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Behind the Buffalo Billion: Key Cuomo ally Kaloyeros no longer at apex of decision-making

Governor Andrew Cuomo's Office
Alain Kalyeros (c.) appears to be on the outs with the Cuomo Administration

Until recently, Dr. Alain Kaloyeros, director of the SUNY Polytechnic Institute, has been the darling of the Cuomo administration. But now, he’s one of the figures at the center of federal and state investigations into alleged pay-to-play schemes for economic development projects and is increasingly on the outs with the Cuomo Administration.

Kaloyeros was recruited to New York over 20 years ago by the current governor’s father, former governor Mario Cuomo, in the 1990s, to develop the then-experimental nano computer chip technology, as part of the State University at Albany. He has been tight with the state’s leaders ever since, including Governors  Pataki, Spitzer, Paterson, and now, at least until recently,  Cuomo, whom Kaloyeros is quick to praise.

“The man I’m proud to call my mentor, our leader, your governor,” said Kaloyeros in an introduction during a July 2015 in Rochester with Vice President Joe Biden, announcing a SUNY-designed and owned photonics lab. 

Governor Cuomo has been eager to return the compliments, as he did during a speech at the topping off ceremony at the giant SolarCity plant in Buffalo, also last summer, where he called Kaloyeros his “economic guru.”

“He has economic visions that other mere mortals can’t actually see,” Cuomo said.

Under Andrew Cuomo, the prestige and the autonomy of what is now the independent SUNY Polytechnic Institute, grew. President Barack Obama visited during his 2012 re-election campaign.

Kaloyeros is president and CEO and is paid over $1 million a year from SUNY and the University’s Research Institute. He has been a key player in designing the state’s Buffalo Billion and other projects, and is credited with inventing the opaque not-for-profit management model that is now under scrutiny by the US Attorney Preet Bharara. It is estimated that he at one time oversaw over $43 billion in economic development projects.

John Kaehny, with the reform group Reinvent Albany, says it has grown into a system that is ripe for corruption.

“It’s out of control, basically,” said Kaehny.  

Kaloyeros, who did not agree to talk for this story, was born in the late 1950s and grew up in war-torn Lebanon. According to a 2012 profile in the Albany Times Union, he survived a terrorist attack as a teenager and, for a time, joined the Christian militia before emigrating to the United States and eventually getting a Ph.D in Experimental Condensed Matter Physics from the University of Illinois.

During the past two decades in the Albany area, the colorful and charismatic Kaloyeros has often been seen driving to the local Starbucks in his Ferrari, with custom license plates that read “Dr. Nano”.

But since the federal probe and an additional investigation by the state Attorney General has begun, Kaloyeros appears to have fallen from grace within the Cuomo Administration.

Attorney General Eric Schneiderman is investigating a SUNY Poly plan to build dormitories for potential pay-to-play arrangements, as well as other economic development projects. Politco New York reports Kaloyeros’ smartphone was confiscated in a recent raid by the AG’s investigators.  

In May, he was stripped of all authority in making economic development deals, according to a letter from Governor Cuomo’s top counsel.

Cuomo’s counsel, Alphonso David, said in the letter on May 2 to top SUNY officials that “all decisions”  made in the future by SUNY Poly and the SUNY Research Foundation regarding the Buffalo Billion on nano programs “shall be subject to review and approval” by Cuomo’s own specially appointed investigator, Bart Schwartz.

Earlier this year Kaloyeros resigned from the boards of two not-for-profit management groups that awarded the contracts. Cuomo has publicly distanced himself from Kaloyeros. They no longer appear together at economic development announcements.

The governor was asked by reporters about the economic development contract awards to politically connected campaign contributors, which are at the heart of the federal probe. Cuomo said he didn’t make those decisions, “SUNY” did. 

“They are the ones who ran the contracts,” said Cuomo, “and I had absolutely nothing to do with it.”

Cuomo says he still thinks the SUNY Poly President’s work has been “extraordinary” in turning around Upstate. When asked not just once, but twice, by reporters whether Cuomo still has confidence in Kaloyeros, the governor did not directly answer.

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. WBFO listeners are accustomed to hearing DeWitt’s insightful coverage throughout the day, including expanded reports on Morning Edition.
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