Blueprint for bribery: NYS; Albany Times-Union
Blueprint for bribery
For seven years, a secret FBI investigation has targeted corruption in state government, slowly moving ever higher up Albany's political food chain. Only now is the extent of the inquiry emerging.
By BRENDAN LYONS, Staff writer
First published: Tuesday, September 6, 2005
For Ronald Laberge, it should have been a night to remember fondly.
Advertisement
Laberge drove across Loudonville that summer evening in 1998 for a private dinner with Gov. George Pataki and a small group of influential and well-respected businessmen. It was a chance to mingle with the state's most powerful public official at a time when Laberge's self-built engineering and real estate firms were thriving.
But Laberge hid a dark secret when he dined with the governor that Sunday night. Less than a month earlier, he had authorized one of his employees to pay a $2,500 bribe to a state leasing agent, which was to be a down payment in an illicit deal aimed at winning Laberge a multimillion-dollar lease with the state of New York.
Years later, as the scandal broke, it would force an abrupt end to Laberge's storied career and leave him a disgraced felon.
It turns out he was determined not to go down alone.
A court document unsealed last week as a result of legal action by the Times Union shows that Laberge, in an attempt to avoid prison, agreed to help FBI agents get where they really wanted to go: inside the shadowy world of state contracts and campaign donations, where authorities suspect lucrative state government deals are awarded through political loyalties and money that changes hands with a wink and a nod.
It was an area of Laberge's expertise. His Colonie-based company, Laberge Group, has done millions of dollars in business with more than 200 government agencies across the state. He has contributed thousands of dollars to Republican candidates.
The investigation led to the governor's office, where the FBI broadened its probe to include Pataki's former longtime executive assistant, Monica F. Bell of Loudonville, after Laberge began naming officials who had helped him, according to several knowledgeable sources. FBI agents began to explore whether Bell, 56, who has not been accused of any wrongdoing, played a role in protecting Laberge in another leasing scandal and helped the Pataki contributor try to secure a $5.8 million state building lease in Troy -- independently from Laberge's attempt to bribe a state leasing agent.
The FBI probe "did not tend to corroborate the information" Laberge provided, the U.S. attorney's office said in a statement filed in court in July.
Bell would not comment. She retained an attorney, Jerome K. Frost, who issued a written statement on Saturday denying that Bell, who is an acquaintance of Laberge's, had anything to do with Laberge's misdeeds.
"Ms. Bell was neither a target of the Laberge investigation by the U.S. attorney's office and the FBI, nor was she subpoenaed in that investigation," Frost said.
Pataki spokesman Kevin Quinn, responding to written questions from the Times Union, denied any wrongdoing within the governor's office and said Bell did not try to help Laberge win a lease. The governor himself did not comment.
"You're making the false presupposition that Ms. Bell made any efforts to assist Laberge in obtaining a state lease," Quinn said. "She has indicated that she did not."
Late last week, the state Office of General Services turned over copies of two federal grand jury subpoeanas it received in January 2001 in connection with the investigation.
One subpoena sought copies of records, including any internal correspondence or e-mails, in connection with two state projects involving Laberge's company. The second sought records related to another state lease in Troy, at the Hendrick Hudson building, which did not involve Laberge or his companies.
The reach of Laberge's work as an informant had remained secret until last week. It began about four years ago after authorities confronted him with irrefutable evidence that he had bribed a state official. In 2003, Laberge, now 69, began taping telephone conversations with associates and baiting FBI targets at political fund-raisers as he meanwhile held candid talks with agents and federal prosecutors about the hidden world of government payoffs.
"Mr. Laberge also prepared memoranda outlining the methods used by politicians and business owners to contribute money to campaigns and to have those contributions recognized for later business opportunities," according to a sentencing memorandum filed by Laberge and unsealed last week in U.S. District Court in Syracuse. "This information laid out the blueprint for the FBI concerning the manner in which business is often conducted in New York."
It's not clear how far the FBI got in its seven-year investigation. Nor is it clear that the investigation is closed.
When Laberge and the state official he bribed both began working as informants, federal authorities assigned one prosecutor to handle their criminal cases and another to oversee the corruption probe sparked by their cooperation. Yet the only people to face charges so far are Laberge, who is scheduled to be sentenced today; Peter F. Dembroski, 44, a former state Office of General Services leasing agent, who helped Laberge in his efforts to win a major state contract, and Richard B. Sawyer, 55, a former commercial real estate broker who vanished after being indicted four months ago and is the target of a federal arrest warrant.
Andrew T. Baxter, a federal prosecutor who headed the corruption investigation, would not comment on details of the lengthy probe. Federal sentencing guidelines suggest a 15- to 21-month prison term for Laberge, but Baxter has asked a federal judge to consider leniency, given Laberge's "extensive" cooperation, by going one tier lower in a guideline sentence, which would give Laberge six months to one year in prison.
Baxter conceded such recommendations are rare when an informant's work doesn't yield any arrests.
"I can tell you, in general, with respect to substantial assistance (from a defendant) we are typically looking for tangible results," Baxter said. "But we don't always accomplish that."
In his recommendation to U.S. District Judge Norman A. Mordue, Baxter said the tips provided by Laberge could not be corroborated and that over time Laberge had given conflicting information.
Laberge contends his ability to penetrate state government corruption at its highest levels was hampered in part by Times Union stories that first exposed the federal investigation in April 2001 -- about a month before Laberge began working for the FBI, according to court records in the case.
Laberge worked aggressively in his undercover role, attending some 23 political fund-raisers where "he tried to ingratiate himself with politicians and establish a foothold into their campaign-contribution practices," according to a memorandum in the case that was unsealed Aug. 29.
"Cooperating with the government put Mr. Laberge's family and employees in jeopardy, both financially ... and physically, as the targets of these various investigations were very powerful people, who presumably would do nearly anything to retain their wealth and power," the memorandum said.
Stephen Coffey, Laberge's attorney, declined to discuss his memorandum.
None of the alleged "powerful people" are identified in any records filed publicly in Laberge's case or related cases. However, several knowledgeable sources said Bell, who was then the governor's confidential aide and part of the powerful Colonie Republican organization, became a focus of investigators as they traced the source of political interference wielded on Laberge's behalf.
Coffey wrote that the investigation also fell short because federal authorities ignored Laberge's pleas to let him "join the Governor's Club ... where his cooperation would do the most good." The "Governor's Club" is a designation that dates to former New York Gov. Nelson A. Rockefeller and has been used by state Republican fund-raisers since to describe significant contributors, sometimes for VIP treatment at special events.
It was in that spirit one Sunday night in 1998 that Bell, a Town Board member in Colonie, where a young Assemblyman Pataki once lived, helped arrange for a dozen men to gather in private at the home of Colonie's Republican patriarch, Harry D'Agostino.
They slipped out of their suit coats and chatted candidly about sports while sipping red wine and feasting on D'Agostino's homemade pasta carbonara and handmade ravioli, according to one attendee, who spoke on condition of anonymity. He said he was questioned by the FBI last year.
"(The questions were) about campaign finance corruption," the man said. "They were interested in what went on and the kind of people who were involved ... they were looking for people who have seen (cash) money pass hands ... the money that makes decisions."
Asked whether the FBI specifically asked about Bell, the man responded: "More than once."
No evidence emerged that anyone at the fund-raising dinner that night -- which are typical for politicians -- had violated any laws.
"This was a thing where the governor was able to come and relax after a day of functions," said D'Agostino, an attorney. "I cooked some food and we had some wine and talked about sports."
D'Agostino did not want to discuss his relationship with Laberge, saying only they've had "a personal relationship for many, many years."
He said the dinner was prompted by a phone call about a month earlier from Bell.
"There's nothing illegal or immoral about it," D'Agostino said.
Bell, who also was at the dinner that night, left her job at the governor's office in January, joining the state Office of Parks, Recreation & Historic Preservation as a special assistant, a job that pays $108,704 a year, according to public records.
A spokesman for the governor's office did not say whether Bell or anyone else on the governor's staff had been questioned by the FBI.
"The Times Union has spent months fruitlessly rehashing this matter, attempting to make it into something it is not," Quinn said. "The fact is our administration fully cooperated with authorities in this matter." incident in which Bell allegedly intervened on Laberge's behalf involved a high-rise building at 41 State St. in Albany, which Laberge purchased in 1997 for $9.65 million. The 12-story building is home to the New York Department of State, and other tenants. Just prior to closing on the deal, Laberge negotiated a new 10-year lease with the state for $17.2 million.
Soon after, a property manager at the building went to the state attorney general's office with allegations that Laberge's company was billing the state through its lease for improvements that actually were being made to another of his properties, the Arcade Building at 488 Broadway in Albany.
The allegations were potentially explosive because at that point Laberge was vying to purchase the former Stanleys Department Store building in downtown Troy in hopes of securing a long-term, $5.8 million lease with another state agency, either the Department of Law or the Department of Health.
The deal in Troy, which eventually fell apart as the FBI stepped in, would have earned Laberge several hundred thousand dollars profit, according to federal authorities. Laberge disputes that estimate and contends he would have lost money.
For reasons that are not clear, the fraud allegations surrounding Laberge's lease at 41 State St. were apparently never investigated by the state attorney general's office, which has no record of the matter.
Federal prosecutors have repeated the allegations in court records and Laberge acknowledged the scheme.
"Laberge later learned of the complaints, which had been referred to ... the OGS and the New York state attorney general's office, from a state official, who was assisting him in his efforts to obtain a state lease for the Stanley Building and who told him that the problem had been take care of," according to a plea agreement signed last year by Laberge.
When the FBI began investigating the bribery scheme, agents eavesdropped on dozens of Laberge's telephone calls and coversations with an informant. During one of those conversations, Laberge told someone, who has not been identified, that his problems at 41 State St. had been "taken care of" by a state official, according to knowledgeable sources.
Frost denied that Bell is the unnamed state official. He said Bell never "acted illegally or inappropriately." was no escape for Laberge from the bribery scandal.
The investigation began in early 1998, authorities said, when Norman S. Leibowitz, who had worked for Laberge for several years, told agents about a bribery scheme just beginning to unfold.
Laberge, in his defense papers, portrays Leibowitz as a corrupt employee who boasted about being an FBI informant and lured Laberge into committing a crime to win the state lease. He contends Leibowitz tricked him into thinking the bribery payment was sanctioned by the FBI at a time when Leibowitz admitted being an FBI informant.
Leibowitz flatly denies that claim and Assistant U.S. Attorney Sara Lord, who is prosecuting Laberge's case, filed a memorandum recently attacking Laberge's account.
"The defendant's assertions that he thought the bribe was 'sanctioned' by the FBI as part of its investigation ... are gross distortions of the facts," Lord said. "In the dozens of conversations that were recorded between the defendant and the informant, there is no evidence that the defendant believes that the informant was then working for the FBI, no evidence that the defendant was reluctant to bribe the state employee, and no evidence that the informant was manipulating (Laberge)."
The scheme involving the Stanleys building in Troy hinged on Dembroski, the OGS leasing agent, agreeing to steer a lease to Laberge for a $5,000 bribe. Laberge would make sure Sawyer, the broker, would get $20,000.
Dembroski held a key position at OGS to pull off the deal. His job was to locate and evaluate potential sites that would be rented by state agencies and make recommendations to his superiors at OGS. He would then guide the projects through an approval process that can take years.
On June 15, 2000, while the FBI was deep into its investigation, Senate Majority Leader Joseph L. Bruno, R-Brunswick, brought Pataki to Troy, in his home district, to announce the project. At the time, the lease wasn't actually finalized. Other state officials and OGS workers were questioning terms of the deal that would have significantly inflated annual payments over the course of the 10-year agreement.
The holdup was in part due to concerns by OGS officials about the earlier allegations that Laberge had been fraudulently charging them through their lease at 41 State St. in Albany.
The premature announcement by Bruno and Pataki fueled the bribery scheme back to life. Dembroski contacted Leibowitz, telling him to hold fast because Bruno and Pataki had already announced the deal, records show.
But the deal collapsed for good in January 2001 when the Office of the State Comptroller sent a memorandum to OGS officials saying it had been warned about the federal investigation and would not approve the lease. Two months later, Dembroski resigned under pressure, and in September of that year he pleaded guilty to federal mail fraud charges.
For four months before he left his job, however, Dembroski had recorded conversations with co-workers and secretly copied documents for the FBI, court records show.
Dembroski told federal agents that it was routine for state OGS workers to be pressured by top officials to steer lucrative rental contracts to landlords who made large contributions to well-connected politicians.
Dembroski was sentenced last year to probation for his role in the bribery scandal. He declined to answer questions when confronted by a reporter recently near his home, saying only that the investigation "obviously was squashed a long time ago." Dembroski now works in the private sector. facet of the case that remains mysterious was described cryptically in a plea for leniency filed by Dembroski and unsealed last year. Federal authorities said one reason the Stanleys building project fell apart for Laberge -- despite Dembroski's best efforts to manipulate the process -- was because a new deal had been inked by the state to occupy office space at the Hendrick Hudson building at 200 Broadway in Troy. "Dembroski described the process by which another large political contributor won that lease," a prosecutor wrote, referring to a five-year, $1.25 million lease for the state Department of Law.
Bruno cut the ribbon on the Hendrick Hudson building project in March 2000, and has been a driving force behind steering state agencies to downtown Troy as part of the city's revitalization effort.
Information about that case was referred to the U.S. attorney's office by the FBI, but no action has been taken.
Brendan Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.
Senior editor Bob Port contributed to this report.
All Times Union materials copyright 1996-2005, Capital Newspapers Division of The Hearst Corporation, Albany, N.Y.
Link to Article Source
For seven years, a secret FBI investigation has targeted corruption in state government, slowly moving ever higher up Albany's political food chain. Only now is the extent of the inquiry emerging.
By BRENDAN LYONS, Staff writer
First published: Tuesday, September 6, 2005
For Ronald Laberge, it should have been a night to remember fondly.
Advertisement
Laberge drove across Loudonville that summer evening in 1998 for a private dinner with Gov. George Pataki and a small group of influential and well-respected businessmen. It was a chance to mingle with the state's most powerful public official at a time when Laberge's self-built engineering and real estate firms were thriving.
But Laberge hid a dark secret when he dined with the governor that Sunday night. Less than a month earlier, he had authorized one of his employees to pay a $2,500 bribe to a state leasing agent, which was to be a down payment in an illicit deal aimed at winning Laberge a multimillion-dollar lease with the state of New York.
Years later, as the scandal broke, it would force an abrupt end to Laberge's storied career and leave him a disgraced felon.
It turns out he was determined not to go down alone.
A court document unsealed last week as a result of legal action by the Times Union shows that Laberge, in an attempt to avoid prison, agreed to help FBI agents get where they really wanted to go: inside the shadowy world of state contracts and campaign donations, where authorities suspect lucrative state government deals are awarded through political loyalties and money that changes hands with a wink and a nod.
It was an area of Laberge's expertise. His Colonie-based company, Laberge Group, has done millions of dollars in business with more than 200 government agencies across the state. He has contributed thousands of dollars to Republican candidates.
The investigation led to the governor's office, where the FBI broadened its probe to include Pataki's former longtime executive assistant, Monica F. Bell of Loudonville, after Laberge began naming officials who had helped him, according to several knowledgeable sources. FBI agents began to explore whether Bell, 56, who has not been accused of any wrongdoing, played a role in protecting Laberge in another leasing scandal and helped the Pataki contributor try to secure a $5.8 million state building lease in Troy -- independently from Laberge's attempt to bribe a state leasing agent.
The FBI probe "did not tend to corroborate the information" Laberge provided, the U.S. attorney's office said in a statement filed in court in July.
Bell would not comment. She retained an attorney, Jerome K. Frost, who issued a written statement on Saturday denying that Bell, who is an acquaintance of Laberge's, had anything to do with Laberge's misdeeds.
"Ms. Bell was neither a target of the Laberge investigation by the U.S. attorney's office and the FBI, nor was she subpoenaed in that investigation," Frost said.
Pataki spokesman Kevin Quinn, responding to written questions from the Times Union, denied any wrongdoing within the governor's office and said Bell did not try to help Laberge win a lease. The governor himself did not comment.
"You're making the false presupposition that Ms. Bell made any efforts to assist Laberge in obtaining a state lease," Quinn said. "She has indicated that she did not."
Late last week, the state Office of General Services turned over copies of two federal grand jury subpoeanas it received in January 2001 in connection with the investigation.
One subpoena sought copies of records, including any internal correspondence or e-mails, in connection with two state projects involving Laberge's company. The second sought records related to another state lease in Troy, at the Hendrick Hudson building, which did not involve Laberge or his companies.
The reach of Laberge's work as an informant had remained secret until last week. It began about four years ago after authorities confronted him with irrefutable evidence that he had bribed a state official. In 2003, Laberge, now 69, began taping telephone conversations with associates and baiting FBI targets at political fund-raisers as he meanwhile held candid talks with agents and federal prosecutors about the hidden world of government payoffs.
"Mr. Laberge also prepared memoranda outlining the methods used by politicians and business owners to contribute money to campaigns and to have those contributions recognized for later business opportunities," according to a sentencing memorandum filed by Laberge and unsealed last week in U.S. District Court in Syracuse. "This information laid out the blueprint for the FBI concerning the manner in which business is often conducted in New York."
It's not clear how far the FBI got in its seven-year investigation. Nor is it clear that the investigation is closed.
When Laberge and the state official he bribed both began working as informants, federal authorities assigned one prosecutor to handle their criminal cases and another to oversee the corruption probe sparked by their cooperation. Yet the only people to face charges so far are Laberge, who is scheduled to be sentenced today; Peter F. Dembroski, 44, a former state Office of General Services leasing agent, who helped Laberge in his efforts to win a major state contract, and Richard B. Sawyer, 55, a former commercial real estate broker who vanished after being indicted four months ago and is the target of a federal arrest warrant.
Andrew T. Baxter, a federal prosecutor who headed the corruption investigation, would not comment on details of the lengthy probe. Federal sentencing guidelines suggest a 15- to 21-month prison term for Laberge, but Baxter has asked a federal judge to consider leniency, given Laberge's "extensive" cooperation, by going one tier lower in a guideline sentence, which would give Laberge six months to one year in prison.
Baxter conceded such recommendations are rare when an informant's work doesn't yield any arrests.
"I can tell you, in general, with respect to substantial assistance (from a defendant) we are typically looking for tangible results," Baxter said. "But we don't always accomplish that."
In his recommendation to U.S. District Judge Norman A. Mordue, Baxter said the tips provided by Laberge could not be corroborated and that over time Laberge had given conflicting information.
Laberge contends his ability to penetrate state government corruption at its highest levels was hampered in part by Times Union stories that first exposed the federal investigation in April 2001 -- about a month before Laberge began working for the FBI, according to court records in the case.
Laberge worked aggressively in his undercover role, attending some 23 political fund-raisers where "he tried to ingratiate himself with politicians and establish a foothold into their campaign-contribution practices," according to a memorandum in the case that was unsealed Aug. 29.
"Cooperating with the government put Mr. Laberge's family and employees in jeopardy, both financially ... and physically, as the targets of these various investigations were very powerful people, who presumably would do nearly anything to retain their wealth and power," the memorandum said.
Stephen Coffey, Laberge's attorney, declined to discuss his memorandum.
None of the alleged "powerful people" are identified in any records filed publicly in Laberge's case or related cases. However, several knowledgeable sources said Bell, who was then the governor's confidential aide and part of the powerful Colonie Republican organization, became a focus of investigators as they traced the source of political interference wielded on Laberge's behalf.
Coffey wrote that the investigation also fell short because federal authorities ignored Laberge's pleas to let him "join the Governor's Club ... where his cooperation would do the most good." The "Governor's Club" is a designation that dates to former New York Gov. Nelson A. Rockefeller and has been used by state Republican fund-raisers since to describe significant contributors, sometimes for VIP treatment at special events.
It was in that spirit one Sunday night in 1998 that Bell, a Town Board member in Colonie, where a young Assemblyman Pataki once lived, helped arrange for a dozen men to gather in private at the home of Colonie's Republican patriarch, Harry D'Agostino.
They slipped out of their suit coats and chatted candidly about sports while sipping red wine and feasting on D'Agostino's homemade pasta carbonara and handmade ravioli, according to one attendee, who spoke on condition of anonymity. He said he was questioned by the FBI last year.
"(The questions were) about campaign finance corruption," the man said. "They were interested in what went on and the kind of people who were involved ... they were looking for people who have seen (cash) money pass hands ... the money that makes decisions."
Asked whether the FBI specifically asked about Bell, the man responded: "More than once."
No evidence emerged that anyone at the fund-raising dinner that night -- which are typical for politicians -- had violated any laws.
"This was a thing where the governor was able to come and relax after a day of functions," said D'Agostino, an attorney. "I cooked some food and we had some wine and talked about sports."
D'Agostino did not want to discuss his relationship with Laberge, saying only they've had "a personal relationship for many, many years."
He said the dinner was prompted by a phone call about a month earlier from Bell.
"There's nothing illegal or immoral about it," D'Agostino said.
Bell, who also was at the dinner that night, left her job at the governor's office in January, joining the state Office of Parks, Recreation & Historic Preservation as a special assistant, a job that pays $108,704 a year, according to public records.
A spokesman for the governor's office did not say whether Bell or anyone else on the governor's staff had been questioned by the FBI.
"The Times Union has spent months fruitlessly rehashing this matter, attempting to make it into something it is not," Quinn said. "The fact is our administration fully cooperated with authorities in this matter." incident in which Bell allegedly intervened on Laberge's behalf involved a high-rise building at 41 State St. in Albany, which Laberge purchased in 1997 for $9.65 million. The 12-story building is home to the New York Department of State, and other tenants. Just prior to closing on the deal, Laberge negotiated a new 10-year lease with the state for $17.2 million.
Soon after, a property manager at the building went to the state attorney general's office with allegations that Laberge's company was billing the state through its lease for improvements that actually were being made to another of his properties, the Arcade Building at 488 Broadway in Albany.
The allegations were potentially explosive because at that point Laberge was vying to purchase the former Stanleys Department Store building in downtown Troy in hopes of securing a long-term, $5.8 million lease with another state agency, either the Department of Law or the Department of Health.
The deal in Troy, which eventually fell apart as the FBI stepped in, would have earned Laberge several hundred thousand dollars profit, according to federal authorities. Laberge disputes that estimate and contends he would have lost money.
For reasons that are not clear, the fraud allegations surrounding Laberge's lease at 41 State St. were apparently never investigated by the state attorney general's office, which has no record of the matter.
Federal prosecutors have repeated the allegations in court records and Laberge acknowledged the scheme.
"Laberge later learned of the complaints, which had been referred to ... the OGS and the New York state attorney general's office, from a state official, who was assisting him in his efforts to obtain a state lease for the Stanley Building and who told him that the problem had been take care of," according to a plea agreement signed last year by Laberge.
When the FBI began investigating the bribery scheme, agents eavesdropped on dozens of Laberge's telephone calls and coversations with an informant. During one of those conversations, Laberge told someone, who has not been identified, that his problems at 41 State St. had been "taken care of" by a state official, according to knowledgeable sources.
Frost denied that Bell is the unnamed state official. He said Bell never "acted illegally or inappropriately." was no escape for Laberge from the bribery scandal.
The investigation began in early 1998, authorities said, when Norman S. Leibowitz, who had worked for Laberge for several years, told agents about a bribery scheme just beginning to unfold.
Laberge, in his defense papers, portrays Leibowitz as a corrupt employee who boasted about being an FBI informant and lured Laberge into committing a crime to win the state lease. He contends Leibowitz tricked him into thinking the bribery payment was sanctioned by the FBI at a time when Leibowitz admitted being an FBI informant.
Leibowitz flatly denies that claim and Assistant U.S. Attorney Sara Lord, who is prosecuting Laberge's case, filed a memorandum recently attacking Laberge's account.
"The defendant's assertions that he thought the bribe was 'sanctioned' by the FBI as part of its investigation ... are gross distortions of the facts," Lord said. "In the dozens of conversations that were recorded between the defendant and the informant, there is no evidence that the defendant believes that the informant was then working for the FBI, no evidence that the defendant was reluctant to bribe the state employee, and no evidence that the informant was manipulating (Laberge)."
The scheme involving the Stanleys building in Troy hinged on Dembroski, the OGS leasing agent, agreeing to steer a lease to Laberge for a $5,000 bribe. Laberge would make sure Sawyer, the broker, would get $20,000.
Dembroski held a key position at OGS to pull off the deal. His job was to locate and evaluate potential sites that would be rented by state agencies and make recommendations to his superiors at OGS. He would then guide the projects through an approval process that can take years.
On June 15, 2000, while the FBI was deep into its investigation, Senate Majority Leader Joseph L. Bruno, R-Brunswick, brought Pataki to Troy, in his home district, to announce the project. At the time, the lease wasn't actually finalized. Other state officials and OGS workers were questioning terms of the deal that would have significantly inflated annual payments over the course of the 10-year agreement.
The holdup was in part due to concerns by OGS officials about the earlier allegations that Laberge had been fraudulently charging them through their lease at 41 State St. in Albany.
The premature announcement by Bruno and Pataki fueled the bribery scheme back to life. Dembroski contacted Leibowitz, telling him to hold fast because Bruno and Pataki had already announced the deal, records show.
But the deal collapsed for good in January 2001 when the Office of the State Comptroller sent a memorandum to OGS officials saying it had been warned about the federal investigation and would not approve the lease. Two months later, Dembroski resigned under pressure, and in September of that year he pleaded guilty to federal mail fraud charges.
For four months before he left his job, however, Dembroski had recorded conversations with co-workers and secretly copied documents for the FBI, court records show.
Dembroski told federal agents that it was routine for state OGS workers to be pressured by top officials to steer lucrative rental contracts to landlords who made large contributions to well-connected politicians.
Dembroski was sentenced last year to probation for his role in the bribery scandal. He declined to answer questions when confronted by a reporter recently near his home, saying only that the investigation "obviously was squashed a long time ago." Dembroski now works in the private sector. facet of the case that remains mysterious was described cryptically in a plea for leniency filed by Dembroski and unsealed last year. Federal authorities said one reason the Stanleys building project fell apart for Laberge -- despite Dembroski's best efforts to manipulate the process -- was because a new deal had been inked by the state to occupy office space at the Hendrick Hudson building at 200 Broadway in Troy. "Dembroski described the process by which another large political contributor won that lease," a prosecutor wrote, referring to a five-year, $1.25 million lease for the state Department of Law.
Bruno cut the ribbon on the Hendrick Hudson building project in March 2000, and has been a driving force behind steering state agencies to downtown Troy as part of the city's revitalization effort.
Information about that case was referred to the U.S. attorney's office by the FBI, but no action has been taken.
Brendan Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.
Senior editor Bob Port contributed to this report.
All Times Union materials copyright 1996-2005, Capital Newspapers Division of The Hearst Corporation, Albany, N.Y.
Link to Article Source
This entry was posted
on Tuesday, September 06, 2005 at 10:35.
