NEW YORK – Gov. Andrew Cuomo says justice has been served after a federal grand jury convicted key players Thursday on charges related to Cuomo’s “Buffalo Billion” economic redevelopment program.
A Manhattan-based jury convicted suspects following a month-long trial put heat on lucrative contracts worth hundreds of millions of dollars being awarded for redevelopment projects to revitalize Syracuse and Buffalo.
“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 said.
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.”
“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 argued the bidding process was fixed to favor certain developers, while the defense argued it was not rigged.
“I’m just speechless,” Ciminelli’s attorney, Paul Shechtman, told his client outside the courtroom.
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 the 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.
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.
Sentencing will be in 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.”
The New York Public Interest Research Group is calling for a special session of the Legislature to consider ethics reforms stalled in Albany.
“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.