Wednesday, January 30, 2013

FitzGerald: Calabrese holds key to 2005 Ameritrust inquiry

The Ameritrust debacle is almost over. Cuyahoga County is on the verge of selling the old bank complex for $27 million -- or $18 million less than it spent on it.

But there’s still a major question about the old government’s 2005 purchase of the Ameritrust complex. Will the public ever know if it was just an unwise deal, or if wrongdoing was involved?

County executive Ed FitzGerald thinks attorney and corruption defendant Anthony Calabrese III knows the answer, and he wants county prosecutor Tim McGinty to get it out of him.

“You asked what the chances are the public will ever know,” FitzGerald said to me last week. “I think Mr. Calabrese knows! And I think he has even more incentive to be cooperative with the county.”

Calabrese (pictured), the last defendant to plead guilty in the federal government’s Cuyahoga County corruption probe, finally admitted to 18 corruption crimes this month. But federal prosecutors agreed to drop the one charge that involved the Ameritrust complex.

Meanwhile, McGinty has charged Calabrese in county court with conspiring to bribe two rape victims to change their testimony. Calabrese has pleaded not guilty.

McGinty’s office says the county and federal cases are unrelated. Still, FitzGerald thinks McGinty could use the new bribery charge as leverage to get to the bottom of the Ameritrust affair.

“Somebody that is a central figure in the Ameritrust transaction is also facing county charges,” FitzGerald said. “It gives them a pretty good incentive to cooperate.”

In 2005, Calabrese was an attorney representing The Staubach Co., the county’s real estate consultant. Last June, federal prosecutors alleged that Calabrese asked J. Kevin Kelley to lobby Jimmy Dimora to buy the Ameritrust complex and promised to reward him if the county went through with the sale. Two months after the deal went through, Kelley received $70,000 and a company with a tie to Calabrese received $99,000 from unidentified sources, prosecutors claimed.

The FBI and IRS began probing the Ameritrust project in 2007. They investigated whether any money from Staubach was “funneled through others for the ultimate benefit of public officials” – but they couldn’t make a case. Instead, they charged Calabrese with witness tampering in connection with the Ameritrust affair, claiming that in August 2008, after the FBI raids on county offices, Calabrese met with Kelley and made false statements about the company that had given Kelley the $70,000.

But it looks like the feds are done digging into the Ameritrust purchase. They agreed to drop the witness tampering charge against Calabrese in exchange for his guilty pleas on the 18 other charges (his role in Dimora’s Vegas trip, etc.). And Calabrese’s plea agreement does not include any agreement to cooperate with the federal probe.

If federal prosecutors have dropped the Ameritrust affair, it may be because it’s too late for them to dig deeper. There’s a five-year statute of limitations on most federal crimes, including the bribery and extortion statutes often used in public corruption cases. The Ameritrust deal went down 7½ years ago.

In state court, most felonies have a six-year statute of limitations. That leaves one more approach, a lawsuit.

“I have had extensive conversations with prosecutor McGinty about taking civil action,” FitzGerald said last week.

His administration’s two investigations of the Ameritrust purchase appear to have formed his brief for McGinty. Inspector general Nailah Byrd told me her inquiry has been forwarded to another agency she couldn’t name. Law director Majeed Makhlouf, who was also looking into the Ameritrust affair, says he has discussed it with McGinty. “I think he’s interested in it as well,” Makhlouf says.

FitzGerald has made it clear he’d like to sue the former Staubach Co., which made $3 million in broker’s fees off the 2005 Ameritrust purchase. The county executive is a former FBI agent, and the deal seems to have reawakened his investigatory instincts. And, of course, the more mismanagement by the old government he can uncover, the more he burnishes his reformer credentials -- at the same time he’s exploring a run for governor.

Staubach’s potential defense seems clear. Rob Roe of Staubach (now part of Jones Lang LaSalle) told me last year that the old county government actually disregarded his company’s advice about the Ameritrust complex. Roe also said nothing about Calabrese’s conduct while representing Staubach appeared improper or gave him pause, and that Calabrese never talked with him about using any connections in county government to help with the contract.

McGinty’s spokesperson declined to comment about FitzGerald’s comments, saying the office couldn't comment about an open investigation. Calabrese’s federal attorney, Chad Ziepfel, also declined comment.

We’ll see if Calabrese talks to McGinty about the Ameritrust complex. Maybe he won’t. He already faces a likely nine-year sentence in federal prison, and that didn’t motivate him to cooperate with the feds.

Is time running out for county action on the Ameritrust purchase? Normally, lawsuits over contracts in Ohio have an eight-year statute of limitations, which would bar a suit from being filed after this September. But McGinty could possibly use this law, which says a prosecutor can sue for damages over a county contract “procured by fraud or corruption.” It’s not clear whether that law has a time limit attached.

(Photos: Cuyahoga County Sheriff,

1 comment:

Anonymous said...

Thanks for keeping your eye on this issue Eric.

It's disgraceful that a newspaper as the Plain Dealer - after all the corruption uncovered by the FBI - hasn't take more of an interest in this by putting reporters to give this a better look.

Roldo Bartimole