Published July 12, 2018
A federal jury in New York convicted key players Thursday on charges related to Gov. Andrew Cuomo's "Buffalo Billion" economic redevelopment program, leaving some lawyers grumbling outside court that it's a bad time to face corruption charges.
The jury in Manhattan returned its verdict after a monthlong trial put a spotlight on how lucrative contracts worth hundreds of millions of dollars were awarded for redevelopment projects aimed at revitalizing upstate New York, particularly Syracuse and Buffalo.
"We are absolutely heartsick over the verdict," said Michael Miller, a lawyer for Alain Kaloyeros, formerly the president of the State University of New York's Polytechnic Institute.
Prosecutors said Kaloyeros arranged for a Buffalo developer, Louis Ciminelli, and his company LPCiminelli to win a development job in Buffalo worth a half billion dollars.
Kaloyeros, praised by Cuomo for his ability to bring high-tech jobs to Albany, was counted on by state officials to repeat the success with the Buffalo Billion project.
Prosecutors maintained the bidding process was corrupt and that deals were steered to favored developers. Defense lawyers said it was not.
As the guilty verdicts were read by the jury foreman, Ciminelli shook his head. Kaloyeros looked down.
"I'm just speechless," Ciminelli's attorney, Paul Shechtman, told his client outside the courtroom.
He called his client "a very, very good man."
Prosecutors said Kaloyeros arranged for Ciminelli, and his company, LPCiminelli, to win a development job in Buffalo worth a half-billion dollars.
They said two other developers and co-defendants, Steven Aiello, 60, and Joe Gerardi, 58, unfairly won a $100 million job in Syracuse. The men are executives at Syracuse-based COR Development.
All four defendants were convicted on all counts.
Kaloyeros was convicted of conspiracy to commit wire fraud and two counts of wire fraud. Aiello was convicted of conspiracy to commit wire fraud and wire fraud. Gerardi was convicted of conspiracy to commit wire fraud, wire fraud and making a false statement. Ciminelli was convicted of conspiracy to commit wire fraud and wire fraud.
It was unclear how much prison time the charges were likely to carry. Conspiracy to commit wire fraud alone carries a potential 20-year prison sentence.
Stephen Coffey, a lawyer for Aiello, said outside court that he was "shocked to see this verdict go right down the line. Guilty on everybody."
He blamed the current political climate and suspicions about public officials and business people who have to work with them.
"These aren't great times to try this case," Coffey said.
Cuomo, a Democrat, had praised Kaloyeros, who led many of Cuomo's efforts to lure high-tech investment upstate. Cuomo once called Kaloyeros his "economic guru" and the governor invited him to appear at the announcement of various economic development projects.
After the verdict, Cuomo issued a stern statement: "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."
Cuomo was not charged in the case or accused of any wrongdoing, but the trial tarnished a program that the governor had made a centerpiece of his efforts to lift the upstate economy.
Prosecutors said Kaloyeros was part of a conspiracy to secretly enable developers who were big contributors to Cuomo's campaigns to win the lucrative contracts.
Ciminelli and others in his company contributed nearly $100,000 to Cuomo's campaign while COR executives and their relatives contributed $125,000 to Cuomo's 2014 re-election campaign.
Cynthia Nixon, who is challenging Cuomo in September's Democratic primary, questioned Cuomo's insistence that he didn't know about Kaloyeros' actions, saying that he's either "corrupt or he is spectacularly incompetent."
"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. But if the governor truly didn't know what his top aide and highest-paid state employee were doing, that's arguably even worse."
Defense lawyers insisted throughout the monthlong trial that the developers were given no advantages in the selection process for the Buffalo Billion project and that other prospective developers had every opportunity to win the jobs.
Sentencing dates were set for October.
Brian Kolb, the minority leader of the state Assembly, said the convictions are "business as usual in Andrew Cuomo's Albany" and show the two-term governor has failed to address New York state's chronic corruption problem even when it's within his own administration.
"Friends get favors, campaign accounts get fatter and taxpayers get the bill," he said. "Change in Albany is long overdue. Despite the governor's prior soundbites, corruption has only become more prevalent on his watch."
One watchdog group, the New York Public Interest Research Group, called for an immediate special session of the Legislature to consider ethics reforms that have long stalled in Albany. They include tighter limits on campaign contributions, more robust ethics enforcement, and greater transparency when it comes to state spending on economic development.
"The governor's failure to produce meaningful reforms, coupled with the Legislature's inability to come to an agreement on its own, highlight the failures of the state's elected leadership to grapple with unending scandals," the group said in a statement.