SAN FRANCISCO (CBS SF) — An executive with waste and recycling company Recology San Francisco has been charged with bribery and money laundering as part of the corruption scandal embroiling the city’s Public Works Department and other city departments.
Paul Fredrick Giusti, 64, the company’s former Group Government & Community Relations Manager, was charged in a federal criminal alleging he engaged in a long-term scheme to bribe former Department of Public Works Director Mohammed Nuru to secure his support to implement garbage fee hikes paid by the public.
The charges were announced Wednesday by U.S. Attorney for the Northern District David Anderson, along with IRS Criminal Investigation Special Agent in Charge Kareem Carter, and FBI Special Agent in Charge Craig D. Fair.
The complaint alleges that Giusti provided Nuru with a continuous stream of money and benefits, ultimately worth over $1 million, to influence Nuru to act in Recology’s favor.
According to the complaint, Giusti concealed the bribes as “holiday donations” from Recology to the Lefty O’Doul’s Foundation for Kids, a non-profit organization for underprivileged children in San Francisco. Nick Bovis, the head of the foundation, used the money to pay for an annual holiday party organized by Nuru for select DPW employees and other invited guests, the complaint alleged.
The complaint also alleges Giusti arranged a job for Nuru’s son at Recology and, once that benefit was discovered, terminated him and promptly secured for him a Recology-funded internship at a non-profit, paid for by a grant for a summer youth internship program.
In addition, Giusti allegedly arranged for Recology to secretly pay for the funeral of a DPW employee by having a non-profit pay the mortuary bill and creating a fake donation invoice, the complaint says.
The so-called donations and other benefits Giusti provided to Nuru came during times DPW would be deciding on Recology’s requests for assistance and approvals, particularly Recology’s successful 2017 application to increase rates to San Francisco residents for garbage service, according to the complaint.
In a prepared statement, Anderson said, “These bribes were laundered through non-profit organizations to disguise their source and to create the false appearance of a legitimate charitable intent. In return for these bribes, Nuru helped Recology obtain garbage fee increases approved by the City but paid by an unsuspecting public. As our investigation continues, each charge sheds new light on the ways and means of City Hall corruption.”
“Following the money is key in a case like this,” said Carter in a statement. “The defendant used non-profit organizations to layer complex financial transactions in an attempt to conceal the payments to a city official. IRS CI will continue to work with our law enforcement partners to ensure that any individual or company involved in this scheme shall be held accountable for their actions and not go unpunished.”
The charges against Giusti make him the ninth defendant charged in the widening corruption scandal at DPW, which include Nuru, Bovis, former Mayor’s Office of Neighborhood Services Director Sandra Zuniga, contractors Walter Wong, Balmore Hernandez and Florence Kong, and Oakland engineering firm execs Alan Varela and Bill Gilmartin. A number of defendants have pleaded guilty and are cooperating in the case against Nuru.
The scandal has also prompted anti-corruption legislation by San Francisco supervisors that closes loopholes allowing city department heads to solicit donations from people seeking contracts or land use permits.
Recology sent the following statement following word of the charges: “Recology is aware of the charges filed against its former employee, Paul Giusti. An investigation by the independent members of Recology’s Board of Directors concluded that Mr. Giusti, Recology’s former San Francisco Community Relations Manager, failed to live up to the ethical standards to which Recology holds itself. Recology placed Mr. Giusti on unpaid leave and ended his employment in June of this year.
“Recology has not been charged with any wrongdoing, and has continued to cooperate with all government investigations.”
Giusti was scheduled to make his initial appearance in federal court in San Francisco on November 23.