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This investigation was, not surprisingly, obstructed by HUD. Freedom of Information requests were returned with incomplete information. One person familiar with problems in the Section 108 program told Alt that a similar request filed by Jim Heaney of The Buffalo News also went nowhere.

A Tale of Two Cities – Hoboken and Buffalo According to a Department of Justice press release, in June of this year, Hoboken, NJ based developer Joseph Barry, “… pleaded guilty to making cash payments totaling $114,900 to former county Executive Robert Janiszewski, in connection with federal and state funding for the Barry company’s Shipyard project in Hoboken, U.S. Attorney Christopher J. Christie announced.”

This case also involved abuse of the Section 108 program. Barry was guilty of making a large cash kickback, a bribe to a friendly, generous politician. What if he had instead, funneled payment through legal sources such as campaign contributions, political fundraisers or even one of the new fangled 527’s that have been spewing political vitriol across America’s TV screens since the so-called McCain-Feingold reform?

The most damning evidence that the Feds were able to obtain was a “payoff list” of bribes that Janiszewski had accepted. Janiszewski, then cooperated with the investigation by wearing a wire. Like Masiello, Janiszewski’s inner circle included boyhood friends who encouraged this sort of “old boy” network. But the question remains, if the bribes Janiszewski received, were redirected into the form of legal campaign contributions, would anyone have been the wiser?

According to our sources, one of Tony Masiello’s longtime political supporters, Harry Williams, had failed to repay, as of last year, a $600,000 Section 108 loan that had been awarded to his restaurant, Harry’s Harbour, as of last year.

Although Williams had supported the political campaigns of the Mayor, such contributions are, in no way, to be construed as bribes. Would that money have been better spent on another business with no ties to the Mayor? Perhaps, but we’ll never know. Will there be any repercussions for Williams failure to pay on the loan provided through his friend’s political influence? Apparently, not.

Another similiarity between the Masiello Administration and the Hoboken story is the questionable redirection of 108 funds into pet projects. In the case of the Pillar’s Hotel project, it was obvious that the City would be stuck with millions of dollars in bad debt. Rather than rule that the loan was in default, over $300,000 was provided to the company to help with “corporate rebranding.”

In the case of the Pillars Hotel, there was major political pressure to keep the cash trough filled because of its association with the much ballyhooed “Buffalo Medical corridor.”

Including both private health care providers such as Kaleida and the formerly public facility of Roswell Park Cancer Institute under the aegis of the government-sponsored Medical Corridor initiative set the tone for the continued taxpayer investment in a money-losing private business.

In Hoboken, the effort to go over-budget for friends was also there. Again, it’s doubtful that this would have raised any eyebrows had it not been for the existence of a payoff list. Think: political contributions good. Bribes, bad.

The Department of Justice in outlining another case of Section 108 abuse stated that, “…An additional $1 million Economic Development Initiative grant was awarded by HUD to the Hudson County government. HUD originally earmarked the funds for use in a proposed hotel in Jersey City, but through a request by Janiszewski as county executive, the money eventually went to an already approved Section 108 loan guarantee application for the Shipyard project.”

In wrapping up the Government’s successful prosecution of Barry, U.S Attorney Christopher Christie stated that, “This is a very satisfying result for the government. Political corruption is a way of life in Hudson County, and we are determined to put an end to it. Using his considerable resources, Mr. Barry helped corrupt the corruptible and added further to the criminal atmosphere that exists in Hudson County government.”

Of course, political corruption appears to be a way of life here in Buffalo, as well. It appears, however, that politicians and favored developers are on the same page here, and that page is not a detailed payoff sheet that will lead to an open and shut case for Federal investigators. As long as Tony Masiello remains a staunch supporter of Gov. Pataki and his anti-labor initiatives with the Buffalo’s Control Board, it is unlikely that Tony and his cronies will find themselves in the same sort of hot water that cooked their counterparts in that other paragon of civic ineptitude, Hoboken, NJ. In the last issue of Alt, we detailed how the Masiello Administration abused the federal department of Housing and Urban Development Section 108 loan program.

We showed how some of these risky loans were made to political cronies who were let off the hook once it became clear that the loan would not be repaid. A loan that would have been considered to be in default in the real world, was instead, put into a special “friends and family” limbo by the Mayor’s Buffalo Economic Renaissance Corporation.