SAN FRANCISCO (CBS SF) — Recology San Francisco, the city’s waste and recycling contractor, will lower rates and reimburse customers for overcharges in a $100 million lawsuit settlement with the city attorney’s office.

Recology was one of two dozen companies, non-profits and individuals subpeonaed as part of a wide-ranging corruption probe linked to former city Public Works Director Mohammed Nuru, along with former Public Utilities Commission General Manager Harlan Kelly, former Department of Building Inspection Director Tom Hui, and others.

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Former Recology executive Paul Fredrick Giusti is among those charged; federal prosecutors allege Giusti engaged in a long-term scheme to bribe Nuru to secure his support to implement garbage fee hikes paid by the public.

City Attorney Dennis Herrera announced Thursday Recology will reimburse ratepayers $94.5 million in overcharges and interest, as well as lower residential and commercial refuse rates starting on April 1, allowing ratepayers to save $6.1 million from April 2021 through June 2021.

Recology will also make a $7 million settlement payment to the City under the California Unfair Competition Law and the San Francisco Campaign and Governmental Conduct Code, Herrera said. In addition, Recology will be under a four-year injunction prohibiting the firm from making any gift to city employees or non-profits at the behest of city officials.

A joint public integrity review by the City Attorney’s Office and the Controller’s Office is ongoing, touched off by the arrest of Nuru by the FBI in January 2020. Among the allegations, Nuru regularly solicited funds from Recology for his own benefit and that of city employees. Recology and its affiliated companies, Sunset Scavenger Company and Golden Gate Disposal & Recycling Company, regularly provided gifts of money, meals, and accommodations to city employees, allegedly to influence decisions affecting Recology.

As the Director of Public Works, Nuru was responsible for ensuring that the ratemaking process for refuse collection was fair and accurate, and would make recommendations on whether to approve rate increases.

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“With this legal action, we are making San Francisco ratepayers whole and sending a clear message that cozying up to regulators won’t be tolerated,” Herrera said in a prepared statement. “Mohammed Nuru may have had his challenges keeping the streets clean, but he clearly excelled at cronyism, slush funds, and indifferent oversight. While ratepayers were taking a hit to their wallets, Mr. Nuru was soliciting money for lavish parties from the company he was supposed to be regulating. It’s outrageous. They say a fish rots from the head. Well, the head of Public Works was Mr. Nuru. He has disgraced all of the dedicated public servants at Public Works who go above and beyond every day for the people of San Francisco.”

Word of the settlement came on the same day the city filed a lawsuit against Recology. Herrera noted that Recology was forthcoming and cooperative with his office as soon as Nuru’s alleged dealings became known.

Recology residential or business customers who have had active accounts July 2017 and March 30, 2021 are eligible for refunds for overcharges, along with 5% interest.

San Francisco Mayor London Breed issued the following statement following word of the settlement:

“I want to thank City Attorney Dennis Herrera and his staff for their work defending the interests of the people of San Francisco. This is an appalling case for our residents and businesses who have been overpaying their trash rates for years. The good news is that thanks to the City Attorney, they will be getting that money back now. Not only will this make a difference for people who are struggling in this moment, but also it sends a message to everyone—from the corporations and city contractors doing business with the City to the individuals working on the City’s behalf—that we will hold everyone accountable. I’m committed to that, and I know our City Attorney is as well. This is an important step as part of our long road to restoring the public trust.”

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