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McGuire company ‘not the target of any investigation,’ CEO says amid U.S. inquiry into Buffalo Billion

ALBANY – The head of a large Buffalo commercial real estate company says that his firm is not the target of a federal investigation into the Cuomo administration’s Buffalo Billion economic-development program.

“McGuire Development company is proud of our reputation. … We are not the target of any investigation,” CEO F. James McGuire said in an interview.

McGuire declined to elaborate on the source of his information, and he also would not say whether his company received subpoenas that federal prosecutors have issued in the last couple of months seeking information about the Buffalo Billion.

McGuire’s comments come a day after Daniel C. Oliverio, a lawyer for LP Ciminelli, the region’s largest construction contractor, said the firm and its principals are not the target or subject of any probe involving the Buffalo Billion or a parallel investigation looking at a $1.3 billion overhaul of Buffalo School District buildings.

“Any statement to the contrary is either erroneous or uninformed,” Oliverio said in a statement Tuesday.

Sources familiar with the investigation told The Buffalo News last week that federal subpoenas have demanded records and documents connected to the Joint Schools Construction Project, an 11-year, $1.3 billion program to renovate 48 public schools in Buffalo. LP Ciminelli has been the chief contractor on the schools project.

The News and other news organizations reported last week that the office of Manhattan-based U.S. Attorney Preet Bharara is investigating the Buffalo Billion, a program begun in 2012 by Gov. Andrew M. Cuomo to infuse additional state cash and other financial incentives into economic-development programs in the region.

“I can’t comment on anything in particular,” McGuire said Wednesday, quickly adding, “It’s always our company’s policy to cooperate fully with any government inquiry.”

McGuire also sought to address questions raised in news reports about donations by Buffalo Billion recipients to Cuomo. He said his firm was “happy to support” Cuomo with political donations but that the flow of campaign dollars had nothing to do with winning one of the awards for the Buffalo redevelopment efforts.

In early 2014, Cuomo announced that McGuire’s company had been selected to handle real estate-related work associated with bringing IBM – and potentially other companies in the future – into a technology hub facility in a portion of the downtown Key Center tower.

McGuire acknowledged that his company made political donations to Cuomo, but that the money came after the Buffalo Billion contract was awarded. Additionally, he said political donations to a Democratic governor from his family are not unusual, given the long association of his father, Frank J. McGuire, as a leading state and national fundraiser for the Democratic Party. Frank McGuire was also a top political ally from Western New York to the late Gov. Mario M. Cuomo, the current governor’s father.

State Board of Elections records show that McGuire Development Co. LLC donated $500 to Andrew Cuomo’s gubernatorial campaign committee Dec. 27, 2013; $25,000 on May 29, 2014; and $10,000 on Oct. 30, 2014.

On Oct. 15, 2013, Fort Schuyler Management Corp., a Utica-based not-for-profit corporation created by the State University of New York, which has been handling aspects of the Buffalo Billion program, issued a request for proposals, or RFP, for construction, development and other real estate-related services. McGuire Development was sent the RFP, according to state records, on Oct. 28.

McGuire on Wednesday said his firm learned about the RFP’s existence when a News business reporter contacted one of his executives after the bidding document was made public to see whether his firm was going to join the bidding.

“That would infer that we were not involved in the crafting or writing of the RFP,” McGuire said in reference to suggestions in media accounts that the RFP was perhaps drafted in such a way so as to favor certain companies.

“Yes, we did give a political donation. It was months after our selection as a developer, but not inconsistent with our family’s political activities or participation over the decades with the Democratic Party,” McGuire said. “It shouldn’t be viewed as unusual. The governor had reinstilled a level of confidence or hope for the prospects of New York State and we’re happy to support him.”

McGuire said that he did not know the amount of money his firm has received from the Buffalo Billion contract, but that it was “minimal” and his company has essentially been acting as a commercial real estate broker on the IBM office location issue. A memorandum of understanding that McGuire’s company and Fort Schuyler signed March 26, 2014, stated that the sides also agreed to a three-year confidentiality agreement in which various business dealings will be kept secret and shared on a “need to know” basis.

Louis P. Ciminelli, head of a Buffalo-based construction company that is building the Buffalo Billion’s sprawling future manufacturing site for SolarCity at RiverBend in South Buffalo, has declined to comment this week. Oliverio, his attorney, has handled news statements.

Ciminelli has been among Cuomo’s largest donors from Western New York. Along with his wife, Ciminelli has donated $105,000 to both of Cuomo’s gubernatorial campaigns.

Bharara has earned a reputation for targeting corruption in Albany, including his open cases against the Legislature’s former two top leaders – ex-Assembly Speaker Sheldon Silver, d-Manhattan, and ex-Senate Majority Leader Dean G. Skelos, R-Rockville Centre. Both stepped down from their leadership posts earlier this year after Bharara’s office accused them of criminal acts.

Word that Bharara is looking at the Buffalo Billion, which Cuomo has hailed for bringing jobs and construction activity to the region, has rattled power brokers across Western New York. In interviews this week, political insiders either expressed little knowledge of Bharara’s activities or said they were intentionally avoiding attempts to find out any information about the probe.

McGuire is the only executive of a company with a Buffalo Billion contract to directly comment on the matter. Others, including several that bid or expressed initial interest in bidding on the original Buffalo Billion request for proposal in 2013, have not returned calls seeking comment.

Recipients of Bharara’s subpoenas, which seek information about the Buffalo Billion, include SUNY Polytechnic, which is run from Albany by Alain E. Kaloyeros, a politically savvy public higher education official who has lobbied four New York governors in a row to invest mightily in his nanotechnology college a few miles from the State Capitol.

Kaloyeros, whom Cuomo chose for a sizable role in the Buffalo Billion, has declined to comment.

The Buffalo Billion is ultimately overseen by Empire State Development, the state’s main economic-development agency. A spokesman for the agency said that as a mater of policy the agency does not comment about law enforcement inquiries.

“We’ve had no contact whatsoever,” Douglas E. Zimmerman, managing director of Amherst-based Toski & Co., an outside auditor for Empire State Development, said when asked whether there had been any outreach by federal prosecutors to his firm.

Assemblywoman Crystal D. Peoples-Stokes, D-Buffalo, whose district has been a beneficiary of Buffalo Billion spending, said she had no information about Bharara’s investigation.

“I can tell you that the Buffalo Billion commitment has leveraged $5 billion in investments,” she said. “Obviously, if they find something that’s not right, we need to fix that.”