Second corruption trial of Cuomo's Buffalo Billion program begins Monday

Jun 18, 2018

Prosecutors Monday will present the second of two corruption cases against former associates of Gov. Andrew Cuomo in federal district court in Manhattan.

Dr. Alain Kaloyeros, the former head of the State University of New York Polytechnic Institute and mastermind of the state’s high-tech development efforts, faces charges of bid-rigging and bribery. Three upstate developers are co-defendants.

Kaloyeros, a Lebanese immigrant with a Ph.D. in physics, was once the highest-paid employee in New York state, earning over $1 million a year. For more than 20 years, he’s been close to several New York governors, including the current governor’s father, the late Mario Cuomo.

He is credited for his role in advancing the nano computer chip technology that formed the base of the state’s vast high-tech development efforts, including the Buffalo Billion. That program awarded $1 billion in government funds for contracts for projects in Buffalo.

The colorful and charismatic Kaloyeros was often seen driving to the local Starbucks and other places in the Albany area in his bright red Ferrari, with custom license plates that read “Dr. Nano.” He frequently appeared at economic development announcements, where he praised Andrew Cuomo.

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

Cuomo returned the admiration. At a 2015 event at the Buffalo Billion’s Solar City plant, he called Kaloyeros his “economic guru.”

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

But prosecutors say there was a dark side to the development projects.

Kaloyeros, who resigned his state post in October 2016, is accused of operating a bid-rigging and bribery scheme. Prosecutors allege he secretly allowed favored developers who made large campaign donations to Cuomo to win nearly $1 billion in government contracts.

He faces a charge of conspiracy to commit wire fraud and two charges of wire fraud, which could carry up to 30 years in prison.

Preet Bharara, then the U.S. Attorney for the Southern District, issued criminal complaints against Kaloyeros and an associate in September 2016.

“Behind the scenes, they were cynically rigging the whole process,” Bharara said, “so that the contracts would go to the handpicked ‘friends’ of the administration — ‘friends’ being a euphemism for large donors.”

Bharara has since been fired, along with scores of other federal prosecutors, by President Donald Trump. His successor, Geoffrey Berman, is pursuing the case.  

Three developers are co-defendants in the trial.

Buffalo-area developer Louis Ciminelli is charged with bid-rigging and conspiring to steer the $750 million contract to build the Solar City factory in Buffalo to his firm, LPCiminelli.

Ciminelli and others in his company contributed nearly $100,000 to Cuomo’s campaign. A bribery charge against Ciminelli was dropped earlier this spring.

Syracuse-based COR Development and its top officers, Steven Aiello and Joe Gerardi, also face charges. Gerardi is accused of helping tailor requests for proposals to make it easier for his company to win the contracts.

COR received $105 million in contracts, including a $15 million film hub outside Syracuse designed to attract Hollywood-style productions. It remained empty for years and was recently sold by the state to Onondaga County for $1.

COR executives and their relatives contributed $125,000 to Cuomo’s campaign.

Cuomo has not been implicated in any of the charges and has rarely commented on the cases since they became public over two years ago. He’s said if any of the accused did something wrong, they should be punished.

“If anyone did anything wrong, I will be the first to throw the book at them,” Cuomo said on May 10, 2016.

In the first federal corruption trial of former Cuomo associates earlier this year, the governor’s former closest aide, Joe Percoco, was convicted on three felony counts for collecting over $300,000 in illegal bribes from businesses that had interests before state government. COR officials Aiello and Gerardi were codefendants in that trial. Aiello was convicted on one count of conspiracy, while Gerardi was acquitted.

Lawyers for Kaloyeros and the three developers who go on trial Monday say their clients are innocent.