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Ciminelli lobbies to oust Buffalo School Board members who back probe of construction profits

Developer Louis P. Ciminelli is using his money and connections to influence the outcome of this year’s Buffalo School Board elections, aiming to oust majority bloc incumbents and put an end to the lawsuit over how much his company profited from the $1.3 billion reconstruction of schools.

Representatives of his company, LPCiminelli, have met with the leadership of the Buffalo Niagara Partnership, threatening to withhold financial support for the organization’s election efforts if it backs majority members.

LPCiminelli officials also have pressured local businesses to lobby the Partnership to decline backing – even to stop doing business - with the incumbent candidates during the election, according to four sources who requested anonymity to preserve relations with LPCiminelli.

And Jay McCarthy, one of those incumbents up for re-election, said an LPCiminelli representative attempted to dissuade him from seeking re-election after failing to convince him to withdraw his support for the district’s lawsuit.

“They wanted it to go away,” McCarthy said.

Kevin Schuler, public relations specialist for the company, acknowledged he and other company representatives have been in conversations with local business leaders trying to influence opinion and ultimately sway support in the school board races.

He said the company also may give money to candidates challenging incumbent members of the majority.

Central to the behind-the-scenes maneuvering is the question of how much LPCiminelli profited from the $1.3 billion reconstruction of Buffalo schools, which is now the subject of a lawsuit by the district. A Buffalo News analysis last year estimated, based on documents available at the time, that the company’s profit could have amounted to $400 million. That would be at least triple what is typical in the industry.

LPCiminelli won’t disclose how much profit it made on the project, saying that is proprietary information.

Majority bloc members, including McCarthy and James Sampson, as well as Carl Paladino and Larry Quinn, have led the charge for the company to disclose where that money went since they took control of the board in 2014.

Now, Sampson, McCarthy and Paladino, who first raised the issue about the company’s profit, are all up for re-election.

“As so many people have observed, this is a very important election for the school district, our children and the city – it is not a single issue election,” Sampson said in response to the company’s efforts. “We should have a thorough public debate about what has been accomplished these past couple of years, especially under the leadership of Dr. (Kriner) Cash, the momentum that has been created and how we as a community build on that momentum.”

Two meetings

In one meeting, Schuler and Executive Vice President Frank Ciminelli met with Dottie Gallagher-Cohen, president of the Partnership, and another Partnership leader and told them the company would not contribute financially to the organization’s School Board campaign efforts if it backed members of the majority, as it has in previous elections. They questioned the majority’s accomplishments and characterized board majority members as lackeys for Paladino, according to three sources with knowledge of the meeting.

Schuler said the meeting did occur.

“We believe they’ve wasted time and resources,” Schuler said of the majority.

Gallagher-Cohen would neither confirm nor deny that conversation when asked by The News.

Instead, she issued a statement: “As we do not use any Partnership operating funds for political action, we have begun the process of assessing the fundraising feasibility to make a meaningful difference in key School Board elections. Through this process, I have heard from many members that have strong opinions both in favor and against the School Board majority. I will not comment further on these private conversations.”

After talking to the LPCiminelli representatives, Gallagher-Cohen then met with Sampson, according to three sources. She told him that Frank Ciminelli and Schuler approached the organization’s leaders with concerns about the scrutiny over the $1.3 billion school construction contracts and district’s lawsuit, saying it was bad for business and that the company plans to funnel money into the election in an effort to oust the incumbent.

The company offered an alternative, suggesting Sampson could “make the issue go away if he wants to” by removing Paladino and Larry Quinn from a separate board that oversees the construction project, although that board was dissolved when the School Board took control of outstanding business related to the project.

Schuler said he made that comment in response to Gallagher-Cohen’s defense of Sampson because he wanted to note that the incumbent has supported Paladino on the construction issue.

The second meeting of LP Ciminelli representatives occurred with board member McCarthy.

McCarthy said he met with Schuler and Maurice Garner, founder of the Grassroots political organization who worked as a consultant for LPCiminelli on the schools project, around the time the board started aggressively asking questions last year.

At that meeting, Schuler and Garner suggested that Paladino had a vendetta against LPCiminelli and encouraged McCarthy to make the dispute go away.

According to McCarthy, Schuler told him: “You can make this all go away with your vote.’ ”

Schuler acknowledged the meeting, saying that he wanted to talk to McCarthy about his time on the board overseeing the construction project and explain the company’s position.

McCarthy, however, refused to withdraw support.

Pressure on others

Both LPCiminelli and the district filed lawsuits against each other, the company alleging the district is illegally withholding payments and the district in turn saying LPCiminelli was contractually obligated to disclose certain financial information regularly throughout the project, but did not. The district seeks financial damages, including repayment of the company’s profits.

Schuler said the company decided to involve itself in the election following a Partnership meeting when members were asked for input on the School Board races. The Partnership typically supports candidates through its political action committee, using money contributed by individual members.

“They’re telling every businessman in town to not support members of the reform majority in this year’s election,” said one source connected to the situation.

One executive from a large local company, who did not want to be named for fear of alienating LPCiminelli, said Schuler contacted him to ask whether Louis Ciminelli, LPCiminelli’s chief executive officer, had talked to the company’s CEO about the election and the possibility of the company’s involvement.

The executive said he told Schuler the company would not get involved in the election.

Schuler acknowledged that LPCiminelli representatives are having conversations with business owners to explain their position, but declined to elaborate further.

“There are a lot of conversations going on,” he said.

Business connections

LPCiminelli’s efforts to influence the election put the Buffalo Niagara Partnership in the awkward position of having to decide whether to withhold its support for the reform majority, something that could ultimately reset the trajectory of the district.

In recent years, business leaders have shown increasing interest in the success of the city schools, which many argue is critical to workforce development and to attract families to the region. Its leaders have also promised to support Superintendent Kriner Cash and his agenda.

In an email to Partnership members, Gallagher-Cohen acknowledged that some Partnership board members have concerns about the group’s involvement, and outlined a process for the organization to decide whether to support candidates.

“Since the board meeting, several board members have expressed their opinions about how we should approach the School Board elections and what we should do,” she wrote in the email sent Friday.

Five Partnership board members told The Buffalo News that LPCiminelli officials have not approached them directly to discuss the election, nor are they aware of any general attempt by the firm to sway the Partnership from making an endorsement.

One Partnership board member, Paul Buckley, president of Applied Sciences Group, said he expects the Partnership, as it has in the past, to make endorsements in this year’s School Board election.

He was asked how he would react if LPCiminelli was, in fact, lobbying the Partnership to stay out of the School Board race.

“If Ciminelli is simply acting as a company that is doing this, detached from the Partnership, they have every right to do so,” Buckley said. “However, if they’re doing this as a board member, independent of the board, I would be very concerned about that. That’s the kind of clout – or influence-peddling, essentially – that shouldn’t be taking place. I believe the Partnership does try to make an attempt to be as apolitical as they can possibly be in a political environment. And that’s sort of stepping over that line.”

Staff writer Stephen T. Watson contributed to this report. email: tlankes@buffnews.com