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Grand jury to hear evidence in Pigeon-Michalek probe

A special grand jury will convene in Buffalo next week to weigh evidence gathered in an 18-month probe of political operative G. Steven Pigeon that now also involves a State Supreme Court justice.
A source close to the investigation said state Attorney General Eric T. Schneiderman will empanel a rare grand jury sought by his office. The source corroborates information from several others close to the situation indicating the special panel could begin its work as early as Monday.
Schneiderman's office, as it has throughout the investigation, declined comment on Friday.
The move sets the stage for the possible indictment of Pigeon, the former Erie County Democratic chairman whose campaign fundraising activities have spawned controversy for more than a decade. But now the scope of Schneiderman's investigation appears to have catapulted beyond election law violations to implicate Pigeon in possible bribery-related charges stemming from emails gleaned from computers seized during a raid at his waterfront home last year. 
The probe now also may have ensnared State Supreme Court Justice John A. Michalek, a veteran jurist who was questioned last week by Schneiderman's investigators, the State Police Bureau of Criminal Investigation and the FBI over a case before him involving a Pigeon associate. The emails taken from Pigeon's confiscated computer, other sources close to the probe say, serve as the basis for quizzing Michalek.
The judge remains on the bench and is conducting court business without restriction, a spokesman for the state Office of Court Administration in New York City said Friday.
The Buffalo News reported Thursday that Michalek was specifically asked last week about his efforts to seek Pigeon's help in securing a Washington job for a relative – just as Pigeon's acquaintance had a multimillion-dollar case pending in his court.
“The investigators are alleging that it was a crime for them to even have these discussions while that case was pending, whether Steve Pigeon helped this person get a job or not,” said one of the sources knowledgeable about the case.
Since then some of Buffalo's most high-profile attorneys have been hired to represent various figures in the case. They include Joel L. Daniels for Michalek, and Paul J. Cambria Jr. and former state Attorney General Dennis C. Vacco for Pigeon. Other attorneys are expected to become involved in coming days and weeks as more and more figures identified in the investigation are summoned to appear before the grand jury.
One source close to the investigation said the effort could continue for “weeks or months” before it reaches a conclusion.
The new phase stems from a series of investigations that has gripped the Western New York political community since 2014, when Schneiderman's office began probing complaints about a Pigeon-connected political committee active in the 2013 Democratic primaries.
The case began when former Assistant District Attorney Mark A. Sacha and Erie County Legislator Betty Jean Grant, D-Buffalo, both filed complaints with the county Board of Elections over how the WNY Progressive Caucus raised $267,000 in 2013 for opponents of several candidates backed by Democratic Party headquarters.
In March 2014, the county's Democratic and Republican elections commissioners – Dennis E. Ward and Ralph M. Mohr – took the unusual and bipartisan step of turning over their findings to the state Board of Elections. The state board never would acknowledge its course of action, but it was known that it voted to refer the case to the attorney general.
From there, the State Police began probing the case, along with Schneiderman's investigators in cooperation with the FBI.
The heart of the complaints against Pigeon's fundraising organization concerns accusations that it spent a significant sum of money in the primaries in illegal coordination with individual candidates.
Pigeon has always denied coordination between his political organization and other campaigns. But sources indicated at the investigation's onset that the county elections commissioners presented evidence – some obtained by subpoena – of discrepancies between amounts of money that the Pigeon organization reported in campaign finance filings and what was actually spent on local political ads. They also were expected to make the case that illegal coordination had occurred.
At the time, sources said the local Board of Elections used its subpoena power to examine records not normally open to public scrutiny, while also matching campaign finance reports with expenditures on political advertising.
By late 2014, Schneiderman's investigators began interviewing key players in the WNY Progressive Caucus. In early 2015, Pigeon left his longtime law firm – Rochester-based Underberg & Kessler – in what he called a mutual agreement.
The case has since developed “an unbelievable number of tentacles” according to one source, underscoring the new avenues now open to investigators.
 email: rmccarthy@buffnews.com