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)

How Hagan & Co. cut Staubach loose from Ameritrust deal

Yesterday, I blogged about how Cuyahoga County’s former government committed to a big consulting contract with The Staubach Co. worth more than $4 million as part of its ill-fated search for a new county headquarters. Today, the story continues with the contract’s undignified end: the county rejecting parts of Staubach’s advice and cutting it loose for $3 million.

One more person on the county’s side, besides Neil Dick and Jay Ross, objected to the Staubach contract’s cost: Tim Hagan, who replaced Tim McCormack on the county commission in January 2005.

“I would not have consummated that contract,” Hagan told me in a 2008 interview about the Ameritrust affair. “I thought [the price] was too much. I didn’t like the terms of it.” He began looking for a way to sever the contract.

In January 2005, Staubach recommended that the county lease the Ameritrust complex from the Jacobs Group. That March, after negotiations, Staubach told the commissioners that Jacobs had improved its offer: it had agreed to include a large parking garage and build a second tower alongside the Ameritrust Tower.  (See the design sketch above.)

Staubach has been criticized for recommending the Ameritrust site. It’s not a sought-after location for offices because the tower is so thin. Rob Roe, former managing partner of Staubach, says the second tower was meant to address that.

“We understood that the floor plan of the tower was too small to accommodate their use,” Roe says. “The tower was always built to have a mate.”

The above design sketch shows the new tower that never came to be: about half the height of the Ameritrust Tower and touching it on one end, suggesting that the two towers’ floors could’ve been linked together.

Hagan, like Staubach, liked the Ameritrust complex’s location and its historic bank rotunda. But he thought the Ameritrust Tower was a blight on downtown’s skyline. He also felt a government shouldn’t lease its main offices.

“You can’t be entangled with a private enterprise if the future of a building might be in question,” Hagan told me in 2008. “The public [should] not have to ask anybody for permission to do whatever they wanted within their public building.”

Also, Hagan told me, he didn’t trust Staubach’s advice.

“I didn’t take their advice because that advice might have been in their own best interest, to be quite candid about it!” Hagan said. He didn’t elaborate. “I wanted to sever the relationship with Staubach and we did.”

(Roe doesn’t know what to make of Hagan’s comment. He says Staubach, now merged with Jones Lang Lasalle, has negotiated other deals with the Jacobs Group, but has never been hired by it. His company represents real estate users, not developers.)

Hagan and Dimora decided to buy the complex from Jacobs and tear down the Ameritrust Tower -- ignoring Staubach’s advice that “totally new construction” would not be “fiscally responsible.” (For more on this, see my 2008 story, “Tower Play.”)

The county cut Staubach out of the loop and negotiated directly with The Jacobs Group.

“We didn’t really need [Staubach] to do that negotiation,” says Dave Lambert of the prosecutor’s office. “Therefore, the commissioners asked me to get us out of the contract.

“They brought their lawyer in. The decision was made to cut our losses, cut Staubach out of the process and move on.”

In September 2005, the county bought the Ameritrust complex as is for $21.7 million. The purchase agreement specifically required the county, not Jacobs, to pay Staubach’s broker’s fee.

“The county wanted to negotiate our final fee down from what was in the contract,” Roe says. “They felt it was easier to control the payment of that fee.”

Staubach’s contract had promised a fee of $6.85 per square foot for its role in choosing the 641,000-square-foot Ameritrust complex. That would’ve added up to $4.4 million.

Instead, Lambert and Staubach attorney Anthony O. Calabrese III negotiated a $2.6 million final payment to Staubach. Add in its initial fee, and Staubach got an even $3 million.

Calabrese’s role brings up one last unanswered question about the Ameritrust affair. Calabrese faces trial in September on charges stemming from the county corruption probe. Federal prosecutors claim that by 2004 and 2005, Calabrese was engaged in a racketeering conspiracy with former county employee and Dimora crony J. Kevin Kelley to “give things of value to public officials and their designees” in return for favors to Calabrese, his law firm and their clients. (The specific charges dating back that far involve the nonprofit Alternatives Agency.)

Calabrese appears only once in public records about the Staubach contract, in a mid-negotiation email in 2004 about how to define “rentable area,” the measure by which Staubach insisted on being paid. Lambert says Calabrese never mentioned any relationships with county employees during settlement negotiations, and never did anything that gives him pause in retrospect.

The county’s inspector general and law department surely want to know if Calabrese’s role in the Staubach contract was clean. But they may not be able to answer the question without subpoena power. That may be one reason why the inspector general is, I’ve been told, cooperating with the FBI.

Update, 6/7: Calabrese asked Kelley to lobby Dimora to buy the Ameritrust Tower, according to a new indictment of Calabrese. The FBI and IRS examined five-figure payments that Kelley and a company linked to Calabrese received in fall 2005, after the building was purchased and Staubach got paid, the indictment says. Hagan makes a flattering cameo appearance in the filing as the public official who questioned the Staubach contract. See my new post here.