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Off With A Bang
January 12, 2005: Hard to believe the first half of the first decade of the new century is almost over. Remember Millennium dread? The fear that computers would crash worldwide, leaving us stumbling in the dark and fruitlessly punching keys of dead ATMs? In Connecticut, the Millennium bogey drove X Governor John Rowland's X aide Lawrence Alibozek, to want his graft paid in gold coins. Which he buried in his backyard. The feds eventually disinterred Larry's treasure. Yo ho ho and a bottle of rum!

Speaking yo ho 'twas only a little over a year ago that Patty Rowland read her rewritten version of "The Night Before Christmas" to a rapt Chamber of Commerce in Middlesex, Conn. Metaphorically laying her finger on the side of her nose and blaming the evil newsmedia for spreading lies re her hubby. Yet on the day before this last Christmas Eve, John Rowland pled guilty to one charge of corruption. Thereby dodging a Santa sack of potential tsoras. Back when Connecticut's Homeland Security Director Vincent DeRosa was Rowland's state trooper chauffeur, he allegedly witnessed the Guv cutting deals with cronies. Over the last year X Director DeRosa was getting chatty with the feds. Supposedly Rowland didn't want him to do likewise in court and tossed in the tea towel. Rowland might even do a few months! Hopefully his buds will be able to install a hot tub in his cell. If Rowland should turn talkative about how he and his crew turned the state house into their bitch, Patty could rewrite his prose. Into the Valley of Graft rode the umpteen hundred?

On the same day Rowland pled out, Alexander Salvagno and his father Raul of AAR Contractor were awarded lengthy prison sentences in federal court in Syracuse, New York. What the EPA calls the biggest case of environmental fraud in U.S. history closed with a bang. Temporarily. Appeals are in the wings. The AAR case involved asbestos abatement fraud in myriad public and private buildings across New York State. One notable AAR project was the Capital Building in Albany. AAR's workers? As a 03/08/04 Syracuse Post-Standard headline put it: "Asbestos Worker tasted it, choked on it".

As ever, the topic of Alex Salvagno and AAR continues to draw QT mail. One recent correspondent lays the main blame not on the Salvagnos but on the various government agencies, both federal and state, that didn't bring the oversight hammer down on AAR earlier. The writer has a point. AAR was one of the most successful environmental abatement companies in New York State-- due in part to lower than average bids. They defrauded the public for a decade. But while it's true the AAR ball was noticeably fumbled by assorted government entities, the prime responsibility for the fraud still lies with the individuals who devised it. According to many accounts, Alex Salvagno never intended AAR to be an honest enterprise. With fraud in mind, he set up his "independent" testing facility Analytical Laboratories of Albany (ALA). ALA not only provided false abatement verifications for AAR, but other companies as well. The AAR story is not about a hard working contractor pushed to cut corners in order to low bid, but a sophisticated criminal operation run by a bright, well connected guy with a taste for doing things grifter style.

On December 23rd, the Albany Times Union covered the Salvagno sentencing and John Rowland's guilty plea on adjoining pages. With photos. The two men, both of whom sullied state houses (albeit in different ways) look as if they were separated at birth. Both are middle aged and stocky. In the photos, both face the camera and hunch into their coats. Their faces wear an almost identical expression; lips pressed together as if holding back outrage over the injustice being done THEM.

Main Street grifters with Ubermensch delusions (MSGUD) are increasingly common. Like orcs, they may be hybrids. Possibly the result of cross breeding between Screwdasystem Man of the Counter Culture Age, and Greedisgood Man from the Neocon Period. MSGUD can be found rampaging across the land. Often in the halls of government and real estate. Some MSGUD multi task. X Governor Rowland dabbled in mortgage flips when he was a state rep hanging in Washington D.C. In Springfield, Massachusetts (birthplace of basketball) dicey mortgage deals by political insiders are one subject of a larger federal investigation into local municipal corruption. In Los Angeles, the cozy relationship between Mayor Jim Hahn and developers Mark Abrams and Charles Fitzgerald, alleged partners in a massive Beverly Hills mortgage fraud, is generating heat. In Miami, Florida, X City Commissioner Humberto Hernandez did the mortgage fraud mambo right into jail. To be followed by suspended Commissioner Arthur Teele, charged with trading construction contracts for bribes when he headed the Community Redevelopment Agency. (Note: MSGUD often lurch in such agencies-- driven by their never ending need for HUD bux.) When the law came looking for MSG Teele he allegedly went full throttle UD and tried to run a cop off the road. Before threatening to shoot him.

MSGUDs are becoming more and more violent. Over the last year the national mortgage industry has been marked by a string of violent deaths connected to unraveling frauds. Such was the case with Thomas Fazy, an Oak Forest, Illinois, mortgage broker gunned down in his office on December 8th while his co-workers took a 20 minute dinner break. Fazy had a long record as a convicted mortgage crook. Recently, he'd been part of a ring that flipped decrepit properties in Chicago's poor nabes. The ring used fake ID's to buy properties back from themselves at inflated prices. Leaving banks and neighborhoods holding the bag. When the scam collapsed Fazy turned state's evidence against his cohorts. Some say that's why Fazy will never flip again.

Chicago is also the place where an investigation into a string of gang related murders led the feds to launch "Operation: This Old House". The investigation expanded into mortgage fraud territory when it emerged that the same gangs who were dealing drugs and doing rivals (30 dead bodies by 10/04) had allegedly laundered some $70 million in profits through more than 100 fraudulent mortgages. Proving that boys in the hood are no less canny about unreal real estate than MSGUD.

The good news front: despite a scandal that erupted last spring in Cleveland, Ohio about a $21.2 million home rehab fraud in the HUD funded Repair-a-Home (RAH) and Senior Housing Assistance programs, it looks as if the culprits were just a couple of building inspectors and contractors. And as Mayor Jane Campbell told the Plain Dealer (01/04/05) in relation to another case of bribery involving one of these inspectors, the city has "disciplined the individual and streamlined the process." The permit process that is. More good: in 2003, the U.S. Department of Housing and Urban Development (HUD!) wanted Cleveland to return $11.6 million of money supposedly misspent in the city's "Empowerment Zone" program. Empowerment Zones are meant to create jobs in high poverty areas via business incentives such as loans and grants. HUD believed Cleveland Zone loans and grants weren't producing enough jobs. And that the jobs being produced went to people living outside the Zones. But thanks to former U.S. Representative Louis Stokes, HUD adjusted that $11.6 million payback sum downward into the comfort zone. To a little over one hundred thousand.

Back when Stokes sat on a congressional subcommittee overseeing HUD, he was a force behind Cleveland getting Empowerment Zones. So when the municipal administration paid Stokes a $150,000 consulting fee to argue their case before HUD they were getting a staunch champion. One thing HUD objected to was that some of the new Zone jobs were really only the old ones of Cuyahoga County outreach workers. Who were transferred into a new office building built within an Empowerment Zone with Zone dollars. But Stokes convinced HUD the investment was legit because it brought more social services into a high poverty Zone. Is that empowerment-- or what?

The person in Ohio who sent QT the Plain Dealer article thinks apathy is the reason people shrug off misuse of HUD funds. (Speaking theoretically since nothing is amiss in Ohio.) It may also be a form of passive complicity. As HUD's mission keeps expanding, more people develop a stake in keeping local HUD Bux flowing. Since they fear that scrutiny of one program will spread to others. It's as if HUD were leading more and more people to carry water for MSGUD.

One last thing. New Yorkers should keep watching the Erie Canal. Rumors of alien abductions at SUNY just keep getting weirder.

Carola Von Hoffmannstahl-Solomonoff

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Copyright (c) 2005 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.


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