NEW YORK, NEW YORK – “This is a case about lying and cheating to get state construction projects worth hundreds of millions of dollars, paid for by the taxpayers of New York" so began Assistant U.S. Attorney David Zhou, in the opening statements of what is expected to be a four-week long trial which spotlights alleged corruption surrounding one of New York Governor Andrew Cuomo’s signature economic development programs.

Charged are Alain Kaloyeros, the former Albany-based head of the SUNY Polytechnic Institute, who was tapped by Cuomo to run several of his marquee efforts, and Buffalo developer Louis Ciminelli, CEO of LP Ciminelli, a firm awarded the bid to build a $750 million state backed factory at Riverbend.

Two Syracuse area developers are also being tried in connection with alleged pay to play schemes in which Kaloyeros has emerged as a central figure.

“These men wanted state contracts and the millions associated with them, so they schemed with Kaloyeros to rig the bids,” Zhou said.

As president of SUNY Poly, Kaloyeros was chosen by Cuomo in his effort to invest billions of dollars in the upstate area in the hopes of attracting thousands of high tech jobs…and effort which has met with mixed, if not disappointing results.

Kaloyeros was also charged with overseeing a sizable portion of Cuomo’s so called Buffalo Billion initiatives.

According to the prosecution, Kaloyeros who was the state’s top paid employee, had worried that he had worn out his welcome with Cuomo, and so he hired Todd Howe, a lobbyist and Cuomo confidant to help smooth things over.

Howe was paid handsomely for his services by Kaloyeros, and by other clients including developers interested in landing state projects. LP Ciminelli, according to the federal government, paid Howe thousands of dollars per month.

It is alleged that Howe and Kaloyeros secretly shared with officials from LP Ciminelli details of what was going to be sought in determining a preferred development for the project before the request for proposal was released publicly.

It is further alleged the defendants then conspired to rig the bids, by tailoring the specifications so that only LP Ciminelli would qualify to become the preferred developer on the lucrative project, and that LP Ciminelli was then awarded the project after Louis Ciminelli and his family members donated $100,000 to Cuomo’s re-election campaign. Ciminelli also hosted a fundraiser for Cuomo which raised another $250,000 for the governor according to court papers.

Originally, Louis Ciminelli and two of his vice presidents were due to stand trial. However, one of those co-defendants, Kevin Schuler, made a deal to cooperate with prosecutors and the other, Michael Laipple, recently had all the charges against him dismissed.

Where is Howe?

The allegations largely center on actions allegedly taken by Howe, whom defense lawyers described alternatively as a “master manipulator,” a “master criminal,” and a “government agent gone rogue.”
They also described their clients as “victims” of Howe.

Moreover, as attorney Stephen Coffey, who represents Syracuse Developer Steven Aiello noted to jurors, “Howe is their (prosecutors) most important witness, and they’re not even going to call him.”

It could in large part be because Todd Howe disgraced himself during the last corruption trial involving a key member of the Cuomo administration – Joseph Percoco. During the trial Howe who agreed to turn government witness, got himself arrested for violating the terms of his cooperation agreement.

The New Star Witness.

Schuler has emerged as the new star witness in the case, and is expected to take the stand on Tuesday.

“He will give you an insider’s view…with emails describing in his own words what the defendants were doing,” said Zhou.

However, when his chance to make an opening statement came, Ciminelli’ s lawyer Paul Shechtman predicted Schuler’s testimony would actually help his client’s case.
“Schuler made a deal for a lighter sentence, and after you hear him you might actually think he didn’t do anything wrong. But I’m certain after you hear him, you will know Lou Ciminelli did nothing wrong,” said Shechtman.

“The Buffalo RFP did not favor Ciminelli, Lou did nothing to shape the RFP to favor Ciminelli, and Lou didn’t conspire to do anything,” Shechtman declared.

Shechtman also called the government’s assertion that the contract for Riverbend was worth $750 million to Ciminelli “nonsense on stilts.” He revealed that Ciminelli’s take from building the project amounted to close to $2 million.

Emails Comprise Important Evidence.

Emails will comprise critical evidence in the case and the first witness to take the stand was Andrew Bellinger, Chief Information Officer for SUNY Poly.

During his testimony, Bellinger said he was directed by Kaloyeros to find a way to make his old e-mails, once deleted, unrecoverable. Prosecutors noted this was the at the same time period that our news partners at Investigative Post had started making inquiries into the Buffalo Billion program, and credited those inquiries by investigative journalists as having launched their investigation.

Political Fallout

As it was in the Percoco trial, there is expected to be fallout from the case for Governor Cuomo. And his opponents wasted no time in seizing on the moment.

Among the spectators at day one of testimony was Zephyr Teachout who unsuccessfully challenged Cuomo in a democrat primary four years ago and is now running for Attorney general.

“This trial illustrates that we have an ongoing corruption and ethics crisis in New York State,” said Teachout to reporters outside the courthouse.

Marc Molinaro, the republican candidate for governor this year, was also outside the courthouse.

“Every instance of corruption brought against individuals around the state seems to be about enabling and benefiting a governor who has consumed an obscene amount of campaign contributions,” said Molinaro. “When Andrew Cuomo came into office he promised a new day. Instead what we’ve seen over the last 7 years is this new corrupt normal, where individuals are either encouraged, emboldened, or simply believe that the only way to do business in the state of New York is to benefit the governor’s campaign coffers.”