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Money is focus of probe into 3 political operatives

State and federal investigators Thursday searched the homes of three Western New York political operatives – confidants to the New York governor, Buffalo mayor and a member of Congress – sending shock waves across state Democratic and Republican party circles.

The investigation of G. Steven Pigeon, Steven M. Casey and Christopher M. Grant appears focused around an independent political committee called the WNY Progressive Caucus, which has ties to Pigeon. Investigators appear interested in the financial activities of the caucus and its ties to several political campaigns in recent years. The probe also includes questions about “elevated” payments for advertising, mailings and other political activities, a law enforcement official said.

The raids targeted three men who have been integral players in local and statewide politics, and that fact was not lost on party insiders in Buffalo and Albany.

Pigeon has vast political connections, from Gov. Andrew M. Cuomo to billionaire businessman B. Thomas Golisano.

Casey – dubbed the “shadow mayor” – was until last year the first deputy mayor under Buffalo Mayor Byron W. Brown.

Grant is chief of staff for Rep. Chris Collins, R-Clarence.

No charges have been filed against anyone. But a law enforcement official familiar with the investigation told The Buffalo News that investigators are looking at the political campaigns and fundraising involving all three.

“They were working together on things, which is kind of strange – a Republican and two Democrats,” the official said.

Without referring to any individual targets of the probe, the official added that investigators “are looking at potential election law violations, possible falsification of records, possible fraud and possible kickbacks. … Some people would call them referral fees and others would call them kickbacks.”

Pigeon’s lawyers insisted he has done nothing wrong and that he has offered to cooperate with the state investigation. Buffalo defense attorney Rodney O. Personius said he was meeting with Casey on Thursday evening but declined to say anything further. Grant could not be reached to comment.

A spokesman for state Attorney General Eric T. Schneiderman declined to provide details about the case.

“There is an ongoing investigation. We have no further comment,” said Damien LaVera.

News of the searches spread quickly. At the Capitol, chatter filled the halls about Pigeon, who has practiced his political trade in Albany for at least two decades and is the most well-known of the three men. He is a former Erie County Democratic boss, a close and longtime political adviser to Cuomo, and has been involved in state and national Democratic Party campaigns – as well as the three unsuccessful gubernatorial campaigns by Golisano, a former owner of the Buffalo Sabres.

As recently as last week, Pigeon told The Buffalo News he has had no contact with law enforcement about a probe begun last year by Schneiderman.

That all changed Thursday morning as federal and state investigators searched his Lakefront Boulevard condominium while outside work crews set up flower baskets.

3-hour search of condo

After police and investigators executed the search warrant at Pigeon’s corner condominium on the 10th floor of the Admiral’s Walk high-rise, he appeared calm but serious shortly after 11:30 a.m. as he stepped off an elevator and walked out of the building in the company of his lawyer, B. Kevin Burke Jr.

A state trooper was eventually positioned outside the two large wooden doors that mark the entrance to Pigeon’s condominium after the lawyer alerted senior investigators inside that reporters had arrived. Josh P. Keats, a senior investigator with the State Police, briefly stepped into the hall and peeled off his gloves as he confirmed the criminal investigation and told a News reporter and photographer to leave the floor.

About three hours after arriving, more than a dozen investigators and staff from all three agencies left Pigeon’s condominium around 2:30 p.m. carrying a computer and boxes of documents and photos, which were loaded into a series of dark sedans and sport utility vehicles parked in the front lot.

That was a far different scene at the condominium than several weeks ago, when Pigeon hosted a party of politicians and insiders – including Brown, Casey and Assembly Speaker Carl E. Heastie, D-Bronx – to watch the fight between Floyd Mayweather Jr. and Manny Pacquiao.

After Pigeon left his condominium Thursday, his lawyer returned, watching as investigators removed materials. “We are disappointed that the Attorney General’s Office tipped off the press about the criminal search warrant,” Burke said.

Dennis C. Vacco, another of Pigeon’s attorneys, said he has repeatedly offered the full cooperation of his client to investigators.

“We’re surprised and disappointed in the search warrant for Steve’s residence,” said Vacco, a former U.S. attorney and state attorney general. “I have personally previously expressed my client’s willingness to fully cooperate. Up until this point in time, my solicitations of cooperation have been ignored.”

‘Did work for the caucus’

Pigeon and Casey are longtime friends, and some consider Pigeon to be Casey’s mentor.

Casey last year left as the top deputy to the Buffalo mayor to go work for a Syracuse developer who owns the old Seneca Mall property in West Seneca. Pigeon’s lobbying firm, Papi Consulting LLC, which lists a Niagara Falls address as its office, last year had a $116,000 lobbying contract with the same developer, Scott R. Congel.

Pigeon’s lobbying firm this year lists two clients: a business in Niagara County attempting to win a state contract to open a medical marijuana cultivation and distribution facility and the Seneca Nation of Indians.

Casey and Grant also have crossed paths in the past even though Grant is a top Republican aide, while Casey is a key Democrat operative.

The search warrants carried out at the homes of Grant and Casey may involve a printing business that did work for the WNY Progressive Caucus, according to a source with intimate details of the investigation.

Investigators were more than likely seeking business records for the printing company and any dealings it had with the caucus, the source said.

“Grant was affiliated with a company that did work for the caucus. The printing company may have been a collaboration between Grant and Steve Casey. It is also my understanding that the printing company may have done some work for the caucus,” the source said.

The work done at the printing business is just one part of a larger investigation, officials said.

Origins of investigation

Schneiderman’s office began investigating Pigeon last year, after the Erie County Board of Elections voted on a bipartisan basis to probe possible election law violations of the WNY Progressive Caucus, an independent political committee allowed to raise and spend as much as it wants – provided there is no “coordination” with a particular candidate.

The state Board of Elections concurred with another bipartisan and unanimous vote last March and referred the case to its own independent counsel. Since then, several contributors to the fund say the State Police Bureau of Criminal Investigation and FBI have questioned them at the behest of the attorney general.

“I believe that every person or entity that made a contribution to the WNY Progressive Caucus received a subpoena,” Vacco said. “From our perspective, there was nothing illegal about the contributions and certainly nothing illegal about the expenditures of the caucus.”

The WNY Progressive Caucus raised $267,000 in 2013 for opponents of several candidates backed by Erie County Democratic headquarters in that year’s primary. Records indicate that Pigeon, a bitter foe of current Democratic Chairman Jeremy J. Zellner and his candidates, gave the caucus $100,000.

Both the county and state elections boards said that the caucus’ campaign finance reports – for which Pigeon was not responsible – contained discrepancies between what was submitted to the elections board and what was actually paid to local television stations for political ads.

The state probe, according to local Board of Elections officials, also aims to determine if the caucus’ fund and individual candidates illegally collaborated.

Pigeon has pointed out that donating to the political fund constitutes his only official connection to the caucus and that he bears no responsibility for its actions. Last year, he also gave $54,000 to Cuomo’s re-election campaign. He and Cuomo have been tight for years, and the governor has sent signals to people in and out of government in Western New York that Pigeon should be considered his go-to political point person from the area.

The Cuomo administration had no comment Thursday.

News Staff Reporters Lou Michel, Robert J. McCarthy, Dan Herbeck, Sandra Tan and Susan Schulman contributed to this report.

email: tprecious@buffnews.com and lmichel@buffnews.com