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FBI's City Hall probes raise questions; Large number of inquiries concerns some lawmakers

One pleaded guilty to stealing federal funds.

Another admitted helping drug dealers.

Still another stands accused of embezzlement.

All three ran afoul of the law, but they also share one other trait.

They all worked in Buffalo City Hall.

And they are not the only current and former city workers who faced criminal prosecution. At last count, seven past and present employees have been indicted, arrested or convicted of federal crimes over the past year.

Even more important perhaps, the prosecutions are the result of five separate federal investigations.

"It's like an onion," said Steven L. Lanser, assistant special agent in charge of the FBI in Buffalo. "You peel away a layer, dig a little deeper and you find something new."

And the FBI's work is far from over.

The federal investigation at City Hall is continuing, and one of the focal points as it moves forward is how the city spends millions of dollars in federal aid. At the top of the list is money that comes to Buffalo from the U.S. Department of Housing and Urban Development.

No one is suggesting there's a crime wave at City Hall, but the large number of federal investigations and prosecutions does raise the eyebrows of lawmakers here and across the state.

It also prompts the question, why so many?

"We just follow the evidence," said U.S. Attorney William J. Hochul Jr. "We never give any consideration to a person's occupation, job title or economic status."

It's no secret the FBI paid at least six or seven visits to City Hall last year.

And the results are no secret, either. Two convictions. Two arrests. Three indictments.

"There's a pattern that I'm concerned about," said Niagara Council Member David A. Rivera, a retired Buffalo police detective.

Rivera said he'd like to see more controls and oversight at City Hall, but that some wrongdoing is likely regardless of who's in charge.

Mayor Byron W. Brown, in a prepared statement, said his administration "takes any allegation of potential wrongdoing seriously."

"It has, in part, been this administration's management and vigilance that has uncovered some of these situations," the statement said. "As a result, we discovered what we believed to be suspicious and improper behavior by employees in the Department of Parking, and forwarded our findings to law enforcement."

Federal authorities stopped well short of saying that the Brown administration is responsible for all of the wrongdoing.

Instead, some investigators are quick to suggest that many of the recent charges are due to Hochul's increased emphasis on rooting out public corruption.

It also is clear that City Hall, more than any other local government, is feeling the heat. And yet, investigators suspect that much of the criminal activity they've uncovered in recent months has been going on for years.

They acknowledge the large number of City Hall investigations but suggest that, while there is corruption in city government, there's no evidence that it's more rampant here than elsewhere.

"This is not exclusive to Buffalo," Lanser said. "If there's money there, there's the potential for corruption."

It was that emphasis on "following the money" that brought investigators and prosecutors their biggest catch so far -- the man who for five years spearheaded Buffalo's development efforts.

Timothy M. Wanamaker stood before a federal judge in December and pleaded guilty to stealing $30,000 in federal money. He did it by using a city credit card to pay for personal travel expenses.

Prosecutors said they know of at least 16 instances of Wanamaker illegally using his city credit card.

The most extravagant of those was a December 2007 trip he made to a conference in Miami. He stayed two additional days and charged $1,943 in hotel, meal and rental car expenses to the city.

"It was a serious lapse in judgment," he told U.S. District Judge Richard J. Arcara in December.

The other big name caught in the federal net is former city lawmaker Brian C. Davis. He stands accused of embezzling more than $40,000 in federal funds while serving on the Council.

Prosecutors claim Davis handed out federal aid to local community groups with the understanding they would transfer some of it back to him and his friends.

Davis has denied the allegations and vowed to take his case to trial.

Unlike most of the investigations at City Hall, which have been separate and distinct, the FBI's scrutiny of Davis and Wanamaker grew out of the same investigation.

When it opened, One Sunset was heralded as a much-needed addition to the tony neighborhood around Gates Circle. When it closed, the restaurant left $160,000 in unpaid government grants and loans and attracted the interest of federal agents.

It also led the FBI to Davis and Wanamaker.

In the case of the "Loose Change Gang," the FBI's involvement came at the urging of a City Hall insider, a whistle-blower of sorts.

It was a tip from former Council Member Kevin Helfer, the city's parking enforcement commissioner, that led to the arrest of parking meter mechanics James V. Bagarozzo and Lawrence Charles.

The two men are accused of stealing quarters -- Bagarozzo about $210,000 over an 8-year period and Charles $3,300 over the course of a month -- from meters.

It was that same type of tip -- this one from the U.S. Department of Environmental Protection -- that led to separate charges against two city inspectors in August.

The inspectors, William Manuszewski and Donald Grzebielucha, were indicted as part of a failed asbestos removal project at Kensington Heights, a vacant housing complex on the city's East Side.

"They certified false documents or lied about what they saw," Hochul said at the time of the indictment.

It was that same type of law enforcement cooperation that led to the investigation and eventual conviction of a former City Clerk employee.

Regina McCullen admitted issuing a fake birth certificate so an alleged drug dealer could use a fake name to bypass security at the Buffalo Niagara International Airport. She was sentenced to two years of probation.

Lanser said the McCullen case, like every other City Hall case, involved a large number of law enforcement agencies, a sign of the FBI's growing relationship with local police.

"Every one of those cases was a joint case," Lanser said of the five City Hall investigations. "At the end of the day, we work as a team."

Along with these investigations there are the pay-to-play allegations unfolding as part of a $1.4 million civil suit in Buffalo federal court.

A Cleveland housing developer has accused Brown and two others -- Deputy Mayor Steven M. Casey and Masten Council Member Demone Smith -- of scuttling its East Side housing project.

The developer claims the three conspired to kill the $12 million project because it wouldn't hire one of Brown's key political supporters.

The FBI's scrutiny of City Hall is a popular topic among Buffalo politicians, some of whom have actually tracked its presence at City Hall.

Common Council President Richard A. Fontana said he knows of at least six instances of federal agents visiting the City Clerk's Office for information. He said the FBI also visited the Department of Permits and Inspections.

"Working for city government is not an entitlement, it's an honor," Fontana said.

When asked if there's a culture of laxity at City Hall that might have contributed to the crimes, the Lovejoy lawmaker said many city employees go beyond the call of duty.

But there are others, Fontana acknowledged, who think the city could never run out of money.

"Some people," he said, "feel the city is an open money pit."

News Staff Reporter Aaron Besecker contributed to this report.