OAKLAND — Among the many allegations of corruption in indictments filed Friday against ex-Mayor Sheng Thao is the notion she was bribed to influence the appointment of a city official who could help secure funding for Thao’s alleged co-conspirators.
Federal prosecutors do not accuse the official, who isn’t identified in the indictment documents, of being knowingly involved in an alleged scheme by the former mayor and her accomplices to trade political favors for guaranteed access to lucrative city contracts.
But documents indicate that the official — who is identified by city records and a source with direct knowledge as city staffer Larry Gallegos — was installed in his position by the conspirators in the sprawling bribery plot outlined in Friday’s charging documents.
Thao, who was recalled by voters last November, has pleaded not guilty, along with her romantic partner Andre Jones and father-son business duo David and Andy Duong, who own a longtime family recycling company contracted by the city of Oakland.
An unnamed co-conspirator has not been charged or named in documents, but all details listed about the individual line up neatly with what is publicly known about Mario Juarez, a local politico who had a violent falling-out with the Duongs not long before the FBI probe first came to light.
The indictments laid out a wide-ranging investigation of criminal corruption in Oakland. The bribery charges center around a pay-to-play scheme that began ahead of the 2022 election and continued after Thao became the city’s mayor in January 2023.
Gallegos’ appointment to a high-level housing position is only one allegation in the indictments, but it reflects a key component of the alleged conspiracy: to fill major city staff roles with people who could favor Thao’s campaign backers for heavy public funding. The discussion included appointments to the Port of Oakland commission and city public works, building and permits, housing and city administrator’s office.
Former Oakland Mayor Sheng Thao and her lawyer Jeff Tsai leave the Federal Building after appearing at the Federal Courthouse in Oakland, Calif., for her indictment on bribery and conspiracy charges by federal prosecutors on Friday, Jan. 17, 2025. Also, her boyfriend, Andre Jones, California Waste Solutions owners, Andy Duong, and his father, David Duong, were indicted. (Ray Chavez/Bay Area News Group)
Gallegos has been a city employee since long before Thao became mayor — in fact, an online biography indicates it was his first job after graduating UC Berkeley decades ago.
Directly before and after his stint in the role that drew the interest of federal prosecutors, Gallegos worked as a program manager in the city’s Economic and Workforce Development Department, where he helped oversee the sale of the Raiders training facility in Alameda.
But for a brief period starting in March 2023, he was appointed as the Housing and Community Development Department’s interim deputy director, a position he received after allegedly meeting with the Duongs and an unnamed co-conspirator for lunch a month prior.
“I wanted him because while at the City he make [sic] sure my projects got done and grants were given to me,” the co-conspirator texted Andy Duong on Feb. 6, 2023, according to the charging documents. Jones is also accused of being involved in the discussions.
Ultimately, Thao “took active steps to advocate for and ultimately influence City Employee 1’s appointment to a high-level position within the City of Oakland,” the documents state, using a descriptor that refers to Gallegos without naming him.
The appointment to the housing position was supposed to be made by the city administrator, who said he “did not believe the experience of City Employee 1 qualified that person for a director-level position,” prosecutors said. But Gallegos was appointed anyway.
California Waste Solutions co-owner Andy Duong, middle, walks off the Federal Building after appearing at the Federal Courthouse in Oakland, Calif., for his indictment on bribery and conspiracy charges by federal prosecutors on Friday, Jan. 17, 2025. Also, his father, David Duong, former Oakland Mayor Sheng Thao, and her boyfriend, Andre Jones, were indicted. (Ray Chavez/Bay Area News Group)
Steven Falk, the interim city administrator at the time, could not be reached for comment. Gallegos did not respond to an interview request, while Thao, Jones and the Duongs declared their innocence on Friday.
Within a couple months of his appointment, records indicate Gallegos began corresponding with representatives for Evolutionary Homes, a housing company founded by the Duongs and Juarez that the feds say was central to the alleged bribery scheme.
Juarez and other representatives for Evolutionary Homes sought Gallegos’ help to tap public funds for the construction of shipping-container homes — the intended business model of a company that never fully got off the ground.
An initial plan between Thao and the Duongs called for the mayor’s romantic partner, Andre Jones, to receive $300,000 for a “no-show” job with the Duongs’ company, Evolutionary Homes, the indictment claimed.
Yet in a March 2023 meeting, Thao asked for her partner to receive 10 times as much money — $3 million — in exchange for the city purchasing 100 of the Duongs’ housing units. She proposed enduring the purchase by using the city’s emergency powers, which would allow the deal to go through without a competitive bidding process.
No deal ever came out of the talks. Evolutionary Homes never applied for a city contract.
Meanwhile, during the summer of 2023, Gallegos was among a small number of city staffers tapped to join Thao and a few dozen others on a trade delegation to Vietnam. The 10-day excursion mostly involved long meetings and pre-planned lunches with foreign officials, according to the itinerary.
Like most others who attended, Gallegos’ travel costs and other expenses were covered by the Vietnamese American Business Association — a group led by the Duongs.
Shomik Mukherjee is a reporter covering Oakland. Call or text him at 510-905-5495 or email him at shomik@bayareanewsgroup.com.
