Updated with details from the charges filed by the state Attorney General's office.
As you've probably heard by now, the office of US Attorney Preet Bharara announced public corruption charges against a group of people that includes Joe Percoco, a former top Andrew Cuomo aide, and Alain Kaloyeros, the head of SUNY Poly.
The charges cover allegations that broadly fall into two overlapping categories -- one focused on allegations that Percoco traded his influence inside in the Cuomo admin for bribes (or "ziti" as the money was allegedly referred to), and the other on allegations that Kaloyeros and Todd Howe, another longtime associate of the Cuomos, rigged the application process for large construction projects in Buffalo and Syracuse.
Bharara emphasized Thursday that the complaint includes no allegations against Andrew Cuomo.
The allegations against Kaloyeros are, of course, of great interest in this area because of the huge presence of the College of Nanoscale Science and Engineering. So let's look at some of the bits related to those accusations.
The players in the SUNY Poly allegations
Here's the alleged cast of characters:
President of SUNY Poly. You know him.
He had been working for a law firm doing government relations work and was being paid by developers. He had also been working for SUNY Poly. (The federal complaint alleges that Kaloyeros had hired Howe to help him maintain his status with the Cuomo admin.) On Thursday in a press conference, Preet Bharara called Howe's working for both sides "an inherently corrupt arrangement."
Howe's ties to the Cuomo family stretch back to Mario Cuomo's administration. (In fact, he hired Joe Percoco back in the day.) He has already pleaded guilty to a group of charges and has been cooperating with the feds.
Developers in Syracuse and Buffalo
Specifically, Steven Aiello and Joseph Gerardi, co-founders of COR Development Co. in Syracuse -- COR built two SUNY Poly-related projects in the Syracuse area, that (largely empty) film hub and a manufacturing facility. And Louis Ciminelli, Michael Laipple, and Kevin Schuler of LPCiminelli -- the company building the massive Solar City factory in Buffalo as part of the Buffalo Billion.
What's alleged, very quickly
Here's the allegation, condensed into one sentence: The feds say that Alain Kaloyeros and Todd Howe, a longtime Cuomo associate who was working for both developers and SUNY Poly, collaborated with developers in Syracuse and Buffalo to rig the bidding process for major projects so the process would favor specific developers.
What's alleged, somewhat longer
And the allegation at greater length: The feds say that Kaloyeros and Howe collaborated to write the requests for proposals for projects in Syracuse and Buffalo administered by the Fort Schulyer Management Corporation -- the SUNY Poly real estate and development arm that handled projects outside the Albany area -- so that the specifications would be tailored for developers that had contributed to Andrew Cuomo's campaign fund. In the language of the complaint, Fort Schuyler was "defrauded" by these actions because it was deprived of a fair and competitive bidding process.
From the federal complaint:
68. As part of this scheme, the Syracuse Developer and the Buffalo Developer paid bribes to Howe, which were purported to be "consultancy" payments and bonuses but which were in fact payments for Howe's actions in his capacity as an agent and representative of CNSE and the Research Foundation who had, along with ALAIN KALOYEROS, a/k/a "Dr. K," the defendant, substantial control over Fort Schuyler's State-funded development projects. In exchange for the payments to Howe, and as described more fully below, Howe worked with KALOYEROS to defraud Fort Schuyler by secretly rigging the bids for large development deals so that they went to the Syracuse Developer and the Buffalo Developer, while falsely representing to Fort Schuyler that the bidding process was fair, open, and competitive. In particular, as set forth below, (a) KALOYEROS caused Fort Schuyler to issue purportedly competitive requests for proposals ("RFPs") for companies to be named preferred deelopers for CNSE in Buffalo and Syracuse, where CNSE intended to undertake significant development projects paid for under the Buffalo Billion initiative and other state development programs; (b) KALOYEROS and Howe secretly tailored the RFPs so that the RFPs requested qualifications held by the Syracuse Developer and the Buffalo Developer. For his part in the scheme, KALOYEROS was able to maintain his leadership position and substantial salary at CNSE and garner support from the Office of the Governor for projects important to him, including the creation of SUNY Poly.
To support the allegations, the federal complaint cites email exchanges involving Kaloyeros, Howe, and the developers that it alleges indicate conversations about how to tailor the RFPs. These emails also point to the players understanding they should be trying not to make what they were doing obvious. (Example: The complaint alleges a note written on a section of the draft for the Syracuse RFP that focused on specific software systems included the phrase "too telegraphed?")
And the complaint alleges that Kaloyeros recused himself from the Fort Schuyler board vote about the projects in order to further distance himself from the alleged setup:
I believe KALOYEROS did so in order to continue to deceive the other members of the Fort Schuyler Board of Directors into believing that the bidding process was fair, open, and competitive, when in fact KALOYEROS had manipulated the process so that the Syracuse Developer and the Buffalo Developer would be chosen regardless of whether KALOYEROS was involved in the voting.
During the Thursday press conference, Bharara called the alleged request tailoring as "just another way to corruptly award cronies willing to pay to play."
The specific charge against Kaloyeros is wire fraud conspiracy.
More charges, this time for projects in Albany
Thursday afternoon, the state Attorney General's office announced charges against Kaloyeros and Joseph Nicolla, the president of Columbia Development. From the press release:
According to the felony complaint, Kaloyeros, a government official, engaged in an ongoing scheme to direct the contracts for government financed projects to favored companies, including Nicolla's company, Columbia Development. Rather than use a fair and competitive process to award contracts, Kaloyeros allegedly improperly used the Request for Proposal process to award certain contracts for the construction of facilities for SUNY Poly.
They've been charged with "Combination in Restraint of Trade and Competition" -- three felony counts for Kaloyeros, and one for Nicolla. Here's the complaint.
The complaint alleges Kaloyeros was involved with three separate schemes. The one allegedly involving Columbia Development was for a proposed SUNY Poly student housing project. (Columbia had acquired land near the CNSE campus on what was then called Loughlin Street.) And the complaint alleges that Kaloyeros and Columbia colluded to set up the RFP to favor Columbia. The outline of the alleged scheme is similar to ones alleged in the federal charges.
(There have been rumblings about this for months. When the Business Review reached out to other developers to find out why they didn't bid on the student housing project, one anonymous developer said "We thought someone had an inside track" -- because the request was so specific.)
The other two alleged schemes included hiring of firm for the construction of a nanofab building, and an arrangement with an architecture firm that had taken space on the CNSE campus.
The federal complaint
Here's the federal complaint against Percoco, Kaloyeros, and others:
State Attorney General's complaint
Some of the extensive coverage of the charges:
We'd really like you to take part in the conversation here at All Over Albany. But we do have a few rules here. Don't worry, they're easy. The first: be kind. The second: treat everyone else with the same respect you'd like to see in return. Cool? Great, post away. Comments are moderated so it might take a little while for your comment to show up. Thanks for being patient.