NEW YORK – Prosecutors could rest their Buffalo Billion case Wednesday – a day after a Rochester construction executive testified the bidding process for the Buffalo economic development program was “unusual” and appeared to put contractor LPCiminelli in a “better position” to win the 2014 contract that later included the taxpayer-financed solar plant at RiverBend.
The testimony by Stephen Bills of LeChase Construction, which partnered with Buffalo’s Uniland Development Co. on a losing bid to get the Buffalo Billion contract, came as defense lawyers dropped a surprise on the trial by revealing Tuesday evening – after the jury left for the day – that they might try to compel the testimony of lobbyist Todd Howe.
Howe is the onetime ally of Gov. Andrew M. Cuomo and a key cast member – though not personally present – in the Buffalo Billion corruption trial, as well as the bribery case earlier this year that led to the conviction of Joseph Percoco, once one of Cuomo’s closest personal and political advisers.
Howe, the star prosecution witness in the Percoco case, has pleaded guilty for his roles in both cases.
Howe has been locked up in a federal jail just across the street from the federal courthouse where the Buffalo Billion case has been playing out the past two weeks in a 26th floor courtroom in lower Manhattan, following his arrest in February during the trial for allegedly violating the terms of his cooperation agreement.
One of the defense lawyers said discussions are underway on whether part of Howe’s testimony from the Percoco trial could be read to jurors – to give them a full picture of Howe’s deeds and character that Judge Valerie Caproni has repeatedly called into question. If not, Howe could be called to directly testify.
Before the trial, prosecutors said they would not be calling Howe.
Unlike the Percoco trial, the Buffalo Billion trial – called U.S. v. Kaloyeros et al – is moving at a relatively lightninglike pace.
On Tuesday, prosecution star witness Kevin Schuler wrapped up his testimony that already saw him state on the stand that his former company, LPCiminelli, was “in the driver’s seat” from the very start to win the Buffalo Billion contract, in part, because of what Schuler testified was information LPCiminelli was fed about the procurement process.
The Buffalo Billion deal was awarded by Fort Schuyler Management Corp., a creation of the State University of New York, in 2014, for then-undisclosed development deals on the state’s behalf in Buffalo.
LPCiminelli would go on to build the solar plant at RiverBend, a $750 million investment of public funds.
Bills, the Rochester executive, said he was not surprised when his firm and Uniland lost to LPCiminelli. “I think as part of the process there was another firm better positioned,’’ he said of LPCiminelli.
Louis Ciminelli, the former chairman of LPCiminelli, is on trial with Alain Kaloyeros, the former head of SUNY Polytechnic Institute in Albany, and two Syracuse developers over federal allegations that the bids were rigged for the Buffalo Billion and a central New York deal.
The Rochester executive called the bidding process “unusual” in that it had no set projects in mind and wanted the successful bidder to be headquartered in Buffalo.
Kaloyeros’ lawyer, Michael C. Miller, sought to poke holes in Bills’ testimony, suggesting during questioning there was nothing unusual that the state would want to have a local developer engaged in a Western New York project.
Defense lawyers sought to make their case repeatedly Tuesday that their clients were unaware and not involved in any bid-rigging.
Reid Weingarten, a lawyer for Kaloyeros, got out of Schuler that the nickname within LPCiminelli for Kaloyeros was "AK-47," which was used to describe the tough negotiating style Kaloyeros brought to the negotiating table for a contract with the Buffalo firm that eventually became the plant at RiverBend. Schuler described Kaloyeros as rude enough on the phone that one LPCiminelli executive talked of driving to Albany to have it out with him. Weingarten went through an array of exhibits showing that much of the communications regarding procurement developments came directly from Howe.
Schuler, who spent the equivalent of nearly two days on the stand, left the courthouse midday accompanied by Terrence Connors, a Buffalo lawyer.
Repeatedly, Weingarten asked Schuler if various documents had any connections to Ciminelli. Over and over, Schuler, who worked for Ciminelli for 11 years, said he knew of no such fingerprints. Instead, defense lawyers sought to portray Howe as the person writing many of the emails to LPCiminelli executives or Kaloyeros.
Prosecutors then brought up an email from Kaloyeros to Ciminelli in which the former SUNY leader suggested LPCiminelli use an RFP for a project awarded that year to a Syracuse firm, COR Development, as a template for what LPCiminelli could build upon with ideas for the Buffalo Billion RFP.
“Do you see Todd Howe’s name anywhere on this exhibit?" Matthew Podolsky, one of the federal prosecutors trying the case, asked Schuler.
“No, I do not," Schuler responded.
Schuler is a cooperating witness in the case, having pleaded guilty to his role in the alleged conspiracy over the awarding of one of Cuomo’s signature upstate economic development projects.
At issue is whether the books were cooked, a term used often during the trial, to benefit LPCiminelli by, in part, dissuading some competitors from trying to win the Buffalo Billion deal awarded in 2014 to the Buffalo firm. At first, it meant RFP language seeking contractors with 50 years’ worth of experience in Buffalo – a requirement that officials said was a mistake and was later changed to 15 years – and a requirement that the winning bidder be based in the Buffalo area.
Schuler testified Tuesday that Ciminelli got visibly angry when he heard about the 50-year requirement, because of a concern that it could force a whole reworking of the bidding process.
“Good afternoon Maestro," wrote Ciminelli to Kaloyeros on April 9, 2014, noting that a blackout period for bidders not to be in contact with Fort Schuyler officials had come to an end.
A month later, LPCiminelli learned that the original project for RiverBend – featuring two smaller solar companies – was about to expand with the entry of California-based SolarCity. That company, according to one exhibit, was promising 2,200 jobs and $4 billion in investment in Buffalo.
Kaloyeros emailed Peter Cutler, a longtime Buffalo political and government fixture then working for Cuomo, and told him the good news. Kaloyeros told him to keep it confidential.
“This is huge. Confidential. Congratulations!’’ Cutler wrote to Howe the next day.
Also testifying Tuesday was Mark Balling, whose international firm Lend Lease had once considered being a part of the bid with Uniland and LeChase in competition against LPCiminelli. He called the RFP “vague” in terms of sites, costs and risks for developers.
RoAnn Destito, Cuomo’s Office of General Services commissioner and a former Fort Schuyler board member, testified that she voted for both the Buffalo Billion and Syracuse awards to LPCiminelli and COR, but that she did not review the specific bids. She said she was assured the process was competitively bid.
After LPCiminelli won the Buffalo Billion deal, it later had to negotiate terms for the RiverBend deal. At one point, Kaloyeros complained about LPCiminelli during stalled talks, saying the company was trying to “nitpick” in order to find “every way possible to make more money," according to one exhibit shown to jurors Tuesday. At one point, the negotiations were going badly enough that Schuler said he feared Fort Schuyler was going to drop LPCiminelli in favor of another company that already had dealings with SUNY Polytechnic in Albany.
LPCiminelli got hooked up with Howe and his Albany-based firm, Whiteman Osterman & Hanna, at a time when the Buffalo builder was trying to land a school construction project in Syracuse. It lost out on that deal, Schuler said, because the bidding document was crafted in such a way as to favor a larger national-type firm.
Paul Shechtman, Ciminelli’s lawyer, noted that Buffalo had fallen on hard economic times. “A lot of announcements and not a lot of progress," Schuler responded. He noted as an example stalled efforts for the UB2020 real estate program in Buffalo. The outlook began to brighten, Schuler said, after Ciminelli went to Albany to tour Kaloyeros’ nanotechnology facility at the SUNY school in Albany in May 2013.
The two men bonded over several things, including a love of high-end sports cars. Two months later, Kaloyeros was in Buffalo getting a tour of possible sites for an expansion of high-tech developments, including RiverBend. The sole real estate company on the tour: LPCiminelli.
“At the end of the day, nano was coming to Buffalo?" Shechtman asked Schuler.
“Yes, in some way, shape or form," Schuler said.