The trial of former SUNY official Alain Kaloyeros, who is accused of joining Todd Howe, an ex-lobbyist who had long-standing ties to Gov. Andrew M. Cuomo and close aides, in steering $1 billion in upstate development deals to Cuomo campaign donors begins Monday in federal court in Manhattan.
The twist: Unlike in a quid pro quo bribery scheme, Kaloyeros isn’t charged with getting anything back.
Instead, prosecutors say the physicist — whose success in attracting nanotechnology research money to SUNY led to an $800,000-a-year salary — hired Howe and tailored bids for large campaign donors to keep his job and stay in Cuomo’s good graces after Cuomo became governor.
U.S. District Judge Valerie Caproni seemed satisfied with the approach at a pretrial conference early this month, telling lawyers, “Protecting a million dollar salary or close to a million dollars seems like a good motive.”
But some legal experts say the latest Albany corruption trial may face rough sledding if there’s no tangible payoff.
“The weakness of the prosecution is that Kaloyeros didn’t receive anything,” said Albany Law School professor Vin Bonventre. “The jury may think that’s a little tenuous.”
And good-government watchers see it as a trial with a mystery at its center — Cuomo development projects going to Cuomo donors, but with no description of a Cuomo role.
“The governor is the hole in the doughnut,” said Reinvent Albany’s executive director John Kaehny. “His absence is puzzling. The governor doesn’t exist in this whole story.”
Kaloyeros, 62, of Slingerlands, is credited with working since the 1990s to establish Albany as a tech center, culminating in the creation of SUNY Polytechnic Institute there.
Cuomo called him a “genius,” and he was tasked with trying to use that blueprint for tech-centered projects in Buffalo and Syracuse through Fort Schuyler Management, the institute’s development arm.
He and developers Louis P. Ciminelli, 62, of Buffalo, and Steven Aiello, 60, and Joseph Gerardi, 58, of Syracuse’s COR Development, are charged with wire fraud conspiracy for scheming to tailor bids while keeping Fort Schuyler’s board in the dark about the insiders’ advantage.
Prosecutors say bid specs were so transparently written that one defendant scrawled “Too telegraphed?” on a draft he was helping to prepare.
And developers who were linked to the giving or raising of at least $250,000 for Cuomo were rewarded with projects that included a large portion of Cuomo’s ambitious “Buffalo Billion” revitalization and an unsuccessful Syracuse “film hub,” prosecutors said.
Defense lawyers say the prosecution theory makes no sense because the governor didn’t directly control Kaloyeros’ job or pay. They argue that all he did was make an honest effort to fulfill Cuomo’s upstate development vision without any bid rigging.
“There’s going to be overwhelming evidence that our client went to extraordinary lengths throughout this process to do wonderful things,” Kaloyeros lawyer Reid Weingarten told Caproni at a recent hearing.
Cuomo isn’t accused of wrongdoing. Administration officials say steps have been taken to clean up abuses in development programs, and prosecutors haven’t argued any campaign contributions were illegal or part of a quid pro quo.
In a statement on the trial late Saturday, Cuomo campaign spokeswoman Abbey Fashouer said, “As the governor has said, there is zero tolerance for any violation of the public trust and if anyone is found guilty of wrongdoing, the book should be thrown at them.”
The case will mark the second time this year that Cuomo, who is running for a third term, finds former members of his administration involved in a federal corruption trial. Both cases feature Howe, a former Cuomo aide who became a lobbyist and then a cooperating government witness.
Howe was the star prosecution witness in March when former top Cuomo deputy Joe Percoco was convicted of taking more than $300,000 in bribes from two Howe clients. In the Kaloyeros case, prosecutors say Howe was getting $25,000 a month from Kaloyeros as a SUNY consultant, while also earning six-figure sums from both the Buffalo and Syracuse developers to land state work.
Howe allegedly persuaded the developers to donate and Kaloyeros to favor them. Despite his multiple roles, however, Howe’s testimony as a prosecution witness at Percoco’s trial was such a problem — he admitted multiple frauds and was caught in multiple lies — that he was jailed and prosecutors have opted not to call him in the Kaloyeros trial.
That decision has reshaped the case. Without Howe as a narrator, prosecutors are expected to tell the story through his emails, such as one to Kaloyeros offering “vitals” — bid information, prosecutors say — “for Buffalo and Syracuse friends.” And they negotiated a plea deal with Kevin Schuler, a Ciminelli executive who dealt with Howe, to testify about discussions of campaign donations and other matters.
Legal experts say the government may be left with some gaps without Howe that weaken the case, but not calling him also puts the defense at a disadvantage by using his statements without exposing him to cross examination.
“It’s very, very unusual,” said Gerald Lefcourt, a Manhattan white-collar defense lawyer. “The government which says it rides on a white horse is trying to get in through the back door a witness they have credibility problems with, and essentially mislead the jury.”
Kaehny, a critic of the development projects who thinks Cuomo’s oversight will be on trial along with the defendants, expressed disappointment with Howe’s absence for a different reason: The public won’t get to hear how and why a political fixer became an economic development adviser.
“It makes this a much narrower trial than it could have been,” he said.