NEW YORK (AP modified) — A former top aide to Democratic Gov. Andrew Cuomo was among eight people charged Thursday in a bribery and fraud case that threatened to tarnish Cuomo’s efforts to revitalize the upstate economy and the reputation of a governor who until now had been spared from a federal prosecutor’s public corruption crusade.
See U.S. Attorney Preet Bharara announce the charges in the video below:
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Joseph Percoco, Cuomo’s former executive deputy secretary and one of his most loyal advisers, was named in a criminal complaint filed in Manhattan federal court. Percoco also worked for the Cuomo’s father, Gov. Mario Cuomo. At the former governor’s funeral last year, Andrew Cuomo called Percoco “my father’s third son who sometimes I think he loved the most.” Percoco’s lawyer wasn’t initially available for comment.
Gov. Cuomo released a statement following Bharara’s conference.
“I learned this morning of the charges filed by the U.S. Attorney’s office that include a former member of my administration. If the allegations are true, I am saddened and profoundly disappointed. 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. Like my father before me, I believe public integrity is paramount. This sort of breach, if true, should be and will be punished.
SUNY has rightly relieved Alain Kaloyeros from his duties and has suspended him without pay, effective immediately.
This matter is now in the hands of the court, which is exactly where it belongs. My administration will continue to be fully cooperative in the matter as we have been since it began.”
The federal probe revealed a web of individuals and businesses tied to Cuomo that were poised to profit from the Buffalo Billion as well as Nano, an initiative effectively led by Alain Kaloyeros, president of SUNY Polytechnic Institute. Kaloyeros who was also named in the federal complaint. Kaloyeros wasn’t immediately available for comment.
U.S. Attorney for New York’s Southern District, Preet Bharara said the “…complaint shines a light on yet another sordid side of the show me the money culture that has so plagued government in Albany. Companies got rich and the public got bamboozled. This is big time stuff that goes to the core of how I think state government operates and it’s distressing and concerning.”
According to the federal complaint, Percoco took more than $315,000 in bribes from 2012 through 2016 from Syracuse-based COR Development and Competitive Power Ventures, an energy company looking to build a power plant in the Hudson Valley. Todd Howe, a consultant for the two companies and former Cuomo associate, set up bank accounts and a shell company to funnel bribes, including payments to Percoco’s wife, the complaint said.
Howe pleaded guilty to several federal charges, including conspiracy to commit fraud, extortion, bribery and wire and tax fraud. His attorney, Richard Morvillo, said Howe “has accepted responsibility for his actions and will testify truthfully if called upon.”
Regarding the Buffalo Billion, prosecutors claim LPCiminelli executives were paying Howe $100,000 a year for help getting state contracts. At the same time, Howe was acting on behalf of the governor. Bharara says the arrangement allowed Ciminelli to avoid the competitive bidding process and get sole access to the Buffalo Billion.
Percoco resigned as Cuomo’s executive deputy in 2014 to lead Cuomo’s re-election campaign. He rejoined the administration in late 2014, then quit a second time in January to become a vice president at Madison Square Garden.
Cuomo’s office said in April that Bharara was examining possible undisclosed conflicts of interest and improper bidding. The administration launched an internal review, and Cuomo promised to “throw the book” at anyone found to be violating the law.
According to state financial disclosures, Percoco also made as much as $125,000 by becoming a consultant for COR Development and CHA Consulting, two firms involved in Buffalo Billion and Nano. The firms are also big Cuomo political donors.
Cuomo said Percoco told him he might take consulting clients. But he never asked Percoco to identify them.
Peter Galbraith Kelly, an executive at Competitive Power Ventures, is accused in the complaint of conspiracy and paying bribes to Percoco. The company, based in Braintree, Massachusetts, didn’t immediately reply to inquiries.
Authorities accused Percoco of conspiring with Kaloyeros and Howe to rig bidding in the Buffalo Billion project and deceive Fort Schuyler, the state-funded entity awarding the lucrative contracts, so they would go to COR Development and Buffalo contractor LPCiminelli. They said Kaloyeros, who oversaw the application process for many of the state grants, retained Howe to help him, and Howe in turn solicited and received bribes.
“Howe worked with Kaloyeros to deceive Fort Schuyler by secretly tailoring the required qualifications for those development deals” so COR and LPCiminelli would win the contracts “without any meaningful competition,” the complaint said.
Also charged in the complaint are two executives at COR Development — Steven Aiello and Joseph Girardi — and three executives at LPCiminelli: Michael Laipple, Kevin Schuler and CEO Louis Ciminelli.
LP Ciminelli released a statement Thursday afternoon.
“We are confident that all company officials acted appropriately and legally. When given the opportunity to fully respond to these charges, we are confident everyone will be vindictated. The company will have no further comment at this time,” they said.