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Pigeon probe expands into Buffalo City Hall

State and federal agents probing the many connections of political operative G. Steven Pigeon have expanded their search into Buffalo City Hall.

In July, City Hall received a subpoena for documents related to firms that have done business with the city during the Brown administration, according to four sources with first-hand knowledge of the investigation. Seven different firms are listed on the subpoena, according to information obtained by The Buffalo News.

Among the documents requested are those related to a local pastor’s housing corporation and documents related to a Cleveland-based development company that accused Mayor Byron W. Brown of pressuring the company to put another local pastor on its payroll in what the housing firm described as a pay-to-play scheme. The Cleveland company’s accusation was tossed out in civil court in February when a judge ruled Brown can’t be sued for his official acts as mayor.

The subpoena also requested documents related to the city’s approximately $46,000-a-year contract for an employee assistance program awarded to a West Seneca firm. The firm was mentioned in e-mail exchanges between Pigeon and State Supreme Court Justice John A. Michalek that last year caught the attention of state and federal prosecutors investigating Pigeon’s relationship with the judge. Michalek in June 2016 resigned and pleaded guilty to corruption charges.

The subpoena presented to the city, according to information reviewed by The Buffalo News, asks for documents related to:

  • Palladian Health of West Seneca, which has been awarded the city’s employee assistance contract since 2011, according to city records.
  • NRP, the Cleveland company that believed it had an agreement to build housing in the city, but says Brown killed the plan when it refused to hire the pastor.
  • Fruit Belt Community Development Corp., which has received some $20 million in government funds over two decades to build low-income housing in the city’s Fruit Belt neighborhood.
  • Modern Disposal, the firm that in January was awarded Buffalo’s recycling contract, which is worth almost $15 million over five years. Modern is a major political contributor to Brown.
  • R&P Oak Hill, a local development firm that is also a major contributor to Brown.
  • HLM Holdings, a development company owned by Hormoz Mansouri. He also owns an engineering firm, EI Team, that received $141,000 in work from the Buffalo Sewer Authority between 2009 and 2013, city records show.
  • American Continental Group, a Washington-D.C. based lobbying firm that was paid $135,000 by the city Sewer Authority between 2009 and 2012, city records show.

The subpoena calls for the city to provide documents including contracts, invoices, emails and text messages related to the seven firms.

Brown referred questions on the subpoena to the city’s law department, which declined comment.

“The city law department does not comment on, including confirming or denying the existence of, any potential litigation matter or process,” Corporation Counsel Timothy A. Ball said.

Brown, however, did recently say that he has not been questioned or contacted by any state or federal investigators.

The FBI and state Attorney General’s office also declined to comment on whether a subpoena was sent to City Hall.

Four of the seven firms listed on the subpoena either did not return phone calls or emails.

Mansouri, with HLM Holdings, said he hasn’t been contacted by state or federal investigators. Mansouri said his companies haven’t done much work for the city in recent years, and any work done, including for the Buffalo Sewer Authority, was bid out.

“The last thing we did was the 2009 Sewer Authority work that we finished in 2013,” he said.

Gary Bichler, a partner with R&P Oak Hill, similarly said he was not contacted by state or federal investigators. The firm was involved in a townhouse project with the Buffalo Urban Renewal Agency in 2008 that never came to fruition, but does not currently have any city contracts, he said.

“I don’t know what it could be about,” he said.

The Rev. Michael Chapman, pastor of St. John Baptist Church and head of the church’s development organization, Fruit Belt Development Corp., also said he was not been contacted by state or federal investigators.

“I haven’t heard anything,” Chapman said. “Everything we do is above-board and open for everyone to look at.”

This most recent subpoena is another indication that state and federal investigators are widening their investigation, even as two charges are pending in court against the West Seneca political operative. Pigeon, a former Erie County Democratic chairman, who subsequently led his own wing of the county Democratic party, has had political ties to local and state leaders, including Gov. Andrew M. Cuomo.

Earlier this summer, the Pigeon probe led investigators to Maurice L. Garner, founder of Grassroots, the political club that Brown used as a springboard for his political career. State and federal investigators on June 15 raided the Grassroots office on Genesee Street as well as the Buffalo home of Garner and the Urban Chamber of Commerce, which Garner also helped found.

No charges have been filed against Garner, but several sources close to the investigation said at the time of the raids that the searches were related to the Pigeon prosecutions in state and federal court.

Investigators are following a money trail that includes campaign finance reports for Pigeon and Grassroots, and currently Brown, several sources have said.

Brown’s campaign fund, Brown for Buffalo, is one of the major financial supporters of Grassroots and Be the Change, a Grassroots offshoot that Garner also founded.

Pigeon is accused of bribing Judge Michalek and also of using one of his campaign funds to illegally finance several Erie County legislative races and a Town of Amherst political campaign in 2013. Pigeon also is accused of illegally conspiring to solicit a $25,000 contribution for Cuomo from a Montreal-based internet gambling company in 2014.

The bribery charges against Pigeon center on accusations that he helped two relatives of Judge Michalek get government jobs in return for Michalek providing political favors to Pigeon, including the assignment of a lucrative court case to an attorney friend of Pigeon’s.

Michalek pleaded guilty, but Pigeon has denied all charges, and his attorney recently succeeded in getting some key evidence thrown out.

The charges against Pigeon stem from evidence investigators obtained from a raid of Pigeon’s waterfront condo in 2015.  The home of Steven Casey, Brown’s former deputy mayor, also was raided that day. Casey has not been charged.

Political reporter Robert J. McCarthy contributed to this story.

Related content:

Judge Michalek says he took bribes as corruption probe moves to Pigeon

West Seneca health care firm catches investigators' interest

Most on subpoena list contributed to Brown

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