Former Niagara Falls mayor charged in 'free' loan deal
‘Smokin’ Joe’ takes felony plea in case
When former Niagara Falls Mayor Vince Anello received a series of loans from businessman Joseph Anderson, the terms of the deal were about as good as any applicant could hope for.
Forty thousand dollars. No interest or repayment required.
It may have seemed to be a wonderful arrangement at the time, but the loans landed both men in serious trouble in federal court on Friday.
Anderson, 49, a prosperous tobacco and gasoline merchant who calls himself “Smokin’ Joe,” took a felony plea deal that could put him in prison for 30 months or more. Because he is a cooperating witness, he hopes to get probation.
Anello, 62, who left office at the end of 2007, was indicted on four felony counts. If convicted, he could face more than a 30- month prison term.
The loan deal arranged by the two men was described as “very disconcerting” by U. S. Attorney Terrance P. Flynn, but Anello’s attorney, Joel L. Daniels, said his client insists he did nothing improper.
“[Anello] looks forward to this trial, and the case will be tried,” Daniels said. “No plea deals. No cop-outs. For the past five years, he’s maintained that he did nothing wrong and didn’t commit a crime. The fact that Joe Anderson pleaded guilty doesn’t change that.”
“The truth hasn’t changed,” Anello said in a brief interview. “I’ve told the truth all along when I’ve been asked about this particular issue. That hasn’t changed whatsoever.”
Anello said he was reluctant to discuss details because he had not yet seen the charges against him. His arraignment is scheduled for Monday afternoon.
Friday’s criminal charges followed a lengthy investigation by the FBI and other federal agencies into the business dealings of the two men.
According to court papers, Anello asked for and received $40,000 in no-interest loans from Anderson in 2003. Then, a year later, Anello helped a company in which Anderson was a principal to get a no-bid contract with the city to operate a downtown pedestrian mall.
City Council members who were asked by Anello to award the no-bid contract were never told — by either Anderson or Anello — about the no-interest loans, Flynn said.
“It’s very disconcerting that anyone could enter into such arrangements and think that it should not be disclosed to the Council or the public,” Flynn said.
“If you’re a public official, it makes sense to disclose this kind of information. It’s astounding to me that they would think that it wasn’t appropriate to disclose it.”
Anello was a councilman when he received two of the loans in the summer of 2003, and he received a third after he was elected mayor in November 2003, prosecutors said.
Some information about the loans has been made public in past news reports, but several significant new details were contained in documents filed by Assistant U. S. Attorney Paul J. Campana:
• Approaching Anderson through an unnamed third individual, Anello in June 2003 asked Anderson for money to help pay off some debts owed by the electrical contracting business Anello ran.
If the business debts remained unpaid and were publicized by the news media, they “would embarrass Councilman Anello as a candidate for mayor,” Campana said in court papers.
Anderson and Anello agreed that the $40,000 would enable Anderson to get “inside” and give Anderson “favorable consideration” in business dealings with the city if Anello became mayor.
• Anello got two $ 1 5 ,0 0 0 checks from Anderson in June and July 2003, and a third check for $10,000 in November 2003, shortly after Anello was elected mayor.
All three checks came from Aarrow Brokers, a company controlled by Anderson, and all three checks were signed by Gail Anderson, who was then Anderson’s wife but the couple has since been divorced.
The checks came from Aarrow Brokers because Anderson and Anello “did not want to show that the payments were being made from Smokin’ Joe’s to Anello.”
• Anello introduced Anderson at a City Council meeting in March 2004 and successfully recommended that the Council approve a no-bid five-year deal for Anderson’s company to lease the East Pedestrian Mall.
“At no time” did Anderson or Anello disclose their $40,000 loan deal to Council members.
• As of the expiration of Anello’s term as mayor, last Dec. 31, Anderson “never asked for repayment of the aforementioned money, and no repayment was made.”
As Anderson, wearing a dark business suit, stood before him on Friday, U. S. District Judge William M. Skretny asked if the court papers accurately summarized what happened.
“Is it accurate?” the judge asked. “You did what is charged here?”
“Yes,” Anderson responded.
The highly successful Native American businessman was flanked in court by two attorneys, Terrence M. Connors and James W. Grable Jr.
Anderson declined to comment after the court proceeding. Connors was asked whether Anello approaching Anderson and asking for $40,000 could be considered a “shakedown.”
“Those are determinations for someone else to make,” Connors said. “If the case goes to trial, [Anderson’s] obligation is to testify and cooperate completely.”
However, both Daniels and Connors denied that Anderson got a sweet deal with the city as a result of his loans to Anello.
“The lease of the East Pedestrian Mall was a financial disaster for Joe and a good deal for the city,” Connors said.
“The prosecution claims that the mayor deprived the city of honest services. I question the government’s theory,” Daniels said. “The mayor was a 24-7 guy working for the citizens of Niagara Falls.
“The mayor did not toss Joe Anderson a bone by advocating for this deal. The only person who lost money on the East Pedestrian Mall deal was Joe Anderson.”
The East Mall is a tree-lined downtown boulevard that runs from the Wintergarden to the Seneca Niagara Casino. When Anderson and some business partners agreed to take it over in 2004, they said they hoped to tie the mall to family-friendly entertainment and shopping activities at the Wintergarden.
But the mall and the Wintergarden — which was shut down last November — were not financially successful.
Skretny scheduled Anderson’s sentencing for March 9. Flynn said agents from the FBI, U. S. Labor Department and the Internal Revenue Service worked on the case.
Denise Jewell Gee of the News Niagara Bureau contributed to this report.
