• Watchdog groups are calling on the Legislature to pass, and for Governor Cuomo to sign, comprehensive “clean contracting” legislation
In 2016, an investigation into a sprawling alleged pay-to-play scheme connected to the Governor Cuomo’s Buffalo Billion economic development program resulted in charges against nine men, including a former top aide to Cuomo, Joe Percoco, and the former president of SUNY Polytechnic Institute, Alain Kaloyeros, a close government partner of Cuomo’s, on bid-rigging, bribery, and other charges.
The organizations -- including Reinvent Albany, New York Public Interest Group, Citizens Union, League of Women Voters, Fiscal Policy Institute, Common Cause, and Citizens Budget Commission -- are also urging state leaders to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone seeking a state contract. Nineteen states and New York City -- but not the state -- already have these anti-pay-to-play laws in place.
“The moment of truth has arrived. State and federal prosecutors say $800 million in state economic development contracts were rigged, but so far, the Legislature and governor have yet to act,” said John Kaehny, executive director of Reinvent Albany, standing in the state Capitol. “It’s time they pass common sense legislation that includes independent oversight over state contracts, uniform contracting rules, and transparency that will prevent corruption and abuse before it happens.”
• Governor Cuomo Announces 35th Proposal of the 2017 State of the State: Restoring the Integrity and Accountability of State Government Through Comprehensive Ethics Reform
The comprehensive package of reforms includes:
Advancing a constitutional amendment limiting outside income and creating a full-time legislature;
Advancing a constitutional amendment imposing term limits for elected officials;
Requiring members of the Legislature to obtain an advisory opinion before earning outside income;
Advancing legislation to close the “LLC Loophole;”
Instituting Public Financing and enacting a number of other campaign finance reforms;
Subjecting local elected officials to financial disclosure requirements;
Promoting Increased Transparency Through Comprehensive Reforms to the State Freedom of Information Law;
Expanding the State Inspector General's authority to SUNY and CUNY not-for-profits;
Creating new Inspectors General for the Port Authority and the State Education Department; and
Ensuring greater oversight of the state's procurement process.
• Statement from Governor Andrew M. Cuomo on Proposed Ethics Reforms Scandal seldom begins with evil, but with temptation, and temptation usually begins with a lack of watchfulness. I will create and appoint separate Inspector Generals for both SUNY and CUNY. They will be charged with identifying and investigating conflicts of interest, fraud, corruption and abuse. They will review contracts and hiring for both improper and illegal actions. They will look for personal benefit to any executive or legislative employee or improper actions with a third party. They will review all campuses and all affiliated entities. The IGs will have the authority to bring any report of improper conduct directly to law enforcement.Alas, "Procurement reform became a hot-button issue following the arrest of several Cuomo allies on bid-rigging charges."
I will also appoint a Chief Procurement Officer for the Executive branch. That person will be charged with reviewing all state contracts, with an eye towards eliminating any wrongdoing, conflicts of interest or collusion. And just so there is no confusion, I do mean all contracts. Any contract or agreement that entails the disbursement of state funds will be subject to review. Any question of collusion, political benefit or personal connections will be thoroughly examined. The Chief Procurement Officer will have investigative and prosecutorial experience, and will be authorized to refer problematic issues directly to law enforcement for further action.
The rig was up, but not that many dominoes seemed to fall.
N.Y. developer pleads guilty ahead of 'Buffalo Billion' corruption trial
Kevin Schuler, formerly an executive at Buffalo-based LPCiminelli, admitted on Friday to wire fraud and conspiracy charges before U.S. District Judge Valerie Caproni in Manhattan, less than a month before a scheduled trial. Schuler said he was involved in a bid-rigging scheme that allowed his company to win a lucrative contract as part of “Buffalo Billion,” a signature economic development project of New York Governor Andrew Cuomo to revitalize the region around Buffalo, New York.And then: Architect of Cuomo’s Buffalo Billion Project Is Convicted in Bid-Rigging Scheme
Alain E. Kaloyeros, a principal architect of Gov. Andrew M. Cuomo’s signature economic development initiative, was convicted on Thursday in a bid-rigging scheme that steered hundreds of millions of dollars in state contracts to favored companies in Buffalo and Syracuse. Dr. Kaloyeros, 62, was found guilty of wire fraud and conspiracy in the fourth week of a federal trial in Manhattan that invited harsh scrutiny of Mr. Cuomo’s ambitious plan to revitalize upstate and western New York, known as the Buffalo Billion. Dr. Kaloyeros, the former president of SUNY Polytechnic Institute, had been credited with helping to create a high-tech industry in the capital region, which led Mr. Cuomo, a Democrat, to place him in charge of the Buffalo Billion project. The governor had praised Dr. Kaloyeros as a genius and “New York’s secret weapon.” Soon, the money began to flow to Buffalo; waterfront parks, gleaming modern factories and a cluster of medical and technology facilities were built.Jury convicts Ciminelli, Kaloyeros in Buffalo Billion bid-rigging scheme
Mr. Cuomo, who has not been accused by prosecutors of any wrongdoing, said after the verdict that he had “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.”
But at the trial, the prosecution presented evidence that Dr. Kaloyeros and Todd R. Howe, a former lobbyist with ties to Mr. Cuomo, conspired to defraud Fort Schuyler Management Corporation, a nonprofit real estate arm of SUNY Polytechnic, by steering lucrative contracts to two firms whose executives were significant donors to Mr. Cuomo’s campaign. As part of the scheme, Dr. Kaloyeros and Mr. Howe tailored requests for proposals, or RFPs, to fit the specific qualifications possessed by the two companies — LPCiminelli, a Buffalo construction management firm, and COR Development, a Syracuse-area firm — and ensure that they be chosen by Fort Schuyler for the projects. LPCiminelli, for example, received a contract to build what became a $750 million solar-panel plant on the banks of the Buffalo River, while COR received contracts worth more than $100 million for other projects. Both firms were clients of Mr. Howe’s.
Michael C. Miller, a lawyer for Dr. Kaloyeros, said after the verdict that his client would appeal. “Alain Kaloyeros is innocent,” Mr. Miller said. “He did not rig bids. Not a penny was lost. Not a bribe was paid. He did the best job that he could for the State of New York and for Fort Schuyler, and we’re just utterly disappointed with the outcome of this case.”
Government watchdog groups said that the verdict, like dozens of previous cases touching on corruption in the state capital, was the result of a lack of strong ethics laws and enforcement.
The jury obviously agreed with the government's key witness, former LPCiminelli vice president Kevin Schuler, who took a plea deal and testified against his former boss early in the trial. Prosecutors dropped their charges against former LPCiminelli executive Michael Laipple.Of course, it's another election season, when procurement reform is a can to be kicked through a political goal post. When procurement reformation is the lipstick slapped on political deformation.
Schuler spelled out for the jury how he, Ciminelli and Kaloyeros conspired to make sure that LPCiminelli emerged as the winning bidder by designing the request for proposals, or RFP, to favor Ciminelli's company. "We had significant influence over the project, influence over the RFP and influence over the process that was going to select a winner," Schuler told the jury.
Most notably, potential bidders were told in 2013 that they had to have 50 years' worth of construction experience in the Buffalo area in order to qualify for the project. That prompted Schuler to show the jury a shirt, produced in 2011 celebrating LPCiminelli's 50th anniversary. "I think someone put this in to help us ... and I'd never seen a requirement like that," Schuler testified. State officials later shrank the requirement to 15 years of Buffalo experience, saying that the 50-year provision was a typographical error.
As Governor Cuomo himself said in his Statement quoted above, "Democrats, Republicans, Conservatives, Liberals, Independents – no party or group is immune."