Buffalo Billion just part of feds’ probe into state projects

ALBANY — The federal probe of New York development initiatives is broader than the Buffalo Billion projects, the highest-profile piece of Gov. Andrew M. Cuomo’s upstate economic strategy.

Investigators have subpoenaed the governor’s office for records of communications with about 20 companies, a source confirmed, that were involved in projects in Buffalo as well as in Syracuse, Albany and the Hudson Valley. They’ve sought communications from high-ranking Cuomo officials, including Bill Mulrow, the governor’s secretary and top adviser; Jim Malatras, the director of state operations; and Gil Quinones, head of the New York Power Authority, the source said.

Beyond the governor’s office, investigators have subpoenaed agencies that regulate solar power and implement solar initiatives, the State University of New York Polytechnic Institute, which has been the guiding force in a number of state-backed high-tech ventures, and Empire State Development Corp., the state’s economic-development arm.

The named companies have been engaged in ventures ranging from a major solar-panel factory in Buffalo to a film hub in Syracuse to a dormitory in Albany to a power plant in Orange County. They also touch on a proposed “inland port” and redeveloping an old NYNEX building in Syracuse and loft apartments in Albany.

The companies, according to a source and to companies that have acknowledged separate subpoenas, include: six full-service development and real estate companies, three real estate firms, three engineering/architecture firms, two manufacturers, two lobbying firms, a power-plant company, a construction firm and a cellphone tower/communications company. None has been accused of wrongdoing.

The majority of companies have not returned calls or have declined to comment. Some — such as LPCiminelli, the Buffalo contractor chosen to build the $750 million solar plant, and Columbia Development, the lone bidder for a SUNY dorm project in Albany — have denied any wrongdoing while saying they are cooperating with authorities.

“I really have no comment on this,” said Robert Doucette of Center Armory Development and Management, a Syracuse firm mentioned in the subpoena to the governor’s office.

The widening probe has “put more eyes” on how the state is spending the public’s money, said Assembly Minority Leader Brian Kolb (R-Canandaigua), and highlighted a lack of oversight.

“We have a responsibility to spur economic development, but a greater responsibility to act prudently with public money,” Kolb said. “New York’s taxpayers have been asked to make a substantial financial commitment to this endeavor — the level of transparency and accountability on behalf of the state must be substantial as well.”

Cuomo has said the probe is focused on Joseph Percoco, his longtime and now-former closest aide, and Todd Howe, a lobbyist who previously worked for Cuomo and the governor’s father, the late Mario Cuomo.

An outside attorney hired by Cuomo to look into the matter said last month: “The state has reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interests by lobbyists and former state employees.”

Federal investigators, however, haven’t characterized the limits of the inquiry.

It appears they are asking about projects to which Percoco and Howe, at this point, weren’t clearly linked. A legal source said it’s not unusual for federal prosecutors to cast a wide net with subpoenas before closing in on a target. Many of the projects were managed in part by the first two subpoena recipients: ESDC and SUNY Polytechnic. A source has said SUNY Poly CEO Alain Kaloyeros also is a focus.

Gerald Benjamin, a political scientist at SUNY New Paltz and a longtime state politics observer, said that while companies and lobbyists might be trying to “influence decisions,” SUNY Poly projects seem to be the “locus of the governmental actions” under scrutiny.

He said the statewide development initiatives carry economic and political risks for the governor. Not only must they pay off economically, he said, but also weather investigators’ scrutiny.

Richard Strassberg, a SUNY Poly attorney, has said the school has been cooperating with the investigation since it began in September 2015 and “based on our own investigation, we have seen no evidence of impropriety by anyone at” SUNY Poly.

Asked by the Syracuse Post-Standard about SUNY awarding $100 million in contracts to his top campaign contributor in Central New York, COR Development, the governor said he had no role.

“The way it worked . . . the state didn’t do any of the contracts,” Cuomo told the newspaper Wednesday. “It’s all done through SUNY, the state university system. They are the ones that actually managed the contracting process . . . They are the ones who ran the contracts, ran the competitions, made the selections.”

COR didn’t return calls to comment. Percoco stated in his 2014 financial disclosure form that he received between $50,000 and $75,000 from COR while off the state payroll, a claim the company has denied.

The governor has said that even if federal investigators find wrongdoing, it doesn’t undermine the propriety of his initiatives.

“These economic development programs in upstate New York are vitally important and have worked extraordinarily well,” Cuomo said. “If somebody did something wrong, I’ll be the first one to throw the book at them. But that doesn’t go to the essence of the Buffalo Billion program.”

Benjamin said Cuomo’s framing of the probe boils down to: “There might be a few bad apples but this is a good program. This isn’t a systemic problem.”

With Michael Gormley