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Buffalo Billion defendants convicted of bid-rigging

A federal jury in New York has convicted key players of corruption in Gov. Andrew Cuomo's Buffalo Billion' economic redevelopment program. 

The jury in Manhattan federal court returned its verdict Thursday after a month-long trial that put a spotlight on how lucrative contracts were awarded for redevelopment projects in Buffalo and Syracuse that were worth hundreds of millions of dollars.  

Prosecutors maintained the bidding process was corrupt and that deals were steered to favored developers. Defense lawyers said it was not.  

One of the lead defendants in the case was Alain Kaloyeros, formerly the president of the State University of New York's Polytechnic Institute. Prosecutors said Kaloyeros helped Buffalo developer Louis Ciminielli's company to win a job in Buffalo worth a half billion dollars.  

That job is the Solar City/Tesla solar panel factory in South Buffalo's Riverbend. That case also involved former Gov. Andrew Cuomo aide Joe Percoco, who was using the state contract process to raise money for himself and his wife.

A principal witness against Ciminelli and Kaloyeros was former LPCiminelli executive Kevin Schuler, who took a plea and turned on his former boss. A mass of charges against former LPCiminelli executive Michael Laipple were eventually all dropped.

Prosecutors said two other developers unfairly won a $100 million job in Syracuse.

NYPIRG Executive Director Blair Horner said Albany could tighten the rules, but doesn't appear to want to.

"It doesn't seem to stop. I mean, the governor promised eight years ago when he was running for office he was going to clean up Albany. I think it's fair to say that that work remains undone," Horner said. "We urge the governor to call the Legislature back to special session and deal with this problem."

Horner said the surprising part was they got caught.

"The U.S. attorney found out about it, coupled with aggressive investigative reporting in Buffalo," he said. "This seems to be a persistent problem. Just a few months ago, the former top aide to the governor was convicted of corruption."

State Comptroller Thomas DiNapoli agreed that Albany has to clean up its house and allow public examination of state contracts.

Credit Dave Lucas / WAMC News
Alain Kaloyeros

"When you have these kinds of cases and this is not the first one, obviously, it really undermines and hurts the credibility of what the intent of the money was," DiNapoli said. "Having economic growth and development certainly helps the great City of Buffalo. That is a worthy goal. But that goal gets tarnished when you have these kinds of situations uncovered by law enforcement."

Gov. Cuomo issued a statement following the verdict, saying "The jury has spoken and justice has been done. There can be no tolerance for those who seek to defraud the system to advance their own personal interests. Anyone who has committed such an egregious act should be punished to the full extent of the law."

Assemblymember Ray Walter (R-Amherst), the ranking member of the Economic Committee, said the verdicts is more evidence that "Governor Cuomo’s economic development schemes have been for sale to the highest bidder" and "wrought with failure and fraud."

"Governor Cuomo has serious questions to answer as to what his role has been and how he intends to repair the public’s broken trust after this egregious abuse and theft of their tax dollars," said Walter.

Green Party candidate for governor Howie Hawkins said the verdicts show the need for an independent Moreland Commission "to investigate corruption within the Cuomo Administration."

State Republican Party Chair Ed Cox went further.

Credit WBFO File Photo
Convicted of corruption Joe Percoco (left) and his former boss.

"The two trials indisputably prove that Cuomo is the most crooked, corrupt Governor New Yorkers have seen in more than a century....The facts of these cases--and other brazen examples of pay-to-play, such as Crystal Run Healthcare that is currently the subject of another FBI investigation--directly implicate the Governor in committing federal and state crimes. The only way to restore the integrity of the Executive Branch is to hold him accountable."

A statement from SUNY Press Secretary Holly Liapis stated the verdict confirms Kaloyeros "breached the public trust. This is unacceptable of any public servant, but especially one who was trusted with leading a world-class public institution."

Liapis said SUNY Poly has "instituted significant protocols to reform its operations, oversight and transparency" since the charges came to light....It is imperative we do not allow the actions of one person to distract from the educational mission, ground-breaking research and academic operation of SUNY Poly or negatively impact the thousands of students, faculty, researchers and staff the campus serves."

She said SUNY will now seek Kaloyeros' removal from his tenured faculty position.

The Buffalo office of the FBI also issued a statement on the verdicts:

"The FBI Buffalo Office jointly initiated and investigated the Buffalo Billion case that ended with today's guilty verdicts in New York City," said Gary Loeffert, Special Agent in Charge of the FBI's Buffalo Office. "Years of investigative work by FBI Buffalo and Southern District of New York agents and prosecutors has changed the way business is done in western New York and across the state. It is the expectation of the public that officials represent the people when they enter office and not their personal interests."

The Associated Press contributed to this story.

Mike Desmond is one of Western New York’s most experienced reporters, having spent nearly a half-century covering the region for newspapers, television stations and public radio. He has been with WBFO and its predecessor, WNED-AM, since 1988. As a reporter for WBFO, he has covered literally thousands of stories involving education, science, business, the environment and many other issues. Mike has been a long-time theater reviewer for a variety of publications and was formerly a part-time reporter for The New York Times.