Jury convicts key players in Buffalo Billion corruption case

The Manhattan jury 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. (Photo: Brian Turner/Flickr/CC BY 2.0)

NEW YORK – 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 that it’s a bad time to face corruption charges.

The Manhattan jury 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.

Defence lawyers promised appeals. “Alain Kaloyeros is innocent,” Miller said. “He did not rig bids. Not a penny was lost. Not a bribe was paid.”

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 a corrupt bidding process steered deals to favoured developers.

As guilty verdicts were announced, Ciminelli shook his head. Kaloyeros looked down.

Outside court, attorney Paul Shechtman, representing Ciminelli, called it a “difficult time to try a political corruption case.”

He noted that former New York state Senate leader Dean Skelos, a Republican, was on trial on corruption charges on the same floor. And former state Assembly Speaker Sheldon Silver, a Democrat, was convicted in May of corruption.

Over 30 New York state lawmakers have left office under a cloud of criminal or ethical allegations since 2000. Over a dozen were convicted of charges including authorizing bribes and diverting charity money for personal use.

“I think you have a state and a lot of citizens in this state that think it is dysfunctional and that there is a culture of corruption,” Shechtman said.

Also convicted were developers Steven Aiello, 60, and Joe Gerardi, 58, executives at Syracuse-based COR Development.

Prosecutors said they unfairly won a $100 million job in Syracuse.

The defendants were convicted of conspiracy to commit wire fraud and other charges. They could face over a decade in prison at sentencings set for October.

Stephen Coffey, Aiello’s lawyer, said he was “shocked to see this verdict go right down the line. Guilty on everybody.”

He, too, blamed the current political climate.

“These aren’t great times to try this case,” Coffey said.

“All these public corruptions. Everything going on in Washington.”

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.”

After the verdict, Cuomo said in a 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 or accused of wrongdoing. The trial tarnished a program that the governor had made a centerpiece of his efforts to lift the upstate economy.

Prosecutors said Kaloyeros was in a conspiracy to secretly enable developers who were big contributors to Cuomo’s campaigns to win contracts.

Ciminelli and others in his company contributed nearly 0,000 to Cuomo’s campaign while COR executives and their relatives contributed 5,000 to Cuomo’s 2014 re-election campaign.

Cynthia Nixon, who is challenging Cuomo in September’s Democratic primary, said 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.”

Defence lawyers insisted chosen developers were given no advantages.

Brian Kolb, minority leader of the state Assembly, said the convictions are “business as usual in Andrew Cuomo’s Albany.”

“Friends get favours, campaign accounts get fatter and taxpayers get the bill,” he said. “Change in Albany is long overdue.”

One watchdog group, the New York Public Interest Research Group, called for immediate ethics reforms that have long been stalled in Albany. They include tighter limits on campaign contributions, more robust ethics enforcement, and greater transparency about state spending on economic development.