Zack Reed, Jeff Johnson, Brian Cummins win city council primaries

Zack Reed may be spending 10 days in jail soon, but he beat his DUI conviction at the polls today. Voters in Cleveland Ward 2 rewarded the longtime councilman for his work instead of punishing him for drinking and driving. They gave him 83 percent of the vote in the city council primary election.

Jeff Johnson’s election gamble is paying off. He took 55 percent of the vote in northeast Cleveland’s Ward 10 against fellow councilman Eugene Miller, who got 39 percent.

Johnson, whose old ward was sliced up in redistricting, looks likely to thwart council president Martin Sweeney’s gerrymandering. Sweeney designed the awkwardly stretched-out Ward 10 to set up Miller for re-election. But Johnson, who served on council in the 1980s and returned in 2009, saw an opportunity to unseat the younger Miller.

The two councilmen, who will face off again in the Nov. 5 election, have both been damaged by scandal. Johnson’s political career seemed over when he served prison time for a 1998 extortion conviction, but voters seem to be accepting that he’s followed a path to rehabilitation. Miller’s troubles, smaller by comparison, are recent: an impaired-driving case, a voting-address snafu just referred to the county prosecutor, and embarrassing 911 calls.

Brian Cummins, councilman for the near West Side’s Ward 14, came out on top of a four-way race in first place with 31 percent of the vote. He’ll face challenger Brian Kazy, who got 26 percent.

Kazy edged out an aggressive candidate, Janet Garcia, for a spot in the runoff. Garcia, running in a ward that’s 41 percent Hispanic, argued for electing a Hispanic councilperson. She won the Democratic Party endorsement and campaigned in a white car covered with her name in giant letters. But another Hispanic candidate, former councilman Nelson Cintron, kept her from achieving critical mass. A pending felony case against her, in which she’s accused of assaulting a Westlake police officer, probably didn’t help either. (She has maintained she’ll be found not guilty.)

November victories by Reed, Johnson, and Cummins would shore up the opposition to Martin Sweeney's council majority. But in Hough’s Ward 7, a Sweeney supporter did better than some expected today.

Councilman T.J. Dow won 47 percent of the vote and will face an energetic challenger, Basheer Jones, in November. Jones, a former radio talk show host, poet and motivational speaker, got 27 percent, while former councilperson Stephanie Howse got 21 percent.

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.)

Campaign finance reform: an activist who won't give up, a county councilman who never understood

Coleridge

Greg Coleridge won't stop. After the Cuyahoga County Council made it clear it doesn't want to regulate the flow of money in county politics in any way, the longtime activist penned an opinion piece for cleveland.com about the lost opportunity to protect our new county government.

Cleveland.com got councilman Michael Gallagher to write a response. In July, Gallagher took the lead in arguing down the charter commission's proposal to give council the power to regulate campaign donations.

Sadly, embarrassingly, Gallagher's op-ed piece shows he didn't even understand what he and the council rejected. He spends the entire piece arguing against limiting the total amount of money any one political candidate can spend.

No one proposed that.  It's illegal. Courts ruled long ago that you can't stop a candidate from spending money.

What you can limit is how much money any one donor can give a politician. That's the rule in national, state and city of Cleveland elections, in order to keep one or two or three wealthy donors from paying for almost all of a candidate's campaign.

Coleridge sums up Gallagher's mistake with a headline on his blog: "Politician confuses political contribution limits with political spending limits."

County politicians have gotten checks for $25,000, $36,000, $50,000, $300,000, and $400,000 in the past.  Once a candidate takes office, what sort of debt do they feel to the writer of checks that big?

Now ought to be the perfect time to ban jumbo-sized donations.  Jimmy Dimora, the poster boy for county reform, testified last week before a grand jury about suspected illegal activity around the 2005 purchase of the Ameritrust complex. Dimora voted to buy the Ameritrust property from the late Dick Jacobs, who seeded Dimora's first campaign for county commission with a $36,000 check.  The county sold the Ameritrust complex this year -- at an $18 million loss to taxpayers.

Coleridge still hopes the county council will change its mind on campaign finance reform. But what are the odds, when Gallagher doesn't even understand what's possible, and most councilpeople clearly want the issue to go away?  It looks like there's only one way for reform-minded people to create a sane campaign finance system in Cuyahoga County -- a citizens' petition for a charter amendment.

County council rejects adding inspector general to charter

The Cuyahoga County council has shot down another effort that would’ve made our new government more transparent and harder to corrupt. Last night it voted not to strengthen the inspector general’s office by adding it to the charter.

The council needed 8 votes to send a charter amendment protecting the inspector general to the November ballot. The vote was 6 yes, 5 no.

“Machine Democrats continue to block real reform,” tweeted Rob Frost, the county Republican chairman last night after the vote. The council’s three Republicans all voted yes, along with three Democrats. Five Democrats said no.

The inspector general, the county’s ethics officer and anti-corruption investigator, was created to give employees a confidential place to report wrongdoing. The first IG, Nailah Byrd, has looked into problems large and small, from employees who don’t show up for work to possible irregularities in the 2005 Ameritrust complex purchase.

But the IG’s office is fragile. A future county executive and council majority who don’t like its investigations could amend or repeal the ordinance that created the office.

That’s why the charter review commission called the IG its No. 1 priority. Its proposed amendment protected the IG from unjust firing. It said the IG could only be removed before her five-year term ends by the executive and a two-thirds vote of council “for inefficiency, neglect of duty, or malfeasance in office after notice and public hearing before the Council.” That got watered down to an amendment that simply put the IG in the charter. Even that couldn’t pass.

Councilman Dale Miller said he voted no because the amendment wasn't strong enough -- it didn’t have language about the removal process. Others said the office was still evolving or needed cost controls on it.

“The inspector general is very important,” said council president Ellen Connally, a no vote, but “I continue to have questions about due process and about the cost of the office. I don’t believe it’s time sensitive.”

County executive Ed FitzGerald disagrees. He proposed the IG as part of his 2010 campaign for his job and says it’s helped create a more open government. He says he’s “disappointed” that council didn’t pass the stronger language from the charter review commission.

“I think it should be put in the charter as soon as possible,” he says. “We don’t know what the future is going to hold in terms of future councils being supportive of the concept.” FitzGerald, who is running for governor in 2014, won’t be in his job after next year. “We don’t know what future county executives are going to have to say about that.”

The council has now shot down the charter review commission’s two best ideas for making the new government more corruption-proof. Council rejected the power to regulate campaign financing last month. The four amendments that are going on the November ballot are all small housekeeping changes – way less important than the inspector general.

Last night did bring some good news for reformers: The prosecutor’s office and law department have settled their years-long conflict about who gets to represent the county in court. FitzGerald and county prosecutor Tim McGinty nailed down the agreement at about 4:30 pm yesterday, just before the council was to vote on whether to settle the matter with a charter amendment.

The Law Department will now represent the county executive and all the departments under his control, including offices such as the medical examiner and fiscal officer. That’s good for efficiency’s sake, because the executive ought to be able to choose his own lawyer.

It’s also an important new check on corruption, because it removes a huge conflict of interest for the prosecutor. After the 2008 corruption scandal, residents clearly want the prosecutor to act as a watchdog of the county government -- which was harder to do when the county government was the prosecutor’s client.

Lanci calls mayor a dirty word – millionaire

It’s an old trick in politics – hit your opponent in the very place you’re most vulnerable.

Ken Lanci’s doing just that in his latest campaign literature. He’s attacking Frank Jackson by calling him – of all things – a millionaire.

Lanci, a self-made millionaire businessman and self-financed mayoral candidate, is trying to out-populist the mayor from the city’s impoverished Central neighborhood. He wants to whip up outrage over Jackson’s salary, currently $136,758 a year. Multiply it by the mayor’s eight years in office and you get to $1 million.

“He will retire on a millionaire’s pension!” Lanci’s flier declares. Jackson’s 36 years as a government employee and his recent salary mean he’ll get about a $100,000 a year pension once he retires.

Lanci’s millionaire jujitsu move is lame – it just calls more attention to his own substantial wealth. He won’t give figures for his own net worth, but it is substantial. He dropped $1 million of his own cash on his 2010 race for county executive, and he says he’s willing to spend $1 million again this year to match Jackson’s campaign fund. He's a flashy guy who’s feuding with Plain Dealer reporters about his very nice car. Clearly he thinks there’s nothing wrong with wealth, or getting paid.

But the flier goes beyond hypocritical millionaire-bashing. Lanci’s trying to argue that Jackson hasn’t earned his salary or pension. The flier also complains that Cleveland crime, poverty and schools have all worsened since Jackson became mayor in 2006.

It’s a potent critique. Education, jobs and crime are the top three issues in any mayor’s race.

But Jackson’s defenders will say Lanci’s attack is simplistic. Mayors don’t control the economy. The Great Recession and the foreclosure crisis hit during Jackson’s first term, wiping out jobs and tearing the fabric of many neighborhoods. The mayor’s supporters will argue that the fairest way to judge him is on how he’s helped Cleveland weather the storm.

McGinty likely wants to question Dimora about 2005 Ameritrust deal

What's Jimmy Dimora doing in the Cuyahoga County jail? He was moved there from federal prison last night, and in his jail booking photo, he doesn't look too happy about it.

Journalists' Twitter feeds lit up with the news this afternoon. Several reporters said Dimora will go before a county grand jury. Why?

"Prosecutors apparently want to question Dimora about lawyer Anthony Calabrese/Ameritrust deal," WKYC's Tom Meyer tweeted.

I think Meyer's right.  County prosecutor Tim McGinty is trying to get to the bottom of the last big unanswered question in the five-year-old county corruption scandal: Was the county's 2005 purchase of the Ameritrust Tower corrupted in some way?

This January, county executive Ed FitzGerald told me he'd asked McGinty to investigate the Ameritrust purchase, especially corruption defendant Anthony Calabrese III's role in it.  McGinty did just that.

The prosecutor hit Calabrese with a six-count indictment last month, including conspiracy and corruption charges that include the 2005 Ameritrust deal.

The indictment charges that Calabrese -- then an attorney for The Staubach Co., a real estate consultant for the county on the Ameritrust deal -- got Dimora crony J. Kevin Kelley to provide him with "non-public information ... from Dimora relating to the then-forthcoming purchase of Ameritrust by Cuyahoga County." After the sale went through, McGinty alleges, Calabrese arranged for an unnamed businessman to pay Kelley a $70,000 bribe for his help.

Now, the reports that Dimora will be put before a grand jury to testify suggest that McGinty is considering further charges against someone. Where's he going with this?

Dimora is named as an unindicted co-conspirator in the Calabrese indictment. It mentions him in connection with the Ameritrust sale and Dimora's famed trip to Vegas.  Why rehash Vegas?  Because conspiracy charges can reach back beyond Ohio's six-year statute of limitations on bribery. To charge anyone with crimes related to the 2005 Ameritrust deal, McGinty needs to prove that it was part of a larger conspiracy that was still active six years ago.

Federal investigators also looked into Calabrese's ties to the Ameritrust deal, and they charged Calabrese with witness tampering in relation to the $70,000 payment to Kelley -- but they dropped that charge when Calabrese agreed to plead guilty to 18 other crimes. Significantly, Calabrese's federal plea deal included no agreement to cooperate with the feds. Does that mean he still has secrets to keep?

==

To read more coverage of the 2005 Ameritrust purchase, follow these links:

"FitzGerald: Calabrese holds key to 2005 Ameritrust inquiry," Jan. 30, 2013

"FBI, IRS investigated Dimora, Kelley, payment to Staubach Co. over Ameritrust Tower purchase," June 7, 2012

"How the county spent $3 million on Staubach’s Ameritrust contract," April 30, 2012

"How Hagan and Co. cut Staubach loose from Ameritrust deal," May 1, 2012

Will Zack Reed win reelection from jail?

So Zack Reed is guilty of his third DUI. His long reign as councilman for the Warehouse District has finally caught up to him. He’s headed to jail this time, for somewhere from 10 days to six months. He’ll be sentenced Sept. 5 – five days before the city council primary.

Is this the end of Reed’s political career? I don’t think so. We may be about to witness the spectacle of a popular city councilman getting reelected from the Cleveland House of Correction.

While he's still a free man, Reed’s running hard. Sunday, he tweeted that’s he’s got 500 yard signs planted in his ward. WKYC’s man-on-the-street interviews yesterday in Ward 2, on Cleveland’s far south side, found many residents ready to reelect him. People like his fiery, fighting style. His three challengers have nowhere near his name recognition.

“Drunk or not, Zack outworks the rest of them,” says local political activist and commentator Mansfield Frazier (who lives in Hough). “I’ve been to meetings at 7 a.m., and there’s Zack.”

Reed sounded contrite in an interview with WKYC’s Tom Beres. “I need to abstain from alcohol, and I will work to ensure that happens,” he said.

“The credibility of my family’s been lost. The credibility of my friends have been lost. And now the credibility of my constituents have been lost,” Reed said. “And now I’ve got to go back out to work to get that credibility back again.”

That humility is probably what his voters want to hear. Redemption stories play well in city politics.

City council president Martin Sweeney has called on Reed to resign. But Reed has no intention of quitting. So how much farther will Sweeney go?

The council can boot Reed out if he misses ten council and committee meetings for any reason, including an extended jail stay. But why kick him off council if voters are going to send him back in January?

Even if visiting judge Larry Allen gives Reed the maximum six months, would council kick him off twice, in 2013 and 2014? Not likely. Expelling a fellow member is a hard vote for a councilperson. It would bring up tough questions. Mike Polensek has already protested that other council members have skipped meetings without punishment. Others may ask why Sweeney ally Eugene Miller hasn’t been kicked off for his address snafu.

It looks like Reed will ride out his jail stint and stay on council through 2017 -- even if he has to get to City Hall by bus.