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'A case about lying and cheating': Buffalo Billion trial begins with opening statements

'A case about lying and cheating': Buffalo Billion trial begins with opening statements

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Alain Kaloyeros, right, former president of the SUNY Polytechnic Institute, walking into federal court in Manhattan in June. (Phil Fairbanks/Buffalo News)

NEW YORK – On a summer day five years ago, Andrew Kennedy was in the midst of touring potential sites for a new solar manufacturing plant in Buffalo when an unexpected visitor arrived.

It was Louis Ciminelli, said Kennedy, one of the state's top economic development officials at the time.

Even though plans for the solar plant were still private and confidential, Kennedy told a jury Monday that Ciminelli joined the tour and rode with Alain Kaloyeros, the state official heading up the Buffalo Billion, the taxpayer-funded initiative that helped finance the manufacturing facility.

When asked if Kaloyeros ever expressed a preference for who should win the project, he said, "Yes, Ciminelli."

Kennedy, now executive director of the Center for Economic Growth, an Albany-based nonprofit organization, was one of the first witnesses to testify in the long-awaited trial of Ciminelli, Kaloyeros and two others.

At the core of the criminal prosecution is the allegation that Ciminelli and Kaloyeros – one of Gov. Andrew M. Cuomo's top advisers at the time – engaged in a secret, behind-the-scenes scheme to ensure LPCiminelli won the $750 million RiverBend project.

As part of a scheme to rig the bidding process, the two men insured that the state's request for proposals were drafted in such a way as to favor the construction and general contracting company Ciminelli owned at the time.

"This is a case about lying and cheating," Assistant U.S. Attorney David Zhou told the jury.

The trial, which is being watched as closely in Albany as it is in Buffalo and Manhattan, will cast a spotlight on the Buffalo Billion program and the allegations that Ciminelli, a prominent business and community leader, was willing to trade on his political ties to Cuomo in order to win taxpayer-funded projects such as RiverBend.

Ciminelli's lawyer countered by suggesting his client did nothing wrong and, in fact, his only motivation was growing his company and improving Buffalo's economy.

"Lou Ciminelli is not running from this fight," said defense lawyer Paul Shechtman. "It's not in his nature to run. He's here to regain his good name."

Shechtman, in his opening statement, said Ciminelli did nothing to influence the state's request for proposals and suggested that prosecution witnesses involved in the developer selection process will verify his innocence.

"Not one of those witnesses, not one, has evidence that Lou Ciminelli rigged the Buffalo RFP," he told the jury.

The RiverBend project in South Buffalo is an 88-acre facility that received more than $750 million in state resources that houses Tesla's gigafactory.

From the day of his arrest nearly two years ago, Ciminelli has maintained his innocence.

With the jury gathered together for the first time, lawyers on both sides provided a blueprint of how they think the case will unfold over the next four weeks.

Early on, prosecutors revealed that former LPCiminelli executive Kevin Schuler will testify against his former boss and provide the jury a front row seat to the alleged scheme.

Schuler, as part of a plea deal with prosecutors, admitted his role in the fraud earlier this year and agreed to cooperate with the U.S. Attorney's Office.

"He'll give you an inside view," Zhou told the jurors. "You'll learn the fraud paid off in spades."

Prosecutors say Cuomo picked Kaloyeros, who was head of the SUNY Polytechnic Institute, to oversee the Buffalo Billion, and that Kaloyeros was eager to please the governor. Cuomo is not accused of any wrongdoing.

"You'll learn Kaloyeros decided the rules didn't apply to him," Zhou said Monday.

Kaloyeros claims his goal was not to cheat taxpayers, but to create long-term, positive relationships with developers such as Ciminelli with an eye toward streamlining the developer selection process.

One of his lawyers also challenged the prosecution's contention that Kaloyeros wanted to please Cuomo and said of the claim, "We'll blow that up to the smithereens. He was a hero in Albany. He was the most valuable property in the SUNY world."

Over the course of the next few weeks, prosecutors may point to Ciminelli’s political donations to Cuomo as evidence of his motivation to win state contracts such as RiverBend.

Zhou, during a recent hearing before U.S. District Judge Valerie Caproni, said the donations were also part of the state's "motivation for rigging the bid” in favor of LPCiminelli.

The criminal case against Ciminelli, Kaloyeros and the two others is far different than the one the government first unveiled in a grand jury indictment accusing them of bid-rigging and bribery.

Prosecutors eventually dropped the bribery charges and, in a surprise announcement just two weeks before the trial, dismissed all charges against Michael Laipple, another former LPCiminelli executive.

The Schuler and Laipple developments mean Ciminelli is the only Western New York defendant on trial in the Buffalo Billion case.

Schuler’s plea deal also came as prosecutors cut ties with Todd Howe, a former Washington lobbyist and another key witness. Howe, who has already admitted guilt for his role in the projects, testified during an earlier trial but was arrested when he violated the terms of his plea deal.

"Todd Howe, by their own admission, is the most important witness in this case. And they're not calling him," said defense lawyer Stephen Coffey.

Coffey represents one of Ciminelli's co-defendants, an executive with COR Development of Syracuse. Two company officials, Steven Aiello and Joseph Gerardi, also face bid-rigging charges.

For Cuomo, the trial begins as he embarks on a re-election campaign for a third term. He is already facing criticism from the opposition – Democratic activist Cynthia Nixon and Republican Marc Molinaro – regarding his ties to the defendants in the Buffalo Billion case and Joseph Percoco, a longtime Cuomo aide who was convicted of bribery in an earlier trial.

Molinaro showed up Monday outside the courthouse in Manhattan and said the public corruption case is evidence of the need to "follow the money."

One of Cuomo's Democratic opponents in the 2014 gubernatorial race, Zephyr Teachout, who is running for state attorney general, also appeared outside the courthouse and declared herself an anti-corruption candidate.

Analysis: Ex-Syracuse mayor piggybacks on Buffalo Billion trial in Cuomo challenge

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