Share this article

print logo

Here's what we know about the corruption charges involving the Buffalo Billion

Gov. Andrew Cuomo’s signature upstate economic development endeavor exploded Thursday morning, as U.S. Attorney Preet Bharara unsealed a criminal complaint in a sweeping corruption case that accuses the major Buffalo Billion economic development contract of being tainted by allegations of bid-rigging and bribes.

Charged with various federal corruption counts in different matters, including the Buffalo Billion project, are:

  • Joseph Percoco, one of Cuomo’s longest and closest former advisors
  • SUNY Polytechnic boss Alain Kaloyeros, as well as top officials with one Buffalo Billion general contractor
  • LPCiminelli, including the company’s leader Louis Ciminelli.


What are the allegations involving the Buffalo Billion?

In the alleged wrongdoing involving the Buffalo Billion and Syracuse contracting processes, the complaint states that beginning around 2013 executives with LPCiminelli “conspired” with Howe and Kaloyeros to “defraud” Fort Schuyler, the not-for-profit entity that the state created to oversee the Buffalo Billion project.


State payments for RiverBend, for instance, were approved by Cuomo’s economic development agency and administered through Fort Schuyler, which was closely associated with Kaloyeros, who for several years has been Cuomo’s point person on the major high-tech projects in several upstate cities, including Buffalo. It was Fort Schuyler that tapped LPCiminelli as the lead contractor for the RiverBend project and other future Buffalo Billion initiatives in a process that was heavily criticized in the past as heavily favoring the Buffalo company.

"Secretly" rigging bidding process to favor LPCiminelli

The complaint accuses LPCiminelli executives of paying bribes to Howe in the form of consulting payments; Howe worked both for LPCiminelli and did work for Kaloyeros’s College and the SUNY Research Foundation. Howe was fired earlier this year from his firm, Whiteman, Osterman & Hanna. In exchange for those payments, the complaints alleged, Howe worked with Kaloyeros to “secretly” rig the bidding process to favor LPCiminelli for the Buffalo deal and COR Development for a separate Fort Schuyler project in central New York. Prosecutors say Kaloyeros and Howe “designed the requirements” for the Buffalo bidding process that mislead the board of Fort Schuyler into thinking the process was a fair one.

Kaloyeros told Howe he wanted to hire him to, among other things, help his Albany-based college “in its relationship” with Cuomo’s office; prosecutors say Howe was paid $25,000 per month by the research foundation to serve as a consultant to Kaloyeros’ college and the Fort Schuyler entity.

"Acting as an agent and representative"

Through 2013 and 2014, LPCiminelli also was paying Howe even while “knowing he was acting as an agent and representative” for Kaloyeros’ college, the complaint states. It alleges LPCiminelli hired Howe to use Howe’s “official position for their benefit.’’ It states that about January 2013, as LPCiminelli was seeking large contracts through Cuomo’s Buffalo Billion program, the firm’s Schuler signed a deal on behalf of LPCiminelli with Howe’s lobbying firm to provide “strategic advice and counsel” regarding business initiatives across the state. It specifically stated no lobbying would be conducted. LPCiminelli paid $100,000 a year for Howe’s work.

The complaint states LPCiminelli hired Howe while knowing of his “substantial influence” with Kaloyeros, as well as others connected with the Fort Schuyler group. Around the end of 2012, Howe directly told Ciminelli that he “was acting on behalf of the office of the governor” and Kaloyeros’ college, then known as College of Nanoscale Science and Engineering – which at the time were both looking to do big economic development projects in Buffalo.

Providing emails about timing and method of announcement of Buffalo Billion bidding process

The complaint states Howe illustrated his connected ways by providing emails to LPCiminelli excecutives about the timing and method of the announcement for the bidding process of the Buffalo Billion projects.

"Significant" contributions to governor's campaigns

The complaint notes that executives with LPCiminelli, including Ciminelli himself, along with the Syracuse development firm, “had become significant contributors to the governor’s election campaigns.’’ Prosecutors say that those contributions were “at least in part to develop a relationship with the office of the governor that would help enable the Syracuse developer and the Buffalo developer to obtain state-funded development contracts.’’

The complaint cites such evidence as: Percoco making “specific requests” that LPCiminelli make donations to Cuomo’s campaign.

$175,000 at Buffalo fundraiser for Cuomo "does not work"

Percoco went so far as to email Howe that a commitment by Ciminelli to raise $175,000 at a Buffalo fundraiser “does not work” because Ciminelli had previously promised to bring in more donations. Ultimately, the complaint said, the Ciminelli-hosted fundraiser, held Nov. 19, 2013, raised $250,000, the complaint alleges. The Buffalo News has previously written on that fundraiser, which Cuomo flew to in a private jet, held at the Hyatt Regency, along with a smaller gathering of high roller donors at Bacchus Wine Bar & Restaurant. Two days later, Cuomo was back in Buffalo announcing an initial proposed project for RiverBend.

The sub-headline in one section of the complaint states that Fort Schuyler was “defrauded into awarding state development contracts” for both the Buffalo Billion deal and a Syracuse project.
The complaint alleges LPCiminelli and COR Development was tapped after “each made sizeable contributions” to Cuomo and had begun paying Howe for his “access to the governor and for Howe’s influence” over the request for proposal process that led to the Buffalo Billion award for LPCiminelli.

The complaint states both Kaloyeros and Howe “manipulated” the contract process to prevent the Fort Schuyler board “from receiving or being able to fairly consider competing bids.’’ It noted COR Development was the sole bidder for the central New York deal and LPCiminelli was one of only three for the lucrative Buffalo Billion contract.

Howe, in a 2013 email to Kaloyeros, referred to LPCiminelli and COR Development as “Buffalo and Syracuse friends,’’ and that they qualified as friends due, in part, by their donations to Cuomo.

Tailored RFP process

Howe also said he had the “vitals” about the two developers – which prosecutors say was information that would be used to “tailor” the RFP process to benefit LPCiminelli and COR Development.

The complaint states that the Fort Schuyler board was led to believe it had “no choice” but to select LPCiminelli. It added that an August 2013 email from LPCiminelli’s Laipple to Howe with “our thoughts” for the bidding process. “Selecting based on qualifications not price is important,’’ the email to Howe said. It noted the email included seven bullet points from Laipple “to be used to draft the Buffalo RFP.’’

The complaint noted the RiverBend announcement by Cuomo in November 2013 was more than three months after Howe had forwarded the email to Kaloyeros from Laipple – and that certain details about the project were not shared with any other developer but LPCiminelli.It noted that Howe also shared internal emails sent from a Cuomo aide about the RiverBend project in the late summer of 2013.

A requirement for a business with 50 years experience

Kaloyeros, meanwhile, was going right to the top at LPCimninelli. On Sept. 9, 2013, he sent an email to Ciminelli that was a “draft of the relevant sections” of the upcoming request for proposal that would be issued by Fort Schuyler. “Hopefully this should give you a sense of where we’re going with this … Thoughts?’’ Kaloyeros wrote Ciminelli. Contained was also information by Kaloyeros about wanting only developers with a certain number of years of experience – a way, critics later said, that competitors could be cut out of the bidding. Fort Schuyler later amended that requirement after at least one of the bidders raised a question about mandating experience in the business of at least 50 years.

Interestingly, Schulyer sent Kaloyeros an email at about the same time noting the 50 years’ of experience by Ciminelli’s firm. Prosecutors said the original RFP, which demanded the 50 years of experience, was meant to “further tailor” the bid in LPCiminelli’s behalf.

Two months later, the demand was amended to 15 years’ experience; officials at the time cited a typographical error. Prosecutors said the alleged error came despite a reputation by Kaloyeros to “closely edit” all bidding proposals by Fort Schuyler. Prosecutors dispute that the 50 years’ requirement was an innocent error.

"50 was a bit obxonious"

“Grrrrr,’’ wrote one LPCiminelli executive to Ciminelli and Schuler about the 50-year demand. “50 was a bit obnoxious,’’ Schuler wrote back. He later wrote, following the change to 15 years, that the change “is still pretty good.’’

Howe in the middle of November 2013 wrote to Ciminelli and others at the firm that the RiverBend announcement would be made the following week. “How do they announce the RiverBend site in the middle of this procurement. Site selection is supposedly part of the eval. Now mind you, I don’t think it’s a big deal but it does need to be considered,’’ Schuler wrote. The complaint states Schuler was concerned that Cuomo’s announcement of RiverBend while the overall Buffalo Billion bidding was underway could jeopardize “the improper advantage” LPCiminelli had for the Buffalo Billion deal.

Prosecutors also allege LPCiminelli falsely claimed on its RFP submission that no one was hired to try to influence the awarding of the contract. The complaint states, as previously reported in the Buffalo News, that other firms avoided bidding on the Buffalo Billion project out of a concern that the bid appeared to be written “to provide an advantage” to one company.
Calls and emails to a lawyer for Percoco, Kaloyeros and Schuler, who serves as a spokesman for LPCiminelli, were not returned.

Bharara has scheduled a noon press conference in Manhattan to provide more details about the case against the case that, at this point, involves nine individuals.



There are no comments - be the first to comment