Percoco, Kaloyeros, six others indicted

Gov. Andrew Cuomo’s former top aide Joe Percoco, ex-SUNY Polytechnic Institute President and CEO Alain Kaloyeros and six business executives were named in a 14-count indictment that was released Tuesday afternoon.

The indictment, secured by the office of U.S. Attorney for the Southern District Preet Bharara, added two charges of wire fraud to the crimes alleged in a Sept. 22 criminal complaint against the same eight men. No additional individuals were named, and the indictment did not reveal that any of the defendants have decided to cooperate with prosecutors.

The new charges aside, the document contained few details that were not revealed in the complaint, which ran past 80 pages and included extensive excerpts from emailed communications traded among many of the defendants.

The indictment — handed up a day before a pushed-back deadline that had been agreed to last month by all parties — lays out what prosecutors describe as two overlapping schemes devised to enrich development companies and the public officials who were doing their bidding.

Percoco, who faces six counts including extortion and soliciting bribes, was joined at the center of the alleged effort by Todd Howe, a lobbyist and consultant who has been a decades-long associate of both Percoco and Cuomo.

Howe, who also served in Mario Cuomo’s administration and at HUD before entering the private sector, pleaded guilty to multiple felonies just before the release of the criminal complaint.

Cuomo has consistently said he had no knowledge of the men’s alleged misdeeds.

The favors allegedly doled out by Howe and Percoco included pressure applied to state agencies, a raise for the son of one of the executives who was working for the governor’s office, and — most valuable of all — details on upcoming state projects that provided a competitive advantage to the firms.
The individuals charged are:

• Peter G. Kelly of Competitive Power Ventures, a Maryland-based outfit that is seeking to build a natural gas-fired power plant in Orange County. Kelly is charged in two counts with bribing Percoco in part by providing his wife, a school teacher, with a “low-show” job worth $7,500 a month.
• Steven Aiello and Joseph Gerardi of the Syracuse-area company COR Development, which worked on a handful of large SUNY Poly projects. The pair face six counts apiece with charges including wire fraud, bribery and making false statements to federal investigators.
• Louis Ciminelli, Michael Laipple and Kevin Schuler of LPCiminelli, a Buffalo-based developer that secured the contract to construct the massive Riverbend solar panel plant that’s the keystone of Cuomo’s “Buffalo Billion” revitalization initiative. They each face a single bribery charge and two counts of wire fraud.

The Riverbend contract is estimated to be worth approximately $705 million, while COR reaped roughly $105 million from two other state projects.

All three companies were generous donors heavily to Cuomo’s campaign, which in the wake of the September criminal complaint decided to quarantine those contributions in a separate account until the case has been adjudicated.

Kaloyeros, indicted on three counts of wire fraud, was the flamboyant CEO and founding president of SUNY Poly, tapped by Cuomo to replicate the success of SUNY Poly’s Albany campus across upstate. He was suspended in September after the release of the complaint, and subsequently resigned his leadership post.

After the indictment was released to the media, Kaloyeros’ defense team released a statement expressing disappointment. “Dr. Kaloyeros is innocent of the charges filed against him and looks forward to being exonerated,” said the statement from the law firm Steptoe & Johnson LLP.

Kaloyeros is also facing state bid-rigging charges alongside Capital Region developer Joe Nicolla of Columbia Development in a case resulting from a now-defunct SUNY Polu dorm project. Both men have pleaded not guilty.

Percoco’s ties to Cuomo go back to the administration of the governor’s father, former Gov. Mario Cuomo. Percoco also served the younger Cuomo during his years in the federal Department of Housing and Urban Development, and in his single term as state attorney general.

Percoco left the administration in 2014 for seven months to manage Cuomo’s re-election campaign — a period in which, according to a disclosure form he filed the next year with the state Joint Commission on Public Ethics, he collected consulting fees from COR Development and CHA Consulting, an Albany-based firm. Last year, it was announced that he would leave the administration to become a senior vice president with the Madison Square Garden Co., where he remains employed despite his arrest.

Percoco’s attorney Barry Bohrer was slightly more flip, and seasonal: “This case is a real turkey. We will knock the stuffing out of it at trial,” he said.

“We give thanks for a system in which a jury can reject the government’s efforts to criminalize conduct that has been found unworthy of prosecution by the highest court in the land,” Bohrer added. “Mr. Percoco is innocent and will enter a plea of not guilty because he is.”

Terry Connors, attorney for LPCiminelli’s Schuler, said company officials “acted lawfully and are innocent.”

Attorney Steve Coffey, who is representing Aiello, said the indictment “has as much merit as the criminal complaint, which is zero. Mr. Aiello has been in business for over 20 years building a well-respected and trustworthy company, and his integrity is being compromised based on the words of a felon. … We will not rest until we achieve full exoneration and show Todd Howe to be the liar he is.”

Gerardi’s attorney Milton Williams said his client “has worked tirelessly to make his hometown of Syracuse a thriving city once again,” and that he would be exonerated.

Before his role in the scandal became public knowledge in late April, Howe had been running WOH Government Solutions, the Washington, D.C.-based lobbying arm of the powerful Capital Region law firm Whiteman Osterman Hanna.

The complaint included excerpts from emails between Howe and Percoco in which the men used special slang such as “ziti” for money and swapped the nickname “Herb.” Howe maintained an office at SUNY Poly’s Fuller Road headquarters, and a designated parking space marked “Master Herb.”

Cuomo’s administration has made efforts to shift control of the projects previously overseen by SUNY Polytechnic’s nonprofit development arms to the leadership of the Empire State Development Corp., a state agency with more rigorous procurement requirements.

Last week, Cuomo released a long statement providing a long list of ethics fixes including the establishment of new inspector general offices at SUNY and CUNY, as well as his intention to appoint a “chief procurement officer” to examine any contract involving payments through the state Budget Division.
After the release of the indictment, Cuomo once again said the case was “a profoundly sad situation for me personally.”

“Now the justice system must take its course, and any of those found guilty of abusing the public’s trust should and will be punished,” he said. “Changes need to be made to restore faith at every level of government. My administration has taken a number of steps in the past several months to reform the procurement process, and has proposed additional measures for the Legislature to take up when they return.”