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Analysis by Mike Hudson

When Niagara Falls Mayor Paul Dyster announced that the FBI was once again rooting around Niagara Falls the week before Christmas, he did so in such a way as to further damage the reputations of former building commissioner Guy Bax and city inspectors Pete Butry and George Amendola, who he claimed were the targets of the agents' inquiries.

Whether that's true or not is uncertain. Newspaper reporters were not permitted to view the subpoena Dyster said had been delivered, and neither the FBI nor the U.S. Attorney's office in Buffalo would confirm that such a document had been issued.

What Dyster failed to mention, and what every employee at City Hall knows, is that -- for seven weeks -- federal agents from the Internal Revenue Service, armed with subpoenas of their own, have been combing through the payroll records of every department in the city. In particular, they were interested in overtime, travel expenses, the private use of city-owned vehicles and cell phones, numerous City Hall sources reported.

"We've never had the IRS in here before, for any reason," said one top City Hall official. "They were here for seven weeks, and they weren't just looking at the Inspections Department."

Sources said the agents spent considerable time in the offices of City Controller Maria Brown, paying particular attention to perks awarded to senior city personnel. Just as salaries for top aides to the mayor have skyrocketed since Dyster took office, the amount spent on travel and overtime has likewise gone through the roof.

While it is unclear who the targets of the IRS investigation are, Dyster's silence on the matter is troubling.

"Why would the mayor call a press conference about one federal investigation and try to keep another one quiet?" one source asked. "It doesn't make any sense, unless it's something that reflects badly on his administration."

The three IRS agents -- two men and a woman -- were particularly interested in records pertaining to city officials who have vehicles issued to them by the city that they are allowed to take home. Dyster himself drives an expensive SUV paid for by city taxpayers.

When he ran for office, Dyster promised an end to corrupt practices that, in the past, involved favorable treatment to campaign contributors and family members. Since taking office, Dyster has rewarded wealthy campaign contributors such as Clinton Brown, Craig Avery and others with city grant and loan packages in what has thus far been an unsuccessful attempt to spur development and growth here.

Jimmy Glynn's Maid of the Mist Corp., which not only runs the famed boat ride but owns the Comfort Inn here, is another Dyster campaign contributor that has benefited mightily from a series of city- and state-funded improvements to the area immediately adjacent to its hotel.

The IRS investigation at City Hall is the last thing Dyster wanted as he heads into an election year. The local daily newspapers will likely ignore it, in much the same way they ignored the federal investigation into Dyster's predecessor, Vince Anello.

Anello was sentenced last month to a 13-month stretch in federal prison.

The culture of corruption that has long characterized the operation of Niagara Falls City Hall has apparently continued unabated under Dyster. In addition to the FBI probe of the Inspections Department and the IRS investigation into the city's payroll, Tina Pugh of the City Clerk's office recently copped a plea deal after being charged with theft, forgery and falsifying business records in that office, and former city policeman Ryan Warme pleaded guilty to numerous federal sex, gun and drug charges in exchange for a reduced sentence.

Niagara Falls Reporter www.niagarafallsreporter.com Jan. 4, 2011