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Thursday, September 16, 2004

Indignant Deters talks retribution


Calls allegations of bribery 'garbage'

By Jim Siegel
Enquirer Columbus Bureau

COLUMBUS - An angry Joe Deters fired back Wednesday at Cuyahoga County prosecutors, calling their allegations of a pay-to-play system in his state treasurer's office a "load of garbage."

"It's total bull - - - -," Deters said, accusing prosecutors of coercing guilty pleas out of two close associates and a lobbyist involved in the investigation. "That's not the way I do business."

Special Prosecutor Thomas Sammon believes contributions to Joe Deters' campaign earned a now-imprisoned Cleveland broker preferential treatment. Sammon outlined the scheme in a recent court memo.

"That's how I would characterize it," said Sammon, when asked if he saw it as a pay-to-play system.

But if Sammon could prove any of Deters' associates handed out state work in exchange for campaign donations, he would have charged them with felony bribery, Deters said.

Deters said the system was "rigged" by the political motivations of Cuyahoga County Prosecutor William Mason, a potential candidate for attorney general in 2006.

He referred to Sammon, who said Tuesday that Deters should apologize for what occurred on his watch, as an "old retired guy who doesn't know which end is up."

"If they believed someone was bribed or there was pay to play, they should prove it," Deters said. "But they can't prove it. They just want to say it in a memo."

Deters' former chief of staff, Matthew Borges, and former fund-raiser Eric Sagun pleaded guilty to misdemeanor charges in July.

Court documents said Borges gave preferential treatment to certain brokers who contributed to Deters' campaign. And Sagun solicited a $50,000 donation from Cleveland broker Frank Gruttadauria for the Hamilton County Republican Party, when both knew the money was really intended to help Deters' campaign.

The man who helped facilitate the relationship between Gruttadauria and Deters, lobbyist Andrew Futey, also pleaded to a misdemeanor and will be sentenced today in Cuyahoga County.

Court documents said Futey took payment from Gruttadauria in exchange for helping him get preferential treatment from the treasurer's office.

In a sentencing memo, Sammon said Futey deserves jail time because he was "evasive and equivocal" during a deposition taken after his plea.

Sammon said he expected Futey might say that he, Sagun and Borges acted without Deters' knowledge. But that didn't happen.

"Consequently, there's always going to be this cloud hanging over this whole affair," Sammon said.

Deters, who recently announced he is running for Hamilton County prosecutor, was not charged in the matter.

"Did Joe Deters benefit from this? Certainly he did," Sammon said. "But the evidence we were able to develop regarding the activities of Borges, Sagun and Futey seemed to stop at the river's edge."

According to Sammon's filing, introduced Gruttadauria to Deters in Cleveland on Aug. 23, 1999. About two weeks later, the two went to Columbus to meet with Deters as Gruttadauria tried to secure state work for his employer, S.G. Cowen.

Sammon found it curious that when they arrived, the first person Futey took Gruttadauria to meet was not Deters, Borges or anyone else in the treasurer's office. They first met with Sagun, Deters' fund-raiser. "Certainly if you go meet the fund-raiser for the campaign committee of an officeholder, you're not talking about Tribe baseball or Bengal football," Sammon said.

On Sept. 30, Futey wrote a memo to Gruttadauria explaining the maximum individual contributions to Deters' campaign and how to make out the checks. He also noted, "Have the contributors mail their contributions to you and we will hand them over to Eric Sagun."

In the last two months of 1999, Gruttadauria raised $60,000 for Deters' campaign.

Sammon also makes particular note of a memo titled "Ohio Strategy" that wrote to Gruttadauria on Dec. 12, 1999, briefly outlining potential business opportunities with the state.

Under the heading "Treasurer's Office," wrote that Gruttadauria should "Continue effort with Sagun and reach goals."

Sammon wrote: "The key to the door of the state treasurer's office that Futey provided to Gruttadauria was a pay-to-play scheme."

Gruttadauria continued his relationship with Deters in 2001, allowing him use of his private jet on two occasions and anonymously donating $50,000 to the Hamilton County Republican Party at Sagun's request.

S.G. Cowen, which before hiring Gruttadauria had done no business with the state, earned commissions on $215 million in trades with the treasurer's office in 2000, according to court documents.

Borges that year pared the number of brokers doing business with the treasurer's office from 50 to 12.

Sammon noted that although Gruttadauria lacked expertise in the type of trading done for the treasurer's office, and he had only recently joined the state's pool of traders, he was ranked third on the list.

In May 2004, Gruttadauria, already imprisoned for cheating clients out of $125 million, pleaded guilty to charges related to his dealings with the treasurer's office, including bribery, money laundering and election-law violations.

Now Deters is talking about retribution. Although he won't give specifics, he said he's looking into whether prosecutors illegally leaked grand jury information to the press.

"I hope they are ready for what comes back at them," he said.

---

E-mail jsiegel@enquirer.com




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