Former Buffalo officials accused Mayor Byron W. Brown and his chief economic development officer of misusing federal funds and giving preferential treatment to lucrative developers, according to documents recently unsealed in federal court. He later claims to have been kicked out in 2018.
A recently surfaced allegation by former executive director of the Buffalo Urban Renewal Authority, Nona Watson, is that city officials, at the mayor’s direction, diverted public resources to politically connected real estate developers Nick Sinatra and David Paulick. It claims to have effectively “induced.” .
However, the allegations are unlikely to lead to civil litigation in the case of Brown or Brendan R. Mehaphy, executive director of the city’s Strategic Planning Office.
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Through spokesperson Michael J. DeGeorge, the mayor declined an interview request, explaining the delay and why the city did not have high-profile raid documents.
The allegations were made in a false claims act lawsuit closed in November 2019. That means reporters and the public couldn’t access court records until about a month ago.
After lingering in secrecy for four years, the federal attorney’s office formally “refused to intervene,” according to legal documents filed in federal court, prompting whistleblower Watson to voluntarily file her case on March 21. After dismissing the allegations, the case was closed in March.
The city and developers took the dismissal as justification.
Deputy Mayor Crystal Rodriguez Dabney, who is also Brown’s chief of staff, said Watson’s resignation was “a positive for us and something we look forward to.”
“I am relieved that this lawsuit has been dismissed,” she added.
Mayoral spokesperson Michael J. DeGeorge said Brown was unavailable for an interview because he was preparing for Monday’s city speech. Sinatra did not respond to messages seeking comment on Sunday.
“The government’s decision not to intervene in this case and the plaintiff’s decision to dismiss the case demonstrate that the allegations are without merit.”
That’s not the view of Watson’s attorney, Harvey P. Sanders.
Sanders said Watson decided to dismiss her claim after learning the federal government was not pursuing a lawsuit.
“It’s hard to fight City Hall alone,” Sanders said.
The dismissed lawsuit, which alleges Watson was forced to resign and barred from city hall offices after voicing concerns in October 2018, came after an anonymous critic of the Brown administration posted the document on Twitter Saturday night. began to spread online in
In addition to alleging that Brown and Mehafi diverted funds to their preferred developers, Watson said the city had “submitted false claims to BURA and the U.S. Department of Housing and Urban Development and carried out a well-orchestrated fraud.” I did,” he claimed. Entitlement funds paid by the U.S. government for purposes other than those specified. ”
The allegations seem to shed light on an intriguing City Hall mystery: why federal agents conducted a high-profile raid on City Hall in 2019 and found dozens of box records after obtaining a search warrant. I took it out.
Suspected “steering” scheme
An unsealed and dismissed complaint from November 2019 examines the inner workings of City Hall. There is no doubt that you will be preyed on by the mayor’s critics.
“The city coordinated a ‘steering’ scheme to position developers to receive city-owned land, federal funding, and privileged inside information,” the lawsuit claimed.”… Everything looks right on paper, but the selection process for these projects has not been competitive.”
The allegations centered on the annual allocation of funds the city receives from HUD through the department’s Community Development Block Grant and HOME Investment Partnership programs. Specifically, according to the lawsuit, the city receives $3.63 million in his HOME funds each year, which it allocates to real estate developers to build or renovate affordable housing, mixed-income or mixed-use projects. I can.
According to Watson’s lawsuit, those funds could support four to five projects each year from a “diverse pool of real estate developers of all backgrounds.” But that is supposed to be done through a formal “call for proposals” competition process, which Watson argued was not actually the case.
“Applicants are misled to believe that this is a fair and equitable process, but instead all decisions are made by Mayor Brown and Mr Mehafi and are based on their own personal agendas,” Watson said. claimed in the lawsuit.
Paulik was a special beneficiary, she claimed. The founder and owner of Creative Structures Services and CSS Construction, her Pawlik is also the former vice chairman of the city’s housing and community development and, according to Watson, “a close friend of Mayor Brown.”
In the lawsuit, Watson claimed that 20% of HOME funding from 2006 to 2019 was given to projects in which Paulik and his company participated. RP Oak Hill Building Co. Inc. followed him with 17%, followed by Lamparelli Construction Co. with 14%.
Among the projects cited by Watson are Brenda Calhoun’s Onyx Global, which converted two vacant two-story commercial buildings at 2201-2209 Fillmore Avenue into six upstairs apartments and downstairs commercial space. I had a suggestion. CSS was the general contractor, but Watson claims that Calhoun was “brought into the project” by Brown and Paulick and was “founded, directed and partnered by Mr. Paulick.”
BURA only issues requests for proposals once or twice a year, Watson said, so Mehaffy gave the $1.3 million project a “special call” and said, “We were working on a current project. As well as providing more opportunities for his favorite groups.
“This project, and others backed by Mayor Brown and Mr. Mehaffey, have often moved to the forefront despite other eligible projects being approved and ready,” Watson wrote. , adding that Mehafi told her: You should select this project. ”
This project, which is not yet complete, received an allotment of HOME funds last week in addition to its original award.
Watson also pointed to People’s Jefferson Avenue Apartments project just north of the Johnny B. Wiley Amateur Athletic Sports Pavilion in Masten Park. Although sponsored and owned by a non-profit organization, the project was developed by Paulik and Nick Sinatra of Sinatra & Co. Real Estate with the support of Herb Bellamy.
BURA has allocated $500,000 of HOME funding for this project. This project is complete and is now open and occupied.
“Our company, CSS Construction, is proud of the work we are doing in the City of Buffalo, our predominantly faith-based nonprofit clientele,” Paulik said in a statement to the news.
Watson also mentioned other projects not involving Paulik or Sinatra.
This isn’t the first time Sinatra and Polik have had an affair with Brown. Since 2013, Sinatra has donated his $15,305 to Brown’s campaign, while Paulik contributed his $16,950, election records show.
A 2021 News survey revealed that BURA has provided $20 million in funding to contributors to Brown’s campaign over the past eight years.
left a year before the raid
Watson said he had “personally observed” the wrongdoing, and that city officials “manipulated and controlled a legally separate entity, the Urban Renaissance Agency, to “abuse and misuse federal funds.” I did,” he said.
The complaint identifies two Federal Agency for Housing and Urban Development programs that the city allegedly misused. These are the Community Development Block Grant Program, which provides anti-poverty funds, and the HOME Investment Partnership Program, designed to create affordable housing for low-income families. .
Instead, Watson argued, the city misused funds by paying city officials and BURA officials for activities that had nothing to do with the program’s mission. She also alleges the city uses funds from its Article 8 housing program as a “cushion” to pay off debt and in emergencies, a practice “hidden in financial records,” she said. Stated.
She quoted Donna Estrich, a former city administration and finance commissioner, saying, “If the mayor doesn’t give these developers a lot of tax breaks, the city’s financial situation will improve.” . ”
Mehaffy, who oversees the Mayor’s Strategic Planning Office, is also the Vice-Chair of BURA, and the Mayor is the BURA Board Chair. Mehaffy’s two roles create a conflict of interest, Watson argued, stating that Mehaffy “applies, approves, votes, and executes without checks or balances.”
Mehaffy did not respond to messages seeking comment on Sunday.
Watson says a disagreement with Mehafi in September 2018 ultimately led to her leaving the agency. Watson said the mayor signed her letter to her as an accountant candidate at BURA, but the offer was canceled after Mehaffey recommended not taking the position.
According to the complaint, Mehaffy and Estrich instead wanted to use the funds “to support the city’s budget.” Watson said she knew such use would not qualify under her HUD rules, and that she “verbally communicated her concerns, turned a blind eye, or agreed to something inappropriate.” I won’t do it.”
The next day, Watson was called to a meeting and said he was “harassed and threatened” if he lost his job. Later, at a meeting with Ms. Mehaffey and Deputy Mayor Betsy Ball, she was told she could either resign or be fired, Watson said.
The complaint states that Ball “referenced (Watson’s) use of the word ‘corruption’ and that (Watson) attempted to further share her views with Deputy Ball to no avail.”
Ball, who has since left his post at City Hall, declined to comment on the allegations.
Watson said he was locked out of City Hall the next day and had his computer access disabled. She said in her email that day she had resigned, but Watson “has expressed her concerns about illegal and improper practices, including the misuse of federal funds, and she has been dismissed constructively.” claims.
A year later, FBI, HUD, and Internal Revenue Service agents raided City Hall. But the Fed has been investigating the Brown administration for years. None of the inquiries resulted in a charge.
The Brown administration has previously claimed, in response to multiple public record requests by the news, that it has no record of the attack.