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2 ex-Cuomo aides among 9 charged in federal corruption probe

U.S. Attorney Preet Bharara announces corruption charges against

U.S. Attorney Preet Bharara announces corruption charges against two former aides to Gov. Andrew M. Cuomo and seven other defendants at a Manhattan news conference on Thursday, Sept. 22, 2016. Photo Credit: Yeong-Ung Yang

Federal prosecutors in Manhattan leveled sweeping corruption charges against two former close aides to Gov. Andrew M. Cuomo Thursday in a complaint that detailed a spectacle of bid-rigging and bribery in upstate development projects and a Capitol awash in dirty money.

“Today’s charges shine a light on yet another sordid side of the show-me-the-money culture that has so plagued Albany,” said U.S. Attorney Preet Bharara, who previously filed charges that led to the convictions of State Senate and Assembly leaders.

“It turns out the State Legislature does not have a monopoly on crass corruption in New York,” Bharara added.

Among nine defendants, the 80-page criminal complaint — so extensive it required a Table of Contents — charged ex-aides Joseph Percoco, described as Cuomo’s “right-hand man,” and Todd Howe, a well-connected lobbyist, as well as Alain Kaloyeros, the president of SUNY Polytechnic Institute.

Howe, like Percoco a former aide to both Cuomo and his father Mario Cuomo, was the alleged linchpin of two interlocking criminal schemes. Prosecutors said he has been cooperating with them since June, and pleaded guilty earlier this week to conspiracy and bribery charges.

The charges, which originated in a probe of Cuomo’s “Buffalo Billion” development plan, said in one scheme Howe funneled more than $320,000 in bribes to Percoco to give favored treatment to lobbying clients. In the other, he allegedly worked as a consultant to Kaloyeros and rigged bids on nearly $1 billion in projects for his clients.

While alleging no misconduct by Cuomo, the complaint described how the bribe-payers donated use of a plane and $350,000 in contributions to his campaign. It also quoted emails describing payoffs as “ziti” and detailing how Percoco worked inside the administration to get Cuomo’s former director of operations, who was not charged, to advance bribe payers’ interests.

Cuomo, in a statement after the charges were filed, said: “If the allegations are true, I am saddened and disappointed. I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone.”

Bharara refused to provide the same clean bill of health he issued earlier this year when he closed his probe of Cuomo’s shuttering of a state corruption commission by saying there was “insufficient evidence to prove a federal crime.”

Asked at a news conference Thursday about Cuomo, Bharara said, “There are no allegations of wrongdoing by the governor anywhere in this complaint. That’s all I’m going to say.” He wouldn’t say if Cuomo had been questioned, and said the probe “remains open.”

The nine defendants — including Peter Galbraith Kelly, an executive with the energy company Competitive Power Ventures; Steven Aiello and Joseph Gerardi, two founders of the Syracuse firm COR Development Co.; and owner Louis Ciminelli and two other executives with LPCiminelli, a major Buffalo construction firm — all were released after court appearances in Manhattan, Buffalo and Syracuse.

Percoco, the key figure in the first of the two alleged schemes, was described in the complaint as a close confidant of the Cuomo family, sometimes referred to as Mario Cuomo’s “third son,” who controlled access to Andrew as his executive deputy secretary.

Howe, the cooperator, originally hired Percoco as an intern in 1992 and worked for the elder Cuomo for years before joining Andrew when he ran the U.S. Department of Housing and Urban Development in Washington, the complaint said.

Percoco’s lawyer Barry Bohrer, in a statement, described Howe as a person of “utterly unreliable credibility” and denied the corruption charges. “Mr. Percoco performed services honestly and within the bounds of the law at all times,” Bohrer said. “He will enter a plea of not guilty because he is not guilty.”

Energy executive Kelly, the complaint said, coordinated $332,000 in payments to Howe’s lobbying firm and $474,000 to Howe personally for his help arranging for Percoco’s aid on state issues. Kelly then arranged for his company to hire Percoco’s wife for $7500 a month on what Bharara called a “low-show” job, the complaint said.

Percoco was having financial problems after he bought a Westchester County house for $800,000 and his wife quit her teaching job, the complaint said. Kelly also wined and dined Percoco during a Montauk fishing trip and other events, and had his company donate a jet for use by Cuomo’s campaign.

In emails quoted in the complaint, Percoco and Howe referred to Kelly as “fat boy” and the graft payments as “ziti”— a usage apparently borrowed from “The Sopranos” television show. “Handle fat boy carefully,” said one Percoco-Howe email from 2014. “We don’t need an interruption in that Zitti delivery or else we’ll really be up the creek.”

When Kelly’s payments weren’t enough, the complaint says, Howe arranged for the two executives at Syracuse developer COR to pay Percoco an additional $35,000 to help solve their problems with the state, and Percoco also helped get a raise for one of the executives’ sons, who worked in the executive chamber in Albany.

In the second scheme, prosecutors said Kaloyeros hired Howe as a consultant on development projects for $25,000 a month because of his connections with Cuomo’s office, and Howe used the post to steer SUNY development projects to COR and another client, LPCiminelli.

Both firms paid Howe six-figure sums and were major Cuomo donors, the complaint said, with COR linked to $250,000 in campaign contributions to the governor as it sought projects, while LPCiminelli was responsible for $100,000 and sponsored a $250,000 fundraiser.

In one case, a bid request for the Buffalo Billion project required a local developer with 50 years experience — a requirement that only the Ciminelli firm could meet. Another required bidders to use the specific project management software used by COR of Syracuse.

“Too telegraphed?” COR executive Gerardi said on one copy of the proposed bid language. “I would leave out these specific programs.”

The complaint said Kaloyeros, who made $500,000 in extra compensation beyond his $800,000 salary, retained Howe and cooperated in the scheme “to maintain his leadership position and substantial salary . . . and garner support from the office of the Governor for projects important to him.”

Kaloyeros was suspended from SUNY. His lawyer, in a statement, said he was innocent and “looks forward to being exonerated.”

The defendants face charges ranging from conspiracy and fraud to extortion, bribe paying and making false statements to federal agents.

With Michael Gormley

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