Legal battle looms despite McCloskey plea; Toledo still faces $10M lawsuit, denies liability

5/10/2006

With former Toledo Councilman Bob McCloskey convicted of bribery in the 2002 Pilkington Plc technical center rezoning case, the legal spotlight now returns to the $10 million lawsuit that started it all.

Adding to the city s legal headaches are new statements from two councilmen who said that McCloskey told them of his demand for $100,000, but they kept silent.

EJS Properties LLC sued the city of Toledo and McCloskey in U.S. District Court in May, 2004, claiming Toledo City Council rejected its rezoning application 7-4 in August, 2002, because of McCloskey s improper demand for $100,000 for a prescription fund for fellow Pilkington retirees.

On Monday, McCloskey, 60, a Democratic member of council since 1994, pleaded no contest to bribery in connection with that incident.

He also pleaded guilty to two federal bribery counts in an unrelated case.

McCloskey has not been sentenced and remains free on bond.

Acting City Law Director John Madigan said that he doesn t believe the city s exposure to a costly legal judgment is any greater now than before McCloskey s conviction.

When you are outside the scope of your authority, you re not representing the city anymore, Mr. Madigan. That s going to be our principal defense. We still contend the city is not liable.

Any jury verdict or out-of-court settlement would come out of the city s general operating fund the same fund that pays for police and fire protection and numerous other city government functions.

An attorney for EJS Properties owner Erich Speckin, of Okemos, Mich., said McCloskey s conviction and reports of his apparent attempts to bribe other council members helps their case.

I think the other facts that have come forth play into the liability of the city, said Matthew Harper, Toledo attorney for Mr. Speckin.

A conviction of Mr. McCloskey certainly bolsters the case against the city. The city might disagree, but that s my belief.

City officials recognized from the start that it and McCloskey might become adversaries.

The city has paid for independent representation for McCloskey by attorney Jay Feldstein, so far authorizing $90,000.

McCloskey was responsible for paying his own legal bills in the criminal case.

Robert Miller, a Lucas County assistant prosecutor, said Monday in court that Toledo Councilman George Sarantou, a Republican, and former Toledo Councilman Louis Escobar, a Democrat, recently told the prosecutor s chief investigator, Frank Stiles, that McCloskey told them just prior to the 2002 vote of his request for $100,000.

Mr. Sarantou, the Republican candidate for Lucas County commissioner in November, declined to comment because of the city s lawsuit.

Mr. Escobar said McCloskey told him he was going to vote against the EJS zoning request because they had rejected his plea for money for the Pilkington retirees.

And, Mr. Escobar said, McCloskey told him that he was going to use the Toledo Federation of Teachers opposition to the charter school as an excuse to vote against the measure.

Mr. Escobar told The Blade that he wondered why he was never deposed by attorneys from either the city or EJS.

He said if they had, he would have told them what McCloskey told him before the vote.

I m amazed that no one has never talked to me, said Mr. Escobar, who now works at the University of Toledo.

In addition to the testimony from Mr. Escobar and Mr. Sarantou, an affidavit filed in the civil case in December claimed that then-Toledo Councilman Gene Zmuda also knew of the $100,000 demand. Mr. Zmuda, now a Toledo Municipal Court judge, has said he does not remember hearing of McCloskey s demand.

Other councilmen deposed in the case denied knowing about the $100,000 request.

By itself, the new testimony may not prove that McCloskey s lobbying made a difference because none of the three was among the majority who voted to defeat the rezoning: Mr. Escobar was absent the night of the vote, and both Mr. Zmuda and Mr. Sarantou voted in support of the rezoning.

Current council President Rob Ludeman said councilmen were advised yesterday not to comment on the case.

Bob Reinbolt, Mayor Carty Finkbeiner s chief of staff, said the mayor would not comment on the lawsuit.

We ll have to see how this works its way through the courts, Mr. Reinbolt said.

Contact Tom Troy at: tomtroy@theblade.com or 419-724-6058.