CNY Developer, Cuomo Associates Charged With Bribery and Fraud
A former Cuomo Administration official is among those named in a criminal complaint by U.S. Attorney Preet Bharara, and accused of carrying out kickback and bribery schemes over a period of several years. Many of those illegal acts, the complaint alleges, involve the governor’s much touted Upstate economic development programs, including the Buffalo Billion.
The 80 page complaint names Joe Percoco, until recently a top aid to the governor, and the head of the State University of New York’s Polytechnic Institute, Alain Kaloyeros, who is also the highest paid official in the state.
The U.S. Attorney says Percoco and his wife, who was hired as a “low show” show consultant to a Hudson Valley power plant project illegally “pocketed” $322,000 in four years, says U.S. Attorney Preet Bharara.
“One of the most powerful people in all of New York was on the take,” Bharara said at a news conference in lower Manhattan.
Percoco was Andrew Cuomo’s right hand man, and was even referred by the governor’s father, the late former Governor Mario Cuomo as his “third son”.
Percoco was known in state government as Andrew Cuomo’s “enforcer”. Most believed that when Percoco spoke, often admonishing those who disagreed with Cuomo, that he spoke for the governor.
Kaloyeros masterminded much of Cuomo’s vast upstate economic development programs. Bharara alleges that Kaloyeros, along with lobbyist Todd Howe, gamed the bidding system, in some cases even allowing key developers who made large campaign donations to Cuomo to actually write the bids to tailor them to their own needs.
“Behind the scenes they were cynically rigging the whole process," said Bharara. “So that the contracts would go to the handpicked ‘friends’ of the administration, ‘friends’ being a euphemism for large donors.”
Todd Howe made money on both sides- working both for the non profit associated with the state to facilitate the contracts and also accepting money from the developers. Bharara announced that Howe pleaded guilty to an 8 count indictment , and is now a cooperating witness in the case.
Two major upstate developers have also been charged in the complaint, Syracuse based COR development, and it’s officers, and Buffalo based real estate developer Louis Ciminelli.
The complaint in part reads in part like an episode of the the Sopranos. It alleges that Percoco actually took inspiration from the TV show about organized crime, choosing to use the word “ziti” as a code word when demanding bribe payments and, according to the complaint, saying at times, “keep the ziti flowing”, and “don’t tip over the ziti wagon”.
Cuomo issued a statement shortly after the complaint was made public, saying in part he is “saddened and profoundly disappointed “, and that he has “zero tolerance for abuse of the public trust”, saying if anything, a friend should be held to an even higher standard. Cuomo has distanced himself from Percoco and Howe since the spring, when word of the federal probe got out.
“If anyone did anything wrong I will be the first to throw the book at them,” Cuomo said on May 10th.
Cuomo was not named in the complaint, but is known to be a hands on manager. Bharara was asked by a reporter whether, based on his investigations so far, he could give Cuomo a “clean bill of health”.
“There are no allegations of any wrong doing or misconduct by the governor anywhere in this complaint,” Bharara said. “That’s all I’m going to say.”
The criminal charges against Cuomo’s associates and former top aide come as both former leaders of the state legislature face lengthy prison terms over corruption convictions.
It also comes as State Attorney General Eric Schneiderman is charging SUNY Poly’s Kaloyeros and another SUNY Poly board member, with felony bid rigging in connection with several public development projects.
Cuomo announced that Kaloyeros has been immediately suspended from his job, without pay.
STATE BRINGS ITS OWN CHARGES
In addition to federal criminal charges, the head of SUNY Polytechnic, Alain Kaloyeros, is also facing state corruption charges from New York Attorney General Eric Schneiderman in three alleged bid rigging schemes. Kaloyeros and a Schenectady based developer, Joseph Nicolla, are accused of steering three multi-million dollar state contracts to favored developers, including Nicolla’s own Columbia Development . The AG alleges that Kaloyeros shared a competitor’s proposal with Nicolla to help him eventually win a contract to build student dorms, and even bragged openly about his total control of the bid solicitation process.
"It's stupid. This scheme is unusual in its brazenness. This is remarkable," Schneiderman said. "It's an explicit agreement for a kickback. It is somewhat unusual, and it certainly reflects an arrogance and a sense that these folks were above the law, and that they were acting in an unconstrained way to abuse their power and enrich themselves."
In other counts, the AG charges, Kaloyeros directly benefitted by demanding that a chosen contractor contribute 3 million dollars to a research grant for SUNY Poly. Kaloyeros’ pay, the highest among public officials in the state of New York, is based in part on the amount of research money he attracts to the school. The developers who received the contracts are among Governor Cuomo’s top campaign contributors.