Federal investigators say a California business owner used a karaoke-bar-turned-brothel to funnel campaign donations to Oakland Mayor Sheng Thao and other members of the city’s political class.
Andy Duong, whose family works as Oakland’s curbside recycling contractor, is accused of having surrogates hand out $18,000 to various political candidates from 2016 to 2018, according to court documents obtained by Bay Area news outlets.
An undercover sting at the brothel in 2018 led to three arrests over accusations of drug and human trafficking. A former manager arrested at the front business is one of the suspected “straw donors” in Mr. Duong’s alleged fundraising scheme.
Mr. Duong’s home was raided by federal agents on June 20, as were the homes of Mayor Thao and Mr. Duong’s father, David, who founded the recycling business California Waste Solutions.
A representative for the Duongs told the San Jose Mercury News that the family are “good citizens who always obey the law."
Ms. Thao, who is facing a motivated recall effort, defended herself from any suspected illegal behavior last week during a press conference.
“The straw donors made their donations at the behest of the scheme's authors and were reported as the true donors on public campaign finance filings but were surreptitiously reimbursed for their contributions,” according to a 2021 court filing into the ethics investigation into Mr. Duong and an associate. The court filing was first uncovered this weekend by the news outlet Oaklandside.
“The authors of this scheme engaged in this activity in a deliberate effort to circumvent various restrictions on the true source and amount of campaign donations,” the filing continued.
Oakland law prohibits city contractors from giving money to political campaigns.
Ethics investigators said former Music Cafe manager Charlie Ngo, who was arrested during the crackdown on the brothel, made over $5,000 in donations to local political campaigns despite not having enough money in his bank account.
A filing from the Fair Political Practices Commission said Mr. Ngo only had $50 to his name when he made a $700 donation to one candidate, and only had $5 in his bank account when he made an $800 contribution to a now former councilmember.
Investigators said Mr. Ngo “made a large cash deposit just before or after writing his check.”
Mr. Ngo gave $800 to Ms. Thao’s city council campaign in 2018. She received $2,400 from people linked to the now-shuttered cafe while she was running for city council, records show.
The former manager had his brothel-related charges dropped by Alameda County prosecutors in 2022.
Ethics officials told The Washington Times that they are no longer seeking to subpoena Mr. Ngo, but the investigation into Mr. Duong remains active.
Mr. Duong was not the listed owner of the Music Cafe, but investigators said they obtained text messages between Mr. Duong and State Assemblyman Ash Kalra where the recycling contractor talked about setting up Mr. Kalra at “his karaoke club.”
Ms. Thao was adamant in a press conference last week that she would be cleared of wrongdoing in the federal investigation.
"I want to be crystal clear: I have done nothing wrong," Ms. Thao said. "I can tell you with confidence that this investigation is not about me. I have not been charged with a crime, and I am confident that I will not be charged with a crime because I am innocent."
The mayor retained a former federal prosecutor as her attorney while the investigation continues. Authorities still haven’t disclosed why they raided the four homes last month.
Ms. Thao also called out the timing of the federal search, which was executed a day after organizers seeking to recall the mayor secured enough signatures to put her on the ballot this fall.
Recall supporters argue Ms. Thao has contributed to last year’s crime wave and dampened economic activity in the East Bay.
Alameda County District Attorney Pamela Price is facing her own recall election this fall over accusations that she is too offender-friendly in the courtroom.
Both Ms. Thao and Ms. Price were elected in 2022.
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