LDC's: the scandal (almost) everyone saw coming

Robert Wiesner defended himself against allegations of bid-rigging at a press conference last week. Credit: PHOTO BY LARISSA COE

Monroe County Executive Maggie Brooks apparently isn’t ready
to give up on local development corporations. Brooks reiterated her support for
the quasi-governmental bodies at a tense press conference last week, which came
on the heels of the arrest of four people, including her husband, for allegedly
carrying out an elaborate bid-rigging scheme.

The four,
including Brooks’s husband, Robert Wiesner, face felony charges as a result of
the state Attorney General’s probe into two county-linked local development
corporations.

The Attorney
General’s Office outlined its case against the four defendants in an
indictment, which was unsealed by acting county court Justice Robert Noonan
last week. The AG’s Office alleges that the four defendants all had a hand in a
scheme to rig bids so that favored companies would get
contracts with one or both of the LDC’s in question: Upstate Telecommunications
Corporation and Monroe Safety and Security Systems.

The history
of the LDC controversy is complicated, with roots in two critical state
Comptroller’s Office audits related to UTC and M3S. In short, the AG’s Office
alleges that, in addition to manipulating the contracts, that two officers of
the corporations used fake contracts, inflated subcontracts, and falsified
invoices to steal money from LDC projects.

The
allegations — all four men have pleaded not guilty — are troubling, of course.
And they reinforce years of criticisms leveled by government watchdogs and some
state and local politicians.

Legislature
Democrats have been particularly critical. The LDC’s operate with inadequate
oversight, which makes them fertile grounds for abuse, said Legislature
Democratic Minority Leader Carrie Andrews during a press conference last week.
And Andrews reminded reporters that Democrats have tried to pass reforms aimed
at preventing the sorts of problems contained in the indictment.

When the
proposal to create M3S came through the Legislature, Democrats offered a
measure that would have required all contracts to come back to the Legislature
for approval. Republicans shot that, as well as other oversight measures, down.
The legislation creating the LDC ultimately passed, but only Republicans voted
for it.

Wiesner, who served as director of security for the Monroe County Water Authority from 2011 until earlier this year, faces
two felony bid-rigging charges. The indictment doesn’t say exactly what the
former Rochester police captain did; it only includes a general accusation that
he was part of the scheme.

Also facing
charges are Nelson Rivera, the county’s former chief information officer, and
John Maggio, president of Navitech Services Corp. Daniel Lynch, president of
Treadstone — a Navitech subcontractor that also has Maggio as an officer — and
a former sales executive for Siemens Building Technologies, was charged a few
weeks ago in connection with the probe. But the indictment unsealed last week
expanded on those allegations, and Lynch now faces a slew of additional
charges; he’s named in all 25 counts of the indictment.

The two
LDC’s contract with Navitech for management services and Navitech has, in turn,
subcontracted out various services and equipment acquisitions. Upstate Telecommunications
provides information systems, including phones and computers, to the county.
Monroe Safety and Security Systems owns the county’s
emergency communications infrastructure and leases it to the county. It’s
currently upgrading the system — which is the purpose that the LDC was created.

The
indictment alleges that Maggio and Lynch, with assistance from Rivera, used a
complex system of fake contracts, inflated subcontracts, and falsified invoices
to steal money from LDC projects over a period of years. Rivera faces two
charges of falsifying business records, in addition to bid-rigging charges.
Maggio and Lynch face some of the most serious charges including grand larceny,
criminal conspiracy, and money laundering.

As for the immediate fallout, County
Executive Maggie Brooks asked the two LDC boards to terminate their contracts
with Navitech. In July, Brooks hired former state Attorney General Dennis Vacco
to conduct an internal review of the LDC’s. During a press conference in
Brooks’s office last week, Vacco said that he recommended terminating the
Navitech contract, as well as cancelling any subcontracts with entities
implicated in the attorney general’s office investigation.

Brooks said
that the two local development corporations help the county perform important
functions in cost-effective ways. She regularly calls the LDC’s public-private
partnerships — framing them as innovative ways for financially stressed
governments to serve taxpayers.

As for the
charges facing Wiesner, Brooks didn’t say much.

“There’s two things I don’t talk about: personnel issues and
personal issues,” she said at the press conference.

But
Legislature Minority Leader Andrews called for Brooks to step away from the
investigation and for the Legislature to assume oversight of Vacco’s review.

Andrews said that she hadn’t heard any of Vacco’s findings or
recommendations until his press conference with Brooks. Vacco should report his
work to the Legislature, she said, which should then lead the investigation of
the LDC’s.

“I think
that the county executive has a clear conflict of interest, and that’s the
bottom line,” Andrews said.

During a separate press conference last week, Wiesner read a brief prepared statement, while his attorney spoke at
some length on his behalf. Both said that Wiesner had no role in any part of
UTC’s bid request or selection process.

They also
said that he had no involvement in the M3S contract process or selection. (The
indictment says that the Water Authority has an agreement with the county to
update its safety and security equipment. That work is part of the county’s
contract with M3S.)

They say
that Wiesner’s prosecution is political. To support that criticism, they
pointed to the way that last week’s arrests and arraignments were handled.

Officials
with the state attorney general’s office marched Wiesner and the other
defendants — in handcuffs — across Exchange Boulevard to the city’s Public
Safety Building, before the indictment was unsealed. A deputy press secretary
for the AG’s office had tipped off some local media to what’s commonly called a
“perp walk.”

“In my
30 years in law enforcement I have never treated a defendant as I was treated
yesterday,” Wiesner said at the press conference. “It was a blatant
and calculated act by the attorney general’s office to embarrass me, embarrass
my wife, and prejudice the case.”

The deputy
press secretary who tipped off the media has been suspended. And Wiesner’s
attorney, James Nobles, says that the attorneys for all four defendants are
considering legal action.