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Blow The Men Down
January 28, 2005: Some QT subjects are like Dracula. Just when you think they've been staked, they pop up in a sequel. Such is the case with AAR Contractor Inc. An environmental clean-up company once based in Albany County in upstate New York. Alexander Salvagno and his father Raul were the heads of AAR. Asbestos abatement fraud was their specialty. For roughly a decade, the duo ran one of the biggest environmental scams ever perped in the USA. In 2005 both went to federal prison. To serve 25 and 19.8 respectively.

The Salvagnos, using several corporate entity names in which "AAR" usually figured, held public contracts across upstate New York. Including ones for elementary, middle and high schools and campus buildings of the State University of New York (SUNY). They also worked on hospitals, public housing, museums, prisons and power facilities. Plus myriad state government offices. Among the latter was the State Capital building in Albany. Also the building containing the New York State Labor Department's Asbestos Control Bureau. A nice touch that. Since AAR, when not faking asbestos removal and dummying up test results via their "independent" laboratory, was having its laborers do slam jobs. As in-- wading into snowstorms of asbestos laden dust sans safety gear and training. Though to be fair, some workers did have counterfeit training certificates.

AAR was busy doing the peoples' work not only in the peoples' buildings, but with taxpayer funded non-profit, corporate and residential projects related to redevelopment, environmental clean-ups and/or historic preservation. At times the Salvagnos worked in tandem with some of upstate's most prominent developers and public contractors. Who despite proximity were just as clueless as the general public re ARR practices. As were the municipal, county and state officials who paid AAR the public's money. Hence once the prison doors slammed on Alex and Raul Salvagno, there was no need for any state investigations into how the fraudsters had obtained so many public and quasi-public state contracts. Or why the reports by the AAR clients and fellow contractors who did notice the non-abatements and rip & run treatments had so little effect for so long.

This AAR sequel is a story of underlings from the company's managerial level. Among them Kevin Pilgrim. As witness for the defense in 2004, Pilgrim testified as Salvagno had coached him. A friend of Alex Salvagno's since boyhood and right through college, Pilgrim has been described as Alex's perpetual henchman and dupe. Loyal to the point of self abnegation. In June 2005, Kevin Pilgrim recanted his 2004 testimony and pled guilty to perjury. Confessing that yes, he'd seen AAR employees working without respirators in snowstorms of asbestos and that Analytical Laboratories of Albany (ALA) the testing facility the Salvagnos set up as a front, routinely falsified results. Pilgrim also took back his story about how he and Alex Salvagno never used cocaine when Pilgrim was employed at AAR.

Also in June 2005, AAR general manager Thomas Reed was sentenced. Reed pled out years ago and became a witness for the prosecution. His testimony was extensive. Reed's teenage son showed up at his sentencing. Not in support but to describe how his father left unabated asbestos in the school his own son attended. U.S. District Court Judge Howard Munson gave Reed 5 years and ordered him to pay back the child support he'd hidden from his family via the financial services company Alex Salvagno helped create. On January 19, 2006 former AAR supervisor Sheon DiMaio was sentenced. Judge Munson sentenced DiMaio to 3 years in prison and made substance abuse treatment mandatory.

Ten more AAR hollow men will be sentenced in the upcoming months.

Speaking of court dates, on January 24th state supreme court Justice Dan Lamont declared that it was AOK for New York State comptroller Alan Hevesi to nix the 46 million dollar contract the State Thruway Authority had granted Joseph Pontoriero and Worth Construction. Though an "extensive investigation"* by the Thruway Authority had turned up Pontoriero and Worth's long history of mob associations and federal investigations in New York, New Jersey and Connecticut, it was Hevisi who said whoa Nelly when the contract flopped onto his desk a few days before curfew rang on his required review. When asked about their Worth go-ahead, the Thruway Authority cited fear of a lawsuit if Worth wasn't granted the contract. Since the company was qualified, made the low bid and Joe Pontoriero has never been convicted of a crime. Court testimony in 2003 by X Mayor Phil Giordano of Waterbury, Connecticut, about how "Joe" bribed him not withstanding.

Phil Giordano was a Main Street Caligula who hung and got high with crack addicted hookers. His main ho sold him her pre-teen daughter and niece. Worth Construction is based in Connecticut and Giordano thought good buddy Joe Pontoriero was cool. And aped his taste in clothes. Joe bankrolled the ape suits. Giordano threw his weight behind Worth being awarded public contracts in Waterbury and flew into rages when denied. He kept his knowledge of the federal investigations of Pontoriero in New York City and New Jersey under his DNA soaked rug at city hall. In the process of investigating Giordano (Operation Land Phil) and municipal corruption related to Worth, the feds discovered the mayor's taste for little girls. The corruption investigation receded before the urgency of stopping the child abuse. Giordano went to jail for the latter.

After Comptroller Alan Hevesi fired Worth from the New York thruway job, Pontoriero huffed and puffed. How dare he be denied a public contract due to nothing more than a grimy tri-state reputation. Pontoriero filed a lawsuit claiming Hevesi was overstepping his authority and had no justification to tell Worth to hit the highway rather than revamp it. Alas, Justice Lamont disagreed. Joe must pack his bulldozer and go. But only from the highway project. Worth still gets to keep its 14 million dollar courthouse job in Putnam County. Where the contract was granted by the county, rather than the state.

Though Joe won't exactly be hurting, this might be a tactful time for Westchester County D.A. and state attorney general hopeful Jeannine Pirro to return his political contributions. As Al Gore and Joe Lieberman did some time ago.

Talking cash backs, a year end state audit of the work force at Endicott Interconnect Technologies (EI or EIT)in Endicott in Broome County, shows the company hasn't retained the number of jobs it promised in return for a 4 million dollar grant from the Empire State Development Corporation (ESDC). This particular grant is only one of many goodies the ESDC has delivered or helped arrange for EI since 2002. Including a 1 million dollar grant from HUD via Community Development Block Grant (CDBG) funds, assorted property and sales tax breaks, low cost energy arrangements and a taxpayer funded, 51.5 million dollar lease arrangement with IBM. From whom EI inherited electronic assembly facilities. Plus several thousand employees. Whose jobs were supposed to be secure thanks to all of the above. Meanwhile IBM is hiring in India. With their unwanted property being subsidized stateside.

But that's another story.

Though the word "corporation" suggests free enterprise, the Empire State Development Corporation is a quasi-public government entity that picks and chooses which development projects and economic enterprises will enjoy the financial benefits and advantages of state support. This largesse often flows through smaller quasi-public local agencies operating under the aegis of the ESDC. Charles Gargano, head of the ESDC, is an appointed, unelected official. As are many (though not all) of the officials who pilot the myriad offspring of the ESDC. Though the ESDC is subject to some oversight by elected representatives, it's been described as an insufficiently monitored Rancho Notorious of cronyism and pork. With a habit of not holding ESDC jacked companies to their promises of jobs jobs jobs.

A common rationale used by both the ESDC and its state watchdogs, for not coming down harder on corporate welfare recipients over unmet promises, is that doing so might cost communities even more jobs. Since financial penalties could cripple "struggling"** companies. Is that a Catch 22 or what? Plus an incentive for non-compliance. Invisible jobs are just as good as real ones. Heck, they're better! No jobs, no wages!

In the case of Endicott Interconnect, if promised job numbers aren't met by the beginning of this year, their state contract requires the company to pay back 1.6 million of the 4 million dollar ESDC grant. The million dollar HUD grant, the tax breaks and bargain energy rates, plus the $51.5 million taxpayer funded lease deal aren't explicitly tied by contract to job creation, so they won't be affected by any penalties. Given the combined value of all of the above, 1.6 mil seems a mere bagatelle. Yet in this instance too, the argument is being made that fining EI might push a "struggling company" too far and harm the community.

Inquiring minds might want to know why a relatively small company such as EI, after 4 years of humongous government support and more advantages than you can shake a stick at, is still in such precarious condition. Which leads to another question. Could quasi-public agencies be even worse than actual government ones when it comes to picking business and development winners? A scary thought considering that Charles Gargano and the ESDC are also pushing mammoth eminent domain land grabs all over the state in the name of enhancing local tax revenues and are hot for casino gambling. Shiver me timbers -- could putting the state's future in the hands of the quasi-public crew leave us living in a wasteland of struggling clip joints?

Carola Von Hoffmannstahl-Solomonoff

"We've got more wolves in New York than there are in Siberia!"

Carola Landis to Betty Grable, I Wake Up Screaming, 1942

"Hey there Little Red Riding Hood/you sure are looking good"

Sam The Sham And The Pharaohs, Li'l Red Riding Hood, Ronald Blackwell, 1966

* "Worth lawsuit against state Comptroller dismissed by state Supreme court judge," Susan Elan, The Journal News, 01/24/06

** "Endicott Interconnect, year three: Work force drops; contract calls for $1.6M payback, History shows state rarely enforces penalty," Tom Wilbur, Press & Sun-Bulletin, 12/18/05

Sources Include:
"Worth lawsuit against state Comptroller dismissed by state Supreme court judge," Susan Elan, The Journal News, 01/24/06

"Prison sentence imposed in asbestos removal case, The Business Review (Albany)," American City Business Journals, 01/19/06

"Endicott Interconnect, year three: Work force drops; contract calls for $1.6M payback, History shows state rarely enforces penalty," Tom Wilbur, Press & Sun-Bulletin, 12/18/05

Press release re Kevin Pilgrim, U.S. Attorney's Office, Northern District of New York, 06/26/05

"Man gets scolded by son, sentenced by judge for asbestos fraud," Newsday & Syracuse Post-Standard, Newsday, 06/23/05

AAR Commercial Victims, list, U.S. Attorney's Office, Northern District of New York, 2005

"CNY raid helped start national crackdown," Mark Weiner, The Post-Standard, 02/15/04

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Copyright (c) 2006 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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