ALBANY — Jurors in the Buffalo Billion trial over the past month heard a lot about the inner workings of their state government in Albany, a system that one defense attorney described as “unsavory.”
When it came time to deliver their verdict, the jurors had another word for what they heard: criminal.
They didn’t like the stories, or more precisely the bid-rigging crimes they determined Thursday were committed by four men: once-mighty Buffalo businessman Louis Ciminelli, former SUNY Polytechnic Institute head Alain Kaloyeros and two Syracuse developers. Their scheme involved more than $850 million worth of some of Gov. Andrew M. Cuomo’s signature economic development projects in upstate.
Now, besides how long the four convicted felons might serve in prison, questions remain: What impact might this and the other big corruption trial earlier this year have on Cuomo’s re-election campaign? And when, if ever, will Albany move to clean up what a stream of official misconduct cases have identified as shortcomings in the operations of government?
It was a matter of minutes for Cuomo’s political opponents to jump in on the guilty verdicts.
“This is an indictment of the Cuomo administration," Marc Molinaro, the Republican Party challenger to Cuomo in the fall general election, said in an interview.
The governor, Molinaro said, “has enabled, empowered and emboldened individuals to bend the rules, to rig the system and to cheat taxpayers." Molinaro, the Dutchess County Executive, added: “When is enough enough? I think it’s now."
Cynthia Nixon, the activist challenging Cuomo in a Democratic Party primary this fall, highlighted the governor's penchant for hands-on governing. To that end, Nixon questioned how Cuomo did not know what was taking place with both the Buffalo Billion affair and the earlier bribery case involving his onetime aide, Joseph Percoco, who was found guilty earlier this spring in a trial that was once legally linked to the Buffalo Billion case.
“But if the governor truly didn’t know what his top aide and highest-paid state employee were doing," Nixon said of Percoco and Kaloyeros, “that’s arguably even worse. Andrew Cuomo is either corrupt or he’s spectacularly incompetent. Either way, the facts from the trials of Joe Percoco and Alain Kaloyeros lead to only one conclusion: We can’t clean up Albany until we clean out the governor’s mansion."
The verdict came a few hours after Nixon’s campaign dropped off more than 65,000 signatures from registered Democrats she says want to see her in a party primary this September against Cuomo.
The timing of the 2018 trials has been especially sour for Cuomo, who is in full re-election campaign mode.
Thursday’s verdicts come four months after Percoco was found guilty in a separate bribery case involving allegations he helped companies with business before the Cuomo administration in return for enriching himself.
U.S. District Court Judge Valerie Caproni, who presided over the Buffalo Billion trial that began June 18, earlier this week delayed Percoco’s sentencing until Aug. 10 — a month before Cuomo is due to square off against Nixon.
About the only good news that came out of the trial for Cuomo is that prosecutors dropped efforts to introduce evidence about major and timely donations to his campaign by Ciminelli and a Syracuse developer, Steve Aiello, also was convicted of charges related to a bid-rigging scheme involving a central New York project.
Prosecutors had called information about the donations made by Ciminelli and Aiello "critical parts of their relationships with both co-conspirators and the Office of the Governor."
One of the bits of evidence prosecutors said they were going to bring, but didn’t, included details about a fundraiser Ciminelli hosted at his home for Cuomo. The governor came away with $250,000 from the event, as Ciminelli was seeking to become the preferred developer of the Buffalo Billion program. That contract, which Ciminelli won, would later go on to feature the $750 million deal his company landed to build the solar manufacturing plant at Buffalo’s RiverBend site.
Cuomo was not accused by prosecutors of wrongdoing in either trial. But his name and office came up regularly.
One such anecdote involved the connection between Kaloyeros, who was afraid of losing his job, and the now-disgraced former lobbyist Todd Howe, who pleaded guilty to eight felonies related to the Buffalo Billion and Percoco trials. Howe promoted Kaloyeros with a once-skeptical Cuomo, helped shepherd through key points of the Buffalo Billion project and was the eyes and ears of the governor’s office for what was taking place in Buffalo as well as at Kaloyeros’ SUNY Polytechnic Institute shop.
Prosecutors, though, said Kaloyeros and Howe helped “cook” the books in order to help LPCiminelli win the Buffalo Billion contract. That included showing advance copies of the request for proposal for the bidding in 2013 and having language make it into the initial RFP that favored the Buffalo general contracting firm.
One of the major requirements — later dropped — was that bidders have 50 years’ worth of experience in the kind of work the state was looking to do in Buffalo. Robert L. Boone, one of the prosecution lawyers, called it “one of the key pieces of evidence” that the RFP was rigged.
Michael C. Miller, Kaloyeros’ lawyer, told jurors that his client broke no laws, in part, because the entity that awarded the deal to LPCiminelli — a private, not-for-profit corporation created by the state university system called Fort Schuyler Management Corp. — was not required to follow state procurement rules. Fort Schuyler, he noted, was designed specifically to operate “outside of the red tape of the New York State system,’’ Miller said.
“We could have a philosophical debate about whether that is the way a state should be running its economic development programs, but that’s the reality that Alain Kaloyeros was operating in," Miller told jurors on Monday.
Both trials shone a light onto the workings of state government that normally takes place far outside what is presented to the public. Milton Williams, in defending his client, Joseph Gerardi, said the Syracuse developer turned to Howe, whose ties to Cuomo and his family went back decades, for help weaving through Albany.
Gerardi, he said, “signed up for something that I’ll just characterize, for lack of a better phrase or word, as the magic phone call game," Williams said. He defined that as Albany’s revolving door system where former senior administration and legislative officials leave state service with "lots of favors in the favor bank that are owed to him."
Such people often end up in a law or lobbying firm, Williams noted, and are turned to by clients for their ability to open doors with often a single phone call. "And that’s how the game works,’" Williams said.
"So, maybe the system should change. That’s through legislation, that’s not through criminal prosecution," Williams said.
Gary Loeffert, Special Agent in Charge of the FBI's Buffalo Office, said years of investigative work by the FBI in Buffalo and in New York State have "changed the way business is done."
"It is the expectation of the public that officials represent the people when they enter office and not their personal interests."
Watchdog groups, however, say the system still needs more work, even following more than a decade's worth of corruption cases in the executive and legislative branches. The groups have tried and failed to get new oversight laws, such as restoration of powers stripped from the state comptroller’s office to pre-approve certain contracts, such as the ones awarded for the Buffalo Billion deals.
Blair Horner, executive director of the New York Public Interest Research Group, said the convictions Thursday "underscore the huge corruption risks that continue to plague Albany." He singled out Cuomo and lawmakers for failing to address the problems.
"New Yorkers deserve better," Horner said.
A longtime critic of both Ciminelli and Cuomo praised the jury's verdicts.
"We've seen in Ciminelli's case, greed took over in his life. You'd have to be a fool not to connect the dots back to Cuomo,'' said Buffalo businessman Carl Paladino, who unsuccessfully ran against Cuomo for governor in 2010. Paladino added that "there's always going to be someone who wants to do a shortcut and develops a relationship with crooked politicians. This is just the tip of the iceberg for a guy like Cuomo.''