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Federal grand jury hears testimony in Buffalo City Hall investigation

Federal grand jury hears testimony in Buffalo City Hall investigation

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FBI removes boxes from Buffalo City Hall

Federal agents executing a search warrant remove evidence from Buffalo Urban Renewal Agency in Buffalo City Hall on Wednesday, Nov. 6, 2019.

A federal grand jury has heard testimony stemming from investigations into various City Hall activities over the past several years, The Buffalo News has learned.

Three sources with knowledge of the situation who asked to remain unidentified say that, over the past few weeks, the panel has heard testimony regarding City Hall practices. Buffalo attorney Steven J. Weiss said Tuesday he was subpoenaed to appear before the grand jury in connection with his 2011 testimony in a civil lawsuit resulting from the failure of NRP Group of Cleveland to land a $12 million housing project sponsored by the city.

Weiss is not accused of any wrongdoing, he said, and was called only as a witness because he testified in NRP's earlier allegations that success in obtaining the city housing contract depended on Mayor Byron W. Brown's demands.

"They asked me all the same questions from the past about my role as a witness in the case," Weiss said Tuesday, declining to enumerate specific questions.

He added that prosecutors never indicated to him the names of any potential targets in the case or the essence of their probe.

"I have not learned anything new and am actually surprised it is still going on," he said.

The U.S Attorney's Office declined comment Tuesday and the FBI did not return a request for comment.

Others with business before the City of Buffalo have also been subpoenaed to testify, one of the sources said, as the grand jury determines whether enough evidence has been presented to charge anyone with crimes.

Objectives of federal prosecutors in convening the grand jury remain unclear. But the new activity follows just after elections earlier this month, and a year after the FBI's court-authorized search of City Hall one day after voters went to the polls in 2019. The News reported then that FBI interest focused on the city's Office of Strategic Planning and the Buffalo Urban Renewal Agency.

The News also reported in the aftermath of the 2019 search warrants that federal agents questioned people about political operative Maurice L. Garner, a longtime Brown ally. Two sources speaking on condition of anonymity said then that they were questioned by the FBI about Garner, the founder of the Grassroots political club.

In addition, state and federal agents in 2017 issued subpoenas throughout City Hall related to several firms doing business with the Brown administration, sources said then. Documents sought in the 2017 subpoenas included those related to NRP, after it accused Brown of pressuring the company to install a local pastor on its payroll in what the housing firm described as a pay-to-play scheme. NRP's accusation was tossed out in civil court earlier that year when a judge ruled Brown could not be sued in his official capacity as mayor.

Brown also prevailed in 2019 after NRP appealed.

In the past, the mayor has denied the allegations of corruption and said his opposition to the NRP project was rooted in public policy concerns, namely the rent-to-own theme behind the development. On Tuesday, spokesman Michael J. DeGeorge said the law firm of Hagerty and Brady continues to handle for the city "all matters associated with the NRP litigation."

"They’ve continued to maintain the volumes of documents pertinent to that litigation and to handle any document requests and legal questions associated with that matter," DeGeorge said.

DeGeorge also said he was "not aware of any staff member that has retained an attorney. The city has not."

He also said the mayor has not been questioned or retained an attorney.

A panel of federal judges recently handed Mayor Byron W. Brown a major legal victory, but it also suggested the pay-to-play allegations at the core of the case raise “troubling questions” about the city’s handling of a $12 million housing project. At one point in their ruling, the appeals court judges refer to the allegation that Brown scuttled the

In its 2019 ruling, the appellate court suggested the pay-to-play allegations at the core of the civil lawsuit raised "troubling questions" about the city's handling of the housing project.

At one point, the Second Circuit U.S. Court of Appeals referred to the allegation that Brown scuttled the project because the developer would not hire one of his political allies, and claimed "substantial evidence" to support it. The judges said they were "constrained" by the law in dismissing the case, but indicated "it can be reasonably inferred" that the city would have moved forward with NRP if the developer had agreed to hire the mayor's ally.

"NRP's allegations and evidence raise troubling questions about defendants' conduct regarding the East Side II development," the panel of judges said in the decision.

2017 City Hall subpoenas

The 2017 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 political operative G. Steven Pigeon and State Supreme Court Justice John A. Michalek that caught the attention of state and federal prosecutors investigating Pigeon’s relationship with the judge.

In September 2018, Pigeon acknowledged in State Supreme Court that he bribed Michalek. The veteran judge resigned after pleading guilty in June 2017, and he awaits his own sentencing in the case. Sources say Michalek's sentencing will follow disposition of the Pigeon case.

In October 2018, Pigeon acknowledged in federal court that he conspired to make an illegal political donation to the 2014 re-election campaign of Gov. Andrew M. Cuomo. Neither the governor nor his campaign were ever implicated in the case.

The possibility of political corruption in Buffalo has been under investigation by state and federal authorities since May of 2015, when agents of the FBI, State Police Bureau of Criminal Investigation and State Attorney General's Office executed search warrants at the homes of several well known political figures. They included Pigeon, the former Erie County Democratic chairman, and Steven M. Casey, the former deputy mayor.

Casey was never charged, but The News has reported that he and Pigeon have cooperated with federal authorities.

Weiss's civil affidavit

But now two sources familiar with the investigation say prosecutors are examining the NRP situation. In his earlier civil suit testimony, Weiss appeared clear and adamant about what he viewed as the mayor's quid pro quo demand. He said then that Brown wanted the Cleveland developer to hire his longtime ally, the Rev. Richard A. Stenhouse, and suggested more than once that its $12 million housing project was at stake.

Weiss also said Brown was angry about white developers getting all the work on Buffalo's East Side.

"Mayor Brown made a statement to the effect that NRP needed to 'make Stenhouse happy or the deal will not go through,' " Weiss said in an affidavit filed in U.S. District Court.

Brown's lawyers described Weiss' declaration as inconsequential.

"It's our opinion that nothing he said in the affidavit has any relevance to the basis for our motion for summary judgment," Michael A. Battle, a former U.S. attorney in Buffalo and one of Brown's lawyers, said then.

The affidavit contained Weiss's account of what he says Brown told him in 2009 while the project was still in the planning stages.

Weiss, who did not represent NRP in the civil suit, said he and Brown spoke several times about the project that year and, at some point, it became clear the city wanted Stenhouse hired as part of the development.

During one conversation, according to Weiss, he explained to Brown that NRP was willing to engage local firms, but only after following a formal bidding process.

"During these conversations, Mayor Brown indicated that he didn't care what we did so long as we hired, 'the right company,' " Weiss said in his affidavit. "I understood Mayor Brown to mean that the project would no longer have his support if NRP Group decided to hire a party other than Rev. Richard Stenhouse."

On another occasion, the two men spoke again, Weiss said, and the mayor was again vocal about about making, "Stenhouse happy."

Stenhouse, a well-known and influential minister involved in development on the East Side, was a defendant in the suit until he settled with NRP for a reported $200,000 in early 2012. Despite settling, Stenhouse has said, through his lawyers, that he never demanded or in any way insisted on a contract with NRP.

When NRP went forward with its request for proposals and hired someone other than Stenhouse, Weiss said Brown told him, "I told you what you had to do and you hired the wrong company."

Weiss ended his affidavit by claiming Brown never once objected to the deal's financing or the rent-to-own nature of the project. NRP's goal was to build 50 rental homes in the Masten and Cold Spring neighborhoods.

Brown has always denied the allegations of corruption.

During his deposition in 2015, the mayor acknowledged he was annoyed at Weiss and his numerous phone calls, but said he doesn’t remember if they talked about Stenhouse.

“I don’t recall that exact conversation,” he said under oath.

During his testimony, Brown was also asked if he and Stenhouse ever talked about the housing development, or if Stenhouse ever asked about a contract with NRP.

“I don’t recall communicating with Rev. Stenhouse on this project directly at all,” Brown said at the time.

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  • Updated

Mayor Byron W. Brown was upset about white out-of-town developers getting too much work in Buffalo when he insisted on adding a prominent African-American minister to a new housing project, according to Brown’s second-in-command at the time. Steven M. Casey, the former deputy mayor, says in an affidavit that Brown pushed hard for the Rev. Richard A. Stenhouse. But

  • Updated

The Cleveland developer who claims Mayor Byron W. Brown operated a pay-to-play scheme at City Hall wants to question Steve Casey, the mayor’s former second in command. A federal judge says the developer will have to wait. In a ruling this week, U.S. Magistrate Judge Leslie G. Foschio put Casey’s deposition and every other aspect of discovery on hold

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