Federal prosecutors have abandoned their three-year scrutiny in a public corruption court case involving San Francisco city officials and former executives with Recology, the North Bay’s waste hauler.
In an Oct. 17 hearing in the city’s U.S. District Court, Federal Judge William Orrick granted an order to dismiss an impending bribery charge, ruling the requirements of a deferred prosecution deal had been met.
Nearly five years ago, the San Francisco-based company became embroiled in a bribery case labeled by the feds as one of the largest corruption scandals in that city’s history.
Paul Giusti, Recology’s government affairs manager, was accused of concocting bribes with Mohammad Nuru, the former San Francisco Department of Public Works director, in exchange for business favors. One bribe included $60,000 paid by Recology to fund four lavish holiday parties for Nuru and supporters.
The far-reaching conspiracy led to a raid by Federal Bureau of Investigation agents in January 2020. That month, charges were filed against Nuru, resulting in a guilty plea and culminating in a sentence of seven years in prison and a $30,000 fine, the court document reads. In a separate filing, Giusti was also ordered to pay that fine and sentenced to three years of probation. Another Recology manager, John Porter, faced the same sentencing court order.
As part of its “deferred prosecution agreement” (DPA) made with the U.S. Department of Justice, the company agreed to pay a $36 million fine.
DOJ officials indicated in this latest court filing that Recology had satisfied the DPA set in 2021 “in both letter and spirit.”
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In making his Oct. 17 ruling, Judge Orrick said he believed more people were involved in the corruption case, according to Waste Dive, a Washington, D.C.-based industry publication that covered the hearing live.
“I’m going to grant the motion, but I wanted to underscore for you and emphasize how corrupt the practice was that led to the criminal charges, and how skeptical I am that the criminal conduct within Recology didn’t go higher than Mr. Giusti and Mr. Porter. I don’t believe that,” he said, according to Waste Dive.
The waste hauler, which serves about 243,000 customers in Sonoma, Marin and Solano counties, also agreed to overhaul the corporate culture. In addition, the company was told to implement ethics training and submit annual reports to the government, among other measures.
The case ensnared its three companies: Golden Gate Disposal & Recycling, Recology San Francisco and its Sunset Scavenger company, which offered compost, recycling, and landfill collection services.
“Recology’s crimes were a stunning betrayal of the duties that it owed to the city of San Francisco, its employees and shareholders, and its customers,” prosecutors concluded in their filing.
But since the corruption was exposed, Recology made what was described as meaningful reform, explaining: “The SF Recology Group has undertaken significant and meaningful efforts to change their corporate culture,” according to the latest filing.
Cary Chen, who was the chief legal officer, is now the president under CEO Salvatore “Sal” Coniglio, who replaced CEO Michael Sangiacomo, among other departures.
Current Recology management, through spokesman Robert Reed, provided a statement to the Business Journal: “Since 2020, Recology has installed new leadership, hired a new CEO and built a substantial and ongoing compliance program that includes regular training for employees, enhanced training for managers and communications to all about our commitment to doing business ethically and lawfully.”
Recology, which started in the Bay Area in 1935, employs more than 3,700 employees managing accounts in California, Oregon and Washington. The waste management company conducts curbside collection services for recycling, composting and trash. It operates a recycling facility in Santa Rosa as well as composting outposts in rural Solano County, east of Vacaville.
As a privately held company, Recology declined to provide its annual revenue. The business data research website, Zippia, lists its annual revenue as $1 billion.
Susan Wood covers agriculture, law, cannabis, production, transportation as well as banking and finance. She can be reached at 530-545-8662 or [email protected]
Staff writer Cheryl Sarfaty contributed to this story.
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