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Developer, ex-Bengal Ndukwe weaves tangled web at City Hall: 'Is it possible the FBI got played?'

Cranley: 'Let's not forget how we got here'
Posted: 6:42 AM, Dec 08, 2020
Updated: 2020-12-08 19:21:18-05

CINCINNATI — Federal law enforcement officials described developer Chinedum Ndukwe in heroic terms during two November press conferences, heralding his role as an informant key to their corruption indictments against two members of Cincinnati City Council.

“Mr. Ndukwe showed moral courage by coming forward,” said Chris Hoffman, special agent in charge of Cincinnati’s FBI office. “I’m hoping that others will draw on his courage and will refer these types of cases to the FBI.”

U.S. Attorney David DeVillers announced a federal indictment against Cincinnati City Council Member P.G. Sittenfeld on Thursday, Nov. 19, 2020.

U.S. Attorney David Devillers said Ndukwe, who is a former Cincinnati Bengal, felt the same as other city developers who “were just sick and tired of being involved in this culture or this expectation of pay to play … Mr. Ndukwe was vital and important to this investigation, and we thank him for everything that he’s done.”

But some attorneys and politicians are now raising questions about Ndukwe’s involvement in the case, after an I-Team investigation showed Ndukwe was chasing more than one City Hall deal while he helped the FBI gather evidence against Republican Jeff Pastor and Democrat P.G. Sittenfeld for bribery indictments.

Using federal indictments and city records, the I-Team constructed a timeline that revealed Ndukwe was working with the FBI to promote his development plans at Convention Place Mall while simultaneously lobbying City Council to improve the terms of a 2018 tax break for another project at 2347 Reading Road in Mt Auburn.

“The timing is very curious,” said Councilman David Mann, who along with Sittenfeld has declared his candidacy for mayor. “It makes me even happier that I voted against the proposal to change the tax abatement (for 2347 Reading).”

Pastor’s defense attorney is also concerned.

Ben Dusing
Defense attorney Ben Dusing

“Is it possible that the FBI got played?” Ben Dusing asked. “It is very interesting that the FBI would choose to use as a confidential witness someone who is receiving favorable action from the city. If they knew, why didn’t it matter? And if they did not know, why didn’t they know? All of these to me are the logical questions.”

The I-Team also discovered that Legal Aid attorney, John Schrider is investigating falsified documents in an eviction case against an apartment property Ndukwe owns in Mt. Auburn.

“You clearly can tell from the documents that they were not signed by my clients,” Schrider said. “I’m doing my due diligence to try to get to the bottom of it.”

The U.S. Attorney’s office declined to comment for this story. Ndukwe’s attorney, Scott Croswell, said any inquires about Ndukwe’s role as a cooperating witness should be directed to federal authorities.

“It would be improper for me to discuss their case other than to indicate to you that in my opinion Mr. Ndukwe provided information as a citizen witness only,” Croswell said.

Council vote and FBI probe: Where the timelines converge

Two federal indictments describe alleged interactions that began in September 2018 between Pastor, Sittenfeld and Ndukwe, who is identified only as a confidential witness in both documents. Prosecutors later confirmed that Ndukwe was a cooperating witness on both cases and that the project he sought to advance was Convention Place Mall at 435 Elm Street Downtown.

Cincinnati City Council Member P.G. Sittenfeld in his office on Wednesday, June 3, 2020. Sittenfeld has made several proposed changes to CPD policy in response to the protests of the Minneapolis police killing of George Floyd.

On Sept. 21, 2018, Sittenfeld contacted Ndukwe to “request a $10,000 campaign donation in checks from multiple limited liability companies,” according to a six-count indictment against Sittenfeld. That request allegedly led to a Nov. 7, 2018 lunch meeting in which Ndukwe introduced Sittenfeld to an FBI agent posing as an investor in Convention Place Mall.

“Following lunch, Sittenfeld agreed to ‘deliver votes’ for the project in return for $20,000,” according to the indictment, which also claims Sittenfeld received four checks of $5,000 each Dec. 17, 2018.

Pastor’s indictment alleges the councilman accepted a private jet trip to Miami, Florida, where he was invited to meet with FBI agents posing as Ndukwe’s Convention Place investors on Sept. 26, 2018. During the two-day trip, the indictment says Pastor “agreed to accept $15,000 and other future benefits in return for providing favorable action relating to” Convention Place and another project not related to Ndukwe. That led to a $15,000 payment that Pastor allegedly accepted on Oct. 4, 2018.

Cincinnati City Councilman Jeff Pastor speaks to WCPO in his office, Feb. 13, 2020, about his push to provide free Metro bus rides for Cincinnati-area military veterans.

Nearly all of that alleged activity happened while Ndukwe was seeking a tax abatement for a $14 million hotel project at the corner of Reading Road and Kinsey Avenue in Mt. Auburn, according to public records obtained from the city by the I-Team.

The records include a formal offer letter in which the city’s development director tells Ndukwe it’s prepared to recommend to city council a nine-year, 60% tax abatement. The letter, dated Aug. 21, 2018, said the abatement deal would require Ndukwe to build a 73,000-square-foot hotel and create 70 new jobs, resulting in at least $1.5 million in annual payroll within three years.

“We estimate that this would save the company approximately $151,337 in taxes per year,” or roughly $1.4 million over nine years, wrote Phil Denning, Cincinnati’s former director of community development and planning.

A two-page summary of the city’s internal analysis says the Mt. Auburn project received a lower score than other deals that were pending at the time because it lacked energy-efficiency improvements and would create “low-wage jobs,” paying an average of $10.30 per hour. It was also expected to generate little return on investment for the city, with $1.23 in new earnings-tax revenue for every dollar in property taxes foregone.

“The applicant has been in contact with several council members and gives the indication he will not be satisfied with only an abatement based on the score,” said the undated report.

That prediction proved accurate on Oct. 3, 2018, when council members Tamaya Dennard and Greg Landsman submitted a motion to improve the deal’s terms. The motion said Ndukwe was willing to pay at least 10 full-time employees a $15 hourly wage and “use best efforts” to fund a youth wellness program at Taft Elementary School in Mt. Auburn.

FBI agents arrested Dennard in February 2020 on corruption charges unrelated to Ndukwe. A federal judge sentenced her in November to 18 months in prison.

The Oct. 3, 2018 motion by Dennard and Landsman called for city development staffers to increase the length of the proposed abatement to 15 years for Ndukwe’s Mt. Auburn project, relying on a 2017 council ordinance that allowed for maximum tax breaks on “catalytic projects” that are “likely to have a substantial effect on encouraging additional investment.”

In Council’s Budget and Finance Committee on Oct. 10, 2018, Mann voted against the motion to increase the tax breaks for Ndukwe.

“My fundamental concern is short-circuiting a process that I think works pretty well,” Mann said. “I’m very concerned about intruding on an ad hoc basis without full information.”

Dennard responded with a defense of Council's involvement.

“I’ve watched us for nine or 10 months vote yes on deals that don’t transform communities,” Dennard said at the committee meeting. “I’ve watched us vote yes on deals that don’t do anything for minorities. I’ve watched us vote on deals that don’t do nothing for poor people. So, the reason why I stepped in and did this –- and it was ad hoc; I’ll the be first to admit it –- but we had a Black developer who was interested in having a project that would really transform the community of Mt. Auburn.”

Sittenfeld, Pastor, Dennard and Landsman all voted in favor of the motion to increase tax breaks for the Mt. Auburn project. So did Chris Seelbach and Wendell Young. That led to the negotiation of a final agreement with Ndukwe, which the council passed with eight votes (Dennard abstained) on Nov. 15, 2018. That increased the value of the Reading Road abatement by approximately $900,000 over the city’s original offer letter, according to council records.

Did one deal influence the other?

The I-Team attempted to reach Dennard through her attorney, Stephanie Kessler, who did not respond to an email request for comment.

Ndukwe was never identified by prosecutors as a witness against Dennard, who pleaded guilty to honest services wire fraud in June. She was accused of seeking a $15,000 bribe from an attorney connected to the development of a riverfront music venue.

In responses to the I-Team’s questions prior to publication, P.G. Sittenfeld’s attorney, Charles Rittgers, did not directly answer whether Sittenfeld’s support for the Mt. Auburn hotel was influenced by the FBI’s alleged bribes relating to Convention Place.

“The Sittenfeld indictment does not allege a bribe relating to the Reading Road project,” Rittgers wrote.

After the story was published, Rittgers gave a more definitive response: "There was no quid pro quo on anything. No vote was influenced by any donation at any point."

Dusing also declined to comment on whether Pastor’s vote on the Reading Road project was influenced by the 2018 actions of FBI agents. But he does question the use of Ndukwe as a government witness.

“Why are these people coming out of the woodwork to serve as cooperating witnesses for the United States of America? It is either because they are wonderful citizens who happen to be very concerned about corruption in city government and are unusually motivated, A. Or B: They have an agenda,” Dusing said.

Meanwhile, Mann said the Reading Road abatement deal should be “reviewed with some depth” if City Council responds to the bribery scandal by ordering a forensic review of all development deals.

“What we don’t know typically is what pressures have been brought on the administration, prior to the time it comes to us, to shape the deal in a certain way,” Mann said. “That’s what needs to be looked at. And it could be helpful certainly to match votes on developments with contributions from developers.”

Council revisits the 2018 abatement

Ndukwe’s hotel project is more than 11 months behind schedule in Mt. Auburn. Records show the city sent Ndukwe a default notice in February of this year because the 2018 tax abatement required the hotel to be completed by Dec. 31, 2019. The letter also said Ndukwe’s company, Kingsley + Co., failed to comply with wage enforcement provisions of the agreement.

In a May 4, 2020 response, Ndukwe blamed rising construction costs, COVID-19 and a 2019 sexual harassment allegation for the delays.

“My firm and I experienced significant adversity in 2019 when a former employee falsely accused me of harassment in a ten million dollar extortion attempt,” Ndukwe wrote. “I was wrongfully accused and cleared after investigations by Hamilton County and the City of Cincinnati. This months-long incident took a toll on my small business, resulting in significant disruption and turnover.”

As Ndukwe worked to bring his tax abatement deal into compliance, an eviction controversy eroded neighborhood support for his hotel project.

Then-Cincinnati City Manager Patrick Duhaney wrote to Ndukwe on Feb. 27, 2020 to address “potentially serious quality-of-life issues” at 2341 Burnet Avenue, an apartment building adjacent to the hotel.

“I have received information indicating Kingsley + Co., through its affiliate ownership of the Burnet Avenue property, intends to redevelop the site or demolish the existing building,” Duhaney wrote. “Said improvements would apparently benefit or expand your adjacent hotel construction project at 2347 Reading Road.”

Duhaney asked Ndukwe to “minimize displacement of residents” and “facilitate their relocation to other quality housing options that are within their means.”

Ndukwe responded a day later with a letter that blamed tenants for any quality-of-life issues at 2341 Burnet. He said removing tenants was necessary to “renovate the structure and recommit the building for use as affordable housing.” He also said the Burnet redevelopment was “a completely separate project” from the adjacent hotel.

“I am disappointed by the way that many in Cincinnati continue to vilify me and my company,” Ndukwe wrote. “As an African American enterprise, I am breaking barriers and creating opportunities to improve the quality of life in my city. Those trying to stop this rehabilitation of this building are insisting that the poor be forced to live in substandard housing and their status quo cannot improve.”

Council votes change as new facts emerge

The eviction controversy and default issue came to a head two months ago, when Ndukwe returned to City Council's budget and finance committee to request an extension of his abatement deal at 2347 Reading. The extension would give Kingsley + Co. until the end of 2021 to complete the hotel.

“My family is here. We are based here. We are excited about this project,” Ndukwe told the committee Oct. 12, 2020. “The critical thing we’re looking for is just time.”

There were some surprising revelations in the two-hour meeting that ended with two of the project’s original supporters – Seelbach and Landsman - voting against the extension.

The first revelation: Carol Gibbs, president and CEO of the Mt. Auburn Community Development Corp., told the committee that her group and the Mt Auburn Community Council rescinded their support for the project “about a month ago.” That led to a new agreement between Kingsley and the neighborhood groups in which Ndukwe promised to:

  • Donate $15,000 over three years to the Principal’s Fund at Taft Elementary.
  • Submit monthly reports on development progress at the hotel and housing properties owned by Kingsley.
  • Redevelop another apartment building on Helen Street for low-income tenants. Like 2341 Burnet, the Helen Street property is adjacent to Kingsley’s hotel site.
  • Commit to “discussion and a resolution” with neighborhood groups to repurpose the hotel building “if there is a need to delay the opening.”

“This is a hot spot in our neighborhood,” Gibbs told the committee. “It is a prime spot for drug use and selling, for prostitution, for shootings. We’re afraid if this building stays vacant for a long period of time that it will create another haven of crime.”

Two months after the hearing, Gibbs said this week that Ndukwe has submitted two development updates to the neighborhood and a cashier’s check for the first of three $5,000 payments to Taft Elementary.

The second revelation involved the eviction controversy, in which four former tenants at 2341 Burnet are pursuing civil claims against Kingsley for alleged violations of Ohio’s landlord-tenant law. That’s when Schrider told the committee that Kingsley was falsely claiming to have reached settlements with his clients.

“Earlier on, a speaker referenced releases allegedly signed by tenants,” Schrider told the committee. “My clients did not sign those releases.”

Schrider further explained that Ndukwe’s attorney gave him the signed releases, which he compared to signatures on IDs and drivers licenses. They didn’t match, he said, and his clients claimed they never signed them.

“When Stuart Richards, the attorney in these cases, gave me these releases, he told me he had absolutely nothing to do with their preparation and that he was handing them to me at the request of his client,” Schrider told the committee.

In an interview last week, Schrider told the I-Team he still doesn’t know who signed the releases, but he’s hoping to discover that information as his claims against Ndukwe continue.

“We’re asking for information to get to the bottom of it,” Schrider said. “If the landlord is going to claim that these releases somehow exonerate them, then we will have to deal with that in the court.”

The eviction controversy was enough for Seelbach and Landsman to withdraw their support for Ndukwe’s hotel project.

“I don’t know how we can continue to do business with someone who just ignores us and does so while treating tenants this way,” Landsman said.

Chris Seelbach
Chris Seelbach

Seelbach said bad behavior should not be rewarded.

“Thirty-three affordable units of housing are gone," he said. "They’re only creating 10 jobs, and only 25% of them need to be in the city. The allegations from tenants, from former employees, there’s just too much there.”

Dennard’s replacement, Jan-Michele Lemon Kearney, voted in favor of extending Ndukwe’s tax abatement.

“I do like this MOU,” she said of the deal with Mt. Auburn neighborhood groups. “You’re actually donating to Taft Elementary School. I think that’s wonderful. And building affordable housing, which we often don’t ask our developers to do.”

Another yes vote came from Wendell Young.

“I think it’s extremely unfortunate that Burnet Avenue and Reading Road have been presented sort of as one project when in fact they are two,” Young said. “The developer is simply saying to us, ‘Look, I didn’t do anything wrong. I’m trying to get this thing done. I need a little help from you guys. Not money, just time.’ And I don’t know why we couldn’t do that for him.”

Sittenfeld abstained from voting in committee but indicated a willingness to support the extension when the matter came to a full council vote.

“If we don’t do this, is there some sense that it imperils the project? That doesn’t seem like what the community is asking for at this juncture,” Sittenfeld said in the Oct. 12 committee meeting.

Pastor, without comment, voted in favor of the extension in committee. Pastor and Sittenfeld both voted yes when Council met Oct. 14, 2020. And in one final surprising twist, Landsman changed his vote to yes after saying he was assured by Ndukwe’s attorney the company would honor its commitments to the Mt. Auburn community and resolve disputes with tenants.

“I do feel better about where things stand based on the commitments I’ve gotten,” Landsman said.

So, in the end, the extension passed with six votes: Christopher Smitherman joined Kearney, Landsman, Pastor, Sittenfeld and Young in support of modifying the 2018 abatement deal. Betsy Sundermann joined Mann and Seelbach in voting no.

But the moment didn’t pass without a tongue lashing from Cincinnati Mayor John Cranley.

“Let’s not forget how we got here,” Cranley said. “This project was going to work its way through the original administrative review, which would have flagged the resident issues that have been raised to us by Legal Aid. But instead, Council brought in legislation demanding that the administration approve the (abatement) and former council member Dennard explicitly said that she felt there was a difference in treatment based on the color of skin. So, once again, the integrity and professionalism of our administration was attacked by Council meddling in a deal. Not surprisingly, it leads to all these unintended consequences.”

Cincinnati Mayor John Cranley addresses reporters after a third member of City Council was arrested Thursday, Nov. 19, 2020 on public corruption charges.

On Nov. 19, 2020, Cranley again reflected on Ndukwe’s interactions with City Council when he called for Sittenfeld’s resignation.

“It was weird to me that they were so willing to cast aside the folks of Legal Aid, who were standing up for these residents,” Cranley told reporters on the steps of City Hall. “Now, I didn’t know at the time that there were corrupt quid pro quos going on with this developer. But you can understand why, reading about all this, could get residents, lower-income residents of the city cynical who say, ‘Who’s going to speak up for me if I’m not powerful and connected.’ Well, I want you to know that I did and other council members did.”