For steering business to a favored contractor, former Niagara Falls Building Commissioner Guy A. Bax received an expense-paid fishing trip, free golf outings, home repairs that included a remodeled bathroom, and driveway plowing.
But now these improper gratuities in 2009 could cost him his freedom and a hefty fine.
Bax, 66, pleaded guilty Tuesday in federal court in Buffalo to accepting a gratuity concerning a program receiving federal funds.
He faces a maximum prison sentence of 10 years and a fine of up to $250,000. But given the circumstances, including his early cooperation, the sentencing guidelines call for a prison term of eight to 14 months, a fine of $2,000 to $20,000, and a period of supervised release of one to three years.
“Obviously, it’s a serious charge,” U.S. District Judge Richard J. Arcara told Bax during the court proceeding.
The federal prosecutor did not specify the overall value of the gratuities in court but later said it was not high.
“It’s not a huge sum,” said First Assistant U.S. Attorney James P. Kennedy Jr. “I find it remarkable in these corruption cases the relative cheapness by which people may be purchased.”
Bax did not comment after he left the courtroom. He remains free until his sentencing on May 10.
But Bax’s lawyer said his client’s promised cooperation and acceptance of responsibility are among the facts he will use to argue against incarceration.
“His early cooperation made this the best path for him to obtain closure,” said defense lawyer Terrence M. Connors of Buffalo. “He feels terrible for his family and the city.”
While not an excuse, “the gratuities were minimal,” Connors said after the plea hearing.
Bax’s plea stems from his friendship with John J. Gross Jr., a well known Falls plumbing and heating contractor and political insider who is currently serving 33 months in federal prison because of convictions on mail fraud and tax evasion.
The FBI has investigated Bax for more than three years and, as recently as last October, interviewed city employees about his relationship with Gross.
The plea agreement details how Bax steered business to Gross and his company, David Gross Contracting, from homeowners and companies seeking permits and approvals from Bax’s city department.
“In promoting Gross and his company, Bax created a perception in those individuals and entities he encountered that it would be in their best interest to use Gross and his company and that if such individuals and entities did so, they would have an easier time obtaining the approvals they sought,” according to 19-page plea agreement.
The agreement revealed the experience of a business person who bought property in the city intending to use the parcel for a commercial enterprise.
In late 2007, the business person met with Bax, who was then the acting building commissioner, to discuss the business plan.
To finish the project, “you have to know the right people,” Bax told the business person, according to the plea agreement.
Bax suggested the business person hire Gross because Gross “knows the right people and he knows the inspectors,” according to the plea.
Bax then told the person that other business people who were trying to get into the same industry failed to develop their projects because they were not using contractors who were “the right people,” according to the agreement.
Bax provided the business person a list of contractors, but based on his comments, the business person understood that only by hiring Gross would the project would be completed, Kennedy said court.
The business person, unnamed in the plea agreement, hired Gross’s company and paid between $25,000 and $30,000 for the work needed to operate the business, Kennedy said.
In another case, this one involving a residential property owner, Bax pressured the owner to hire Gross to do work needed before the city would issue a certificate of occupancy, according to the plea agreement.
In a meeting, Bax provided the property owner with the contact information for David Gross Contracting.
The property owner felt “Bax was very clear that he should hire Gross,” Kennedy said.
Following the meeting with the property owner, as well as other meetings between Bax and other property owners, the inspections department would provide David Gross Contracting with a list of deficiencies needing to be addressed before the properties could pass inspections, according to the prosecutor.
Once the company received the department’s letter for each property, a company employee would contact the property owner and arrange to make the repairs, according to the plea agreement.
“In this manner, Bax used his position to provide a competitive advantage to DGC,” according to U.S. Attorney’s Office.
Kennedy would not say how many other property owners and businesses Bax steered to the contracting company.
“Those were representative,” Kennedy said of the two case in the plea agreement.
The agreement also calls for Bax to cooperate with the government regarding any and all other criminal activity related to fraud and public corruption, whether undertaken by him or others.
The cooperation includes submitting to interviews with government attorneys and agents as well as testifying before grand juries and at local, state and federal trials.
In exchange, Bax will not be prosecuted by federal prosecutors for any other federal criminal offenses involving fraud or public corruption, according to the plea agreement.
“As we have said in the past, this office intends to root out public corruption wherever it occurs,” U.S. Attorney William J. Hochul Jr. said in a statement. “Every person or business is entitled to a level playing field when it comes to dealings with government officials. Public employees, for their part, may not illegally or personally benefit from their position. While instances of public corruption are fortunately rare in Western New York, such will be treated firmly and decisively when they come to our attention.”