Embattled recycling hauler supported former San Jose mayor’s interests

The web of influence wielded by the owners of San Jose's primary recycling company -- now under an FBI microscope -- includes Silicon Valley's former mayor turned congressional candidate.

California Waste Solutions, the company at the center of an FBI raid that included company executives and Oakland Mayor Sheng Thao, gave $10,000 in 2022 to a PAC started by Sam Liccardo and his former chief of staff Jim Reed to elect business-friendly politicos like Mayor Matt Mahan. Liccardo, who served as the city's mayor until 2022, is now running for Congressional District 16 to replace retiring Rep. Anna Eshoo.

CWS also donated $3,000 in May 2018 to a committee Liccardo supported that opposed a pro-sprawl development ballot initiative, Measure B. The committee has since been terminated.

Others who have received money from CWS or its owners, David Duong and his family, have either returned the money or donated it -- including Liccardo's rival in the race, Assemblyman Evan Low. The lawmaker received $6,600 from Duong and said he'll donate the money to a farmworker nonprofit.

Liccardo and CWS also have another connection: Jonathan Padilla. And that relationship is in the spotlight after Liccardo did not recuse himself from a critical vote in 2019 that benefitted CWS.

Padilla, who spent a year working on Liccardo's mayoral campaign in 2014, served as a lobbyist for the recycling hauler in 2018 and 2019. Padilla requested the controversial recount in the congressional race that handed Liccardo a major advantage -- it broke a tie between two other politicians on the November ballot and ensured Liccardo would only face Low in the runoff election.

As CWS' lobbyist, Padilla met with Liccardo in December 2018 to convince him to extend the company's contract with the city.  City records show Padilla met with city officials on behalf of CWS from 2018 to 2019.

One month after that meeting, Liccardo was one of nine councilmembers who voted to continue contract talks with CWS in Jan. 2019.

San Jose City Hall was locked in a contentious dispute that year with CWS after city administrators decried high contamination rates and poor performance, and recommended ending CWS' contract. CWS blamed the city for unreasonable fines, failure to educate residents about recycling and a tiny garbage bin that forces people to throw trash into the recycling stream. They also accused the city of discrimination against a minority-owned company and filed a $34 million lawsuit.


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A critical vote

Before that January 2019 vote, Councilmember Pam Foley recused herself because one of her campaign consultants was later hired by CWS -- a policy required by the city. Liccardo, however, did not recuse himself despite Padilla working on his 2014 mayoral campaign and then lobbying for CWS. The city policy appears to only cover the last election. Liccardo was reelected mayor in 2018.

Padilla, who's also a tech entrepreneur, said Liccardo's and Foley's situations are different. Foley had just been elected into office in 2018 and the consultant in question worked on her campaign that year.

"I hadn't worked for Sam (Liccardo) in over four years, spent most of those years overseas, and wasn't that close to Sam at the time, so I don't think there's any issue here," Padilla told San Jose Spotlight, adding that he didn't lobby the mayor's office as much as he lobbied other city officials.

A city policy requires politicians to abstain from a vote if they worked with a campaign consultant in the 12 months preceding their election who is advocating for an issue they are voting on. The policy aims to "protect" trust in government by avoiding the appearance of bias or favoritism.

One ethics expert said the public will have to weigh whether Liccardo should've recused himself from the CWS contract vote, despite Padilla's work on his campaign exceeding the time range covered by the policy.

"Consultants tend to have a wide range of clients. It seems like more of a smell thing," said John Sims, a retired law professor at University of the Pacific McGeorge School of Law, told San Jose Spotlight. "The fact that the party that's before the council has the same consultant that worked for the official four years previously -- that doesn't seem likely to be a legal problem. But I don't think you'll find there are definite lines here. People will just have to make their own judgments about it."

Liccardo's campaign maintained he's not beholden to special interests.

"This election is a choice between Evan Low, who has gladly accepted hundreds of thousands of dollars from oil companies, PG&E, and private prisons, and voted their way, and Sam Liccardo, who refuses to," campaign spokesperson Gil Rubinstein told San Jose Spotlight.

Liccardo faces a federal complaint alleging his campaign coordinated a dark money effort to fund the recount requested by Padilla to eliminate one of his competitors and help his prospects in November. Padilla paid for the recount through a super PAC called Count the Vote, which has some principals in common with a committee supporting Liccardo's campaign. Liccardo has denied any coordination.

Tainted contributions

A California Fair Political Practices Commission report from 2021 alleges Duong and his son Andy were involved in laundering at least 93 campaign contributions totaling nearly $76,000. The scheme allegedly resulted in the company reimbursing friends for making political contributions to candidates across the state, including the South Bay, on their behalf -- an illegal practice that uses "straw donors."

Duong and another company executive made contributions to the campaigns of San Jose City Council District 8 candidate Tam Truong and Congressman Ro Khanna. Both have said they won't keep the money.

FPPC spokesman Jay Wierenga told San Jose Spotlight the investigation is ongoing.

Oakland's Mayor Thao allegedly received some of those laundered donations. Her home was searched by federal agents in June in connection with an undisclosed investigation.

Duong has maintained that he and his family have not done anything improper and are cooperating with authorities.