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FBI agents said to be curious about CAO's nexus with Grassroots

FBI agents said to be curious about CAO's nexus with Grassroots

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The FBI searched the offices of the Urban Chamber of Commerce, shown here, in June 2017 and the offices of the Grassroots political club. Three sources interviewed by FBI agents focusing on the Community Action Organization say the agents want to know about any CAO links with Grassroots. (Derek Gee/The Buffalo News)

FBI agents inquiring about the Community Action Organization of Western New York are asking about its links with the Grassroots political group, according to three people whom agents have interviewed.

While the heads of both the CAO and Grassroots say their entities are not connected, the three people interviewed by the FBI said agents are interested in any financial links between the CAO and Grassroots or key Grassroots figures, among other things.

"Grassroots is definitely a focus," said one of the three, a former CAO employee. The three sources asked to remain unidentified to avoid drawing their new employers into the situation or to avoid criticism from CAO leadership.

There has long been an overlap in personnel between Grassroots and the CAO, an anti-poverty agency that spends about $50 million a year in Erie and Niagara counties, most of it government-provided. A Grassroots founder, Maurice L. Garner, was a teenager when he began a decades-long association with the CAO. Years later, with Grassroots established as a solid East Side force, Garner served as a CAO board member and, for three years ending in 2006, as director of neighborhood services. Garner said he is no longer involved with the CAO.

Grassroots helped launch the careers of Mayor Byron W. Brown and other high-profile politicians.

L. Nathan Hare was active in Grassroots before becoming the CAO's chief executive in 2002. Grassroots launched the career of Crystal Peoples-Stokes, who today holds the title of Assembly majority leader. She appoints a member to the CAO board. For years, her brother, John Calvin Davis, was a CAO director and for a time the board president.

In June 2017, FBI agents raided the Grassroots headquarters and two other locations linked to Garner as part of a public-corruption investigation into political operative G. Steven Pigeon, who has since pleaded guilty to state and federal charges. Pigeon is said to be cooperating with authorities in a bid to avoid jail time.

The agents took materials from the Grassroots offices at 339 Genesee St., Garner's home at 64 Meech St., and the Urban Chamber of Commerce, which he founded, at 1325 Main St. Like Pigeon, Garner has been a political ally of the mayor.

Garner, who now runs a lobbying firm, was never charged, nor was anyone at Grassroots. But when an agent sat down with a CAO source recently, he mentioned that Grassroots was on the agents' radar, the source told The News.

Garner noted that he has drifted away from Grassroots over the years. So he had no comment when told FBI agents are asking about links between Grassroots and the CAO.

Grassroots president Willie Morris acknowledged that some people affiliated with his political organization have also been affiliated with the CAO because both are fixtures in Buffalo. Beyond that, "there really is no connection," he said. Meanwhile, Hare has publicly said his organization keeps its distance from Grassroots and stays out of politics.

"I don’t have an attitude against Grassroots," Hare recently told the Buffalo Challenger newspaper. "I still support Grassroots people, but I don’t allow any political stuff to be done at the CAO. I don’t allow tickets to be sold, no flyers, no endorsements, nobody recruiting volunteers from my staff … I’d rather everybody in Erie and Niagara Counties hate me because I won’t dance with anybody politically."

Hare says Grassroots and the CAO share a community.

"The Grassroots organization is based largely on the East Side of Buffalo," Hare told The Buffalo News on Tuesday. The East Side of Buffalo is also the geographic location of the highest areas of poverty in Erie County. Nine of the 50 highest poverty districts in New York State, by percentage, are located on the City of Buffalo’s East Side.

"The CAO is required by regulation to have a tripartite board," he continued. "One-third of our board members have to be elected officials or their designees, who represent districts with a relatively high proportion of poor and low-income people. The Grassroots organization has been most effective in shepherding its candidates to win elected office in these districts. For that reason, and that reason only, several members of our board also have had affiliations with the Grassroots organization."

CAO money goes to Grassroots. The News found four occasions when the CAO bought a table at the Grassroots annual fundraiser, spending nearly $2,500 total. The CAO was reciprocating for the Grassroots practice of buying a table at the CAO's annual fundraiser, an event that gives the agency money unbound by the rules of a state or federal grant. An internal accounting of those dollars spent in 2018 shows the CAO also gave $500 to Garner's Urban Chamber of Commerce for advertising.

When Hare was asked weeks ago about CAO's support for Grassroots, he said that "for many years, the CAO has supported other nonprofits working on and advocating for issues it shares."

"This is paid out of discretionary funds," he added, "and usually buys a table at an event and/or advertising in the event brochure. Tables are normally occupied by board members."

FBI agents started asking questions about CAO after a power struggle waged in October between Hare and some board members. Amid concerns about the agency's books, a board majority voted to fire Hare seven months ago. An accounting firm was then hired to conduct a forensic audit that could detect fraud.

But the vote to fire Hare was nullified by the agency's attorney – one of the mayor's confidantes – and months later Hare's critics were dismissed from the board. The forensic audit never materialized, and an armed security team blocked the door when four dismissed directors tried to attend a meeting to demand their seats.

Attorney helps mayor’s ally keep CEO job with nonprofit

One of the three sources the FBI asked about Grassroots told the agents that Garner back in October sought to intervene on Hare's behalf soon after the vote to fire him. But Garner told The News he did not attempt to contact any member of the board. He said he heard, by word of mouth, that board members had tried to fire Hare, so he called his longtime friend "to show support."

Unlike Garner, the mayor did appeal to a board member on behalf of Hare. The mayor sought out then-board president Jenine Dunn, an email indicates. Neither Dunn or Brown will discuss their conversation. But former board treasurer Jennifer Shank said Dunn told her that she refused to have the board reconsider Hare's termination. Shank and Dunn were among the directors who voted to fire Hare in October and were ousted in January.

Shank weeks ago told The News of the FBI's interest in the CAO. She said agents knocked on her door Feb. 20, the  first business day after The News wrote about the CAO's internal power struggle and the dismissal of certain directors. The News has since confirmed that the State Attorney General's Office is examining CAO matters as well.

Brown on Grassroots raids: 'I don't know anything'

The Buffalo News: Good Morning, Buffalo

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