NEW YORK - Nine people, including two former aides to Governor Andrew Cuomo, were indicted Thursday in a federal corruption inquiry.
The public corruption charges are related to two alleged bribery and fraud schemes in connection with the award of hundreds of millions of dollars in New York State contracts and other official state actions.
At a news conference with U.S. Attorney Preet Bharara, FBI special agent-in-charge Adam Cohen,and IRS criminal special agent-in-charge Shantelle Kitchen, two former aides, Joseph Percoco and Todd Howe, and President of SUNY Polytechnic Institute Alain Kaloyeros, were among those involved in a long-running federal investigation into the Cuomo administration’s attempts to lure jobs and businesses to upstate New York.
These charges come from “two overlapping criminal schemes involving bribery, corruption and fraud in the award of hundreds of millions of dollars in state contracts and other official state benefits,” federal prosecutors said in the complaint.
Along with the three men, the complaint charged Peter Galbraith Kelly Jr., who oversaw lobbying and public relations for Competitive Power Ventures; Steven Aiello, president of COR Development; Joseph Gerardi, another COR executive; Louis Ciminelli, founder of LPCiminelli; and Michael Laipple and Kevin Schuler, two LPCiminelli executives.
The charges in the complaint include bribery, wire fraud and honest services fraud.
All state-funded projects were shaped under the umbrella of the SUNY Polytechnic Institute and its subsidiaries. Kaloyeros is the President of SUNY Polytechnic Institute.
Kaloyeros was given free reign by Cuomo to create high-tech economic development projects that could create jobs across the state.
One of those projects was the AIM Photonics Institute headquartered in Rochester. What impact this investigation will have on the funding related to the Photonics Institute remains to be seen.
In a separate indictment within New York, felony state-level charges were brought against Kaloyeros and Joseph Nicolla, the president of Columbia Development, by New York State Attorney General Eric Schneiderman.
According to the criminal complaint, Kaloyeros and Nicolla rigged the bidding process for three multimillion-dollar contracts.
Kaloyeros allegedly guided those contracts to pre-selected companies, including Nicolla’s Columbia Development. He also reportedly used the Request for Proposal process to award certain contracts for the construction of facilities for SUNY Polytechnic.
This allegedly included the development of a SUNY Polytechnic student housing complex in Albany, construction of the NanoFab West research building, and leasing space to an architecture firm in exchange for future work on SUNY Polytechnic projects.
“The charges filed today outline a blatant and brazen abuse of taxpayer dollars and the public trust,” said Attorney General Schneiderman. “This self-serving scheme alleged in the complaint was particularly egregious because it was aimed at enriching powerful people at the expense of the state’s public university system. We will continue to hold public officials accountable and ensure that all officials are held to the same high standard of integrity that New Yorkers deserve.”
Kaloyeros is charged with three felony counts of Combination in Restraint of Trade and Competition, while Nicolla is charged with one felony count of Combination in Restraint of Trade and Competition.
If convicted on state charges, Kaloyeros faces up to 4-12 years in prison. Nicolla would face a maximum of 1.3-4 years in prison if convicted.
Wrapping up his first term as Assemblyman of the 133rd district, republican Peter Lawrence says corruption is nothing new in his experience in Albany. Lawrence said Thursday, these allegations should draw more focus on ethics.
"What we need in state government is a very strong ethics bureau, an ethics officer," Lawrence said. "We need an independent strong individual nominated by the governor and approved by both houses of legislature."
Governor Cuomo issued the following statement:
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.
Greater Rochester Chamber of Commerce President and CEO Bob Duffy also released a statement regarding the investigation:
Like so many others, we are just learning details of the charges. If the news is true, it is very disappointing and any individuals convicted should be held accountable. I have very firm faith in the justice system and will wait for that process to unfold before making any further comments. As chairman of the AIM Photonics Leadership Council, the institute remains a strong priority for our community. I expect it to move forward based upon the strength of its economic development potential and its many public and private partners.
The following statement is from Senator Rich Funke:
These accusations justify every New Yorker’s worst fears about Albany. Here at home, the work being done to grow jobs and investment through our Photonics Institute is too important to be derailed by these allegations. An unpaid suspension for Dr. Kaloyeros is not enough. I call on the Governor to terminate his employment in full as soon as possible."
Read the federal and state criminal complaints below: