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State probes former Niles mayor over waived Cafaro HQ fees
By DAVID SKOLNICK
skolnick@vindy.com
NILES
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Niles-Cafaro
Document
Signed Agreement by the Board of Control, Regarding The Permit Fees For The Cafaro Corporate Offices Relocation
Former Mayor Ralph A. Infante, whose house and business were raided as part of a criminal investigation, didn’t follow city and state laws last year when he waived building-permit and inspector fees for the Cafaro Co.’s headquarters without city council’s approval.
“Unless there’s a mechanism to authorize the board of control or a department head to waive or adjust [fees], it is up to city council to give those waivers,” said city Law Director
J. Terrence Dull. “The way it should have been done is by council.”
City council never voted on reducing the fees, city records show.
The waiver of $22,761.54 is a relatively small amount of money compared with the $30 million in projects finished or under construction at the Cafaro-owned Eastwood Mall complex.
The waiver for the Cafaro headquarters was uncovered during a state audit of the city’s finances that led to the larger investigation by state and federal law enforcement into possible illegal activity in Niles involving government officials and others.
Infante, who lost re-election last year after 24 years as mayor, and the Cafaro Co. are subjects of the investigation, though the company is not a target in the waiver of fees, according to a source close to the probe.
The permits for the headquarters totaled $30,719.56 with $22,761.54 waived between Jan. 23 and Dec. 11, 2015, according to records provided by Dull at the request of The Vindicator.
“When there is a mandatory construction fee in an ordinance, a council would have to amend the ordinance to change the fee or change the procedure for who could waive that fee,” said Dan Tierney, a spokesman for the Ohio Attorney General’s office speaking in general terms and not about the Niles case.
Agents with the FBI, Ohio Auditor’s Office and the Ohio Bureau of Criminal Investigation seized records from Infante’s house and bar (Infante’s Lounge or ITAM 39) Feb. 1, and other documents – primarily related to Cafaro Co. projects at its Eastwood Mall including its headquarters and two hotels – from the building and zoning department at city hall Dec. 4.
BCI agents searched the Youngstown headquarters of the Cafaro Co. also on Dec. 4.
The city’s board of control, of which Infante as mayor served as chairman, approved a waiver of fees for Cafaro’s headquarters and the Residence Inn by Marriott, also at the mall complex, during a Dec. 17, 2014, meeting, according to records provided by Dull.
Attempts by The Vindicator to contact Infante were unsuccessful.
Also on Dec. 17, 2014, Infante wrote a letter to Anthony Cafaro Jr., president of the Cafaro Co., to inform him the board of control approved his request and granted a variety of incentives for the company’s new headquarters and the Residence Inn.
“City of Niles shall waive building permit fees and inspection fees through the city of Niles building and zoning department, except for out-of-pocket fees which the city subcontracts to outside consultants as opposed to a city employee, any and all city-imposed fees and/or assessments related to the office complex project, banquet/conference center, and adjoining mall areas, regardless of how described or characterized, shall be waived in their entirety,” Infante wrote in the letter to Cafaro.
The letter was cosigned by Neil A. Buccino, then-service director, and Maurice Guarino, then-safety director. The three made up the city’s board of control until the beginning of the year.
Guarino said state auditor investigators spoke to him a couple of months ago about the board of control waiver, showing him the letter to Cafaro.
“I don’t recall it, but I signed it,” he said. “I don’t know anything about the board of control” not being permitted to waive fees.
Buccino couldn’t be reached to comment.
Councilman Stephen G. Papalas, D-at large, said Infante met with a few members of council, including him, in the fall of 2014 – before the board of control vote – asking city council to grant the waiver. Because the city is in fiscal emergency, Papalas said he objected to the request, and it was never brought to council again.
After finding out the waiver still occurred, Papalas said, “It’s very disappointing and disturbing. Somebody went behind my back. Council and the administration should look at this and tell the Cafaros, ‘Look, this didn’t go through the proper channels, and we need the money back.’”
Infante sent a one-sentence letter to Anthony Vigorito, the city’s building and zoning inspector, on March 25, 2015: “Attached you will find the agreement signed by the board of control regarding the permit fees for the Cafaro corporate offices relocation.”
Vigorito declined to comment when asked if he had any discussions with the mayor on the fees and if he knew the fees could be waived only by city council.
“I don’t know what Anthony was thinking in granting that waiver,” Papalas said. “Everything will come out in this investigation. It’s unbelievable. The question is: how many other times did this happen?”
The waiver also was granted by the board of control for the Residence Inn, but Vigorito said he didn’t allow the waiver because the deal was between the city and the Cafaro Co. TMI Hospitality, a Fargo, N.D., firm that served as the hotel’s contractor, submitted the paperwork for the project to the city so Vigorito said he didn’t reduce any of that project’s $55,728.31 permit fees. Vigorito added that no one questioned him about his decision.
Joe Bell, spokesman for the Cafaro Co., said, “We were given approval by the city of Niles, and we weren’t privy to any internal correspondence they had in the city.”
The investigation by the AG’s office includes but is “not limited to theft in office, tampering with records, falsification and dereliction of duty,” according to a Dec. 8, 2015, judgment entry by Judge Andrew D. Logan of Trumbull County Common Pleas Court.
On Oct. 14, 2014, a week after the state auditor put Niles in fiscal emergency, the agency’s special investigation unit, which investigates potential fraud, searched for records in Infante’s mayoral office.
The amount of income tax collected at the mall was questioned in November 2015 by Tim Lintner, one of two state-appointed financial supervisors for Niles, and Mary Ann Coates, a certified public accountant who sits on the Niles Financial Planning and Supervision Commission.
Linter said at the time that only $20,000 was collected from the Eastwood complex, which he said was low.