City official’s role in One Sunset operations criticized
![<i></i><br /> “Have I met with [Stokes]? Absolutely. But I meet with literally hundreds of people every week.” Mayor Byron W. Brown](http://media.buffalonews.com/smedia/2009/06/03/07/425-bn-20090603-A002-sourcessayprobe-9678-MI0001.standalone.prod_affiliate.50.jpg)
An internal probe into a City Hall development agency’s involvement with a failed restaurant raises serious concerns about the actions of an agency executive, Michelle M. Barron, The Buffalo News has learned.
While Mayor Byron W. Brown wouldn’t comment on any aspect of the probe, he stressed Tuesday that he did not orchestrate efforts to steer public funds to One Sunset owner Leonard Stokes. The News asked Brown about rumblings that he had meetings with Stokes as the businessman was trying to build his restaurant.
“Have I met with him? Absolutely. But I meet with literally hundreds of people every week,” Brown said.
As for suspicions that have been raised by some that the internal probe might be a tool used by the administration to try to protect Brown by serving up a scapegoat, the mayor reiterated that it would be “inappropriate” to comment on the probe until the city comptroller finishes an investigation.
The mayor submitted the review to Comptroller Andrew A. SanFilippo, who is reviewing lending practices within the Buffalo Economic Renaissance Corp. Like Brown, SanFilippo’s office refused to divulge the contents of the report prepared by agency counsel Divitta Alexander. The officials said it would be premature to discuss the report until the comptroller issues his findings.
But sources confirmed that the probe is critical of some actions taken by Barron, the agency’s vice president of neighborhood economic development, involving One Sunset. While they said the actions do not appear to violate any laws or even past internal policies at the agency, sources said the internal report raises questions about potential conflicts of interest and other concerns.
A News investigation concluded that Barron helped run the restaurant, assisted in drafting what some considered a faulty business plan and helped One Sunset snare publicly funded loans after bankers on an agency committee rejected loan requests. The latter maneuver involved agency employees approving smaller loans and a grant whose amounts exempted the transactions from further banker scrutiny.
One Sunset closed last December, and Stokes defaulted on $160,000 in city and county loans and grants. Brown informed the comptroller this week that the agency has initiated its “standard loan collection procedures” against Stokes.
The News investigation found that Barron helped operate One Sunset, writing checks, dealing with a payroll company, interfacing with vendors demanding payments for past-due bills and even helping to decorate the Gates Circle restaurant.
The comptroller’s review, led by chief auditor Darryl McPherson, will focus on the agency’s lending policies and will include a review of some delinquent loans. When SanFilippo announced his office’s unprecedented review of an agency that generally operates with little City Hall oversight, he raised concerns that the controversy involving One Sunset “potentially could be just the tip of the iceberg.”
Tony Farina, the comptroller’s spokesman, said SanFilippo “welcomes the opportunity” to review the Brown administration internal findings. But Farina said SanFilippo’s probe will be “independent and not tied in any way” to the conclusions reached by the agency’s review.
On a related topic, Brown said the agency approved numerous policy changes at its May 20 meeting as part of a “comprehensive reform initiative” launched in January by city Economic Development Commissioner Brian Reilly. One action, said Brown, substantially strengthens the agency’s code of ethics and conflict of interest policies.
For example, one clause stipulates that employees or directors should avoid taking actions that could create even “apparent” conflicts between their agency duties and their private interests. “These reforms are important, because they strengthen and clarify policies at BERC,” Brown said Tuesday.
Administration officials downplayed the possibility that Reilly’s reform efforts were ramped up because concerns about transactions involving One Sunset were already beginning to surface early this year. Brown spokesman Peter K. Cutler said Reilly’s initiative is part of a broader effort to improve a number of city development processes.
McPherson is hoping to complete the comptroller’s investigation in July.
Anyone who has information that could be relevant to the probe is encouraged to call the city’s fraud hotline at 851-8779.
SanFilippo has publicly stated that his review might call for new layers of accountability in what some critics have long branded “shadow governments.” The Buffalo Economic Renaissance Corp., the Buffalo Urban Renewal Agency and the Buffalo Neighborhood Revitalization Corp. don’t have the same accountability requirements as city departments.
“This office has felt all along that we should have direct oversight over these development agencies’ spending practices,” SanFilippo said last week after he announced plans to review the Economic Renaissance Corp.’s lending policies.
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