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Ex-SUNY official who oversaw Cuomo upstate development convicted in bid-rigging trial

The jury found Alain Kaloyeros guilty of steering contracts to favored Buffalo and Syracuse developers, both major donors to Gov. Andrew M. Cuomo.

Former SUNY official Alain Kaloyeros leaves a federal

Former SUNY official Alain Kaloyeros leaves a federal courthouse in Manhattan after being convicted Thursday on bid-rigging charges on the second day of jury deliberations after a three-week trial. Kaloyeros was found guilty of steering $1 billion in upstate development deals to Cuomo campaign donors. Photo Credit: Charles Eckert

The once-powerful former SUNY official who Gov. Andrew M. Cuomo lauded as a visionary and picked to oversee his signature upstate “Buffalo Billion” revitalization program was convicted Thursday of bid-rigging, marking the latest in a string of Albany corruption scandals to end in guilty verdicts.

Alain Kaloyeros, 62, of upstate Slingerlands, who founded SUNY Polytechnic Institute, was found guilty in Manhattan federal court of steering contracts to favored Buffalo and Syracuse developers, both major Cuomo donors. Jurors reached their verdict on the second day of deliberations. Kaloyeros faces up to 60 years in prison for wire fraud and conspiracy.

After a three-week trial that cast a harsh light on the inner workings of state economic development efforts, jurors also convicted Buffalo builder Louis P. Ciminelli, chosen to develop a solar-panel fabrication plant, and partners Steve Aiello and Joe Gerardi of Syracuse’s COR Development, which won projects including a now-defunct film center.

Cuomo, who was not accused of wrongdoing, quickly distanced himself.

“There can be no tolerance for those who seek to defraud the system to advance their own personal interests,” the governor said in a statement, calling for the defendants to be “punished to the full extent of the law.”

The verdict came in the aftermath of convictions earlier this year of Cuomo lieutenant Joseph Percoco and former Assembly Speaker Sheldon Silver in separate bribery cases. The governor’s political foes pounced with statements of their own Thursday linking him to a corrupt culture.

Cynthia Nixon, who is challenging Cuomo in the Democratic gubernatorial primary, said the Kaloyeros case showed the governor was either inattentive to the spending of state funds, or corrupt himself.

“We’re supposed to believe that the master architect of the Governor’s economic development plan doled out nearly a billion dollars without the Governor’s knowledge or guidance?” she said. “I for one don’t believe that.”

Republican gubernatorial candidate Marc Molinaro also chimed in.

“What was really found guilty was the reckless pay to play, incompetence of Andrew Cuomo’s administration,” Molinaro said. “He has empowered, emboldened and encouraged individuals to bend the rules, rig the system and defraud taxpayers.”

Kaloyeros, a Lebanese-American physicist specializing in nanoscience, is credited with using SUNY to develop public-private technology partnerships that sparked an economic rebirth in Albany, and was at one time the state’s highest earning employee with a salary of $800,000.

A colorful figure nicknamed “AK-47” for his hair-trigger temper who drove sports cars with vanity plates like “DR NANO,” Kaloyeros was described in testimony as anxious after Cuomo’s 2010 election to enhance his power and prestige by winning the new governor’s support to extend his economic blueprint.

He was accused of conspiring with lobbyist Todd Howe, an ex-Cuomo aide whose firm was paid six-figure fees by SUNY to act as a liaison with the governor’s office — and who also, one witness said, served as the “eyes and ears” of Cuomo’s aides. Ciminelli and COR, who were also paying Howe six-figure consulting fees, received projects worth nearly $1 billion.

But Howe, a cooperating government witness, didn’t testify after questions about his credibility arose during Percoco’s trial. The result was a less-explosive trial than some anticipated, missing any narration by Howe of his interactions with Kaloyeros and Cuomo’s office, and any testimony about campaign contributions.

Prosecutors instead built their case on emails — some deleted by Ciminelli and Kaloyeros after the investigation surfaced — showing that the developers had inside access to bidding materials and were allowed to suggest specs that fit them.

One spec required 50 years experience in Buffalo, which only Ciminelli could meet, and another was so obvious that Gerardi wrote “too telegraphed” on a draft. Defense lawyers argued that the 50-year provision was a mistake and discussions before bidding were OK under fast-track procurement rules used to jump-start development projects.

Jurors declined to speak to reporters, and none of the defendants responded to questions after the verdicts. But their lawyers were shocked.

“I’m just speechless,” Ciminelli defense attorney Paul Shechtman whispered to his client about the outcome in a case they considered weak, attributing it to public impatience with corruption.

“There are a lot of citizens in this state who think it is dysfunctional and a culture of corruption,” Shechtman said. “If you’re picking a time to try corruption cases, you wouldn’t necessarily choose 2018.”

“We are absolutely heartsick,” said Michael Miller, the lawyer for Kaloyeros, who wasn’t accused of getting any money or bribe as part of the scheme. “At the end of the day all he really tried to do was the governor’s mission in Buffalo — and next thing you know he’s in court convicted of three offenses.”

The men were each convicted of a wire fraud conspiracy to deprive Fort Schuyler Management Corp., the SUNY affiliate that awarded the bids, of knowledge that they were rigged. Kaloyeros was also convicted of wire fraud with, separately, Ciminelli and the Syracuse men. Gerardi was also convicted of lying to federal agents.

Lawyers for all four said they would appeal.

With Yancey Roy

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