Will we ever get answers on the Ameritrust Tower debacle?

Ten years ago today, Jimmy Dimora allegedly held one of his now-infamous power meetings in Independence, at the Holiday Inn on Rockside Road. The topic of the day was the Ameritrust Tower.

Dimora and his fellow Cuyahoga County commissioners were searching for a new county headquarters site. Two months earlier, in November 2004, the Staubach Co., the county’s real estate consultant, had delivered a report that scored the Ameritrust complex fourth among competing developers’ proposals.

But on Jan. 21, 2005 -- according to the lawsuit Ed FitzGerald’s administration filed in June -- Dimora met with someone from Staubach and the company’s attorney, Dimora crony Anthony Calabrese III.

Four days later, Staubach delivered its recommendation that the county should relocate to the Ameritrust complex, owned by the late developer Dick Jacobs -- even though it still ranked lower than other sites in Staubach's scoring.

Later in 2005, Dimora and his fellow county commissioners dumped the plan to lease the Ameritrust complex and bought it for $21.7 million. The county eventually lost about $28 million on its investment in the Ameritrust site. The costs included a $2.6 million payment to Staubach to get out of its contract.

Today, Cuyahoga County’s new government has a lawsuit pending against the firm and several other defendants. The suit is Cleveland’s last chance to get the elusive answers to long-asked questions:

Did Dimora corrupt the decision to buy the Ameritrust Tower? Did he nudge the 2005 county headquarters search toward his benefactor, Dick Jacobs, who had seeded his 1998 campaign with a $36,000 donation?

Did the pattern revealed in the 2008 federal corruption investigation -- people paying Dimora’s cronies to influence him – also lead to the Ameritrust Tower debacle?

A decade after the alleged deed, the question is in danger of receding into history. But it’s still alive, because there’s money at stake.

FitzGerald and his law director, Majeed Makhlouf, spent years building a case against Staubach and the politically connected consultants and attorney it hired, including Vince Russo (Frank Russo’s son) and Calabrese -- both of whom were sentenced to federal prison on other corruption charges.

The former Staubach, now Jones Lang LaSalle, says Russo, Calabrese, and company performed legitimate services for them. Its lawyers -- and other defendants’ -- have filed disdainful court briefs asking judge Jose Villanueva to dismiss the case.

The firm calls the county’s complaint “patently false,” says it “fails to meet even the barest pleading requirements,” and has “no facts to support its claims.” It argues that FitzGerald filed his case too late because of the statute of limitations.

The suit faces other hurdles besides the passage of time. Staubach wasn’t quite responsible for the decision to buy the Ameritrust complex – it recommended that the county lease the site and move in. It warned that totally new construction would not be "fiscally responsible." The decision to buy it instead (to tear it down) was heavily influenced by Tim Hagan, who joined the county commission in January 2005 and felt it was important for the government to own its headquarters, not be “subservient to a landlord.”

Now that FitzGerald is gone, how hard will the county keep fighting?

FitzGerald was practically obsessed with the 2005 Ameritrust Tower transaction during his four years as county executive. He knew that the purchase of the long-vacant skyscraper was one of the reasons voters threw out the old government, which made his election possible. The former FBI agent and ambitious reformer was energized by the prospect of baring ugly truths about the tower deal. He badly wanted to prove he could govern better than the Dimora-era regime.

Now the battle falls to Armond Budish, FitzGerald’s successor. Budish has already shown hints of distancing himself from his predecessor’s legal battles. He’s announced that he’ll hire a new law director to replace Makhlouf. Within days of taking office, he released FitzGerald’s keycard records, which FitzGerald had tried to withhold from the public.

In some ways, the Ameritrust suit is a remnant of Cuyahoga County’s dirty past. FitzGerald mopped up the Ameritrust debacle by selling the complex to a developer who agreed to build and lease a new headquarters for the county on the site. (In keeping with FitzGerald’s goal to reduce the size of county government, the new building is smaller than the behemoth Dimora and Hagan envisioned and abandoned.)

Now, the modern, glassy new county HQ is open. Next door, the once-scorned Ameritrust Tower has been resurrected as The 9: a luxury hotel, club stage for burlesque dancers, and high-rise home of Johnny Manziel. The gorgeous Cleveland Trust rotunda is about to reopen as, of all things, a downtown grocery store.

Both sides are awaiting Villanueva’s ruling on the motions to dismiss the case.  If the judge issues a mixed ruling -- allowing some counts to proceed but hinting at weaknesses in the case – then I could see Budish deciding to cut the legal bills and declare it’s time to move on.

Or, Budish could adopt FitzGerald’s zeal. He, too, could benefit politically if he recovers money possibly lost to the old regime’s corruption.

There’s also a simpler reason for Budish to keep fighting.

The suit seeks to resolve important unanswered questions. Did we truly plumb the depths of Cleveland’s corruption in 2008? Or did the corruption go even higher and deeper than we know?

Ten years later, Clevelanders still deserve an answer.

FitzGerald files suit over 2005 Ameritrust deal -- but can he answer the biggest question?

Ed FitzGerald says he’s kicked off the “hopefully the last chapter” in the Cuyahoga County corruption saga. He’s filed a lawsuit to try to prove longstanding suspicions that Jimmy Dimora and his cronies corrupted the county’s ill-fated 2005 purchase of the Ameritrust Tower.

The lawsuit could answer questions about the old county government’s controversial $3 million deal with a real estate consultant. It also hints at an even deeper possible scandal -- that Dimora may have manipulated the search for a new county headquarters site so that the Ameritrust site would come out on top.

For years, FitzGerald has vowed to get to the bottom of lingering questions about the former Staubach Co.’s real estate consulting contract. He thinks its $3 million payment was inflated, and he questions why Staubach liked the Ameritrust site.

“This whole thing started because when you look at the transaction on its face, it doesn’t make sense,” FitzGerald said yesterday. After the FBI probe of the Ameritrust deal didn’t result in convictions, FitzGerald asked county prosecutor Tim McGinty to look into it. “As the years went by, we got some additional information from the prosecution,” FitzGerald said.

Now, FitzGerald’s administration claims Staubach paid $500,000 to people close to Dimora, who helped Staubach get Dimora’s ear and then get the contract. The alleged cast of characters includes Vince Russo, corrupt ex-auditor Frank Russo’s son, and Vincent Carbone, a contractor implicated in the county corruption probe. The suit says Staubach hired them as “government relations” consultants.

“The amounts involved here are pretty astronomical,” FitzGerald said. “Over a half million dollars -- a huge portion of the total contract -- is all in government relations. Whether or not they’re true experts in government relations is a real question.”

The suit also claims Anthony Calabrese III played a major role in corrupting the Ameritrust project. Calabrese, a central figure in the federal corruption case, worked as an attorney for Staubach.

The suit (pdf) alleges that Staubach hired Calabrese so that he’d help them get meetings with Dimora and win the county’s business. It claims Calabrese got $99,000 of Staubach’s alleged “government relations” payments.

Last year, county prosecutor McGinty got Calabrese to plead guilty in state court to paying a $70,000 bribe for inside information about the Ameritrust sale. McGinty also called Dimora, Frank Russo, and others to testify before a county grand jury. Info from McGinty’s criminal investigation helped the law department file suit.

The complaint even tackles the most explosive question about the deal: Why did the county choose to buy the Ameritrust complex? The suit clearly implies that Dimora steered Staubach’s site search for a new county headquarters toward the Ameritrust complex, then owned by the late developer and Indians owner Dick Jacobs.

Dimora met with Staubach officials at the Holiday Inn Rockside in Independence on January 21, 2005, the suit claims -- four days before Staubach delivered its recommendation.

“Ameritrust all of a sudden became the first recommended choice,” county law director Majeed Makhlouf said yesterday. Earlier, Staubach had ranked the site fourth. Makhlouf says Staubach hasn’t provided any records about why it moved the Ameritrust site to first place.

The lawsuit claims the county wouldn’t have chosen the Ameritrust site if not for Staubach’s alleged wrongdoing. Makhlouf suggested the county may seek damages for its $1 million annual upkeep of the complex and the $10 million it spent to remove asbestos from it. (The county sold it last year at a loss of about $18 million.)

But Staubach didn’t tell the county to buy the building – it recommended leasing it. The company, now part of Jones Lang Lasalle, pointed that out in a statement yesterday. It accused FitzGerald of filing a “baseless” lawsuit for political purposes (to burnish his reformer credentials while he’s running for governor, presumably). The company denied any wrongdoing and noted that it cooperated fully with McGinty’s investigation. Update: The company also says Russo and Carbone's company provided "legitimate services" that included "much more than government relations," and that the county has ignored documents that prove as much.

“Isn’t it rather interesting,” Makhlouf said, “[that] all these expenses are allegedly charged to see how suitable the building is, so you can tear it down?” Sure. And that’s a question for Dimora. Staubach never wanted to tear it down.

The decision to buy the Ameritrust Tower lies with Dimora, Tim Hagan, and Peter Lawson Jones, the county commissioners in 2005. Hagan and Jones explained their reasoning in my 2008 story “Tower Play.” Dimora’s reasons are less clear.

Given what we now know about Dimora’s corruption -- how he repeatedly nudged the county toward decisions that benefited his friends and benefactors -- the question of whether he nudged this search toward a benefactor’s site is worth asking. Dick Jacobs, who died in 2009, seeded Dimora’s first campaign for county commissioner with a $36,000 donation.

An FBI wiretap caught a Dimora crony claiming vaguely that the county chose the Ameritrust site because the owner of a competing property wouldn’t pay a kickback. But the FBI couldn’t build a case on that. Learning the truth or untruth of that story may be beyond the reach of FitzGerald’s lawyers -- the real last chapter in the county corruption saga, one that no one may be able to write.

FitzGerald prepares to sue over 2005 Ameritrust purchase

The years of controversy over Cuyahoga County’s 2005 purchase of the Ameritrust Tower may be about to reach a climactic moment.

Cuyahoga County Executive Ed FitzGerald's law department is preparing to file a lawsuit over the controversial real estate deal. The county’s board of control voted today to hire two law firms as special counsel for “potential litigation related to the County’s purchase of the Ameritrust Complex.”

County law director Majeed Makhlouf says the county may sue the former Staubach Co., a former real estate consultant to the county, and Anthony Calabrese III, a lawyer who represented Staubach.

Prosecutor Tim McGinty may become involved in the case as well. The “primary avenue” for a suit, according to Makhlouf, would be an Ohio law that allows county prosecutors to sue for damages over a contract “procured by fraud or corruption” or to recover money “illegally drawn” from the county treasury.

FitzGerald has talked about suing Staubach, now part of Jones Lang LaSalle, since early 2012. He has complained about the $3 million the old county government paid Staubach over the Ameritrust purchase and the allegations Calabrese was involved in criminal wrongdoing related to the deal.

Cuyahoga County’s old government paid $21.7 million for the Ameritrust complex in September 2005 and spent roughly $23 million more on the project, including the $3 million broker fee, asbestos removal, and the purchase of a second parking garage. The new county government sold the complex to the Geis Cos. this year for $27 million, or a loss of about $18 million.

McGinty indicted Calabrese on corruption charges related to the Ameritrust affair this summer. The indictment claims that Calabrese got J. Kevin Kelley to give him “non-public information” from then-commissioner Jimmy Dimora about the pending deal, and that after the sale, Calabrese arranged for Kelley to receive a $70,000 bribe for his help. A county grand jury is also reportedly investigating possible connections among Dimora, Calabrese, and Vincent Carbone, whose company was the construction manager on the Ameritrust project. Calabrese has pled not guilty.

Rob Roe of Jones Lang LaSalle says the company has cooperated with all prior investigations into the Ameritrust transaction and will cooperate in any future inquires. "We believe our efforts on behalf of the County met the highest standards of quality and ethics that our clients have come to expect from us, and no one connected with any prior federal or County investigation into the transaction has ever suggested that they did not," Roe said in a statement Tuesday.

In an interview with me in spring 2012, Roe defended Staubach’s broker fee (which was shared with other companies) and its advice to the county (which was to lease the Ameritrust complex, not buy it). Roe said nothing about Calabrese’s conduct while representing Staubach appeared improper or gave him pause, and that Calabrese never talked about using any connections in county government to help Staubach.

A lawsuit now would come eight years after the controversial real estate deal. In fact, the county may be racing against the clock. If it files suit before September 30, it could avoid a legal battle over whether an eight-year statute of limitations applies.

The investigation of the deal has been long and complex, Makhlouf says. Now, with the federal corruption investigation mostly complete and the Ameritrust complex sold, the county is close to ready.

“This is a very important piece of litigation for us,” says Makhlouf, “but we couldn’t do anything that risked what we were doing in the sale of Ameritrust and the potential for the rejuvenation of that entire quarter.”

To assemble a case, the county’s lawyers have looked at the Jimmy Dimora trial, the federal and county indictments of Calabrese, county documents that federal investigators seized and have now returned, and an employment discrimination lawsuit against Jones Lang LaSalle that alleges senior management improperly destroyed records after learning about clients’ roles in federal corruption probes.

“It wasn’t the kind of investigation you went into, and there were all these records, and you went through them, and [found] the smoking gun,” Makhlouf says. “It was the type of investigation that needed many pieces to fall together from different places.”

The county hired business law firm Brennan, Manna & Diamond of Akron, and Giffen & Kaminski of Cleveland, which has business litigation and white-collar criminal defense practices. It was hard to find law firms who could help the county, Makhlouf says. Almost every local law firm had represented clients in the county corruption investigation, he says, and many firms did not want to sue a real estate broker because they see them as sources for referrals.

A suit under prosecutors' power to protect public funds is now easier because of the new agreement between the prosecutor and the law department over how they will split and share the job of representing the county in court. That law has no statute of limitations, Makhlouf says.

(Updated, 2:50 pm, to reflect the prosecutor's potential role, and 9/10, with details on the law firms hired and a new statement from Roe.)