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BUFFALO, NY - Earlier this week, 2 On Your Side told you about a federal report that said $1.6 million in federal funds that should have gone to the community was spent inappropriately.

A day after our report aired, the city confirmed that was the case.

And then the following day, Mayor Byron Brown told us that even though he sat on the panel that was supposed to monitor where the money went, he had no knowledge of the alleged wrong-doing or the report.

In addition, he thought that the payments to the lobbyists were appropriate at the time.

"When I started, there were firms that were retained and we continued the practice, not knowing there was an issue at that time," Brown said.

The mayor took office in Buffalo in the winter of 2006.

According to documents from the U.S. Department of Housing and Urban Development, Office of Inspector General, three lobbying firms were inappropriately paid with federal dollars up until 2010.

The firms are all located in Washington, D.C. and worked for the city to provide legal advice and lobby members of Congress.

2 On Your Side's Steve Brown spoke to the mayor Thursday about the payments.

STEVE BROWN: Did you have any idea how they were being paid? What pools of money that they were being paid from?

MAYOR BROWN: "Again, I did not know the day-to-day, they were working for the city, right."

STEVE BROWN: They were getting paid from an account that came from an account you did not know?

MAYOR BROWN:

But it wasn't appropriate and hasn't been for years.

According to the HUD OIG's report of investigation, paying lobbyists with federal funds is strictly prohibited.

According to United States Code, Section 1352: None of the funds appropriated by any Act may be expended by the recipient of a Federal contract, grant, loan or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress [...].

Barry Covert, a criminal defense attorney, spoke to 2 On Your Side for legal analysis Friday on the mayor's comments.

"All of these grants have certification forms that when the recipient gets the money, they specifically have to certify that they will not use this money for lobbying purposes," said Covert.

The report states that the city had "actual knowledge that funds were misused for lobbying."

"I don't know what the mayor himself knows, but his officials certainly know that his council's office, the lawyers that review the contracts and the officials that signed the HUD contracts are certifying specifically that they are aware of that law and that they're in compliance with that law," said Covert.

In our interview, the mayor didn't take any personal responsibility for either the city's mismanagement of the funds to the lobbyists, or whether he failed to monitor how the money was spent.

"No, we do not have any lobbying firms that work for the city with federal funds," Brown said.

HUD nor the city have provided us any names of who signed off on lobbyists contracts. Our legal expert says that these people wouldn't be charged criminally, but could be fined up to $100,000 for each lobbyist payment with federal funds. City officials say that HUD hasn't asked for any of the $1.6 million back and that the city could be fined in the future.

Meantime, Common Council member Michael LoCurto says his office has decided to file a Freedom of Information request with HUD OIG to get and review their report of investigation. Once council gets the report, LoCurto wants to question the administration about these findings.

Sen. Kirsten Gillibrand tells 2 On Your Side, in response to HUD OIG's report of investigation: "The allegations in this report are obviously very serious and troubling. We must get to the bottom of the problem and hold anyone who misused taxpayer dollars accountable." Gillibrand also says her office will work with HUD and the City of Buffalo to ensure that federal dollars are used appropriately.

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