Gigliotti figures in federal investigation of Pittsburgh's city administration
July 7, 2013 8:00 AM
People close to Robert Gigliotti described him as a hardworking family man with strong ties to Banksville.
By Rich Lord, Liz Navratil and Moriah Balingit / Pittsburgh Post-Gazette
A Banksville-based parking entrepreneur who is central to the federal investigation of city of Pittsburgh dealings began his business career while working as a laborer in the Department of Public Works, then parlayed connections -- including with Mayor Luke Ravenstahl -- into success.
Robert Joseph Gigliotti, 46, built a client list that ran the gamut from the Duquesne Club to the Cheerleaders strip club, while family, friends and professional allies rose to positions including chief of police and judge. Now his ties and deals have attracted the attention of federal agents.
Investigators have asked questions or subpoenaed documents related to interactions between Mr. Gigliotti's businesses and Mr. Ravenstahl's administration. People with firsthand knowledge of the investigation have told the Post-Gazette that agents have been dogged in their inquiries about his relationship with Mr. Ravenstahl. Mr. Gigliotti appears to have retained a former federal prosecutor to represent him.
People close to him described him as a hardworking family man with strong ties to Banksville.
"I can't say anything but great things about him," said state Rep. Dan Deasy, D-Westwood, who grew up with Mr. Gigliotti and remains close to him. "I have every confidence in the world that he did everything on the up-and-up."
Many of Mr. Gigliotti's friends, colleagues and competitors would not talk about him for the record. Mr. Gigliotti could not be reached for comment in recent weeks at his home, office or the Le Mont Restaurant, where one of his companies handles valet service.
Public documents and background conversations indicate that Mr. Gigliotti's pursuit of connections and contracts brought him a position in Pittsburgh's informal power structure. Those same pursuits may be among the reasons the city's formal political structure is feeling the heat of a federal probe.
A lucrative lease
When Mr. Gigliotti couldn't get a meeting with the city's top redevelopment official in 2008, he went straight to the top.
At the time, the Urban Redevelopment Authority was planning to bid out the right to manage four publicly owned parking lots. Mr. Gigliotti, owner of William Penn Parking, couldn't get on URA executive director Pat Ford's calendar.
So on Jan. 15, 2008, Melissa Demme, Mr. Ravenstahl's senior administrator, wrote an email to Mr. Ford, asking him when he was meeting with Mr. Gigliotti.
"Ouch, I forgot," Mr. Ford responded, in one of numerous emails the Post-Gazette obtained through a right-to-know request. "I will follow up with Rob. Thanks for the reminder."
William Penn Parking went on to get the lucrative lease for the lot behind the URA's offices, despite the fact that rival Kail's Parking offered the agency more money. URA officials said they awarded the lease to Mr. Gigliotti's company in part because he offered to freeze rates for a year, while Kail's wanted to raise rates.
Competitors have speculated that Mr. Gigliotti's connections to the city's power brokers gave him an edge in his attempts to land prized contracts.
"Obviously, he got all the good deals that were related to the city," said Bill Bodziak, former director of operations for Extravagante Valet, which competed with Mr. Gigliotti's Tri-State Valet. "It could be either the people he knows, or he does provide a good service."
He added that if a parking operator is "well known like that and you have those connections and that's your circle ... it kind of comes naturally that you're going to be the favorite."
William Penn Parking pays the URA $12,950 per month for the right to run the lot behind the agency's offices. That's $2,050 per month less than the offer made by Kail's Parking, meaning the URA has forgone $120,000 in revenue.
Two participants in the lot-bidding process have told the Post-Gazette that the FBI has asked them about it. One said the agents last questioned him in January.
Mr. Gigliotti's company kept its promise not to raise rates on the lot for one year -- but not much longer. In September 2009, his business partner, Robert S. Arrigo, wrote to the URA to advise them of rate increases that he characterized as "extreme" but "significantly lower than any of the competition in the area."
The rate freeze, he wrote, was "hurting my financial position and ability to make a profit."
Today the lot charges $10 for one to two hours -- up from $6 in 2009. The URA denied a right-to-know request for information on William Penn Parking's tax payments for the lot, so its exact revenue wasn't available.
Mr. Arrigo could not be reached for comment.
'Outgoing, friendly' and connected
Mr. Gigliotti's early glimpses of the city's inner workings came when he was a child and his father, longtime city police Officer Anthony Gigliotti, brought him around the police bureau's motorcycle unit, whose members at times included former police Chief Nate Harper and current Assistant Chief of Investigations George Trosky.
A member of Brashear High School's class of 1984, Mr. Gigliotti wrote in his senior yearbook that he was "Active in Tennis. Plans to become a police officer or electrician."
Instead he signed on with the city's Department of Public Works in 1987, at the age of 21. Like many of that department's employees, he became a member of the Allegheny County Democratic Committee, and still serves on the 20th Ward committee.
He registered his first valet business in 1991, and launched his second in 1998, when he was still on the city payroll. Attorney Michael McCarthy, now a judge in the Allegheny County Court of Common Pleas, helped him to incorporate William Penn Parking in 2003. A year later, Mr. Gigliotti created Tri-State Valet.
He also built relationships by coaching Banksville baseball and basketball teams, and by volunteering at St. Margaret of Scotland in Green Tree.
"I think he's a good guy," said Brian Matts, the vice president of the Banksville Athletic Association and Mr. Gigliotti's neighbor. He said Mr. Gigliotti is "outgoing, friendly, easy to talk to."
Mr. Gigliotti deepened his ties to the police bureau in 1997 through his marriage to Linda Gallagher, now a detective in the department's auto squad.
Detective Gigliotti worked as one of three employees in the bureau's special events office, which coordinates officer moonlighting, as recently as the summer of 2010. Records obtained by the Post-Gazette show that Mr. Gigliotti sometimes hired members of the bureau's motorcycle unit to do traffic work for William Penn Parking and Tri-State Valet. His wife, as part of her job, handled invoicing for companies, including Tri-State Valet, that hired officers to moonlight.
In 2005, after Bob O'Connor was elected mayor but before he was inaugurated, Mr. Gigliotti urged insiders to pick Nate Harper as chief, according to a former O'Connor aide. Mr. O'Connor instead appointed Dom Costa, and Mr. Ravenstahl later replaced him with Mr. Harper. Mr. Gigliotti later supported the promotion of George Trosky, now assistant chief, according to insiders.
Mr. Harper is now under indictment for diverting public money to private uses. According to his attorneys, the former chief is cooperating with federal investigators, and he has met repeatedly with the FBI and IRS.
In May, a sergeant and a detective working under Chief Trosky brought to the U.S. Courthouse at least six boxes of documents relating to parking variances given out by the bureau over the last five years.
Variances give businesses such as valet companies and restaurants guaranteed on-street parking in places where it would normally be prohibited. Records show that until this spring, Tri-State frequently received more spaces at some locations than did competing companies.
Until recently, the assistant chief of operations typically handled the approval process for parking variance applications, but former Assistant Chief William Bochter has said that Mr. Harper handled the granting of some variances to Tri-State.
Fine dining and influence
Councilwoman Theresa Kail-Smith first met Mr. Gigliotti when she was working on state Rep. Dan Deasy's 2005 campaign for city council. Ms. Kail-Smith replaced Mr. Deasy when he was elected to the state House.
In mid-2011, Ms. Kail-Smith proposed legislation that would place stronger restrictions on strip clubs, limiting where they could be established and limiting physical contact between dancers and patrons. Soon after, Ms. Kail-Smith said Mr. Gigliotti contacted her office and asked that she meet with attorneys from the adult entertainment industry. The councilwoman, who met with a variety of stakeholders on the matter, agreed, and Mr. Gigliotti sat in on one of those meetings. The legislation did not pass.
She acknowledged that Mr. Gigliotti was well known in the district and carried political clout because of his connections to the community and to the LeMont. That Mount Washington restaurant is the scene of frequent candidate fundraising events.
Mr. Gigliotti rarely makes political donations, according to online records of contributions to state and city candidates.
Mr. Gigliotti has served as a host committee member for at least one of Mr. Ravenstahl's political fundraisers. Sources said their acquaintance went beyond politics.
One former administration member wrote in a statement provided to the FBI that Mr. Gigliotti often met the mayor in the evening at the Le Mont.
Mr. Ravenstahl's attorney, Charles Porter Jr., could not be reached. Mr. Ravenstahl declined comment on Mr. Gigliotti through his spokeswoman.
The investigation of the city that first seemed to focus on police matters has inched closer to Mr. Ravenstahl. Ms. Demme and three current or former mayoral bodyguards have testified before a grand jury. Agents have obtained documents related to the mayor's home remodeling contract and have sought to interview his ex-wife, who declined.
Other attorneys who represent witnesses in the probe told the Post-Gazette that Mr. Gigliotti has hired attorney Stephen Stallings, a former federal prosecutor. Mr. Stallings would neither confirm nor deny his representation.
Win some, lose some
In a 2011 email to the URA, Mr. Arrigo indicated that the businesses he ran with Mr. Gigliotti "manage a total of 5,490 event, garage, surface lot and valet spaces each day."
Based on parking variances he has obtained from the city and marketing materials he has submitted to the URA, Mr. Gigliotti serves medical facilities, restaurants, hotels and nightclubs throughout the city.
In 2007, demolition to make way for Consol Energy Center threatened a parking garage and lots managed by William Penn Parking. Mr. Gigliotti thought he'd found a replacement lot for his customers: a Hill District parcel controlled by Robert Lewis, the head of Orbital Engineering.
Mr. Gigliotti and Mr. McCarthy, who became a judge later that year, thought that they had negotiated a lot lease deal with Mr. Lewis, according to court papers. When the deal fell through, Mr. Gigliotti sued Mr. Lewis, alleging breach of contract and fraud. He demanded $4.8 million, which he characterized as three years worth of lost profits.
Mr. Gigliotti lost the case, but reached terms with Mr. Lewis.
Last year Mr. Gigliotti leased another URA lot, adjacent to Consol Energy Center, for $7,500 a month -- the best of three offers made to the agency. He promised to keep rates at $7 for weekday parking -- $20 for Penguins games. He has since lowered daily rates to $6, and some rival operators suggested that he probably isn't making money on the lot.
"Honestly, I have a lot of respect for the guy," said Mr. Bodziak. The hard-knuckled, who-you-know aspect of his success "kind of comes with the territory. ... In my opinion, it's how the business works."