By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
Bribe-taking by the city's building-code regulators is about as shocking to New Yorkers as subway-fare beaters at rush hour, and while some of the names involved raised eyebrows, no one was too surprised by the corruption scandal in the buildings department announced last September by Manhattan District Attorney Robert Morgenthau.
The announcement of eight more indictees brought little reaction, other than lamentations from Mayor Giuliani and his investigations commissioner about a "culture" of corruption at the agency and vows to change things. In a scheme that fit the dismal pattern of past scandals, prosecutors said city employees took free trips, meals, and tickets to sporting events from a corrupt, private buildings consultant who went unnamed in the indictments. In this case, the suspects went as high as the agency's well-liked number two executive, veteran bureaucrat Barry Cox.
But past probes never came so uncomfortably close to City Hall. And despite the mayor's complaints about the building agency's endemic problems, the investigation produced substantial evidence that outside political pressure was a major factor.
Some of that pressure, wiretaps in the case revealed, came from City Council minority leader Thomas V. Ognibene, a staunch Giuliani ally who serves on the committee overseeing the buildings department.
As detectives listened in over an eight-month period in 1997, they were surprised to hear crooked buildings-consultant Ron Lattanzio, who was emerging as the fulcrum for corruption at the buildings department, engaged in frequent discussions with Ognibene and his chief of staff, Dennis Gallagher.
Lattanzio, detectives soon learned, was an old friend and former neighbor of Ognibene from Middle Village in Queens. He was chief fundraiser to the tall, bearded Republican-Conservative councilman with the statesman-like demeanor. So eager was Lattanzio to help his friend that when an opponent challenged Ognibene for the Republican and Conservative party nominations that summer, he hired a private detective to dig up dirt on him.
Conversations and faxes intercepted between Lattanzio and Ognibene's office revealed arrangements made by Lattanzio for the councilman and Gallagher to take expense-paid trips to Vermont and Disney World.
In turn, police heard Ognibene and Gallagher strategizing about how to get City Hall to force the buildings commissioner to hire a friend of Lattanzio'ssomeone the consultant thought he could easily manipulate. They heard Gallagher casually agreeing to call buildings-department employees on behalf of Lattanzio's projects. They also heard Gallagher agree to help out on a troublesome state investigation into an engineer who was a Lattanzio partnerand later heard Lattanzio credit Ognibene with stopping the probe.
Lattanzio's operation came crashing down in June 1998, when police raided his offices and arrested him for tampering with evidence. A couple of months later, court records show, Lattanzio decided to cooperate with investigators, agreeing to wear a wire in meetings with city officials. Detectives lost the element of surprise, however, when the Daily Newsdisclosed Lattanzio's arrest that August. Only those blinded by greed continued to deal with the consultant, whose business was relocated to the same address on Maiden Lane where the city's Department of Investigations has its offices.
As for Ognibene and Gallagher, investigators were unable to obtain solid evidence that the trips were taken and that any crimes were committed. Under state law, a co-conspirator's claims are not sufficient for conviction. And, as happens in many political probes, they were not able to establish any clear quid pro quo between the consultants' gifts and the politicans' acts. Ognibene and Gallagher were never charged in the case or confronted by investigators. And their dealings with Lattanzio were never revealeduntil now.
Due to term limits, Ognibene is leaving the council at the end of the year. He has told reporters he expects to be named by his friend Governor Pataki to a $136,700-a-year state judgeship. Gallagher is now running for Ognibene's seat in the council.
Neither returned repeated messages to their Queens district and City Hall offices.
Lattanzio's attorney, Norman Bloch, declined all comment, as did spokespersons for the district attorney's office. Several of those indicted last fall have pleaded guilty, but at least two, including former deputy commissioner Cox, are headed for trials this summer in which Lattanzio is expected to be the key witness against them.
If he takes the stand, he should have a good story to tell.
Ronald Lattanzio, 44, took his first lessons in the game as a young budget official and assistant city-buildings commissioner in the Koch administration in the early 1980s. He was something of a rising star until 1986, when he was caught holding late night cocaine and pot parties in his office with a bunch of other party-hearty city workers. He lost his job in the scandal, but he simply moved to the private sector as a buildings consultant and never looked back.
No one else looked either. Even the inspector general who handled the drug investigation later worked as a private attorney for Lattanzio's consulting outfit. The important thing for those who sought him out was that Ronnie Lattanzio knew the right people and how to win city approvals when things got tough. He wooed them all with flattery, gifts, and contributions.
"Ninety percent of this job is just kissing these guys' asses," he confessed to a client in the summer of 1997. "I got scraped knees and chapped lips."
In 1996, he popped up on the D.A.'s investigative radar screen as detectives pursued ever-expanding leads into corruption among residential-building managers. They heard a fast-talking, wisecracking powerbroker whose expertise appeared to be rigging million-dollar construction bids and bribing city officials to ignore violations and speed up permits.
There were five separate phone lines into Lattanzio's busy A&E Consulting Service at 417 Canal Street and police bugged them all, listening in as the consultant and his crew discussed their secrets of success.
"Send for the blind inspector," was Lattanzio's favorite line, always good for a laugh with clients. "Get Ray Charles," agreed one contractor who didn't want asbestos found on his project.
Another secret advantage, investigators learned, was a professional-license seal belonging to a retired engineer that was kept in a desk drawer in Lattanzio's office and brought out whenever building plans required an engineer's approval. The elderly engineer never saw the plans but took thousands of dollars a month from Lattanzio for use of his good name.
Other angles spilled out in shop talk among Lattanzio's stable of building expediters, who moved applications along at the buildings agency.
"Unless you're willing to bribe somebody you're not gonna get no fucking C of O," explained one seasoned expediter to a newcomer trying to obtain a Certificate of Occupancy. "So, throw a hundred dollars in the folder and you'll get your C of O in an hour."
Lattanzio personally handled negotiations with higher-level officials, doling out free tickets to the Knicks, the Rangers, the Mets, and the Yankees. For those further up the ladder, he offered expense-paid trips to Disney World and other luxury retreats.
"I can't tell you what I spend on trips a year," he moaned to a fellow consultant.
One trip to a plush Vermont resort hotel went to Edmund Cunningham, a 30-year veteran fireman who had worked his way up to chief of his department's Bureau of Fire Prevention. "I wanted to thank you, you know for, uh, setting that thing up. We had a great time," Cunningham was heard saying to Lattanzio in May 1997. That same day, investigators learned, Cunningham approved a fraudulent Lattanzio application to have fire violations removed from a midtown office building he was handling. Cunningham later pleaded guilty to accepting an unlawful gratuity.
The first thing about Councilman Tom Ognibene's relationship with Lattanzio that caught the investigators' attention, according to the affidavits, was a similar vacation scheme.
On May 13, 1997, they intercepted phone conversations and faxes between Lattanzio's secretary and a Brooklyn travel agency. "Re: Prize letter," a fax from Lattanzio's office to the agency was headed. "Let me know if these are ok," was the note on the cover sheet. What followed were two letters, one addressed to Gallagher and the other to Ognibene, informing them that they had won first and second prize, respectively, in the travel agency's annual business-card drawing.
"Dear Mr. Ognibene," read the letter to the councilman. "We wish to congratulate you as our 2ND PLACE PRIZE WINNER. You were chosen out of our yearly business card drawing to receive a trip to the [Manchester, Vermont] Equinox Hotel and Spa." Accommodations would include: a townhouse suite with fireplace, a bottle of wine on arrival, a book from the Times' bestseller list, an "Equinox tartan throw," breakfast, dinner, and use of the fitness spa.
Gallagher's letter awarded him a "vacation for four" to Disney World in Florida. Making their own inquiries, detectives learned the cash value of Gallagher's trip was about $3300; Ognibene's was worth $1050.
"The chances of Ognibene and Gallagher taking first and second prize in an honest 'business-card drawing' are remote to say the least," detectives stated in an affidavit to the court. "Rather it is much more likely that the letters were written to provide a cover for a bribe."
The same day that the bogus prize letters were being faxed, detectives heard Lattanzio phone Ognibene's office.
"Hey baby," Lattanzio was greeted by Ognibene's secretary. She put him right through to Gallagher, who put Lattanzio on speaker phone with himself and the councilman.
"What's good?" Ognibene greeted him.
Lattanzio began by saying he had come up with an idea that might help Ognibene in an ongoing fight the councilmember was having with the huge development firm Forest City Ratner, which was trying to build a multiplex cinema in Forest Hills. Neighbors were virulently opposed to the project and Ognibene had vowed to block it.
"Listen, one other thing I forgot to tell you last night. . . . Call Joel Miele," he urged Ognibene, referring to the city's environmental commissioner, who was also a Queens Republican. The developer would eventually need a sewer permit from the environmental agency, he explained, and it could be blocked. "Which means people can't shit," Lattanzio said.
"I'm gonna make the phone call right now," Ognibene responded, according to the affidavits.
Lattanzio and Ognibene then briefly discussed logistics for a meeting the next morning. The consultant then shifted to something else that was weighing on his mind. As investigators later pieced it together, Lattanzio and another building consultant were pushing for an architect named Albert DeNunzio to be appointed to a key post at the buildings department. Once installed, Lattanzio said in wiretapped conversations, DeNunzio could be relied upon to give them carte blanche at the agency.
"All right, one other thing," said Lattanzio to Ognibene. "I'm sorry to keep bothering you."
"You don't bother me," the councilmember assured him. Lattanzio explained that, despite phone calls from City Hall officials to buildings-department officials, his candidate, DeNunzio, hadn't yet been hired. The job application had landed on the desk of Barry Cox, the deputy commissioner who was later indicted, and there it sat, much to Lattanzio's annoyance.
"All right," said Ognibene. "I mean, you know how frustrating this is."
"Look," said Lattanzio, referring to Cox, "he's at a level in government now he's gotta choose sides. You can't fucking walk the fence at a deputy commissioner level, especially in this administration."
Ognibene responded with his own ominous comment. "Well, I got a quid pro quo coming up if everything goes well, and a big one. And he may be the fucking odd man out," said the councilman.
Investigators spelled out how they interpreted Ognibene's words: "He would see to it that Cox was punished if the job for DeNunzio didn't come through," they wrote in an affidavit.
What did he do for me? griped one reluctant contractor, pressed for a $2000 campaign contribution to Councilman Ognibene. He opened the door, explained Lattanzio.
The subject of the architect's job became a steady theme in subsequent conversations. At one point, detectives heard Gallagher tell Ognibene that they were taking the issue to mayoral chief of staff Anthony Carbonetti and then-deputy mayor Randy Mastro. If that didn't work, Gallagher told Lattanzio, Ognibene would go to the mayor himself.
"I just got off the phone with Tom and I let him know," said Gallagher. "He'll go back down to Carbonetti and he's gonna try to get to Mastro today."
The buildings consultant was later heard boasting to the job seeker DeNunzio about how Ognibene had expressed his dissatisfaction to Carbonetti: "He went in to see Carbonetti and says you know, 'You got some pairs of balls . . . how many signatures did the mayor get for his petitions to put him on the primary [ballot], uh, for November? 25,000. How many did Queens give you? 15,000. Thank you very much! I delivered 15,000 signatures to you and you're fuckin' around my guy?' "
DeNunzio, who was never charged, told the Voice that he was ultimately offered a job at the buildings agency, but not at the level he or Lattanzio had hoped. DeNunzio insisted he had no pre-arrangement to help the consultant and had only casually forwarded his résumé to see if there was any interest in him. "The job had a pension, that was one reason I was interested," he said.
On May 21, 1997, Morgenthau amended his eavesdropping applications to add both Ognibene and Gallagher as possible suspects in violations of state bribery laws.
As investigators continued to listen, they heard Lattanzio ask for the help of Ognibene and his staff with other problems. One was a potentially troubling investigation by the State Department of Education into the alleged misuse of the engineer's stamp by Lattanzio's firm.
Investigators poring over Department of Buildings filings found more than 150 plans had been submitted in less than a year by Lattanzio with the seal of approval from engineer Richard Kamholtz. But the engineer acknowledged on the phone with Lattanzio that he had never even visited the consultant's Canal Street offices.
After state investigators opened their probe, Lattanzio was heard telling Kamholtz: "We'll bring you up to at least 2000 a month but I'll throw in an extra grand next month for all your inconvenience." He assured the older man that his lawyers, one of whom was a former buildings-department inspector general, would take care of the problem.
Later that day, Lattanzio called Gallagher about the upcoming license hearing. "If you can do anything," he said. "I gotcha. . . . All right, sir," Gallagher confidently responded, adding, "I'm going to go in and talk with Tom."
Lattanzio was later overheard telling associates that he had squelched the probe with Ognibene's help. State officials declined to comment about their investigation, but confirmed that no action was taken against Kamholtz's engineering license, even though Kamholtz himself later admitted his scams to investigators from Morgenthau's office and the city's department of investigations. Kamholtz died earlier this year. "I don't know anything about it," his widow told the Voice.
Some interchanges between the consultant and Ognibene's office were simple requests for a helpful phone call. In an October 1997 conversation Lattanzio called Gallagher to say he had just put "a [campaign] check in the mail." He then went on to ask if Gallagher could help with a pending building-permit problem. "My girl is down there now," Lattanzio said, "trying to wiggle [a building permit] out of 'em herself at the administrative level. . . . But if you can have somebody make a call . . . "
"All right," said Gallagher, adding that he was already expecting a call from the commissioner. He then patiently took down the names of the agency employees who had Lattanzio's permit application on their desks.
The campaign check was just one of many Lattanzio rounded up for Ognibene. Campaign records show the consultant shelled out $5500 out of his own pocket in direct gifts and in-kind contributions. He goaded his associates, including several contractors with whom he was busy rigging bids, to ante up thousands of dollars in contributions as well. Although there was no indication that Ognibene played any role in the rigged bids, Lattanzio told his pals that the politician was nonetheless an important ally.
"What did he do for me?" griped one reluctant contractor, pressed for a $2000 contribution. "He opened the door," explained Lattanzio.
The calls brought results. In one example, Ognibene campaign records show Ognibene received $1750 from L&M Larjo, a Long Island-based waterproofing firm that pled guilty to a bid-rigging scam with Lattanzio.
As Ognibene's campaign was getting underway in July, Lattanzio worried openly in a conversation with Gallagher about how much he had spent. "The other thing we gotta think about is, you know how I've been paying for all these fundraisers? Is there any way that I have to hide that?"
Gallagher assured him that the campaign would pick up the costs, but filings don't indicate any such reimbursements.
Ognibene's biggest political concern that year was the threat posed by Frank Borzillieri, the extreme right-wing school board member and former Ognibene ally. Borzillieri entered primaries for both the Republican and Conservative party nominations against Ognibene. His candidacy was a long shot, but he had the councilman worried.
In July, Lattanzio told Gallagher he was going to hire a private detective to spy on the rival candidate. Investigators didn't note any objections to the plan in their affidavits. The wiretap records show that the private dick spent several days tailing Borzillieri, watching his house and gathering background information on the candidate. Lattanzio wanted the detective to take pictures of people going in and out of Borzillieri's home. "I wanna know if he has a car and if he paid his taxes," Lattanzio was heard telling the detective.
On July 26, the detective told Lattanzio he had obtained Borzillieri's credit report. It is a violation of state and federal privacy laws to reveal credit records of outside parties and the detective warned Lattanzio: "You got to make sure you don't mention that too much."
Lattanzio was more interested in the contents. "Is it good or is it bad?" he asked.
The detective stalled. "Umm, these things are somewhat inaccurate sometimes." Lattanzio pressed again, saying it was "real important" and the detective finally agreed to fax Lattanzio the report, adding one more caution: "It's defamation of character though, for you to say something about somebody's credit report, so you know."
Although Lattanzio told the detective he would spend "around $1500" for the investigation, Ognibene's campaign-finance reports show no such expenses.
Borzillieri was trounced by a three-to-one margin in the primaries. He knew he never had a chance against Ognibene. "I didn't take it seriously," he said. But the private eye's mission apparently stayed private. "I never heard anything about it," said Borzillieri.
Prosecutors allowed their eavesdropping war rants on Lattanzio's offices to lapse on November 7, 1997. An investigator said recently that the decision was based on manpower limitations, a change in tactics, and a belief that the wiretaps, which required hundreds of hours of investigative staff time, were becoming "repetitious."
Investigators, however, kept their court authorizations to maintain pen registersdevices that show numbers called and receivedon Lattanzio's phones. From December 1997 until June 1998, when Lattanzio was arrested, the logs showed more than 200 calls between Ognibene's office and Lattanzio'sfar more than those made by any other suspects involved with the crooked consultant.
In the final weeks of the eavesdropping, investigators heard Lattanzio's secretary continue to work on details of the bogus travel prizes for Ognibene and Gallagher. At one point, the secretary called Gallagher to tell him she was faxing a new award letter to another Ognibene staffer.
They also heard the secretary complain that Lattanzio wanted the travel agency to speed things up. The staffers, apparently, were used to it. "Ron wants to kiss these people's ass, I guess," explained his secretary to the travel agency. "I don't know why."