allegedly asked Bovis to use the foundation to organize and help pay for the party. It grew “larger and more elaborate” over time, according to Giusti’s criminal complaint. The cost of the holiday party in 2016 was $12,290, authorities estimated. By 2019, it exceeded $52,000.




Recology made its first contribution to the Lefty O’Doul’s Foundation for the party in late 2016, while it was applying for a rate increase for the next year, authorities said.

On Dec. 5, 2016, Nuru met with Giusti and another Public Works employee in charge of the application process for rate increases. That same day, a Recology check for $5,000 was prepared, ostensibly for a “holiday donation” to the Lefty O’Doul’s Foundation, authorities said.

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One week later, Recology prepared another $5,000 check, authorities said. The next day, the company submitted its application, which requested a 21.43% increase in residential waste collection rates. The increase over the previous years was dramatically lower — only 4% and 1%, authorities said.

The holiday party payments became more extravagant over the next few years. In October 2017, Recology contributed $15,000. In 2018 and 2019, the company made $20,000 contributions.

Giusti’s first appearance in court is scheduled for Monday. If convicted, he faces up to 30 years in prison and hundreds of thousands of dollars in fines.

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