Date: April 20, 2021
Source: News Room
In a criminal complaint unsealed last week, federal investigators accuse Recology Vice President John Porter of bribing disgraced former head of San Francisco Public Works Mohammed Nuru in exchange for his help securing fee and rate increases for the company's waste and recycling services. This resulted in overcharging city ratepayers to the tune of $100 million, as was recently revealed in a lawsuit filed against the company by the City Attorney's Office.
Federal prosecutors say that as far back as 2013, Porter, along with another Recology official already charged with bribery, Paul Giusti, used a series of San Francisco non-profits to funnel more than a million dollars into off-the-books funds controlled by Nuru. Porter is said to have signed checks funding lavish Public Works holiday parties.
Recology and San Francisco Reach Settlement (https://www.wasteinfo.com/news/wbj20210317D.htm), March 5, 2021.
Former Recology Executive Charged with Bribery (https://www.wasteinfo.com/news/wbj20201125B.htm), November, 2020.
April 15, 2021
Second Trash Company Executive Charged With Bribing San Francisco Public Regulator
Federal Probe Of San Francisco City Hall Corruption Continues As Another Recology Executive Is Charged With Bribery
SAN FRANCISCO - John Francis Porter, the former Vice President and Group Manager of Recology's San Francisco Group, has been charged in a federal criminal complaint unsealed today with bribing former Director of San Francisco Department of Public Works (DPW) Mohammed Nuru and with money laundering, announced Acting United States Attorney Stephanie Hinds, Internal Revenue Service-Criminal Investigation Acting Special Agent in Charge Michael Daniels, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
The complaint unsealed today alleges that Porter, 37, of San Francisco, bribed Nuru and participated in laundering the proceeds of the bribe as part of an alleged years-long scheme to defraud the public of its right to honest services. Porter was Group Controller and later Vice President and General Manager of Recology's San Francisco Group, which provides refuse collection and disposal services in the City of San Francisco. Porter was a central player in the scheme detailed in the complaint that provided Nuru, then the DPW Director, with a continuous stream of money and benefits to influence Nuru to engage in official acts benefitting Recology.
Nuru resigned as the Director of San Francisco's DPW after being charged in a January 16, 2020, federal complaint with honest services fraud for a scheme to bribe a San Francisco Airport Commissioner. The prosecution of Nuru remains underway.
Porter is the second Recology employee charged. Paul Giusti, the former Recology San Francisco Group Government and Community Relations Manager who reported to Porter, was charged in a November 18, 2020, federal complaint with bribery and money laundering for his role in the same conduct described in today's complaint allegations against Porter. Giusti's prosecution is continuing.
"Once again a person employed by a company contracting with San Francisco has been charged with bribing a San Francisco City Hall official with more than $1 million of funds and benefits," said Acting U.S. Attorney Stephanie M. Hinds. "A person who pays a bribe is as criminally liable as the public official who takes it. Our investigation of San Francisco City Hall corruption continues. If you have information about corruption among San Francisco public officials or contractors with San Francisco, reach out to the FBI. Your cooperation is important."
"Rooting out public corruption remains one of the highest priorities for IRS - Criminal Investigation," said Acting Special Agent in Charge Michael Daniels. "IRS - Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners. Pooling the skills and resources of each agency makes a formidable team as we investigate allegations of criminal wrong-doing."
"John Porter is the eleventh individual charged in the FBI's probe into public corruption in San Francisco City Hall," said FBI Special Agent in Charge D. Fair. "This complaint reflects the FBI's commitment to hold corporate executive leadership accountable for their actions. The FBI will continue to investigate all individuals, regardless of their position, who seek to improperly influence public officials for corporate gain at the expense of the public. If you have any information on bribery, corruption, or other illegal acts, please contact the FBI."
The specific charge of the complaint alleges that in the summer of 2018, Recology sought to raise the "tipping fees" it charged the City of San Francisco for dumping materials at the Recology Sustainable Crushing facility. During the summer and fall of 2018, the complaint alleges, Porter sought Nuru's assistance with Recology's efforts to increase the tipping fee. Porter enlisted the help of his subordinate Giusti, who had a close relationship with Nuru.
The complaint states that Porter emailed Nuru seeking assistance in obtaining the tipping fee increase on November 26, 2018. Thereafter, Giusti agreed to give Nuru a bribe of $20,000 to influence his official actions on the proposed increase. The complaint describes that Porter gave written approval for Recology to issue a $20,000 check described as a "holiday donation" to the Lefty O'Doul's Foundation for Kids, a non-profit organization to help underprivileged San Francisco children run by Nick Bovis. Giusti provided the bribe money to the Lefty O'Doul's Foundation, and Bovis used the Recology money to pay for Nuru's elaborate DPW holiday party, not to help underprivileged San Francisco children. Despite the bribe, the attempt to increase the tipping fee was ultimately unsuccessful. Bovis pleaded guilty to honest services fraud in May 2020 for bribing Nuru.
The complaint further describes Porter's role in the Recology San Francisco Group's efforts, acting through executives including Giusti and Porter, to direct benefits to Nuru totaling over $1 million to influence Nuru, who was Recology's regulator. Recology had an ongoing need for Nuru's approvals, including for rate increases for residential garbage collection. The complaint cites an email that Porter sent in 2015 to a colleague at Recology: "Mohammed is the Director of the DPW who ultimately signs off on our rates. Needless to say, keeping him happy is important."
To keep Nuru happy, the complaint alleges that Giusti, with the approval of Porter or Porter's immediate predecessor, arranged for Recology to provide Nuru with a stream of benefits over years. Porter ultimately approved $55,000 to fund Nuru's DPW holiday parties in payments disguised as charitable Lefty O'Doul's Foundation donations. The complaint also describes Porter's role in approving hundreds of thousands of dollars over years in Recology payments made, at Nuru's directions, to a San Francisco non-profit, ostensibly for a DPW program called "Giant Sweep." That non-profit held the money for about a week or two, then took a 5 percent cut and sent the money at Nuru's direction to accounts controlled by Nuru at another non-profit. Recology's payments to Nuru were closely tied in time to specific needs for Nuru's assistance and approval.
Porter is charged with one count of bribery, in violation of 18 U.S.C. § 666(a)(2), and one count of laundering the proceeds of honest services fraud, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). If convicted of bribery, he faces a maximum penalty of 10 years in prison and a fine of $250,000. If convicted of concealment money laundering, he faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, or both. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Porter is expected to make his initial appearance in federal court in San Francisco on April 20, 2021, at 10:30 a.m. before U.S. Magistrate Judge Jacqueline Scott Corley.
Thus far in the San Francisco City Hall corruption probe, 11 defendants have been charged, and multiple defendants have pled guilty. Most recently, Sandra Zuniga, 45, of South San Francisco and the former Director of both the San Francisco Mayor's Office of Neighborhood Services and San Francisco's Fix-It Team, entered her plea of guilty to a charge of conspiring to launder money with the former DPW Director Muhammed Nuru. Zuniga entered her guilty plea in a plea agreement that remains partly under seal in which she agrees to cooperate with the FBI in the public corruption investigation relating to San Francisco government.
The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney's Office. The case is being investigated by IRS Criminal Investigation and the FBI.