BY FRANK PARLATO
A lot has been written about political operative and attorney G. Steven Pigeon, 55, after a state grand jury was led to indict him on June 30th on nine felony counts of bribery, rewarding official misconduct and grand larceny by extortion.
Pigeon has pleaded not guilty to all charges.
“The grand jury only hears one side of the story. There will be another side presented when we go to trial,” said Pigeon’s attorney, Paul Cambria.
MICHALEK SAYS HE IS DIRTY
Pigeon’s alleged partner in crime, former State Supreme Court Justice John A. Michalek, 65, accepted a plea deal last month, admitting to bribe-receiving and offering a false instrument.
Prosecutors allege that an “understanding” existed between Michalek and Pigeon that the judge would engage in “official misconduct which advanced Pigeon’s interests”.
In return, Michalek allegedly agreed to accept and accepted “benefits from Pigeon.”
Michalek faces a prison sentence of up to seven years. He will be sentenced by a Syracuse judge who, up until last month, was of equal standing with Michalek – State Supreme Court Justice Donald F. Cerio Jr..
Sentencing is scheduled for Sept. 21.
MICHALEK’S PLEA MAY FACTOR IN THE DEFENSE
Michalek’s attorney, Carrie H. Cohen negotiated a plea deal where the Attorney General’s office, headed by Eric Shneiderman, will not make a sentencing recommendation provided Michalek cooperates as a witness against Pigeon.
In return, Cohen is free to argue, without opposition, that the judge should spare Michalek prison time.
Michalek’s quick and timely plea ensured his pension, calculated by the Buffalo News at $120,500 annually, is safe – ironically, it will be paid by the taxpayers he admitted to defrauding through corruption. Presently there are bills in Albany wending toward law that could revoke pensions of public officials convicted of corruption.
Sources say Michalek may have readily taken his plea to avoid more serious charges for him or a member of his family.
Defense lawyer Cambria is expected to seek in a motion all relevant information concerning his emails to others, especially emails, if any, Michalek sent to other attorneys with cases before him.
It is known Michalek gave interviews to law enforcement. Did those interviews reveal other crimes?
The pages of modern jurisprudence are replete with examples of people avoiding prosecution by lying as prosecution witnesses.
Several sources say Michalek’s friends were shocked when he took the plea because Michalek privately and vehemently protested his innocence.
As lawyer Jim Ostrowksi wrote in this publication, “It may be shocking but the fact that a judge pleads guilty doesn’t mean that much. People plead guilty all the time to avoid the risk of being (unjustly) convicted of much more serious charges and going to prison.”
Parsing this down, it seems, at the heart of the Pigeon case are allegations of a two-way bribery scheme.
Pigeon’s lawyer says his client claims innocence.
Michalek says he is guilty. If Michalek is telling the truth and not lying to save himself, will Pigeon argue that, while the judge was trying to solicit a bribe from him, he was not aware that that was the judge’s intention?
The question for a jury is did Pigeon knowingly participate in the bribery scheme?
Before the jury can attempt to determine that, they will have to examine what the two men got as a result of their alleged bribery scheme.
EMAILS IN EVIDENCE
Much of the case depends on a series of emails exchanged by the two men.
The state alleged, “Emails written between Pigeon and Judge Michalek illustrate the official conduct that Judge Michalek engaged in and the benefits that Pigeon provided to him and his family members.”
Some who have read Michalek’s emails, which he sent on his official state courts email service, say they are chatty, and often lengthy, and include discussions of his personal health, family matters, and business and political observations as well as information about the cases Pigeon had before him.
Pigeon’s replies, said to be typed from his cell phone, were typically short.
As a possible explanation for the personal tone in Michalek’s emails, sources close to the two men say that Pigeon and Michalek were personal and family friends since Pigeon was a teenager and Michalek was in his mid 20’s.
According to a source, Pigeon and Michalek remained close and worked together in political campaigns in the south towns in the late 70’s and 80’s. Pigeon worked on Michalek’s campaign for judge and his wife’s campaign for Town Supervisor of Hamburg. Through the years, they worked closely and spoke often. Pigeon knew his children since they were born.
In addition to the emails, court documents entered with Michalek’s guilty plea allege Pigeon and Michalek met for “breakfast, lunch and coffee at various times between February 2012 and early 2015.”
What the former judge will testify about those meetings and how they inform the context of the emails is unknown.
But friendship aside, the state alleges Michalek corruptly helped Pigeon. How did he help him?
THE CASES MICHALEK ALLEGEDLY HELPED PIGEON
The state alleges “At the same time that Judge Michalek sought benefits from Pigeon, Pigeon had an interest in lawsuits pending before Judge Michalek. During this period, Judge Michalek kept Pigeon apprised of the status of the lawsuits, engaged in ex parte communications with Pigeon about them, sought Pigeon’s advice and input on various issues that arose when the cases came up on his calendar, provided Pigeon with advice as to how the cases should be handled, and made favorable rulings in certain situations to protect Pigeon’s clients and business associates’ interests.”
While other Michalek cases may be under investigation, raising the specter of additional federal charges, the state has focused on two cases, both involving Palladian LLC, a West Seneca health care company.
Pigeon was, for years before the lawsuits commenced, a consultant and attorney for Palladian and its managing members, Kevin Cichocki and Paul Candino.
The Pigeon trial will likely review the result of the two Palladian cases. Did Pigeon’s clients win their two cases?
One was a lawsuit filed by Palladian against HealthNow, alleging HealthNow misappropriated corporate trade secrets.
The case settled out of court, after a number of convoluted turns, pitting family members against each other, for an undisclosed terms and a financial settlement.
The final outcome was decided not by Michalek but HealthNow and Palladian.
The second case, filed in 2012, was an inter-company dispute between Pigeon’s clients, Cichocki and Candino, against another Palladian member, Summer Street Capital II, over control of Palladian.
That case also settled out of court, but led to a poor result for Pigeon’s clients. Given a short window of time to find funding, Pigeon’s clients lost control of the company. Summer Street Capital II manages Palladian today.
The defense may argue that not only did Michalek not make a ruling on the ultimate merits of the case, Michalek’s alleged “favorable rulings” were procedural and not substantive and were properly based on law.
Substantive or not, the state may argue, Pigeon’s clients, hence Pigeon, received benefits from Michalek’s ex-parte communications and his actions.
The defense may rebut, if an active bribery scheme was in effect, why didn’t Pigeon take the case to trial where his corrupt judge would rule in his favor?
The state may further argue that even if Michalek did not rule on the merits, it was a crime for them to even have certain discussions while the cases were pending.
The defense may rebut that a judge, not a lawyer before him, is held more responsible to determine the propriety of ex parte communications, and moreover, judges are held to higher standards than lawyers.
JUDGES WHO ACCEPT BRIBES ARE USUALLY HELD MORE RESPONSIBLE
While New York State Supreme Court Justice Thomas J. Spargo was sentenced to more than two years in federal prison in 2009 for trying to solicit a $10,000 bribe, the attorney who paid the bribe, Bruce Blatchly, was not charged.
Two Lucerne County PA. judges, Mark Ciavarella and Michael Conahan, were convicted of accepting money from Robert Mericle, builder of two private, for-profit youth centers for the detention of juveniles, in return for contracting with the facilities and imposing harsh adjudications on juveniles brought before their courts to increase the number of residents in the centers.
Judge Ciavarella was sentenced to 28 years in federal prison. Judge Conahan was sentenced to 17 and-a-half years. But the man who made the bribes, and had the most to gain, Robert Mericle, was sentenced to one year in Federal Prison.
An Arkansas judge, Michael Maggio was convicted of receiving bribes in exchange for lowering the damages awarded in a civil suit, He got 10-years.
U.S. District Judge Brian Miller of Little Rock declared at sentencing, “A dirty judge is more harmful to society than a dope dealer.”
But wealthy nursing home owner, Michael Morton, who made the bribes, was not charged.
MICHALEK’S THREE WISHES
So if Pigeon was helped by Michalek in his two legal cases, as the state alleges, what did Michalek get in return?
In his emails, written over the course of three years, Michalek, who seems to have initiated most of the communications, asked Pigeon for help on three matters:
The first was to help find a job for “relative 1” as the indictment reads, who is, in fact, Michalek’s son, John Conner Michalek.
According to sources, Michalek and his wife, Patricia thought if John Connor found a good paying, decent, respectable job, possibly in Washington DC, he might abandon his plan of joining the armed services and going overseas, possibly to Afghanistan.
Pigeon, sources say, knew John Connor since he was a baby and sympathized with his worried parents.
Pigeon, however, was unable to find the young man a paying job.
However, based on an email from Michalek to Pigeon, and as clarified by sources — in 2012, John Conner was permitted to work as an (unpaid) volunteer in the Obama presidential campaign.
A source familiar with the family said, John Conner and the Obama camp didn’t particularly please each other and he left after one week–and despite his parents’ wishes, John Conner joined the Navy and was stationed overseas.
Michalek also sought an appointment to a government task force or committee on education for “relative 2”, which was, in fact, Michalek’s wife, Patricia, who is a Democratic Committeewoman and once ran for supervisor for the Town of Hamburg.
Such an appointment, while unpaid, offers political cache, prestige and social opportunities.
In Jan. 2015, the judge emailed Pigeon and arranged to send Pigeon a copy of his wife’s resume. Pigeon was unable to help. Patricia never received an appointment to any committee.
The charges also allege that between 2012 and 2015, Michalek asked Pigeon to recommend him to Pigeon’s alleged friend, Gov. Andrew Cuomo for an appointment to the Appellate Division, a higher judicial post.
On Dec. 10, 2012, Michalek emailed Pigeon, “think there is a seat open in App Div… I applied… Normally I wouldn’t mention it to you. . . wonder if you could help.”
Pigeon replied: “I will start talking u up.”
On Jan. 8, 2013, Michalek wrote to Pigeon: “Unc Steve…How’d you do with the Gov??? …”
Pigeon responded: “Bunch happening … in albany now… Gov went well … Talked u up … Let’s have coffee soon.”
Michalek was not appointed by the governor to the appellate court.
Pigeon was known in political circles to be pushing another judge for the appellate appointment, who was in fact appointed. Other than the emails, there seems to be no indication that he pushed Michalek’s appointment.
Did Pigeon, succumbing to Judge Michalek’s constant requests, offer lip service to the judge?
As far as the two-way bribery scheme goes, the state has focused on three specific requests Michalek made of Pigeon: 1. to find his son a job, 2. his wife a committee appointment 3. An appointment for himself as a higher court judge.
None were accomplished.
TICKETS ARE BRIBES?
Still, even if Pigeon didn’t deliver on Michalek’s three requests, the state alleges that Pigeon “knowingly conferred, offered and agreed to confer on” Michalek a ticket to a fundraiser for Gov. Andrew M. Cuomo, which was given to Michalek’s wife.
The state says it was a $1,000 ticket, but a source who was there said it was a $250 ticket.
Is it a crime? Gifts of tickets to political affairs are common enough that they are exempted as banned gifts in the New York State Public Officers Law which reads (1-c [(j]) reads, “…. The following are excluded from the definition of gift: (i) complimentary attendance, including food and beverage, at bona fide charitable or political events…”
Pigeon, a source says, also comped 50 other people with tickets which cost him nothing. Pigeon was the co-host of the event with Howard Zemsky.
HOCKEY TICKETS IN BOX SEATS
The state also alleged that once in February and once in March 2013, Pigeon “knowingly conferred, offered and agreed to confer on” Michalek Buffalo Sabres hockey tickets in payment “for (Michalek) having violated his duty as a public servant.”
Michalek did accept two tickets, two times for box seats at a Sabres game. He brought his wife to the games. Pigeon attended one game.
Pigeon, who in 2003, had a hand in saving the Buffalo Sabres by encouraging billionaire Tom Golisano to purchase the bankrupt team, has over the years given out hundreds of free tickets which are provided to him by clients.
The tickets he gave to Michalek and his wife were for box seats owned by a client who had no cases before Michalek. The tickets cost Pigeon nothing.
Pigeon has also arranged for comp tickets to be given to Bill Clinton, US Sen. Charles Schumer, Dick Gephardt, and scores of local officials including county legislators, town supervisors, councilman and many area judges.
A RECEIVERSHIP FOR A PIGEON PAL
The last of the 9-count indictment against Pigeon concerns how “Judge Michalek selected an attorney of Pigeon’s choosing to handle a receivership.”
Michalek, like many judges, appointed numerous attorneys as receivers for cases he was handling. In fact, when Michalek had his cases transferred as a result of his alleged crimes, he had more than 350 cases before him.
In 2012, he asked Pigeon to recommend an attorney for receiver for a golf course in a foreclosure case.
The 9th and final count against Pigeon concerns a young attorney named Edward Betz. Betz has not been charged and is cooperating with the prosecution.
In 2009, Betz graduated from University at Buffalo Law School making him about 27 when the events named in the indictment occurred.
Sources say Betz’s friendship with political operative Jack O’Donnell – a close Pigeon ally – helped Betz become assistant corporation counsel for the City of Buffalo in 2010. In 2011, after O’Donnell became an Erie County Water Commissioner, which he secured, sources say, in part because Pigeon helped engineer a new majority in the Erie County Legislature, Betz was named associate counsel of the Erie County Water Authority, earning $117,000 a year. Soon afterward Betz became general counsel of the Water Authority at a salary of $124,000.
After the majority in the legislature switched, Betz lost his six figure job.
In 2012, Michalek asked Pigeon to recommend a lawyer to be appointed as a receiver to temporarily manage a golf course involved in foreclosure litigation before Michalek.
Michalek admitted he appointed Betz as a receiver as a political favor to Pigeon. He also admitted that Betz had not been approved by the courts as a qualified receiver.
Michalek emailed Pigeon in 2012, “We pushed it through anyway … have to give them a spec reason etc. … will figure it out ….”
The defense may argue that it was not Pigeon, but Michalek who appointed Betz. It was not Pigeon, but Michalek whose responsibility it was to determine whether Betz was on the list of qualified receivers. It was not Pigeon’s responsibility to ascertain qualifications for being a receiver.
It is not known if Michalek appointed other attorneys in other cases that were not on the list of qualified receivers.
A YOUNG LAWYER EXTORTED?
After Betz became receiver, for which duties he earned about $45,000, according to Assistant Attorney General Susan Sadinsky, who is the lead prosecutor in the case, Pigeon attempted to persuade Betz to fire the property’s managers and replace them with “cronies.”
Sources say there were not multiple “cronies” that Pigeon asked Betz to hire, but only one person, David Pfaff, a longtime Pigeon ally, who, at the time, lost his job and was facing foreclosure.
Just as Pigeon secured work for Betz who lost his job, Pigeon tried for Pfaff.
According to court papers, Betz refused to hire the “cronies,” and Pigeon retaliated by taking $5,000 from the receiver by “extortion.”
Sadinsky said the money was listed as consulting services. She says they were never performed.
Pigeon’s defense may argue that Pigeon did consult with Betz and that the $5,000 fee was earned. Even if it wasn’t, an attorney may pay a referral fee to another attorney.
An attorney however, may not pay extortion to another attorney.
If Betz, a lawyer, thought he was being extorted by another lawyer (Pigeon), he had an obligation to report it to the grievance committee of the bar association and law enforcement.
Part 1200 Rules of Professional Conduct, Rule 8.3., of The New York State Unified Court System reads: “A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.”
But instead of reporting the extortion, Betz paid it – as the state claims.
What will likely come out at trial is that Betz continued to accept client referrals from Pigeon after Betz paid Pigeon the alleged $5,000 extortion.
According to a source, Betz accepted client referrals from Pigeon, including Seneca businessman Aaron Pierce, who paid Betz more than $100,000 in legal fees. Betz also accepted referrals from lawyer John Bartolomei, a close Pigeon ally, at Pigeon’s recommendation. That work brought Betz additional income.
All told Betz accepted more than $100,000 in fees from Pigeon referrals after Betz allegedly paid Pigeon $5,000 in extortion.
In addition, in 2014, through working with Pigeon’s political wing of the Democratic party, Betz was introduced to the then-majority on the Buffalo School Board and Pigeon associates were reportedly supporting their candidates.
In Jan. 2016, the School Board majority selected Betz to be counsel to the School District at $160,000 per year. According to sources, Betz eagerly sought and accepted Pigeon’s help in getting this appointment and once again was restored to a six figure political position.
If these facts are true, and if they come out at trial, will Betz be able to credibly claim he was so afraid of Pigeon that he paid $5,000 in extortion, failed to report it, yet continued to accept lucrative clients from Pigeon which earned him more than 20 times the original alleged extortion?
The defense may also argue that if, as the state alleges, Pigeon was retaliating for Betz’s decision not to hire Pfaff and other “cronies”, why did Pigeon continue to refer clients to Betz?
Betz told The Buffalo News: “My only involvement in this matter is that I was asked to violate my ethical responsibilities as a receiver, and I steadfastly refused to do that.”
Cambria said Pigeon has denied all of the prosecutors’ allegations, including the charge of extortion.
On June 30, when Attorney General Schneiderman came to town to announce the indictment and his views of the case, he said that his probe is not over.
Next week, we will review the political backdrop, including the relationships others have had with Pigeon to question whether these people and their motives influenced the nature of the case and the deals thus far made.
Shouldn’t the state, like the defendant, be required to bear the closest scrutiny? If the state has, as it claims, pursued this case untainted by political considerations and solely in the name of justice, it should be able to withstand such inquiries.