Federal prosecutors in Manhattan have announced charges against two former aides to Gov. Andrew M. Cuomo and others in a corruption probe of upstate development projects.
Among nine defendants, those charged include ex-aides Joseph Percoco and Todd Howe, as well as Alain Kaloyeros, the president of SUNY Polytechnic Institute. Howe is cooperating with the investigation, according to the federal complaint.
The case, which began as a probe of the so-called Buffalo Billion development, accuses the defendants of two bribery and fraud schemes in connection with the awarding of hundreds of millions of dollars in New York State contracts.
In a related case, New York Attorney General Eric T. Schneiderman is scheduled to announce state felony charges against Kaloyeros and an Albany-area developer who has received state economic development aid under Cuomo.
The 80-page federal complaint, complete with a Table of Contents, laid out two overlapping corruption schemes. In one, a Syracuse developer and an energy company allegedly funneled $315,000 in bribes through Howe to Percoco and his wife.
In the other, the Syracuse developer and Louis Ciminelli, a politically connected Buffalo builder and a defendant, allegedly conspired with Kaloyeros to rig bids overseen by SUNY.
When news of the investigation into the governor’s former aides broke in April, his office quickly cut ties to both Percoco and Howe and ordered its own internal investigation. The results of that inquiry have not been released.
In a statement Thursday, Cuomo said he “learned this morning of the charges filed by the U.S. Attorney’s office that include a former member of my administration.”
Cuomo said that 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 12-count criminal complaint emphasized Percoco’s ties with Cuomo — describing him as the governor’s “right hand man” who started working for former Gov. Mario Cuomo in 1992 and controlled access to the current governor.
It also described Howe’s ties, saying he had worked for the elder Cuomo, originally hired Percoco, and later worked for Andrew Cuomo when he served as secretary of the federal Department of Housing and Urban Development.
Percoco’s lawyer, Barry Bohrer, in a statement denied the corruption charges and said that the key cooperator — Howe, who pleaded guilty this month to conspiracy and bribery charges — was a person of “utterly unreliable credibility.”
“It is an overreach of classic proportions,” Bohrer said. “Mr. Percoco performed services honestly and within the bounds of the law at all times. He will enter a plea of not guilty because he is not guilty.”
Peter Galbreath Kelly, an executive with Competitive Power Ventures, an energy company that received contracts and other favorable treatment in New York, was also charged in the case.
The complaint said Kelly coordinated $332,000 in payments to Howe’s government relations firm and $474,000 to Howe personally for his help arranging for Percoco’s aid.
He also allegedly had his company arrange for Percoco’s wife to be hired for a $7,500-a-month job when Percoco was having financial problems after buying a Westchester house for $800,000, and entertained Percoco at events like a Montauk fishing trip. Kelly had his company donate a jet for the use of Cuomo’s campaign, the complaint said.
The complaint, replete with emails among the alleged conspirators, said Howe and Percoco referred to Kelly as “fat boy” and the payments as “ziti.”
“Handle fat boy carefully,” said one email from 2014. “We don’t need an interruption in that Zitti delivery or else we’ll really be up the creek.”
Named defendants Steven Aiello and Joseph Gerardi were identified as co-founders of the Syracuse developer. Both men are executives with COR Development Co. LLC in Syracuse.
According to the complaint, Percoco still needed money in addition to the payments to his wife, and arranged for the Syracuse company — a client of Howe’s — to make $35,000 in payoffs.
In return, he allegedly worked to free up state funds for a project the firm was involved in, and arranged a raise for Aiello’s son, who worked in the governor’s executive chamber in Albany, prosecutors said.
In addition to Ciminelli, who is chief executive of Buffalo construction firm LPCiminelli, the indictment also named two executives — Michael Laipple and Kevin Schuler — as defendants.
The complaint said Kaloyeros, who made an $800,000 salary as the head of SUNY Polytechnic and $500,000 in other compensation, helped rig bids for Ciminelli and the Syracuse company “to maintain his leadership position and substantial salary … and garner support from the office of the Governor for projects important to him.”
The complaint said that Kaloyeros hired Howe to help him keep his position and push for projects, and Howe in turn took bribes from Ciminelli and the Syracuse firm to influence projects overseen by SUNY Polytechnic in their direction.