Western New York

Buffalo Budget Problems?

From the Morning Memo:

The Buffalo mayor and comptroller appear to be at odds over the state of the city’s financial situation.

Comptroller Mark Schroeder released a report Thursday claiming the city operated at a $23 million loss during the last fiscal year. He said in order to fill the gap, the administration once again tapped into reserves.

Schroeder has consistently criticized the mayor’s balance for having a structural imbalance and said there aren’t anymore unassigned funds to dip into if revenues fall short for the current budget.

 “The city has squandered more than $107 million of its reserves in the past eight years,” he said. “The reserves at a such a low level right now, there won’t be enough to fill budget deficits moving forward.”

The Mayor’s Office, however, maintained the year end financials did not include any gaps or use of reserve funds that weren’t anticipated. It claimed if not for the loss of $7 million in casino revenue from the Seneca Nation of Indians, the city would have been in the black this year.

“As we have stated many times, we are confident that there will be an end to this impasse shortly and that we will receive the monies that are owed to the City. Any surplus funds will be redeposited into the Unassigned Fund Balance,” city spokesperson Mike DeGeorge said. “We also disagree with the assertion that any City funds have been ‘squandered’. We remain a stronger, smarter, safer City that continues to grow and provide quality services and greater opportunities for all of our residents.”

The Seneca Nation claimed it has fulfilled its obligation in a revenue sharing agreement with the state. It has not made a payment since Spring 2017 and the dispute is currently in arbitration.

The other cities where Seneca casinos operate, Niagara Falls and Salamanca, have also complained the loss of revenue has hurt their bottom line.

The Nation, which recently elected a new president, was not immediately available for comment.

Start-Up NY Success Symbol Closes, Blames Trump Tariffs

From the Morning Memo:

A Buffalo-based tablet company often held up as one of the Cuomo administration’s success stories, announced Thursday afternoon it was closing.

The 77 remaining workers at Bak USA will be laid off. The company was part of the Start-Up NY program which offered expanding businesses significant tax breaks and academic partnerships.

When critics questioned the program’s results the administration often pointed toward Bak, which not only was growing but sought to hire workers from disadvantaged communities in the Buffalo region.  However, Chairman JP Bak said the business didn’t make enough of a profit to sustain itself.

“My family started this business nearly four years ago with a bold vision: to empower American students and workers by producing computers in the U.S.,” he said. “Through the innovation and hard work of our talented team, we achieved more than we dreamed. Regrettably, the economic pressures on our young company have become too great to withstand.”

Bak actually blamed the Trump administration, at least in part, for the failure. He said the additional, unanticipated costs as a result of tariffs imposed by the White House were a deciding factor in the decision to close.

WNY Democrats found the reason easy to believe.

“I wish this federal policy was different than it is. Unfortunately, these tariffs that have been imposed have consequences and in the case of Bak USA, an American tablet manufacturer, the consequences have been devastating,” Buffalo Mayor and State Dem Chair Byron Brown said.

Erie County Executive Mark Poloncarz echoed the mayor’s sentiments, adding he spoke with the chairman about his efforts to keep the company owning as recently as Thursday morning. Bak USA opened its global headquarters near downtown Buffalo in 2015.

Rochester Lobbyist Arrested In Connection With Bribery Scheme

Federal prosecutors have charged a second person in connection with a bribery scheme that originated in Monroe County.

Lobbyist Robert Scott Gaddy was arrested Thursday for allegedly willfully aiding and abetting bribes to state Assembly Member Joe Errigo, in order to influence him to introduce legislation aimed at obstructing a pending development project. Law enforcement arrested Errigo in connection with the same scheme last month.

According to the complaint, an individual working with the Federal Bureau of Investigation, conspired with Gaddy and Errigo and paid the two men a total of $10,500 over the course of several months. The lobbyist was originally approached about coordinating with another legislator, identified as “Member A,” but Gaddy suggested Errigo introduce the bill.

“The people of Western New York, like all our citizens, deserve to have representatives who act in the public’s interest, not for their own personal financial gain,” U.S. Attorney J.P. Kennedy said. “Where, as alleged here, legislative acts are undertaken not on their merits but in exchange for the payment of bribes and in hopes of personal financial gain, then all involved in the corruption of our legislative process ought to expect to face criminal charges.”

The FBI said it did not allow the proposed legislation or any other official acts to advance beyond preliminary stages. The legislation in question was assigned bill number A10227.

The official charges are: Bribery concerning programs receiving federal funds, and honest services wire fraud. Gaddy made his initial appearance Thursday and is due back in court in December for a status conference.

If convicted, he could face up to 20 years in prison and a $250,000 fine.

Bannon : Don’t Jump to Blame The Right for Attempted Attacks On Dems

From the Morning Memo:

Former Donald Trump advisor Steve Bannon arrived a little later than expected to his Western New York event last night, thanks to tightened security at the airport in New York City after a handful of major national Democrats, and a significant news organization, were mailed suspicious packages.

Bannon condemned the attacks, which were all targeted at individuals or outlets of which the president himself has been publicly critical, but bristled at the idea that this could be the result of the political rhetoric pushed forward by his former boss.

In fact, Bannon said people should not rule out the possibility of a “false flag” attack with Election Day less than two weeks away.

“You’ve just got to get the facts,” Bannon said. “First off, it’s totally and completely unacceptable. If people on the right did it, it’s unacceptable. If people on the left did it, the act itself is totally unacceptable.”

“Whoever did it, it seems to me the logic would be to try to galvanize enthusiasm on the left to say, hey look, these are these crazy right-wingers. People in the middle, you’re going to have this divisive language.”

Bannon said violence on both sides needs to stop, although he believes such incidents are often overlooked by the media when they are generated by the left. He said violence should not be confused with civil protest from his opponents, which he insists he respects – even if he disagrees with their opinions.

Organizers of Bannon’s event in WNY had claimed it faced its own threats, but Democrats claimed that was lie meant to stir up the base.

Either way, last night’s “Reed Tide Rising” rally went off incident free, with the biggest disruption being a band playing loud music outside the fire hall.

DiPietro Cancels Fundraiser With Bannon, Blames ‘Radical Leftists’

Assemblyman David DiPietro, R-East Aurora, was planning to host former Trump advisor Steve Bannon as a featured guest at his fundraiser following Bannon’s Get Out The Vote rally in Elma next week.

But DiPietro canceled the reception on October 24 at the Roycroft Inn in East Aurora because he said the historic hotel and restaurant was receiving constant threats of violence and property destruction. He said, because of the threats, the property managers were requiring the DiPietro campaign to provide additional safety measures including 30 uniformed police officers and a $5 million insurance policy.

The assemblyman blamed radical violent leftist for forcing the decision and said threats came from as far away as Portland, Oregon and Oakland California.

“The good people at the Roycroft Inn are deeply concerned. This morning I realized nowhere is safe in today’s political climate – even my  historic hometown,” DiPietro said. “As a boy, my family celebrated many milestones at the Roycroft. As mayor of East Aurora, I helped the Roycroft with too many projects to recite. The vision of this beloved building in flames, swarmed by masked rioters, was too much”

For now, it appears the GOTV event on Wednesday at the Jamison Road Fire Hall in Elma is still on track. Organizer Michael Caputo, who works closely with Bannon, has said this kind of reaction to his visits is relatively common.

DiPietro said he will still hold a long-planned fundraiser at the Roycroft on Thursday with no guest of honor.

Pigeon Pleads Guilty In Federal Court

Steve Pigeon, a well-known and well-connected political operative in Western New York, pleaded guilty Tuesday to his second felony charge in less than two weeks.

The litigation has been ongoing for several years but with the plea, there are no more outstanding charges against former Erie County Democratic Committee chairman.

“It’s over,” defense attorney Paul Cambria said. “We’ve wrapped everything up. Three indictments are gone.”

Pigeon admitted to soliciting and coordinating an illegal $25,000 campaign donation from a foreign national through a straw donor.

“When it comes to the election process generally and to campaign contributions in particular, transparency is really the primary tool that we use to eliminate graft and dishonesty,” U.S. Attorney, Western District of New York, J.P. Kennedy said.
Federal prosecutors originally brought these charges against Pigeon in May 2017, but subsequently dropped them, instead moving forward with charges in which he was accused of bribing a judge. Late last month, he pleaded guilty to bribery in a parallel state Supreme Court case. The state Attorney General agreed to drop separate election law charges as party of the deal and the U.S. Attorney turned back to its original case.

“We felt that it would be appropriate to include this additional criminal conduct and to hold him responsible for that and that’s what happened today,” Kennedy said.

Cambria believed it was a good disposition for his client.

“There are few people in the world who can withstand three separate indictments and three separate trials and so that had a lot to do with resolving the case the way we did,” he said.

Although not named in the indictment, the contribution in question went to Governor Andrew Cuomo’s 2014 reelection campaign. The campaign has maintained the public records make it clear it did nothing wrong.

The U.S. Attorney would not comment about the possibility of further action related to the matter but Pigeon’s attorney Paul Cambria says cooperation with any ongoing investigation is not a stipulation of his deal.

“If there were, we  wouldn’t discuss that anyway. I mean that  isn’t the kind of thing that you talk about in news conferences but no, we don’t have any obligations at this point as we sit here so we’ll go forward,” Cambria said.

Pigeon faces up to five years in prison and a $250,000 fine although federal sentencing guidelines suggest ten to 16 months. Cambria, while not conceding his client will serve any time, said he believes there’s a good chance the state and federal sentences could be served simultaneously.

WFP Member Would Have Supported Collins Removal From NY-27 Ballot

From the Morning Memo:

For six weeks, Republican leaders in NY-27 examined a multitude of ways to remove indicted Rep. Chris Collins from the November ballot.

All the while, local Democrats argued that any effort to replace the embattled incumbent congressman with a less problematic candidate would be a fraudulent undertaking, and promised to challenge the substitution in court.

Erie County GOP Chair Nick Langworthy said he believed the party had legal and viable options.

He accused his opposition of being hypocritical, and said they would not be raising the same red flags if and when, for example, the Working Families Party looked to remove failed Democratic primary gubernatorial candidate Cynthia Nixon from its ballot line.

This became something of a moot point after Collins surprised Langworthy and other local Republican leaders by deciding to remain on the ballot on the advice of his legal team. However Langworthy’s hypothetical is happening now.

The Working Families Party is waiting on Gov. Andrew Cuomo’s decision about whether to accept what was originally Nixon’s designation, and, in a complicated bit of Election Law maneuvering, has bumped the actress-turned-activist down to run in the Assembly district currently occupied by Manhattan Democrat Deborah Glick.

Langworthy on Twitter Wednesday, perhaps a bit tongue-in-cheek, suggested “fraud” a half a dozen times.

WFP Executive Committee member Phil Rumore, however, rejected the comparison between the Nixon and Collins situations. Most notably, the Buffalo Teachers union president pointed out, the erstwhile gubernatorial candidate isn’t facing any federal charges.

However, Rumore says he actually agreed with the idea of Collins being removed from the ballot.

“You don’t want to disenfranchise the voters in that are by having somebody that’s been indicted for a serious crime,” he explained.

Rumore admitted he thinks an alternative Republican would have made the race even more complicated for Democrat Nate McMurray, whom the Buffalo Teachers Federation has endorsed.

Pigeon ‘Exploring Resolution’ In Federal Case

From the Morning Memo:

Former Erie County Democratic Committee Chair Steve Pigeon appears to be working out a plea deal with federal prosecutors.

According to court records, Pigeon is scheduled for a change of plea hearing Tuesday of next week. Roughly a year ago, the political operative pleaded not guilty to eight felony counts, including bribery and wire fraud.

Pigeon faced parallel charges in state Supreme Court until last week, when he admitted to one felony bribery count. The judge agreed to cap his sentence at the misdemeanor level of one year.

Both cases are connected to a scheme in which Pigeon exchanged a series of favors with a state Supreme Court justice, including trying to help his family members get a job and a political appointment. In return, he would receive influence over some case in front of the judge.

The state AG’s office said Pigeon would lose his law license as part of the deal. His sentencing in state Supreme Court is scheduled for Dec. 21.

As for the federal case, there’s no word yet on how much leniency Pigeon may receive. “We are exploring resolution,” was all his attorney Paul Cambria would say.

The U.S. attorney’s office had originally charged Pigeon with coordinating and soliciting a back-door donation from a foreign national to the governor’s 2014 reelection campaign. Those charges were dropped after the bribery indictment was unsealed.

The state plea also satisfied charges Pigeon’s faced in a separate election law case so his days in court may soon be over.

Pigeon Pleads Guilty To Bribery Charge

Former Erie County Democratic Committee Chairman Steve Pigeon pleaded guilty to a felony count of 3rd degree bribery Friday morning in state Supreme Court.

The political operative admitted to bribing former state Supreme Court Justice John Michalek, who pleaded guilty himself more than two years ago. According to the Attorney General’s office, Pigeon offered Michalek assistance in obtaining employment and a political appointment for two of the judge’s family members, as well as providing free tickets to a political fundraiser and a professional hockey game.

In exchange, there was an understanding Pigeon would have influence over Michalek’s official actions on the bench. The exchanges are detailed through emails and text messages from February 2012 to April 2018.

“As we detailed, Steve Pigeon orchestrated a brazen, multiyear scheme to bribe a sitting judge – demonstrating flagrant contempt for the rule of law and the interests of New Yorkers. Now, he’s being brought to justice,” Attorney General Barbara Underwood said. “We have zero tolerance for public corruption. New Yorkers deserve to be able to trust the integrity of their officials – and my office will continue to do everything in our power to hold accountable those who violate that trust.”

The charges originally stemmed from a 2013 election law complaint against Pigeon which led to federal investigators executing a search warrant in May 2015. Pigeon not only faced nine charges connected to the bribery scheme but was eventually charged in state Supreme Court for the election law complaint connected to his independent expenditure committee the WNY Progressive Caucus.

The AG’s Office said Friday’s plea satisfied the charges against him in that case, as well. Pigeon faces up to one year in prison and will lose his law license.

His sentencing is scheduled for December 21. Michalek, who was charged at the same time, has not been sentenced yet either, but did resign his judgeship and was disbarred.

The legal process took several years, in part because of several rulings and challenges between the prosecution and defense over whether seized emails were admissable in court. Ultimately, the judge ruled with the attorney general.

Pigeon also faces parallel charges in federal court and his attorney Paul Cambria suggested that was a factor in them accepting the deal.

“Just defending so many indictments on so many fronts is a daunting task for anyone. Resolving all of this and the state indictments at this level was a satisfactory alternative, particularly with the condition that sentencing would be at misdemeanor level,” Cambria said.

The state trial was scheduled to begin next month.

Niagara Falls Mayor Welcomes $12.3 M Advance

From the Morning Memo:

Help came just in time for the city of Niagara Falls and its mayor, Paul Dyster.

The city council and Dyster had been struggling with a shortfall in the early stages of this year’s budgeting process. Last March, the Seneca Nation of Indians made its last payment to the state, claiming it had fulfilled its obligation as part of a gaming revenue sharing agreement. A large portion of that money would have gone to Niagara Falls, where the Senecas operate their largest casino.

“There was just a report from the state Comptroller’s office that had us as the third most stressed of six cities that were identified as being under conditions of financial stress,” Dyster said. “If you look at the way the score was derived, it’s almost entirely the result of the casino situation.”

Then the state stepped in, advancing the city $12.3 million. The state and the Senecas are in the middle of an arbitration process that could be complete by as soon as mid-December, according to Gov. Andrew Cuomo.

However, Dyster said Niagara Falls still needs to complete its final budget by the first week of December, and isn’t completely out of the woods – fiscally speaking.

“The arbitration timeline doesn’t line up with our budget timeline,” the mayor said. “We saw that situation evolving over a period of months, and we’ve been in negotiations with the governor’s office for quite some time, resulting in the announcement that you heard today.”

The money means Dyster and the Council can avoid unwanted cuts to things like fire and public safety. But the mayor said the city still needs to figure out how to become less reliant on the casino money.

The revenues have been gradually reducing over the last few years due to more competition in the gaming market.

Also, Dyster pointed out, even in the best case arbitration scenario for the state, the current compact would still run out in 2023. The mayor said the city will still consider a new garbage collection fee of up to $200, but now it may be able to offset those costs by keeping property taxes consistent or even perhaps a cut.