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Hartford Mayor Arrested On Bribery Charges

By JEFFREY B. COHEN And MATTHEW KAUFFMAN | The Hartford Courant

January 28, 2009

Mayor Eddie A. Perez sat in his office at city hall on a late June day in 2007 and assured a pair of state criminal investigators that the rumors weren't true, that he had long ago paid in full for the $20,000 renovation at his home by city contractor Carlos Costa.

He could even get them the canceled check to prove it.

But barely an hour and a half after Perez said goodbye to the investigators, the mayor was in the offices of the Hartford Federal Credit Union filling out an application for a $25,000 home equity loan. It fell to Perez's lawyer nine days later to tell investigators that the mayor, in fact, had never paid Costa for the work that had begun more than two years earlier.

On Tuesday, as Perez was arrested and charged with bribery, falsifying evidence, and conspiring to falsify evidence, he continued to say what he has long said — that he always intended to pay Costa for the kitchen and bathroom renovation work, and that his wife's health problems simply distracted him. There was no quid pro quo between the mayor and Costa, and there was no crime, Perez said.

But that's not the story Costa tells. In arrest warrants supporting criminal charges filed against both men, Costa said he never expected a penny for what he says was a $40,000 renovation job — twice what Perez eventually paid — and says he considered the freebie "the cost of me doing business with the City" and the price for keeping easy access to the mayor.

That access, Costa told investigators, paid off.

At the same time Costa was doing what he considered free work for Perez, the mayor was doing Costa "a big favor" — overruling city employees who had all but decided to yank Costa off a multimillion-dollar city job on the Park Street streetscape. Costa says Perez helped him out; Perez's attorney says the mayor's goal was to save the city money.

Now, two men who called one another friend find themselves pitted against each other in a legal battle that is already threatening to claim political victims. On Tuesday, three city councilmen called for the removal of the city council President Calixto Torres — a longtime Perez ally.

It will be up to lawyers to parse the state's bribery statutes, asthe mayor and his lawyer launched a vigorous verbal defense Tuesday. But regardless of the spin and explanations, the 25-page arrest warrant includes potentially damaging revelations:

•Perez, the warrant says, misled state investigators about whether he paid for Costa's work.

•Perez paid Costa nothing until after he was confronted by state investigators.

•When he did pay Costa, Perez only paid half of what Costa told investigators the job cost.

And there may be more revelations to come, as the investigation continues. Prosecutors say more arrests are expected.

The mayor of the state's capital city is due in court Feb. 3 to begin his formal legal defense. But his attorney, Hubert J. Santos, wasn't waiting for a courtroom to refute the allegations in the arrest warrant.

"In my judgment, it doesn't allege a crime," said Santos, who belittled state prosecutors' record on corruption cases at a 1 p.m. press conference for his client Tuesday. "If you're going to destroy an administration, particularly one run by one of the few minority mayors in the state of Connecticut, the least we could ask of the prosecutor's office is to allege a crime."

In the arrest warrants, Costa told investigators he feared he would have been "black balled"as a city contractor if he had not done the work for Perez for free.

Costa testified that the first time he and Perez ever talked about the cost of the job was in late 2006 — long after most of the work was done — when Perez complained of rumors circulating in the city about renovation work performed for free at his house. Concerned that the rumors could spell trouble, Perez asked Costa to prepare a bill for the work, the contractor told investigators.

That bill — cobbled together from various supplier receipts and comprising 11 general line items — was bogus, Costa testified, totaling a little more than $20,000 for what the contractor said was probably a $40,000 job.

Those receipts, from Home Depot and other building-supply companies, show that Costa billed the mayor at cost for a steam shower, whirlpool bath, marble floor tiles, granite countertops and other materials. But while Perez has repeatedly maintained that the receipts covered all work done at the house, investigators say thousands of dollars' worth of materials are missing from the bills, other supplies were charged at artificially low prices, and Costa's invoice dramatically underreports the cost of labor associated with the job.

Investigators, who inspected Perez's home in July 2007, said a nearly 9-foot marble vanity top in the bathroom is not accounted for in the bill Perez paid. The vanity top, in the color Emperador Dark, matches a raw slab of marble purchased at the time by Costa's company for $426 — but typically sold to homeowners at several times the cost. But Perez never paid for that bill, or for what would typically be hundreds of dollars more in fabrication costs, such as cutting holes for sinks.

There are also no bills for some electrical fixtures used in the bathroom, some tile and backsplash in the kitchen and for a custom-made granite threshold installed between the kitchen and dining room, the arrest warrant alleges.

Investigators also say Perez underpaid for granite kitchen countertops and a custom-made bathroom vanity. Perez was eventually billed $45 a square foot for 50 square feet of Juparana Bordeaux granite. A Costa employee told investigators that Costa typically charged homeowners $70 to $75 a square foot for the granite, indicating Perez saved $1,250 to $1,500 on the slab.

The mayor also paid $371 for a bathroom vanity custom-built by a high-end cabinetmaker, who told investigators the vanity required about $1,200 worth of labor to create. It appears the cabinetmaker, Woodworks Retail & Architectural, never charged Costa for the work until early 2007, and co-owner John Gajewski testified that he sent Costa a bill for $350 plus tax because that's the price Costa told him to charge.

In return for his work on Perez's home, Costa benefited in various ways from the mayor's influence at city hall, prosecutors say. Perez had checks expedited for Costa, something city employees told the grand jury was a rare occurrence. He arranged for a performer at Costa's Carioca Club to receive a key to the city. And when city employees wanted to declare Costa in default of a multimillion-dollar city contract and put his insurer on notice, Perez stepped in and ordered a subordinate to back off, prosecutors say.

Prosecutors Tuesday also brought bribery charges against Edward Lazu, a former city contract compliance supervisor accused of trading favorable treatment of Costa for a new driveway at Lazu's Hartford home.

Lazu said he paid Costa $1,100 — in cash, with no receipts — for work USA Contractors did removing nearly 40 feet of sidewalk and putting down part of a stone driveway. But Costa testified the job was worth at least $5,000, and that Lazu never paid him. He told investigators that money only came up after Lazu received a grand jury subpoena, at which point Costa said Lazu asked him to provide a cash receipt for $1,000. Costa refused.

Prosecutors allege that Lazu certified USA Contractors to perform demolition and asbestos-abatement work, even though the company's state licenses to perform that work had expired, and blocked efforts by subordinates to compel Costa to abide by prevailing-wage laws for employees.

Tuesday began with hordes of reporters clustered both at Perez's house on Bloomfield Avenue and at the Troop H state police barracks in Hartford. At 9:20 a.m. on a cold morning, a grim-faced Perez opened his garage door, got into his blue Mercury Mountaineer, started the ignition and quickly drove toward his attorney's office, just blocks from the state police barracks.

Shortly after 10 a.m., Perez and Santos arrived at the barracks, and Perez was arrested. With Perez walking alone and well ahead of Santos, the two entered the building without speaking to reporters. Less than 30 minutes later, they emerged. Again, Perez walked well ahead of Santos. All Perez said before he got into a waiting Cadillac was, "one o'clock."

At 1 p.m., Perez reappeared in the function room at city hall. Now he stood surrounded by friends, family, supporters and city employees who gathered to cheer their mayor, and who applauded when he told them that he was staying put.

"The people of Hartford have voted for me twice since I made these allegations public, and I remain humbled that they have selected me to work with them to make the city of Hartford a better place," Perez said. "That is why I intend to serve out my term and complete the job I was hired to do."

Courant Staff Writer Steven Goode contributed to this report.