Sin tax final score: Sports and money 56, frugal populists 44

For Clevelanders who follow politics, today’s the aftermath of a major conflict.

Nearly the entire political and business establishment lined up to support Issue 7, the alcohol and cigarettes tax for stadium renovations. A scrappy coalition of activists opposed it with a ferocity that had nothing to do with spending 7 1/2 more cents on a six-pack of beer.

The final score: Issue 7 passed, 56 percent to 44 percent. What’s that mean, beyond the price of a cigarette pack or a scoreboard? A lot. Here are a few keys to understanding the vote.

It’s a sports town. Someone recently wrote that losing the Browns in 1995 wounded Cleveland as badly as losing the Dodgers did Brooklyn. It’s true. For many Clevelanders, the sports teams make up a huge part of the city’s identity.

The major leagues drive hard bargains with cities. The public cost of owning Progressive Field, Quicken Loans Arena and FirstEnergy Stadium is going above $1 billion with this vote – to $1.2 billion from 1990 through 2035, Cleveland Magazine has calculated. Yet, we learned yesterday, a majority in Cuyahoga County is willing to pay it.

The frugal populists revolt. A lot of people in Cuyahoga County – about 44 percent of people, it turns out – think it’s unfair, outrageous, and illegitimate to spend tax money to build and renovate sports stadiums. Issue 7 gave a new generation a chance to join a rematch of the May 1990 vote on Gateway, which realigned local politics in ways that still resonate.

Many sin tax opponents weren’t just resisting the great expense of being a sports team’s landlord. They were frugal populists who treated Issue 7 as a vote on the entire Cleveland political system, especially the alliance of government and business.

The best way to understand most Cleveland political debates isn’t party politics. It’s, do you believe in spending tax money on “public-private partnerships” that draw people and business downtown? Or do you thinks that’s corporate welfare, giveaway of money better spent on other needs? That debate has run through our politics for decades, from tax abatement in the ’80s through Gateway in 1990 through the convention center debate in 2007, to the sin tax rematch yesterday. (For more on this great divide, check out my commentary after George Voinovich retired – the conflict traces back at least to his years as mayor.)

Populism declines in City Hall. Plenty of voters may have wanted to pressure the sports teams for a better deal, but almost no politicians did. Some were pragmatic, believing the city and county had little leverage to reopen lease negotiations midway through a binding contract. For instance, Mayor Frank Jackson voted against the stadium leases in the ’90s as a city council member, but felt bound to honor them as mayor.

Still, the near-unanimous support for Issue 7 among city and county officials reflects a political realignment. There aren’t many Dennis Kucinich-style leaders, ready to fight big business, in Cleveland politics anymore.

Money talks. Of course money affects elections. And the business-political alliance will always outspend the frugal populists. Issue 7 supporters spent more than $1 million, mostly from the teams, to get their message out. Polls suggest that helped sway undecided voters and turn the election around. Opponents had much less to spend.

What now? The debate about public stadium spending isn’t over. For one thing, the city and county have no agreement on how to split up the new sin tax money. I asked city council president Kevin Kelley about that on WCPN this morning, and he couldn’t say how it’ll be resolved.

The city and teams would like an even three-way split of the funds. But the county council isn’t inclined to do that. It may keep control of the sin tax funds and force the city to come to it, hat in hand, every time FirstEnergy Stadium needs repairs. Or, the city and county may negotiate a cooperative agreement on how to split the money, maybe with some new committee deciding how to set priorities.

I wouldn’t even be terribly surprised to see the Gateway board take over FirstEnergy Stadium. Gateway already has a system for comparing and prioritizing repairs at Progressive Field and Quicken Loans Arena. So why not bring the football stadium under that system, once the funding source is the same?

Whoever’s in charge of spending the stadium tax money will have an important job. They’ll have to manage the teams’ renovation requests so the costs don’t exceed the projected $260 million tax revenue. If the anti-sin tax crowd wants to stay engaged, it has plenty to watch and probe.

Kevin Kelley talks vacant housing, council discipline, East Cleveland merger

My Q-and-A with Kevin Kelley, Cleveland’s new city council president, is out now in the March issue of Cleveland Magazine.

Kelley’s election may lead to a more assertive city council than we’ve seen in eight years. His predecessor, Martin Sweeney, valued cooperation with Mayor Frank Jackson and let the mayor's office set civic priorities. Kelley’s agenda for 2014 includes initiatives on vacant housing and gun violence, both still in the study stage.

The 45-year-old councilman from Old Brooklyn talked with me about his insistence on better discipline and decorum in council, his plans to step up home demolitions, and his thoughts on whether Cleveland should annex East Cleveland. Here’s an extended version of his answers. You can read his comments about why he supports extending Cuyahoga County’s alcohol and cigarette tax for stadium repairs in this blog post.


CM: What are your plans for vacant housing?

KK: The council has commissioned a study to look at the effect of demolition and how it affects property values. We need to aggressively attack these houses. Some homes are candidates for restoration, but what’s really causing the devaluing of real estate is the 5,000 we can all agree need to come down. The biggest challenge is not identifying the houses to come down, but identifying the money.

CM: Councilman Jeff Johnson will often make the case: I don’t just want demolition, I represent a historic neighborhood, I want some of these properties preserved, and I want to find money for that too.

KK: Certainly there are some [houses] that are candidates for restoration. But the biggest part of the problem is those that must come down. Even councilman Johnson or those who are active in the historic preservation community would agree that there are homes that are beyond saving. It’s bringing all of our property values down.

CM: At a retreat just after New Year’s, you told councilpeople to show up to meetings, show up on time, understand what they’re voting on, and pay attention to testimony. But only 10 out of 17 councilpeople attended your retreat. Does that prove your point?

KK: No. That was something I wanted to do before we started the session. I knew it was during the holidays, some people told me they were out of town visiting family. If it were held while we were in session, I’m confident we’d have 100 percent participation.

Look at attendance and punctuality since that retreat. Every meeting has started within 3 minutes of its starting time. We’re acting in a more professional manner. I think we’re taking things more seriously. I’m trying to make people more cognizant of the fact that when you sign your signature or cast a vote, millions of dollars are appropriated. When you consider the enterprise funds and the general fund, we appropriate over $1 billion a year. That’s something we need to be aware of, and that’s why I insist everybody be at their seats when the roll is called.

There was not a lot of chatter during the legislative portion of the meeting. There was not a lot of roaming around. The directors have agreed to come to meetings 10 minutes early to discuss any issues councilmembers might have so that please don’t have to roam around during the meetings. Overall, these changes are being accepted by my colleagues.

CM: What do you think about talk of Cleveland and East Cleveland merging?

KK: We need to commission a study that will look at whether this makes sense for both communities. It’s an intriguing opportunity, but we need to look at the cost of providing services to East Cleveland. There’s a lot of risk, but a lot of opportunity. It’s too early to say whether it’s definitely something we should or should not do. We need to take a very sober, thoughtful approach to this.

CM: What are the risks for Cleveland?

KK: The risks are that our budget is very tight. There’s not a lot of extra money. Our biggest challenges are providing safety forces. They take up 55 percent of our budget. Are we able to extend that level of service to what would be a new part of the municipality? Are we able to deal with the infrastructure challenges that East Cleveland poses? We have our own infrastructure challenges, in terms of the conditions of our roadways.

CM: What are the opportunities for the city?

KK: The opportunities are, there’s a lot of gems in East Cleveland. There’s a lot of nice old houses, parks, industry — [GE’s] Nela Park is still there. They have big city problems on a small city budget. If we come together, and that helps our ability to bond projects, can we be better together because of our now increased population, income tax and property tax values?

When we look at the big-city problems some of our inner-ring suburbs are facing, it’s an opportunity to demonstrate to other communities that by coming together, we can solve these problems together. We can make this work, we can do a merger and keep the local character, but get the benefit of working together.

CM: Could this pave the way for other mergers in the future?

KK: If it’s determined that it’s in Cleveland’s interest, and it is done well, and it can demonstrate that because of its merger, East Cleveland is in a much better position and Cleveland is in a better position — then yes, it can be seen as a transformative step that other communities can take and [a way] we can build a better Greater Cleveland.

CM: What was it like to be Kevin J. Kelley when a J. Kevin Kelley in the town next door was indicted on corruption charges?

KK: That was an interesting time! When it first happened, there was quite a bit of confusion. A couple of callers to my office were “so disappointed” in me. It was a tough time. With each subsequent headline, the effect on me lessened a little bit. But every now and then, one of my friends’ moms would say, “Oh, I know Kevin’s going to be OK. I know he didn’t do anything.”

Council president Kelley defends Browns deal, supports sin tax

Kevin Kelley got grilled about Browns stadium funding on Tuesday. Cleveland’s new city council president sat in a circle at Speakeasy, the bar below Bier Markt on West 25th, and took questions at the end of a Civic Commons event. Five straight people asked him about the council’s November vote to pay $30 million for stadium repairs and upgrades over the next 15 years.

Kelley said the Browns’ lease binds the city to make the repairs. But he found the agreement between the cash-strapped landlord and billionaire tenant a tough sell.

“Are we always going to own Browns Stadium?” one woman asked. “Is there a plan ever to have the Browns buy Browns Stadium?”

“The city owns the stadium, and we probably always will,” Kelley said. “We owned the one before it.” That’s common in most cities, he said.

Kelley said he voted for the agreement because the city’s lawyers and a study by the engineering firm URS pegged the city’s lease obligations at about $30 million. “I wasn’t going to authorize a nickel that wasn’t contemplated in the lease,” he said. The Browns wanted the city to do more, “and the city pushed back quite a bit.”

Three weeks into the 45-year-old Old Brooklyn councilman’s job as president, stadium funding is the big question he’s got to face. Yesterday, Kelley urged the Cuyahoga County Council to put the “sin tax” on alcohol and cigarettes on the May 6 ballot and encouraged county residents to vote for it.

“We as a community made a decision through the ballot box that we wanted to build these sports facilities,” Kelley told me today. FirstEnergy Stadium, Progressive Field and Quicken Loans Arena are all publicly owned, part of the deals struck in the 1990s to bring the new Browns to town and make the Indians and Cavaliers happy long-term tenants.

“We own these,” Kelley told me. “We have to make these repairs. It’s either going to come out of the sin tax or it’s going to come out of the general fund, which pays police officers, firefighters, which pays EMS, which pays for recreation centers. It maintains the parks our kids play at. It plows our streets.

“It’s not a giveaway of public funds to rich owners,” he insisted. “It’s meeting the obligation that we as a community made many years ago -- because the city and the county have to make these repairs. We have leases, we have obligations. It’s either a penny a beer, 4½ cents on a pack of cigarettes, or it’s going to come out of the general fund.”

The Browns’ stadium lease, approved in 1996, looks different to many Clevelanders in 2014. Back then, Cleveland, wounded over the Browns’ forcible removal to Baltimore, was determined to get an NFL team back.

Now, the bills are mounting. City Hall is tapping its general fund for $2 million a year to fix and improve the football stadium. It still owes $11 million a year on the stadium’s construction debt. Up to now, the sin tax has covered those debt payments, but it expires this year.

To my surprise, Kelley told me the county council hasn’t decided if a sin tax renewal would cover all of the football stadium debt. The council still has to agree on how much of the hoped-for tax money would go to FirstEnergy Stadium and how much to the Q and Progressive Field. That may or may not happen before the tax renewal goes on the ballot.

At Speakeasy on Tuesday, one voter suggested the city needs to demand better lease terms from the Browns. “Many people say that deal was made somewhat under duress, there was a desperation for some kind of team,” he told, “so it wouldn’t be out of line to renegotiate in some fashion by being really aggressive.”

I asked Kelley about that. “You would need both sides come to the table to open it up,” he replied. “I don’t know that that discussion has been had yet.” He suggested the city would find itself in a tough bargaining position. “It’s difficult to open negotiations in the middle of a lease,” he said. “Now that we’re in this lease, it’s very challenging to say, ‘We’ve changed our minds.’”

FBI, IRS investigated Dimora, Kelley, payment to Staubach Co. over Ameritrust Tower purchase

The FBI and IRS investigated whether Cuyahoga County officials received bribes for their decisions on the ill-fated Ameritrust Tower project, a prosecutors' filing revealed today.

Among the details alleged in the filing: Anthony O. Calabrese III -- an attorney for The Staubach Co., the county's real estate consultant -- asked county employee J. Kevin Kelley to lobby Jimmy Dimora to buy the Ameritrust complex.  Calabrese, who represented Staubach in contract negotiations with the county, promised to reward Kelley if the county purchased the complex.

And in October 2005, soon after the county bought the Ameritrust Tower and paid Staubach $2.6 million for its consulting work, Kelley and a company with a tie to Calabrese both received five-figure payments as part of an unidentified series of financial transactions.  The FBI and IRS investigated whether any money from Staubach was "funneled through others for the ultimate benefit of public officials," the prosecutor's filing said.

The new information is part of a superceding indictment of Calabrese, who's scheduled for a September trial on corruption charges.

However, the filing is also significant for what it does not say.  It doesn't assert that Kelley actually lobbied Dimora, or that Dimora received anything of value for his Ameritrust decisions, or that any of the Staubach money actually went indirectly to public officials, or that the Staubach Co. was aware of what Calabrese was allegedly doing.

Staubach isn't named in the Calabrese indictment, but the company is easily identifiable from details. (Only one "global real estate advisory firm" got paid $2.6 million "related to the Ameritrust project" in fall 2005.) The company had recommended that the county lease, not buy, the Ameritrust Tower as a headquarters site. Its contract called for it to be paid more than $4 million if a deal on a property it recommended was completed.  That $4 million-plus was later negotiated down to a $2.6 million.

Rob Roe, who was managing partner of Staubach (now part of Jones Lang LaSalle), told me in April that nothing about Calabrese’s conduct while representing him appeared improper or gave him pause, and that Calabrese never talked about using any connections in county government to help with the contract.

Calabrese faces only one charge related to the Ameritrust Tower investigation: tampering with a witness or informant.

The indictment alleges that, a week or two after the July 2008 FBI corruption investigation raids, Calabrese met Kelley in downtown Cleveland. They went from a hotel lobby to the 21st floor of the Justice Center, the filing charges, where they talked in a place overseen by someone they could trust: then-judge Bridget McCafferty's jury deliberation room.  The charge alleges that Calabrese talked about the county corruption investigation and a Business 57, which had given Kelley $70,000 three years earlier.  Calabrese made false statements to Kelley, the charge says.

The new charge, Count 20 in today's indictment, explains a lot of the buzz around the Ameritrust Tower lately.  It reveals some of what the FBI was investigating in 2007 and 2008 (previous clues appeared in Judge Sara Lioi's late December opinion).

It also shows that county executive Ed FitzGerald's decision to investigate the Ameritrust Tower purchase, the Staubach contract, and Calabrese's relationship to it isn't just based on idle suspicion.  Judging by what he and top aides told me earlier this year, the U.S. Attorney has been communicating with him and county inspector general Nailah Byrd about the Ameritrust Tower's place in the corruption investigation.

The Calabrese indictment also contains a cameo appearance by Tim Hagan, aka Public Official 10, but it's one Hagan might find flattering: "PO10 [Hagan] questioned the County contracting with Business 55 [Staubach]. Despite PO10's concerns, the County awarded Business 55 an approximately $3 million contract related to the Ameritrust purchase and transition." (Mostly true, except the contract was signed before Hagan took office.)

Here are some links to my previous reporting about the Staubach contract and FitzGerald's Ameritrust investigations:

"How the county spent $3 million on Staubach’s Ameritrust contract," April 30

"How Hagan and Co. cut Staubach loose from Ameritrust deal," May 1

"Two county investigations of Ameritrust Tower underway since December; feds cooperating," March 16

"Can FitzGerald sue Staubach over Ameritrust Tower?" March 23

"FBI investigated failed Ameritrust Tower sale, asbestos contract," Dec. 29


(photo from clevelandskyscrapers.com)

Mason mum on race to succeed him, but he's watching

I ran into Bill Mason last month at an event and asked him if he was endorsing in the race to succeed him as Cuyahoga County prosecutor. No, he said, and gave the standard diplomatic line of an incumbent laying low, some variation on, "There's a lot of good candidates out there."

Then Mason told me about a vote the Democratic Party ward leaders had taken the day before on whether the party should endorse a candidate. Like an NFL fan obsessing over his betting pool, he recited the numbers from memory:

28 votes to recommend

James McDonnell, 26
Kevin Kelley, 16
Tim McGinty, 7
Subodh Chandra, 4
Bob Triozzi, 1

Mason may not be running or endorsing, but the veteran political pro still loves the game.

I was surprised at the results. McDonnell, a defense attorney and brother of county judge Nancy McDonnell, is the least known of the five candidates. (Kelley is a Cleveland councilman, McGinty a county judge, Chandra and Triozzi former Cleveland law directors.)

Mason said McDonnell had been working hard for the endorsement, spending months making the rounds of ward meetings to introduce himself.

I knew this was true. I met McDonnell this summer at Zagara's grocery store in Cleveland Heights, where he was wearing a James J. McDonnell For Cuyahoga County Prosecutor T-shirt. He told me he was visiting Democratic neighborhood picnics and the like.

Back then I might've agreed with Mark Naymik's description of McDonnell in an October report on the race: "He's amiable but over-confident and is relying on a decent ballot name to propel him." Guess he wasn't over-confident after all. All that hard work is paying off.

Just how much it pays off, we'll see today. The county Democrats are gathering at the Music Hall to vote on whether to endorse in the March primary. A winner could get a big advantage. Ed FitzGerald's party endorsement in last year's executive race helped propel him through the primary.

But it won't be easy for McDonnell or anyone else to get that endorsement. As Mason, the experienced party politicker, pointed out, a candidate needs 60 percent of the vote to get it. So the five-way race could remain wide open until the voters get a chance to decide.

Update, 12/8: No one got the endorsement. Anastasia Pantsios describes the meeting and vote on Ohio Daily Blog: McDonnell had support in the western suburbs, Chandra in the eastern suburbs, Kelley in the city of Cleveland.

Update, 12/15: Mark Naymik reports that every Parma Democrat voted for McDonnell. Hmm...

Primary moves back to March 6; Kucinich-Kaptur, prosecutor races to heat up

UPDATED with Kevin Kelley campaign announcement.

Buried in the news that Ohio Republicans rushed their ruthlessly gerrymandered congressional map through the state House and Senate this week was another change: Ohio's 2012 primary will be on March 6 after all, not May.

So if Mitt Romney and Rick Perry battle to a near-tie this winter, Ohio Republicans may actually get a say in who their presidential candidate will be, as Democrats here did in the tight 2008 race between Barack Obama and Hillary Clinton.

It also means campaigning will start soon in two big local races. Dennis Kucinich will be fighting to stay in Congress, forced to compete against fellow progressive Marcy Kaptur from Toledo.

And the race to succeed Bill Mason as county prosecutor will get hot fast.

Cleveland city councilman Kevin Kelley announced today that he's running for the job. (No, he's not Parma's J. Kevin Kelley, of corruption scandal fame.) "Kelley’s plans for the office include expanding the community-based prosecution model, improving efficiencies to save taxpayer dollars, and focusing on quality of life crimes that destroy neighborhoods," his press release says.

I've already blogged that Subodh Chandra, Bob Triozzi, and James McDonnell are running. Recently, Mike McIntyre, in Tipoff, basically confirmed a rumor I've heard: that judge Timothy McGinty is thinking about running too.

Meanwhile, Brent Larkin swiped at Mason in his Sunday column, as if to urge voters to elect a less political prosecutor this time.

What do corruption charges add up to?

What do today's charges against J. Kevin Kelley mean for those higher up?

If "Public Official 1" and "Public Official 2" in the prosecutor's filing are Jimmy Dimora and Frank Russo, then the feds are likely eyeing at least three possible charges against the county commissioner and four against the county auditor.

The prosecutor's filing suggests that Public Officials 1 and 2 went to Las Vegas in April 2008 and had parts of their trip paid for by officials with the halfway house Alternatives Agency and the contractors Blaze Building and Phoenix Cement -- businesses with county contracts that had recently been approved by the county commissioners or were pending before them. The feds allege that Officials 1 and 2 used their influence to benefit the companies, or tried to.

Official 1 allegedly got to use a condo in the Stonebridge development and use a limo 22 times in connection with the Stonebridge owner's purported efforts to hold onto the county engineer's office as a tenant.

Official 2 allegedly gave J. Kevin Kelley a raise and reduced hours to reward him for not running for mayor of Parma. Also, it's alleged that Official 2 got cash in exchange for helping a company acquire a subcontract on the county's geospatial information systems project.

I've added comment from Alternatives Agency and a lawyer for K&D to previous posts here and here. I've put calls in to lawyers for Dimora, Russo, Kelley, and Blaze and Phoenix. If I hear from any of them, I'll post about it.

Feds: Berea contractor paid for part of trip to Vegas, got help with bid and his choice of inspector

The complaint against J. Kevin Kelley and others also alleges that a business executive paid for parts of PO1 and PO2's April 2008 trip to Las Vegas.

Last year, Phoenix Cement of Berea got a $4.6 contract for a concrete job at the new county juvenile justice center. Blaze Construction, which shares an address with Phoenix, got a $2.8 million contract to resurface part of Snow Road in Parma. Blaze also bid on a $36 million general trades contract at the juvenile justice center, but didn't get it.

All three of those contracts are mentioned in the charging document against Kelley, though Phoenix and Blaze are referred to as Business 4 and Business 3.

An executive of both companies, "BE1," is alleged to have spent $4,500 on the Vegas trip "entertaining KELLEY, PO1, PO2, and PO2's travel companion." The document says: "On approximately seven occasions during the April 2008 Las Vegas trip, BE1 gave gaming chips to PO1."

When a problem developed with Blaze's bid on the $36 million contract, the complaint against Kelley alleges that "PO1 and PO2 talked on the telephone to each other and to other County employees concerning the problem with BE1's bid and instructed County employees to research bids, collect documents, contact other County employees, and take other actions with the intent of assisting BE1's companies."

Blaze didn't get the contract. It went to competitor Panzica Construction in April 2008. It got the Snow Road contract in May.

The feds allege that BE1 requested to have a certain inspector assigned to the Snow Road project. They say Kelley managed to make that happen. The charges say Kelley did that at PO1's urging -- to carry out BE1's request to have a certain inspector assigned to the Snow Road project:

--
KELLEY told PAYNE that PO1 again asked KELLEY if the particular inspector had been assigned to the Snow Road project. PAYNE said, "Why is that a big f-king deal to him [BE1]?" KELLEY responded by telling PAYNE about BE1 losing the general trades contract for the Juvenile Justice Center and mentioning that since PO1 could not help BE1 with the general trades contract, POI said to KELLEY, "I really want to get this done for this guy."
--

This charge is interesting for what PO1 allegedly did and what he didn't do. The feds say PO1 got part of his Vegas trip paid for by the Blaze/Phoenix official, that he successfully pushed for the inspector to get assigned to the Snow Road project, and that he tried to help Blaze with its bid on the juvenile justice center trades project.

But the trades contract went to someone else. There's no allegation that either concrete contract was steered.* And PO1's defense might easily include pointing to this line:

--
"It is going to be $35 million [POI] instead of $22 [million]. You going to be able to award it to me if I am low?" PO1 responded, "Yeah."
--
Here, PO1 could say he is just following the law: the low bidder usually gets a construction contract.

*Update, 6/17: Actually, the charges do suggest PO1 helped the Phoenix concrete bid in some way, but how is not clear. See this post for details. And again, Phoenix was the low bidder.

Feds: Kelley bribed with raises to get out of Parma mayor's race

The charges against J. Kevin Kelley include the allegation that he accepted a raise and reduced work hours in his job at the county auditor's office in 2002, in exchange for dropping his plans to run for mayor of Parma in the 2003 election. The deal was allegedly struck by an anonymous elected public official, "PO2."

Perhaps this is obvious, but: the elected official in charge of the auditor's office is the auditor, Frank Russo.

From the charging document:

In or about 2002, KELLEY was running for Mayor, City of Parma, Ohio. P02 told KELLEY that he had met with other members of the Democratic party, and that they wanted KELLEY to withdraw from the mayoral race. At that time, KELLEY was working 35 hours per week in the Auditor's Office, at an annual salary of approximately $58,000. P02 had ultimate authority over KELLEY's work hours and salary.
194.
P02 offered to reduce KELLEY's work hours to 30 hours per week and to increase his annual salary to approximately $75,000, in exchange for KELLEY withdrawing from the mayoral race.
195.
KELLEY withdrew from the race in or about December 2002, and P02 thereafter adjusted KELLEY's compensation. These raises were unnecessary and unjustified, in that they were based on KELLEY's agreement to withdraw from the mayoral race and not based on KELLEY's performance at the Auditor's Office.
196. In exchange for P02 convincing KELLEY to withdraw from the mayoral race, KELLEY's opponent gave a thing of value to a relative of P02.

Update, 3:15 pm: The Plain Dealer interprets that last part as referring to Parma Mayor Dean DePiero's 2004 hiring of Vince Russo, Frank Russo's son. DePiero, caught off guard, tells the PD that Kelley was never officially a candidate and calls Kelley a fabricator. I have a call in to DePiero.

Update, 6/15: Here is a written statement DePiero issued to the press: “I’m shocked at the allegation. What is being alleged about my actions is just not true. I have never been afraid to run against anybody, especially J. Kevin Kelley. I stand by my solid service and reputation as a public official.”

The trip to Vegas

The prosecutors believe that a county commissioner and another elected official received a trip to Las Vegas in exchange for getting a contract for Alternatives Agency.

Here's another excerpt from the charging document. The section 1951 mentioned at the end is the Hobbs Act, the federal bribery and extortion statute.
--
KELLEY used the additional funds he received from Business 1 to purchase first class airfare aboard Continental Airlines for P02, P02's travel companion, and PO 1, at a cost of $1,268.50 per ticket. PO1 and P02 each gave KELLEY a check to cover the cost of the airline ticket to make it appear as if PO1 and P02 each paid for his own ticket. P02's check did not include payment for his travel companion's ticket. Upon receiving the checks from P02 and PO 1, KELLEY gave them back cash in the approximate amount of the check each had given to KELLEY. Business 1, through increasing KELLEY's monthly consulting fee, intended to pay for P02's and PO 1's hotel rooms in Las Vegas. Despite KELLEY receiving an increase in payment from Business 1 for this purpose, the hotel rooms were paid through another means.
34.
On or about April 6, 2008, KELLEY telephoned SCHUMAN and said, "Hey, we're heading out now [on the Las Vegas trip]. The guys [PO1 and P02] wanted me to call and thank you." SCHUMAN replied, "Oh, I hope everybody has a good time."
35.
On or about April 6,2008, KELLEY, POI, P02, and P02's travel companion boarded a Continental Airlines flight from Cleveland to Las Vegas.
36.
On or about April 9, 2008, SCHUMAN asked KELLEY if he was back in town. KELLEY confirmed he flew from Las Vegas on "the red eye" the previous night. SCHUMAN then said, "Come on down to the Agency tomorrow. I got the rest of your money." KELLEY replied, "Oh beautiful. I appreciate it sir."
37.
On or about April 14, 2008, KELLEY and SCHUMAN discussed the Las Vegas trip. SCHUMAN then confirmed that KELLEY had picked up his check from Business I and inquired, "We're all square right?" KELLEY explained that one month remained at the increased rate before returning to the regular rate.

On or about April 17, 2008, the County Commissioners approved a $250,000 contract with Business 1 for residential facilities for the work release program, PO 1 having performed official acts to secure this contract for Business 1.

All in violation of Title 18, United States Code, Section 1951.

"PO1" to Kelley: "I don't wanna know what you get out of this"

PO1, the anonymous public official mentioned but not charged in the prosecutor's allegations released today, is clearly a county commissioner.

An excerpt from the charges against J. Kevin Kelley, released today:

--
On or about February 13, 2008, SCHUMAN, another Business 1 employee, and KELLEY met for lunch at Delmonico's restaurant in Independence, Ohio. During that meal, KELLEY called PO1 and said that he was having lunch with SCHUMAN and another Business 1 employee. KELLEY said, "Yeah, their thing is on your agenda for tomorrow for their money.

PO1 asked, "Yeah, give 'em more you mean or take it away?" KELLEY responded, "No to give 'em back some of their, what you stole from them." POI laughed and said, "I don't wanna know what you get out of this, I don't even wanna f--ing know." KELLEY replied, "I get nothing out of this," to which POI responded, "I don't even wanna know.... The less I know the better." KELLEY responded, "Definitely. The less you know the better is right." KELLEY added, "Speaking of that, Vegas." KELLEY and PO1 then discussed reservations for their upcoming trip to Las Vegas.

On or about February 14, 2008, the County Commissioners approved a $250,000 allocation for Residential Facilities for the Work Release Program for the period May 1, 2008 through December 31, 2008, and authorized the Office of Procurement & Diversity to advertise for bids. Business 1 knew that it would be the sole bidder for this contract.

J. Kevin Kelley, two other former county employees indicted; two unnamed elected officials also implicated

The first charges in the Cuyahoga County corruption scandal came down today. J. Kevin Kelley, the former county engineer's employee and former Parma school board president, is charged with corrupting county and Parma schools contracts. Two other former county employees also face charges.

The charging document also says two elected public officials, "PO1" and "P02," received "property not due to them" from "Business 1." The document doesn't name them (in federal prosecutors' practice of not naming uncharged people in indictments). It charges that J. Kevin Kelley provided PO1 and PO2 with gifts such as expensive meals and a trip to New Orleans, in exchange for the expectation of favors.

The description of Business 1 matches the non-profit Alternatives Agency. A fourth person indicted is Brian Schuman, a former co-executive director for Alternatives Agency. See this Plain Dealer story from March for more on the organization.

{Update, 4:20 p.m.: "I’m aware of that allegation, but have no personal knowledge to that effect," said Tom Griveas, the new executive director of Alternatives Agency. Griveas says he started his job in May, and that Schuman resigned a week later. The agency also has a new board of directors, he says. "The board of directors has wanted to take the agency in a new direction, to get away from the taint Mr. Schuman has placed on this agency. We do good work here and want to continue to do it."}

The charging document quotes conversations of J. Kevin Kelley's dating back to December 2007, suggesting that the feds may have electronically monitored Kelley.

"These charges mark the beginning of the end to the reign that a few corrupt officials have held in Cuyahoga County government," Frank Figliuzzi, head of the FBI's Cleveland office, said in a statement.

Read the U.S. Attorney's press release here and the prosecutor's court filing here.