Ex-Cuomo Aide, 8 Others Charged in Corruption Scheme by U.S.

(Bloomberg) -- A former top aide to New York Governor Andrew M. Cuomo was charged with extortion and soliciting bribes in a wide-ranging case that federal prosecutors said involves hundreds of millions of dollars in state contracts.

Joseph Percoco, who was Cuomo’s executive deputy secretary, and seven others were charged in a complaint released on Thursday. Other defendants include Alain Kaloyeros, the president of the State University of New York Polytechnic Institute in Albany, and Louis Ciminelli, a former chairman of the New York Power Authority and the chief executive officer of the construction firm LPCiminelli. A ninth man was charged separately.

“Today’s charges shine a light on yet another sordid side of the show-me-the-money culture that has plagued state government in Albany,” Manhattan U.S. Attorney Preet Bharara told reporters. He added that “there are no allegations of wrongdoing or misconduct by the governor.”

New York Attorney General Eric Schneiderman later announced the filing of charges against Kaloyeros and real estate developer Joseph Nicolla. Prosecutors accuse Kaloyeros of steering contracts to “handpicked companies” including Nicolla’s Columbia Development Corp. Nicolla isn’t named named in the U.S. case.

In a statement, Cuomo said that any official who committed a crime should be punished, and he said his office would cooperate with U.S. prosecutors. “If the allegations are true, I am saddened and profoundly disappointed,” the governor said. “I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard.”

Schneiderman said the charges filed by his office “outline a blatant and brazen abuse of taxpayer dollars and the public trust.”

Six Charges

Percoco, now a senior vice president at the Madison Square Garden Co., faces six charges in the U.S.’s unsealed criminal complaint, including accusations that he used his government position from 2012 to 2016 to demand that companies with business before the state make payments to him and, in at least one instance, his wife, in exchange for unspecified official actions. Percoco’s wife isn’t charged in the case.

Percoco’s lawyer, Barry Bohrer, rejected the accusations in an e-mailed statement, calling them “an overreach of classic proportions” and saying they were based on a source that is not credible. Bohrer said his client would plead not guilty.

Kaloyeros has been suspended without pay, Cuomo said in his statement. Kaloyeros faces a single wire-fraud conspiracy count. His attorney, Mike Miller, didn’t respond to a phone message seeking comment on the allegations. The SUNY school president, who calls himself “Dr. Nano,” oversees a network of research facilities and corporate partnerships aimed at turning the state into a hub for nanotechnology.

Todd Howe, the man charged separately, is a longtime adviser to Cuomo. He has pleaded guilty to conspiracy charges, Bharara said.

Howe’s lawyer, Richard Morvillo, said that his client was cooperating with authorities. “Mr. Howe has accepted responsibility for his actions and will testify truthfully if called upon,” Morvillo said.

Power Plant

According to the complaint, Competitive Power Ventures Holdings LLC paid more than $287,000 in bribes to Percoco and his wife in exchange for official help in winning a state contract worth more than $100 million, which was to be used to finance a nearly $1 billion power plant in Wawayanda, New York. The company also sought Percoco’s help in obtaining millions of dollars in credits for a power plant it was building in New Jersey, prosecutors said.

Meanwhile, executives at COR Development Co. LLC arranged for Percoco to receive $35,000 in bribes in exchange for help in reversing a decision by a state economic development agency, getting the state to pay overdue bills to the company and getting a raise for an executive’s son who worked for Percoco.

Other charges involve Cuomo’s “Buffalo Billion” economic development plan for upstate New York, which authorities allege devolved into a morass of bribery, corruption and fraud. This involved payments to tailor state contracts to fit the bids of the companies seeking the awards, including applications by COR Development and LPCiminelli, prosecutors said.

SolarCity Plant

Ciminelli’s company won a $1.7 billion bid to build a factory and other facilities on the site of a former steel facility in Buffalo that will be occupied by Elon Musk’s SolarCity Corp. Luring the nation’s largest installer of rooftop solar panels to western New York was a key facet of the governor’s plan to reverse the region’s economic decline.

Under the terms of the deal, the state is to own and equip the $900 million factory, with $500 million of the money coming from the Buffalo Billion program. SolarCity has agreed to lease the facility for $1 a year for 10 years, and is expected to create more than 3,000 jobs in the area.

Ciminelli’s lawyer, Daniel Oliverio of Buffalo, New York, didn’t reply to a phone message seeking comment.

According to the New York attorney general, Kaloyeros awarded a SUNY Polytechnic student housing development contract to Nicolla’s company after sharing with him information from a rival business along with project specifications.

“That’s absolute nonsense,” said Nicolla’s lawyer, E. Stewart Jones of Albany. He accused the attorney general’s office of allowing itself to be “stampeded” into filing charges by Bharara before it had completed its investigation. Jones said his client will answer the charges with a plea of not guilty.

The first case is U.S. v. Percoco, 16-mj-6005, U.S. District Court, Southern District of New York (Manhattan). The other case is U.S. v. Howe, 16-cr-632, U.S. District Court, Southern District of New York (Manhattan). The attorney general’s case is People v. Kaloyeros, Albany City Court, Albany County, New York.