LORAIN — The city plans to hire a Cleveland law firm to investigate whether it can pursue civil action to recover taxpayer money that may have been spent on deals that were marred by public corruption.
Lorain City Council is scheduled to vote Monday on hiring Jeffries, Kube, Forrest and Monteleone at a rate of $175 per hour to handle the inquiry, which will focus not only on examining Lorain’s links to the ongoing federal corruption probe in Cuyahoga County, but also issues discovered during a local investigation into the city’s now-deceased former chief building official, Bill Desvari.
“Acts of public corruption that may have occurred at City Hall are being investigated,” Lorain Law Director Pat Riley said, although he declined to discuss specifics.
Riley said the local investigation came about as the city met with Lorain County Prosecutor Dennis Will’s office about a year ago to begin preparing for Desvari’s trial on a variety of corruption charges stemming from his time at the helm of the city’s Building Department.
But that preparation led to other issues within city government that raised questions, and a team of investigators was put together to look into other possible violations of the law. Desvari died this summer before he could face trial, but by then the investigation had already branched out into other directions and is still ongoing, Will said.
So far, no one else has been charged with a crime, although that’s a possibility.
“Clearly we’re investigating it as a criminal matter,” Will said. “The evidence will take us where it takes us.”
In addition to the expanded Desvari investigation, Lorain Mayor Chase Ritenauer acknowledged that the city will review the money it paid out to Vorys, Sater, Seymour and Pease, a law firm that has done a significant amount of work for the city in the past, including on the controversial retroactive property tax abatements given to homeowners in the city’s community reinvestment areas.
One of Vorys’ chief contacts with the city was Anthony Calabrese III, who was indicted along with the city’s former community development director, Sandy Prudoff, in the federal corruption investigation last year.
Although Calabrese continues to maintain his innocence, Prudoff pleaded guilty earlier this year to charges that he was paid to do work he never actually did for Alternatives Agency Inc., a Cleveland halfway house that Calabrese also represented. Prudoff, who is now serving a two-year prison term, was purportedly hired to find a Lorain County location to house an expansion for Alternatives, but court documents state that he never did that work.
Federal prosecutors contend that Calabrese used his influence at Alternatives to convince the agency to hire consultants of his choosing and those consultants then provided him with favors in return.
Prosecutors have never said what favors they believe Prudoff, who was placed on leave and then retired in September 2009 after city officials learned he was a target in the investigation, did for Calabrese in exchange for the $144,000 he was paid by Alternatives.
But Prudoff’s plea agreement noted that Vorys conducted reviews of its attorneys and one of the factors considered was an “attorney’s ability to obtain and retain clients.” Calabrese no longer works at Vorys.
The law firm began doing work for the city, mostly for the Community Development Department in 2001, and was paid more than $1.6 million during that time.
Brittaney Schmidt, Vorys senior manager of business development, said Thursday in an emailed statement that the firm’s work for the city was done at the request of city officials and “involved sophisticated legal issues that the city was not capable of addressing without the assistance of outside counsel possessing specialized expertise.” Most of that work, she wrote, dealt with the issue of the city’s community reinvestment areas.
“All of the Vorys firm’s services were described in detailed billing statements rendered to the city,” Schmidt wrote. “More than two years ago, the firm agreed to accept a reduction of 35 percent in the fees then owed by the city in recognition of the city’s difficult financial situation and the firm’s long-standing relationship with the city as a client.”
Ritenauer said the city doesn’t exactly know what, if any, lawsuits will end up being filed over public corruption investigations. That’s the whole point of hiring the Jeffries law firm, he said.
“The amount of information that is collected is huge, and it’s going to be up to them to parse out what the city can go after,” Ritenauer said.
Jeffries is being paid a $30,000 retainer from which the hourly fees will be deducted, and the law firm will receive 30 percent of any recovery made before a lawsuit is filed and 35 percent if a lawsuit is actually filed, according to the proposed contract.
Contact Brad Dicken at 329-7147 or bdicken@chroniclet.com.
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