Strange twists in FBI’s East Bay bid-rigging sting

Photo: Ethan Rohloff, Courtesy Perkins + Will - An aerial view of Lawrence Berkeley National Laboratory above the UC Berkeley campus.

By Otis R. Taylor Jr.   May 1, 2017 

Mario Wagner was trained in the family flooring business, Wagner’s Carpet Installations, which was run by his father and uncle.

But it collapsed after 20 years, and Wagner wanted to avoid such a fate for his company in Oakland, RF Contractors.
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He sought guidance from Turner Group Construction, a family-run business that has worked on several high-profile Bay Area projects, including the renovation of the Fox Theater in Oakland. He admired how the family members worked together at Turner.

Work with the community,” Wagner, 30, said. “It reminded me of the family business we had where we gave out turkeys and things like that. I wanted to continue that.

“I kind of took to them, because they represented where I wanted to take my business. The Turners really saw the dedication that I had.”

But Wagner, an Oakland native who dropped out of high school to start his own flooring business, said he needed mentoring to keep the business on a prosperous track. That’s a challenge facing young, black contractors.

What the Turner family represents to him is more than subcontracting work tossed his direction. Wagner said they have provided business knowledge and skills taught in classes at the Bay Area Resource Center, a contractor outreach program started by Turner Group.

"That’s more valuable than anything,” Wagner said. “I took advantage of those classes. I think I’ve surpassed the knowledge portion of the business that my uncle and dad had.”

His father and uncle now work for him at RF Contractors, which has done projects for Men’s Wearhouse, San Francisco International Airport and Oakland Housing Authority.

Now it’s the Turners’ turn to fight for the life of their company.

Last month a federal grand jury indicted eight people after a bid-rigging investigation. Two of the people charged were Turner Group Construction executives and brothers: Chief Operating Officer Lance Turner, 57, of Oakland and Chief Financial Officer Len Turner, 56, of San Leandro.

Both face charges of conspiring to defraud the U.S. Department of Energy.

According to the indictment, the Turners engaged in bid rigging for a contract to renovate a Department of Energy-owned building at Lawrence Berkeley National Laboratory. The Turners allegedly were aided in the scheme by Taj Reid, the son of Oakland City Councilman Larry Reid.

Taj Reid and the Turners allegedly colluded with a “developer” willing to pay bribes. The developer was actually an undercover FBI informant. The Turners allegedly agreed to submit a higher bid so that the developer could secure the contract with a lower bid.

According to attorneys representing the Turners, millions of dollars in projects that were in the company’s pipeline have been frozen or postponed since the indictment. If the brothers are convicted, it could be a fatal blow to a homegrown company that gives second chances to ex-cons, a company that pulled up other local black and brown contractors as its business expanded.

But the case against the Turners seems weirdly constructed. And looking at how the developer — known to those he was introduced to as William Joseph — socialized makes me wonder what the government was after.

After snagging state Sen. Leland Yee and former San Francisco school board President Keith Jackson in a sting, the feds angled for some big fish across the bay in Oakland.

They used Joseph, a black man whose cover story was that he was an Atlanta developer looking to put some money into big projects, like a five-star hotel near the Coliseum complex in Oakland.

According to my colleagues Matier & Ross, Joseph waved around a multimillion-dollar letter of credit and bragged that he had access to even more money. While it’s unknown just who Joseph had meetings with, he approached at least two black San Francisco supervisors, London Breed and Malia Cohen. He also reached out to at least two black Oakland City Council members, Reid and Lynette Gibson McElhaney.

And six of the eight men indicted along with the Turners are black.

“When the Turners are vindicated, the government will have to answer to why it deliberately went and tried to target a minority business with an excellent reputation in the East Bay community,” Dennis Riordan, Len Turner’s attorney, told me.

The Turners entered not guilty pleas last week.

“Our clients are innocent of the charges, we believe,” said Martha Boersch, who represents Lance Turner. “They’re looking forward to showing that and proving that in court.”

Their defense is that the bid Turner Group submitted was legitimate.

“The point is that if they in good faith believed that they were submitting a valid bid on the DOE project, there’s nothing wrong with that,” Riordan said. “They were led to believe by Joseph there was a valid project so they submitted what they believed to be a valid bid in connection with that project.”

Wagner told me the indictment of the Turners feels like an assault. He said he still had a lot to learn from them as he builds toward his goal of securing a million-dollar contract.

Last week, he submitted a $400,000 bid to do the floors for a senior housing project in Richmond.

“I remember not having opportunities and knocking on doors, and I’m glad the Turner door opened,” said Wagner, who is enrolled in a 10-week project management course at Bay Area Resource Center. “I’m able to help other subcontractors and even general contractors with what I’ve been taught.”

San Francisco Chronicle columnist Otis R. Taylor Jr. appears Monday, Wednesday and Friday. Email: otaylor@sfchronicle.com Twitter: @otisrtaylorjr