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No federal crime found in Cuomo’s shutdown of the Moreland Commission

ALBANY – U.S. Attorney Preet Bharara says there is “insufficient evidence” to prove that anyone in the Cuomo administration, including the governor, committed any federal crimes in the operation and 2014 shutdown of a state anti-corruption commission.

Bharara, U.S. attorney for the Manhattan-based Southern District of New York, issued a rare public statement Monday afternoon that appears to effectively end his office’s probe of the Cuomo administration and its handling of the Moreland Commission on Public Corruption.

However, the brief statement by Bharara made no mention of the status of his office’s probe of the Buffalo Billion economic development program. His office issued several subpoenas last summer to at least two state agencies, including the governor’s economic-development department, and two Buffalo companies as part of an investigation into the Buffalo Billion contracts and campaign contributions.

Word of the statement by Bharara essentially ending a probe that has been underway for more than year spread quickly through the State Capitol on Monday, two days before Gov. Andrew M. Cuomo is to give his annual State of the State address.

“After a thorough investigation of interference with the operation of the Moreland Commission and its premature closing, this office has concluded that, absent any additional proof that may develop, there is insufficient evidence to prove a federal crime,” Bharara said in a statement.

But in the statement’s second sentence, Bharara made clear that his office is still looking into possible corruption cases in Albany that may have been a part of the Moreland Commission’s own probe before Cuomo abruptly shut it down in 2014. The commission had a number of open investigations when Cuomo shut it down, including probes into the financial activities of lawmakers.

“We continue to have active investigations related to substantive inquiries that were being conducted by the Moreland Commission at the time of its closure,” Bharara said.

A Manhattan criminal defense lawyer who served as counsel for the governor’s Executive Chamber during the Moreland probe released his own brief statement just 20 minutes after the comments by Bharara were emailed to reporters.

“We were always confident there was no illegality here, and we appreciate the U.S. Attorney clarifying this for the public record,” said Elkan Abramowitz.

Cuomo created the Moreland Commission in 2013 to investigate corruption in Albany after state lawmakers refused to go along with ethics-related changes he wanted passed in that session. The following spring, after what some watchdog groups said were relatively weak changes in ethics laws, Cuomo closed the commission.

Bharara then immediately demanded the records of the Moreland panel. He criticized the early demise the commission and, at one point, issued a letter warning against any contacts by the Cuomo administration with members of the closed panel.

Bharara’s office has not commented on its Buffalo Billion investigation. Last summer or late spring, subpoenas were sent to Cuomo’s Empire State Development Corp., the State University of New York Polytechnic Institute, as well as to Buffalo contractor LPCiminelli and real estate firm McGuire Development.

Critics, who have spoken on condition of anonymity, have said the state conducted a vague bidding process that ended up with the two Buffalo firms being selected to handle Buffalo Billion construction and real estate contracts. The state has defended the process, saying that it was not out of the ordinary for request-for-proposal processes and that it had made clear it wanted Buffalo-based firms that had flexibility and ability to move quickly on Buffalo Billion-related projects as they came up.

State Republican Chairman Edward F. Cox sought to focus on what Bharara did not say in his statement, pointing out that the prosecutor left the door open if further evidence developed. “In addition, the statement does not apply to the governor’s Buffalo Billion program and sole-sourced contracting to his wealthy donors,” Cox said.

The statement by Bharara on Monday was a legal victory for Cuomo and his administration, and the timing was especially fortunate: just hours ahead of Cuomo’s high-profile State of the State speech and the release of his 2016 budget plan to legislators at a Wednesday afternoon event in a convention center near the Capitol.

Democrats saw the statement by Bharara, a former counsel to Sen. Charles Schumer, D-N.Y., as good news for Cuomo. “We respect the decision of the U.S. Attorney and I guess we can now start focusing on the business of the people,”’ said Assembly Speaker Carl E. Heastie, D-Bronx.

Heastie said the Bharara probe has been “hanging out there” and that the statement effectively ending the Moreland investigation allows Cuomo to “move on.”

Over the months, allegations were made in various media reports that the Cuomo administration sought to steer the Moreland Commission away from certain investigations. There were also questions raised about the timing of Cuomo’s decision to close the panel in 2014 – just as the group, which included current or former prosecutors as members, was in the midst of a number of investigations of possible corruption in Albany.

Bharara has criticized what he termed the premature shutdown of the Moreland Commission while it was still actively looking into corruption at the Capitol. In July 2014, several commission members released letters defending the Cuomo administration’s handling of the Moreland panel and its work. That led to a warning by Bharara, whose office was in the midst of investigating questions about possible interference in the panel’s work and the way in which it was shuttered. Bharara warned about commissioners being asked to issue public comments and raised the possibility of problems over witness tampering or obstruction of justice if it did not stop.

On Monday, the governor did not comment beyond the statement issued by his administration’s criminal-defense lawyer. Cuomo did appear on a radio program hosted by the Rev. Al Sharpton, but he was not asked about Bharara’s statement.

Some Republicans were quick to pounce. Westchester County Executive Rob Astorino, who lost to Cuomo in the 2014 election, and is said to be weighing another gubernatorial run in 2018, was unmoved by Bharara’s announcement.

“The fact that insufficient evidence of federal crimes was available to indict Mr. Cuomo of obstruction of justice is not the same as finding him innocent,” Astorino said. He called for the appointment of an independent prosecutor to determine whether any state crimes were committed.

“The likelihood that state laws were broken was always the greater possibility,” Astorino said.

The statement by Bharara also comes as Cuomo is expected to make the problems of Albany’s corruption part of his State of the State address. Cuomo and lawmakers are under pressure by watchdog groups to embrace stronger ethics and campaign finance provisions in an effort to restore the public’s trust in the Capitol, which was battered last year by the dual corruption convictions – won by Bharara – of former Assembly Speaker Sheldon Silver, D-Manhattan, and former Senate Majority Leader Dean G. Skelos, R-Rockville Centre.