New York corruption case touches ex-Cuomo aides, university heads

The charges followed a federal investigation into Buffalo Billion, a $1 billion economic development project aimed at revitalizing the area around the city of Buffalo.

Ramon Espinosa/Reuters/File
In this 2015 file photo, New York Governor Andrew Cuomo, right, walks with former aide Joseph Percoco at the Hotel Nacional in Havana, Cuba. Percoco is one of eight people charged by federal and state prosecutors.

Federal and state prosecutors on Thursday announced charges against 10 men, including two onetime senior advisers to New York Governor Andrew Cuomo, in corruption and fraud cases involving state contracts worth hundreds of millions of dollars.

The charges followed a federal investigation into Buffalo Billion, a signature $1 billion economic development project of Cuomo aimed at revitalizing the area around the city of Buffalo, once an upstate industrial powerhouse.

Joseph Percoco, a former executive deputy secretary to the governor, and Alain Kaloyeros, president of the State University of New York's Polytechnic Institutes, were among eight people charged in a complaint filed in Manhattan federal court.

Todd Howe, a lobbyist and a ex-adviser to Cuomo when he led the U.S. Department of Housing and Urban Development, pleaded guilty to federal charges and is cooperating. Richard Morvillo, his lawyer, said Howe "will testify truthfully if called upon."

New York Attorney General Eric Schneiderman announced separate state charges against Kaloyeros and a real estate executive, Joseph Nicolla, over alleged bid-rigging involving three multimillion dollar contracts.

Barry Bohrer, Percoco's lawyer, called the prosecution "an overreach of classic proportions." Kaloyeros's lawyer, Michael Miller, declined to comment. Nicolla's company, Columbia Development, did not respond to a request for comment.

Albany corruption

The corruption cases are the latest to focus on Albany, New York's capital, following last year's convictions of the leaders of the state's legislature's two houses, Democrat Sheldon Silver and Republican Dean Skelos.

"Today's complaint shines a light on yet another sordid side of the show-me-the-money culture that has so plagued the government," Manhattan U.S. Attorney Preet Bharara told reporters.

Cuomo announced Buffalo Billion in 2012, offering incentives to induce companies to help revitalize the Buffalo region's economy.

The federal complaint detailed two overlapping schemes.

In one, Percoco, Cuomo's "right-hand-man," sought $315,000 in bribes in exchange for offering help to two of Howe's corporate clients, an energy company and a Syracuse real estate developer, prosecutors said.

These included payments arranged by Peter Galbraith Kelly, a senior vice president at Competitive Power Ventures, which obtained a $100 million contract to finance a $900 million power plant, prosecutors said.

Neither that company nor Kelly's lawyer responded to requests for comment.

Buffalo Billion

Prosecutors said in another scheme, Kaloyeros, who oversaw a grant application process under Buffalo Billion and similar programs, and Howe, who he retained to help develop projects, conspired to rig bids for contracts to favor two developers.

Howe in exchange received bribes from those developers, Syracuse's COR Development Co, run by Steven Aiello and Joseph Gerardi, and Buffalo's LPCiminelli, run by Louis Ciminelli, Michael Laipple and Kevin Schuler, prosecutors said.

Prosecutors said executives at both companies were major donors to Cuomo's election campaigns, with COR becoming its top upstate donor after ramping up contributions beginning in December 2011.

Cuomo has not been accused of wrongdoing.

In a statement, Cuomo said he was "saddened and profoundly disappointed" by the allegations involving Percoco, who previously also worked for and was close to Cuomo's late father, former Gov. Mario Cuomo.

"Like my father before me, I believe public integrity is paramount," Andrew Cuomo said. "This sort of breach, if true, should be and will be punished." (Reporting by Nate Raymond; Additional reporting by Jonathan Stempel; Editing by Daniel Bases)

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