Why Are You Still Paying Him?

Utilities Director Julius Ciaccia has been at the center of corruption scandals for 15 years.

Cleveland politics political scamming Cleveland’s sewer department kickbacks
A lesser man might have feared that day in 2004. Water Commissioner Julius Ciaccia Jr. had just watched federal agents hand down the first criminal charges in a massive bribery case involving his department.

For years, men in his supply warehouse had been running their own blue-light specials, allowing vendors to overcharge the city by millions of dollars in exchange for cash, dishwashers, and luxury seats at Jacobs Field. It all went unnoticed for eight years, until auditors found something strange in the paper trail.

Before it was over, Ciaccia, monarch of the nation's eighth-largest water system, would see 10 people convicted, including three of his employees. But he had built his career on self-confidence and was not about to lose it now.

That very day, instead of being indicted, Ciaccia got a promotion. Then-Mayor Jane Campbell named him director of public utilities, giving him dominion over not just water, but the city's electricity and pollution control. He would now oversee more than 1,800 employees and a budget of $423 million.

In a nominally functioning city, Ciaccia would have been jettisoned long ago. Though never formally charged, federal prosecutors have accused him of accepting bribes, and his department has been home to continuous looting and a string of corruption scandals spanning 15 years. But in the City of Cleveland, his soiled résumé won him blessings and promotions from five mayors.

Such is the charmed life of a man who stumbled into power during Dennis Kucinich's disastrous mayoral reign and has clung mightily to it ever since. He's survived two massive bribery trials -- including allegations that he took payoffs from Nate Gray -- not to mention sexual harassment and discrimination scandals. Yet he's still here, and once again on the verge of promotion, preparing for a new job and a $175,000 salary overseeing the region's sewers. Secure in his penthouse office overlooking Lake Erie, he defies anyone to stop him.

From the beginning, Ciaccia followed in the grand tradition of Cleveland governance, carving a path marked by the Holy Trinity of incompetence, patronage, and a keen disinterest in guarding the people's money.

After graduating from Parma High and getting a business-administration degree from Cleveland State, he landed his first job in politics through a friend of Kucinich in 1976. At the time, Kucinich was clerk of municipal courts, so he made Ciaccia his deputy. A year later, when the city's youngest mayor was elected, he appointed Ciaccia -- a 28-year-old with no experience in water or electricity -- director of public utilities, responsible for ensuring that your water was fresh, your lights came on, and millions of your dollars were secure.

It wasn't an altogether shocking move by the Boy Mayor, who was about to launch an era of unparalleled ineptitude. Kucinich also hired a 24-year-old lawyer to run the city's finances. Lack of experience would be a touchstone of his administration. And it worked to Ciaccia's advantage.

When Kucinich imploded, new Mayor George Voinovich kept Ciaccia on as deputy water commissioner. Then, in 1988, Ciaccia was elevated to water commissioner, charged with supervising 1,100 employees and supplying water to 1.5 million people throughout the region.

He wasn't exactly the ideal man for the job, once admitting to The Plain Dealer that he never touches tools and "won't so much as change a washer." But he managed to pick up a few tricks of the trade. More important, he impressed his superiors -- who knew even less than he did -- by appearing well informed about details a plumber would consider elementary, "even down to the type of pipe that was required for repairing water lines," says his former boss, Michael Konicek.

In Cleveland, such basic knowledge of one's job was considered a small miracle.

Politicians were drawn to his swagger and ease among workingmen, for he was the rare bureaucrat who could crack jokes about not wanting a hard hat to mess up his hair. They admired him for following through on promises and being fearless in battles over rate hikes and union contracts. "He's a plain-talking, straight-talking, straight-shooting kind of individual," says Councilman Matt Zone.

Of course, Ciaccia also knew the quickest path to their hearts: Turn his department into a patronage dumping ground for the politically connected. At least five of his relatives work for the city, including two in water. And he was a willing babysitter for others due favors, whether they were qualified or not.

Payton Hall, Mayor Mike White's doomed personnel director, found new employment overseeing the water department's plants and labor relations. Stephanie Radcliff, who was reprimanded for burying people in the wrong plots as city cemetery manager, got a job reviewing water contracts. Neither Hall nor Radcliff had any experience in water before taking their new posts.

With the right friends providing recommendations, nearly anyone could find a job with Ciaccia. Dwight Wilson, a graduate student with no previous experience in the industry, best illustrates the lack of standards. He went straight from a four-month internship in Mayor White's office to overseeing 500 employees and maintaining the city's water lines.

By the time Mayor Campbell left office, so many City Hall flunkies had been dumped on the department that jobs were scarce. They had to start inventing positions for people, remembers longtime customer-service rep Louis Brown.

Today, employees readily grumble about the boss, but few people have the guts to cross him. He has mastered the art of instilling fear in his minions. And while Ciaccia always claims ignorance about corruption within his domain, he seems to know every move of his enemies.

In 2003, FBI agents visited one employee's home to ask questions about corruption. Two weeks later, Ciaccia pulled the worker aside. "I heard the FBI was out at your house," he began. "What did you tell them?"

When Scene interviewed Brown at a Holiday Inn next door to water's headquarters, Ciaccia knew about it within days. When another employee arrived to meet a reporter, he refused to get out of the car, fearing that Ciaccia had set him up. Middleburg Heights Mayor Gary Starr claimed someone -- he isn't sure who --called and told him not to talk to Scene while we were reporting this story.

By knowing every detail, Ciaccia has managed to maintain control of his sprawling kingdom. He only pleads ignorance when the knowledge could be used against him.

Every few years, his management is called into question. Contractors will overcharge the city, consultants will collect exorbitant fees. Each time, Ciaccia acts as if it's a minor screwup, never to happen again. Until it does.

As early as 1992, construction and engineering consultants started routinely billing an extra 8 percent on things like new furniture, travel expenses, even hotel stays. As the FBI later alleged, padded consulting fees were the norm during White's reign. The 8 percent would eventually find its way to White's bagman, Nate Gray.

A Plain Dealer exposé revealed that one of the major players collecting these fees was engineer Ralph Tyler, a close White ally who helped design high-profile projects such as Browns Stadium and the federal courthouse. His company was part of the team of consultants overseeing a $124 million expansion of Cleveland's water system, and he was brazen with his billing. By 1995, the water department had budgeted $97,000 for the inexplicable markups charged by Tyler's team.

The bills included $1,800 in training at Baldwin-Wallace for water employees. Tyler paid for the classes, then billed the city for reimbursement -- plus 8 percent. He even had the cojones to charge the city an extra 8 percent on the $60 it cost to have City Hall's weekly flyer mailed to his office.

Years later, federal prosecutors came up with a theory to explain Tyler's creative billing. They accused him of bribing Gray in exchange for contracts in Cleveland and East Cleveland ["What's That Smell?" October 18].

So in 1995, when the PD began asking questions, City Council members called for better accounting. But Ciaccia wasn't interested.

To him, paying tens of thousands in corruption surcharges was just normal business in Cleveland. Besides, identifying thievery was far too much work. As he told a reporter at the time, weeding out a few thousand bucks on a $124 million project could slow things down. "You can analyze to inertia," he said.

So the looting continued. In 1997, city officials discovered that Libby Construction, a company paid to haul dirt from repair sites, was charging for full loads when its trucks were half empty. Ciaccia was chastised for poor supervision. Yet, Libby kept getting millions of dollars worth of work.

City leaders hardly seemed to mind. In the carefree world of Ciaccia's water kingdom, being continually ripped off was simply business as usual.

The biggest scam on his watch went unnoticed for eight long and fruitful years. Its brilliance lay not in clever bookkeeping or covert scheming. It thrived openly, right under the boss' nose. Ciaccia either wasn't looking or didn't care who stole what.

In 1995, Norman Gore, the general storekeeper at the water department's supply warehouse, launched a lucrative kickback scheme. He allowed Victory White Metal Company to charge wildly inflated prices for basic equipment such as hydrant parts and plumbing supplies. Victory returned the favor with cash, cars, World Series tickets, and a loge at Jacobs Field.

This was not a subtle arrangement. Once, the company charged $8,300 for a part worth $40. Another time, it billed $39,000 for plumbing supplies worth just $9,000. In all, Victory overcharged the city by more than $1.1 million, according to court documents.

Gore also started taking bribes from Woodhill Supply, a Willoughby plumbing supplier. Woodhill would bill the city for materials it never actually delivered. In exchange, Gore and other employees received stoves, refrigerators, even gardening equipment.

Fortunately for Gore, this was during the reign of Mike White, when the city's finance department was run as badly as water. Accountants didn't even know they were supposed to balance the books, much less examine spending outside their office.

It would take eight years for auditors to wake up. In 2003, they received an anonymous complaint about water workers getting gifts from vendors. They discovered that employees were faking purchase orders and engaging in strange shopping transactions, such as ordering four air conditioners and receiving a stove instead.

They handed the case to the FBI. Gore and his head storekeeper, Kenneth McNeil, were fired. Warehouse manager James Stallworth resigned. All three later pleaded guilty to corruption charges. Seven employees from Woodhill, Victory, and other companies were convicted in the scheme.

Ciaccia has never been charged -- although Bill Edwards, a spokesman for the U.S. attorney's office, says a corruption investigation remains open. Ciaccia has repeatedly insisted that he had no idea what was going on at the warehouse.

But it's a tough argument to buy, coming from a man who knows when a lowly customer-service rep talks to a reporter on his lunch break. "No one ever caught him by surprise," Konicek says.

During the trials, lawyers painted Harvard Yard, the department's warehouse, as an island of chaos. The men who repaired pipes and bought plumbing supplies in the sprawling complex, located on Harvard Avenue near Newburgh Heights, enjoyed relative freedom. No one even bothered to question why a contractor was selling the city a Jacuzzi, a stove, or a dishwasher.

"That was like an unruly animal out there," says Councilman Mike Polensek. "Nobody was watching the henhouse."

But former employees say Ciaccia allowed this anarchy to occur, and that he was handpicking favorite contractors as well.

In court documents, former Harvard Yard manager Stallworth describes a department run via the Chicken Little School of Management. Staff weren't trained, and there were no rules for daily operations. Workers were constantly struggling to chase down the paperwork needed to buy supplies. Since their own department was a mess, and City Hall was less than helpful, they often relied on vendors to provide documentation. Inevitably, this birthed open invitations to scamming.

Another convicted former employee, who did not want to be named because he's looking for a new job, confirms that he was a willing cog in the chaos. He admits to accepting a computer and a TV from Woodhill in exchange for allowing the company to charge for supplies it never delivered.

But the real power, he explains, lay with Ciaccia and the bigwigs at City Hall. If a pipe broke and the repair parts weren't in stock, Ciaccia would call Gore and tell him which company to hire. This was not the power play of an ignorant boss.

After the employee pleaded guilty to accepting bribes, prosecutors confirmed that he was simply following orders, and U.S. District Judge Patricia Gaughan said he was the least culpable person involved in the scam.

So the employee, who had dedicated 14 years to the city, asked Ciaccia for his job back. But the boss seemed more worried about being ratted out himself.

"I don't know about getting your job back," Ciaccia told him. "You pleaded guilty to something, and I don't know what you told those people."

As the bribery mill hummed along through the late '90s, it soon became apparent that Ciaccia lacked some other basic management skills.

In 1998, Angela Lockhart, a clerk at Harvard Yard, found herself confronted by Dwight Wilson, that overeager intern from Mayor White's office, who was now in charge of maintaining the city's water lines. He also happened to be Lockhart's supervisor.

Wilson was fond of Lockhart, but had a strange way of showing it. In a deposition, she said he didn't just ask her out. He made it clear he wanted to marry her -- though they had just met. He even asked her to help look for a house. "And I want you to have my babies," she remembered him telling her.

Believing her job was on the line, she eventually agreed to date him and even slept with him a few times. But it wasn't a pleasant experience, she claimed in a deposition. He reveled in the power he held over her, and she feared she would be fired if she didn't return his affections. "I'm the boss -- you fucking the boss, and I'll fuck somebody up," he told her, according to court records.

But when she finally broke up with him, Lockhart suddenly found herself with more work to do. She was watched so closely that she was timed when she went to the bathroom. When she e-mailed Ciaccia to complain about her added duties, he wasn't impressed.

"Are you sure you are not trying too hard to tie this to unrelated job situations?" he replied.

Not that she expected Ciaccia to be sympathetic. In a deposition, she alleged that Ciaccia also suffered from gentlemanly deficiencies.

Once, in the copy room at Harvard Yard, he was giving her a hard time about not having a serious boyfriend. "We need to find you somebody," he told her. When she told him not to bother, it didn't go over well.

"You think you're something, don't you?" she remembered him saying. "If I wasn't getting ready to turn 50, I'd knock you off just to show you that I could."

When Lockhart eventually filed a sexual harassment complaint against Wilson, Ciaccia's response might have been predicted. Wilson was cleared in an internal investigation. But the city launched a far more aggressive probe of Lockhart.

An investigator followed her to an apartment in Bedford, taking pictures and keeping her under surveillance. After 15 years on the job, she was fired for breaking the city's employee residency rule.

She fought back in court, alleging that White and Ciaccia were retaliating. Without admitting wrongdoing, the city gave her $55,000 to go away. (Lockhart could not be reached for comment.)

Wilson kept his job until February 2007, when he left to become assistant director of the St. Petersburg, Florida water department. He declined Scene's request for an interview.

Corruption continued to swirl around the department. In 2005, when Nate Gray was on trial for a massive multi-city extortion ring, the smell of Ciaccia rose again.

In the mid-'90s, the engineering firm Camp, Dresser & McKee hired Gray as a consultant to help it win work in Cleveland. Gray began collaborating with Gilbert Jackson, an executive at the firm. It was a fruitful partnership. A few months after Gray was hired, the firm snagged a $7.1 million contract to draft a master plan for the water department's growth.

After they inked the deal, Gray's consulting fees inexplicably increased by $425 a month, prosecutors alleged. Rony Joel, an engineer who worked for the firm, testified that when he asked about the extra money, Jackson told him it was being kicked back to Ciaccia to help pay his daughter's tuition at Kent State.

Prosecutors also alleged that in 2002, when the firm was again trying to win another contract, Ciaccia asked Jackson to make a $25,000 contribution to a scholarship fund established by Mayor Campbell. In taped phone conversations, Gray and Jackson discussed the money and its purpose.

"Honestly, Nate, between you and I . . . nobody is going to give up $25,000 unless something is in return," Jackson said.

They talked about how Ciaccia was "amenable" to awarding Camp, Dresser & McKee a bigger portion of the contract if the scholarship money came through. In September 2002, the firm cut the check, and Jackson told Gray he didn't mind if Ciaccia took "the credit," as long he would "just give us the work."

In all, prosecutors said Camp, Dresser got more than $14.8 million worth of water contracts, thanks to Gray and Jackson's bribes. Both men are now in federal prison. Ciaccia, of course, denied any wrongdoing and has never been charged.

In fact, despite the stench that had trailed him for years, he kept winning promotions. Campbell appointed him utilities director, and he hung on to his post when Frank Jackson took office, though scores of other department heads were axed.

Then, this winter, the executive director's post opened up at the Northeast Ohio Regional Sewer District. Current director Erwin Odeal was retiring. He and board attorney William Schatz recommended Ciaccia as the replacement.

It would seem a perfect fit for someone with Ciaccia's résumé. The FBI is investigating the district for massive cost overruns. The feds are also looking at Schatz, whose private clients were doing a healthy business with the district. When his conflicts of interest were revealed, he abruptly resigned. The board nonetheless paid Schatz $50,000 to leave quietly and not sue. It was a mysterious bonus rendered to a man under federal investigation.

Most board members are reluctant to explain why they hired Ciaccia. Here was an agency whose every move was now being scrutinized by the feds, yet it chose to appoint a man whose name had become synonymous with corruption scandals.

Board member Thomas Longo, mayor of Garfield Heights, didn't return calls. Nor did laborers' union leader Anthony Liberatore Jr. President Darnell Brown, Mayor Jackson's chief operating officer, refused comment, as did Sheila Kelly, another Jackson appointee. Ronald Sulik, a board member whose employer, United Automatic Heating Supply, is named in the FBI's investigation of the sewer district, also refused to comment.

Ciaccia himself is uncharacteristically silent. "He's not ever declined any interviews," says his communications director, Paula Morrison. Yet after four days of negotiations, he refused to talk to Scene.

Parma Mayor Dean DePiero had yet to join the board when Ciaccia was hired, but says he supports the decision. "I think Ciaccia has a lot of experience with utilities, has been around a long time. In my dealings with him, he follows up, is hardworking, and has integrity."

Middleburg Heights Mayor Gary Starr says that when Ciaccia was hired, only a handful of candidates were presented to the board. Starr was impressed that Ciaccia had handled a billion dollars' worth of construction projects and only once overspent his budget by more than 10 percent.

"That kind of gave me some comfort . . . that he's going to be a reformist and save the taxpayers millions of dollars," Starr said.

When Scene pointed out Ciaccia's record of scandal -- including more than $1 million lost to bribes -- Starr admitted he'd need to hear the Water King's plans for reform before giving him a long-term job guarantee.

But he's the only one even mildly concerned. Ciaccia's friends, acquired through 30 years of patronage and favors, are confident he'll do a fantastic job. They brag about how he upgraded the city's water plants, won national awards, and helped preserve the region's drinking water.

"For the most part, he's been a very strong and effective leader for our city," Zone says.

"He had a vision of how to make the system better. He had all of the skills necessary to do an outstanding job," adds Konicek.

"When things came to his attention, he didn't run, he didn't hide -- he dealt with them," says Polensek.

Such endorsements illustrate the loyalty Ciaccia engenders in his allies. Unfortunately, they also serve as testimony to Cleveland's rock-bottom standards of governance.

DePiero, like other Ciaccia allies, excuses the Harvard Yard scam as an inevitable part of overseeing a large business. The important thing, he argues, is that Ciaccia reacted quickly to correct problems and fire the people involved. "When you have that many people working for you, it's inevitable that someone's gonna do something stupid or illegal," he says.

If Ciaccia were really a criminal, they reason, the FBI would have nailed him by now. "He hasn't been charged with anything yet," Zone says. "You would think by now . . . they would've found something."

Adds Polensek: "Allegations were made; there was no substance. I, quite frankly, thought the FBI did a great disservice by throwing that out there."

But it's a curious argument to make. From Sam Miller to Mike White, they know that few at the top of the city's political kingdom are ever convicted. So they stand by their man.

Even the $25,000 scholarship contribution, which Ciaccia has admitted soliciting, doesn't bother Polensek. In his world, such deals are simply government in Cleveland. "I never looked upon that as a shakedown, as a bribe," he says.

In America's poorest city, they still consider Ciaccia their best hope. Says Polensek: "I think he's the best water commissioner we've ever had."

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