Two nonprofits that San Francisco has awarded millions in funding have been directly linked to the corruption scandal surrounding former Public Works head Mohammed Nuru for the first time, in a newly unsealed plea agreement.
In the agreement, signed in 2021, former Recology executive Paul Giusti admits that he sought to influence Nuru’s official actions by directing payments from the waste company to both the Clean City Coalition and the Asian Pacific American Community Center. Federal prosecutors moved to unseal the agreement in February, and the filing was later referenced as part of the case against another Recology executive charged in the scandal, John Porter.
The revelations of the involvement of the two nonprofits—which have active city contracts worth about $7.5 million combined—come after Porter pleaded guilty Tuesday to a fraud conspiracy charge.
Porter, an ex-Recology vice president, admitted that he conspired to bribe Nuru, including with $55,000 in payments concealed as donations for needy children that were used to throw holiday parties for Nuru’s friends, workers and political supporters, prosecutors said.
Recology wanted to keep Nuru happy because he could use his position to hurt—or help—it by adjusting the rates San Franciscans pay for trash collection and the fees it charged the city to recycle asphalt and concrete.
The newly unsealed filing confirms previous reporting by The Standard showing that Recology funneled hundreds of thousands of dollars through the Clean City Coalition to an account that Nuru used to treat his staff.
Until now, Clean City Coalition was referred to in federal court filings as “Non-Profit A.” Federal prosecutors previously said the funneling of those payments was “consistent with a pattern of money laundering.”
The Giusti plea also names former Recology Chief Operating Officer Mark Arsenault, the subject of a previous investigation by The Standard.
Giusti said he sought approval from his supervisors, Arsenault or Porter, before arranging annual $150,000 payments to the Clean City Coalition at Nuru’s request.
Nuru referred to the payments as “the big one,” Giusti said.
Attorneys for Arsenault and Porter declined to comment. The Clean City Coalition did not respond to a request for comment.
The Clean City Coalition continues to be a San Francisco contractor. It currently has active multiyear contracts with Public Works to water street trees for $4.1 million and with the Human Services Agency worth $1.5 million to provide job training for people transitioning out of homelessness.
Recology ended Porter’s employment in 2021, before any charges were filed, the company’s spokesperson said, adding that it has acknowledged that it is responsible as a matter of law for the acts of its former employees.
“As Recology has stated on numerous occasions, it unequivocally condemns this behavior and expects all of its employee-owners to act according to the highest ethical standards,” the company’s spokesperson said in a statement. “Since these acts took place, new management has embraced enhanced compliance and training programs, including policies to address situations where Recology’s employee-owners may interact with public officials.”
Court records show the firm fired Porter for his alleged role in Recology overcharging San Franciscans nearly $100 million for trash pickup. Recology ultimately agreed to settle a lawsuit from the city by repaying ratepayers.
As long ago as 2020, federal prosecutors revealed that Recology paid for Nuru’s son to get a job at a nonprofit.
But the nonprofit went unnamed until now.
In his plea agreement, Giusti said he arranged for the Asian Pacific American Community Center to start a Recology-funded summer youth program and hire Nuru’s son in 2017 and 2018.
Recology granted the nonprofit, which helps support underprivileged youth in Visitacion Valley, nearly $24,000 in funds over those two years, according to the plea agreement.
Federal prosecutors say the payments were part of the “stream of benefits” that Recology paid Nuru to act in its favor, court records show.
At the time of the second payment, prosecutors said Recology executives, including Porter, wanted Nuru to approve a multimillion dollar hike in the fees that his department paid Recology to recycle asphalt and cement.
Recology previously hired Nuru’s son to paint debris boxes when he was still in high school, Giusti said in his plea agreement. But the former executive said he arranged the job at the Asian Pacific American Community Center because Arsenault told him “it would not look good for Recology to employ the Director of DPW’s son.”
At the time, Recology was asking the city to raise the rates it would charge all San Franciscans for garbage collection.
Without referring to the Asian Pacific American Community Center by name in the original complaint against Giusti, prosecutors said the nonprofit kept Nuru’s son employed despite him falling asleep on the job, telling children to “shut up” and twisting one child’s arm.
Prosecutors said Nuru’s son was the only Asian Pacific American Community Center intern funded by Recology in 2017, indicating that the grant “was a guise” to conceal who paid him.
Reached by phone, the nonprofit’s Executive Director Rex Tabora said his staff did nothing wrong and that the allegations against Nuru’s son are “exaggerated.”
“He did his work,” Tabora said. “It’s not like he never showed up or anything.”
Tabora said he asked Giusti, who served on the nonprofit’s board, for Recology funding to support the youth program for years before finally convincing him. Recology previously contributed to other Asian Pacific American Community Center community events.
Tabora said he did not know that Nuru’s son would be hired when he received the money from Recology. He said Nuru’s son was one of only two applicants for the low-paying position, and the other stopped responding.
“There was nothing nefarious that we did as far as I’m concerned,” Tabora said. He later added, “The FBI would still be all over APACC today if we did something out of the ordinary.”