Gotham Gazette http://www.gothamgazette.com/component/tags/tag/1250 Mon, 23 Oct 2017 15:30:21 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) DiNapoli, Seeking Restored Power, Points Finger at Only the System http://www.gothamgazette.com/?id=6577:dinapoli-seeking-restored-power-points-finger-at-only-the-system http://www.gothamgazette.com/?id=6577:dinapoli-seeking-restored-power-points-finger-at-only-the-system DiNapoli speech charts

Comptroller DiNapoli (photo: @NYSComptroller)


Comptroller Tom Dinapoli is not interested in pointing fingers at any of his fellow elected officials when it comes to the massive scheme alleged to have corrupted major state economic development programs under the noses of Governor Andrew Cuomo and state legislators.

In the wake of corruption charges brought against nine individuals by U.S. Attorney Preet Bharara, DiNapoli was given multiple opportunities Friday during a radio interview, but he declined to criticize either Cuomo or the Legislature. Speaking with host Susan Arbetter on The Capitol Pressroom, DiNapoli instead called for greater oversight through his office of the large state contracts that had been awarded by SUNY Polytechnic and two affiliated nonprofits as part of Cuomo’s Buffalo Billion program and other state efforts to boost the economies of central and western New York.

Calling the bribery and bid-rigging allegations “very troubling,” DiNapoli said that the situation “seems to speak to a systemic failure, as to not having adequate checks and balances.” But asked by Arbetter if Cuomo helped create the system that was so ripe for abuse, DiNapoli demurred. After pausing and searching for his words, DiNapoli said, ”I don’t know that it’s productive to, you know, finger-point at the governor.”

The comptroller repeatedly said that the system lacked oversight and accountability, but excused the mindset behind its creation, saying that communities needed help and that he understood the desire for efficiency in moving money to projects meant to stimulate local economies that had not recovered from the Great Recession. His office, he said, is designed to approve contracts and is incorrectly known for slowing down the process -- when his office does slow something down, DiNapoli said, it is for good reason.

In September, Bharara brought charges against former Cuomo aides, prominent developers who were generous Cuomo campaign donors, and the now former head of SUNY Poly, Alain Kaloyeros, on whom Cuomo heaped praise and responsibility over years.

When Arbetter pressed DiNapoli on Cuomo and the Legislature enabling SUNY Poly and the system that appears to have been abused by what the comptroller called “a web” of stakeholders, DiNapoli again struggled to find his answer, then said, “From my perspective there was not adequate oversight in the way the process was set up, both with SUNY Poly and with the use of Fuller Road or Fort Schuyler, these nonprofits that were set up.” He pointed to the fact that the Comptroller’s oversight of construction contracts was diminished in 2011 and called for it to be restored.

Later in the interview, Arbetter asked DiNapoli why the Legislature, which he was once part of as an Assembly member, had been so quiet about the questionable system at play. DiNapoli began answering by saying officials were trying to help downtrodden communities, that there was consensus “we need to do more.”

“There is a hopeful expectation that it’s all going to be handled in the right way,” DiNapoli said of the mindset when a key priority is established by state government. Arbetter asked, “So lawmakers don’t want to get in the way?” To which DiNapoli said, “Well, unless there’s a reason to. In fairness, you did have the hearing that the economic development committee had in the Assembly and some fireworks came out of that.”

DiNapoli was referring to a recent hearing that came well after media reports of the federal investigation into the Buffalo Billion and years after flags were raised by watchdogs about the system at hand.

After Arbetter pushed back further, DiNapoli conceded, “Well, I think clearly that there’s more that could have been done, more questions asked...Clearly the lesson of this is that you can’t just trust that it’s all going to be handled in the right way.”

“I think the Legislature does have to play a more effective role in oversight,” DiNapoli said. DiNapoli's office did not provide further comment when asked on Sunday to clarify why the comptroller was hesitant to more directly hold anyone accountable.

When Cuomo and the Legislature stripped power from the Comptroller in 2011, they left the independent auditor’s office on the sidelines as hundreds of millions of tax dollars flowed to developers and other corporations through SUNY Poly. It was this cash flow, the opaque contracting process, and the state’s loose campaign finance laws that helped allow former Cuomo aides Joseph Percoco and Todd Howe to manipulate the system for their means, according to Bharara’s allegations.

While DiNapoli has called for restoration of all contract vetting powers before, he, like legislative leaders, has largely been quiet as Cuomo and others have revved up economic development programming through a system some watchdogs have long warned can too easily be taken advantage of by nefarious actors.

A careful, serious elected official who is well-regarded by many across the state, DiNapoli, a Democrat like Cuomo, is not one to throw verbal bombs or pursue headlines. Not necessarily media shy, DiNapoli is, however, inclined to let his audit and contract oversight work do the talking.

Recently, DiNapoli was on the receiving end of Cuomo vitriol when the comptroller released audits of other Cuomo economic stimulus programs, calling into question their efficacy. In turn, Cuomo called audits “opinion” and said that DiNapoli needed to “educate himself,” referring to him as “the Assemblymember” in an apparent effort to undermine him further.

DiNapoli responded in typical fashion -- by downplaying conflict and pointing to the content rather than escalating the back-and-forth. An astute headline from Politico New York read, “Cuomo thunders, and DiNapoli shrugs.” It is unsurprising that DiNapoli took the path he did on Arbetter’s show, pointing toward the future and needed changes, rather than laying direct blame with the governor or legislative leaders for past mistakes.

In May, DiNapoli did announce a series of proposed “reforms to state fiscal practices” that he led with a call for restrictions on “‘backdoor spending’ by public authorities” and requirements for “more comprehensive public authority disclosure.” In a press release, DiNapoli’s office said that “public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight.”

The proposals also came after news reports of the federal investigation into Cuomo’s economic development programming.

Earlier in May, DiNapoli had released his analysis of the recently-passed state budget for Fiscal Year 2017. His office wrote, “the budget expands on actions in recent years that have blurred both fiscal and operational distinctions among state agencies and public authorities.”

Cuomo paid DiNapoli's May suggestions and analysis little public mind, but did announce plans for procurement reform in the wake of the September charges brought by Bharara. The day after the U.S. attorney outlined the criminal complaint, Cuomo said in Buffalo that the revitalization of the city would not miss a beat, but that he was immediately moving power from SUNY Poly to the Empire State Development Corp. Cuomo also said that he had received recommendations from a private investigator he had hired and that he was accepting all of them -- but he declined to make them public.

On Thursday budget and government watchdog groups called on state legislative leaders to “hold emergency oversight hearings on the allegations by the U.S. Attorney of the largest bid-rigging scandals in state history.” A coalition including Reinvent Albany, Citizens Union, NYPIRG, Citizens Budget Commission, and others said that the public deserves more information about how “more than a billion dollars in state contracts were rigged and what reforms will be implemented to address this huge and systemic failure.”

Asked by Arbetter about the call for such hearings, DiNapoli said no one should rush to do anything, that it is important for all the best minds to get together and figure out the path ahead. Noting that state legislators are focused on their impending elections next month, he said that if they want to hold hearings toward the end of the year, that would be “their prerogative.”

The watchdog groups on Thursday also laid out “five clean contracting reforms” including that all state funds be awarded through “competitive and transparent contracting” and empowering “the comptroller to review and approve all state contracts over $250k.” Additionally, they called on the state to enact “pay to play” laws as are found in 19 states and New York City that would limit what entities with state business can donate to political campaigns.

DiNapoli appears to be largely on the same page. The comptroller has not been aggressive about publicly pushing his reforms, though -- while he gave a speech in May to outline his proposals, he has not, for example, called a press conference to put more public pressure on lawmakers to act.

When asked by Arbetter what he could have done differently to protect against the type of corruption alleged by Bharara, DiNapoli said he could have been more aggressive, but focused more on his “limited authority.”

“I would hope the Legislature would look at our role, restore what’s been taken away...perhaps some areas where our role can be strengthened,” he said. When Arbetter asked if he’s going to be more aggressive, DiNapoli paused and said, “We will certainly be more vigilant.”

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by Ben Max, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

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DiNapoli, Seeking Restored Power, Points Finger at Only the System Sun, 16 Oct 2016 04:00:00 +0000
For Review, Cuomo Chooses Outside Agent Over Existing State Investigators http://www.gothamgazette.com/?id=6377:for-review-cuomo-chooses-outside-agent-instead-of-existing-state-investigators http://www.gothamgazette.com/?id=6377:for-review-cuomo-chooses-outside-agent-instead-of-existing-state-investigators schneiderman cuomo moreland corruption

Scheiderman, left, & Cuomo, center (photo via The Governor's Office on Flickr)


More than a month after Governor Andrew Cuomo announced that Bart Schwartz, a former federal prosecutor, would head an “independent investigation” into the Buffalo Billion economic development program, it remains unclear whether Schwartz has begun his work and the governor has repeatedly said that his contract with the state is still being finalized. The Buffalo Billion project and other pieces of Cuomo’s economic development programs have drawn scrutiny from the U.S. Attorney and Attorney General Eric Schneiderman due to allegations including bid-rigging that favored large Cuomo donors.

This past week, the State Inspector General’s office issued a report on the source of a leak about an investigation into Mayor Bill de Blasio’s fundraising practices at the State Board of Elections. By all accounts the investigation was conducted expeditiously.The Joint Commission on Public Ethics is also involved in a de Blasio matter as it probes his allies’ lobbying practices. These matters, not to mention the existence of the Attorney General and Comptroller, make it clear that state government already has a number of investigative bodies that would not have required extended contract negotiations and monetary compensation to conduct an investigation of the Buffalo Billion. But, Cuomo decided not to call on an existing investigative body to look at all aspects of his major economic development programs.

Gov. Cuomo’s office did not respond to questions about why an existing agency was not selected. Schwartz’s office declined to respond to questions about whether he had a contract and how many staff he would bring to his review of state economic development programming.

Schwartz’s role is murky given that the U.S. Attorney and Attorney General are now both pursuing widespread investigations. It is unclear what he can do investigatively that won’t interfere with active probes. Government watchdogs say that Schwartz’s appointment would have had an impact when concerns about the bidding process were initially raised, but at this point many believe Cuomo is simply trying to obscure the scope of the federal probe and claim high ground as state integrity is questioned.

“Schwartz’s investigation was triggered by a criminal probe. If he had been brought in years ago, that would have been a different thing,” said John Kaehny, executive director of Reinvent Albany.

Jennifer Rodgers, a former federal prosecutor and head of Columbia Law School’s Center for the Advancement of Public Integrity sees value in Schwartz’s hiring. “There are two things Bart Schwartz brings to the table: independence and resources,” Rodgers said.

“JCOPE is constantly tagged as not independent, and the state IG is ostensibly independent although appointed by the Governor,” noted Rodgers, adding that Schwartz’s firm, Guidepost Solutions, “has all the experts he might need to examine such a complex system: lawyers, former law enforcement officials, computer people - people with a set of skills that the IG and JCOPE would be hard-pressed to bring together.”

While Cuomo has said Schwartz will take a soup-to-nuts approach to his review, no one will know exactly what he is tasked with and how his work will be done until his contract is finalized and made public.

Schwartz’s firm details its approach to internal investigations on its website:

“Guidepost Solutions is frequently called upon by businesses to conduct internal investigations into allegations or suspicions of corrupt or fraudulent conduct by employees. We rely upon our full-time staff of attorneys, forensic accountants, research analysts, field investigators and computer forensics experts to staff these assignments, and we work collaboratively with our business clients to develop an investigative plan that is appropriate to the suspected misconduct...Since most of our investigative professionals have had experience in federal, state and local law enforcement—as prosecutors, auditors and agents—our investigative strategies are developed with an understanding of the evidence that may be needed to support an eventual criminal prosecution.”

The section goes on to state that the team is “equally sensitive to matters of confidentiality and public perception.”

Blair Horner, legislative director of the New York Public Interest Research Group (NYPIRG), said that Gov. Cuomo had a full menu of options to choose from before even considering Schwartz. “The governor had a toolbox he could have gone to to review this, but instead he went out and bought a new hammer.” Critics of the state's approach to economic development, including the Buffalo Billion, have repeatedly said that the state Comptroller should have more oversight of contracts and spending - something Comptroller Tom DiNapoli recently addressed in a series of proposals.

Horner said that the arrangement with Schwartz could technically allow Cuomo to address issues faster than if the IG’s office was investigating.

“Schwartz reports directly to him, so in theory it would all happen faster, although the IG did just turn a report around in a few weeks,” said Horner, referring to the investigation of the BOE leak. “The IG would have to issue a report and the IG would have to act.”

In other words, if the IG’s office was investigating the case the governor wouldn’t be able to fix anything until after a report was released, and the IG would have to recommend actions to be taken, which could include civil cases or referrals to law enforcement agencies for violations of the law, according to New York Executive Law section 53.

The Cuomo administration has said Schwartz will have the ability to review contracts and control cash flow, while also looking for larger fixes to the system, giving him a more proactive role than standard investigators. In an April 29 statement announcing his impending hire, Schwartz said that given the investigation and the administration’s desire to keep the Buffalo Billion program running, “they have asked me to commence an immediate review of all grants and approvals – past, current and future – in certain programs and operations,including the Buffalo Billion/Nano Economic Development Program.”

“It’s belt and suspenders, but I’d rather have it that way,” Cuomo told reporters in New York City last week, referring to redundancy and noting that he will consider making changes to economic development programs depending on the findings. Cuomo aides have periodically reminded reporters that Schwartz will also have direct approval of contracts and cash allocations. No one has confirmed whether Schwartz has indeed begun his work.

Last week, when asked if Schwartz’s report would be made public Cuomo appeared less sure of what Schwartz would be doing and admitted he had yet to secure a contract with him. “He is being hired as an independent to do an independent review,” said Cuomo. “I don’t know what his standard protocol is. I wouldn’t have a problem with [making his findings public], but I don’t know how he operates.”

Cuomo’s aides later clarified Schwartz’s report would be made public if it didn’t interfere with the U.S. Attorney’s investigation. It is unclear if there has been communication between Schwartz and U.S. Attorney Bharara’s office.

Kaehny of Reinvent Albany said he finds it a “stretch of the imagination” to think the governor could appoint someone to investigate the Buffalo Billion matter when the crux of the federal investigation appears to hinge on whether contracts were exchanged for major donations to the governor’s campaign.

“He could have asked the Attorney General and Comptroller to jointly choose an investigator and signed an MOU [memo of understanding] that would give them access to the documents they need. It would have been highly credible, people would believe it.” He noted that “most observers don’t think of the IG or JCOPE as independent” and so wouldn’t have the ability to “give the governor a clean bill of health.”

Rodgers said a joint investigation by Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli, both Democrats like Cuomo who are known to have strained relationships with the governor, could have appeared independent but the relational friction could have prevented the governor from wanting to hand them the keys to his signature economic development program. She noted both offices would have the resources necessary for an investigation the scope of the Buffalo Billion.

The main question surrounding Schwartz’s usefulness in the matter remains exactly what Cuomo has tasked him with investigating. Cuomo has repeatedly said that Bharara’s investigation focuses on two men, longtime associates Todd Howe and Joseph Percoco, something disputed by those familiar with the investigation.

On Thursday Cuomo was asked whether he has been told by the U.S. Attorney’s Office that its probe focuses on only a few people. Cuomo said that he hadn’t but that he believes the actions of a few people are at issue.

“Our investigator will talk to hundreds of people, but it’s about the actions of several people,” Cuomo said, adding that he would consider changes to economic development practices if Schwartz’s indicates they are necessary.

“There are major question marks around the scope of his engagement and the access he will get,” Rodgers said of Schwartz. “He has the tools and independence, but what was he asked to do with them? That is why it's so important we see a contract.”

While Schwartz’s role has remained unclear, U.S. Attorney Preet Bharara’s investigation into alleged bid-rigging in Cuomo’s economic development initiative appears to be quickly expanding; last week the U.S. Attorney’s office and Attorney General Eric Schneiderman's office conducted a joint raid on the headquarters of SUNY Polytechnic, the organization that oversees Buffalo Billion contracting. The raid appeared partly targeted at the office of Howe, a Cuomo ally and lobbyist, who has lobbied the administration while also representing semi-governmental entities and remaining close with key players in the Cuomo administration.

A recent Wall Street Journal story revealed emails showing that Howe, someone Cuomo himself has said is a target of the probe, had a close hand in guiding SUNY Poly head Alain Kaloyeros as well as directing conversations with the governor’s top aides about how to do so. Cuomo insisted last month that he wasn’t close friends with Howe. On Thursday he said otherwise, telling reporters “I know Todd Howe. I’ve known him for many years. He worked for nano, he’s worked on a lot of these projects. But it’s also irrelevant. If anyone does anything improper, they will be punished to the fullest extent of the law, period.”

Kaehny said that Schwartz’s appointment has in a way already failed the administration. “The problem Schwartz faced from the very first moment is that his client is the governor, and the people targeted by subpoenas are extremely close to the governor,” said Kaehny, adding that it is hard to have faith in an investigation launched by the governor himself. However, it won’t be clear exactly what kind of investigation Schwartz is undertaking until his contract is made public, if one is indeed signed.

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

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For Review, Cuomo Chooses Outside Agent Over Existing State Investigators Sun, 05 Jun 2016 04:00:00 +0000
Role of Cuomo’s ‘Independent Investigator’ Remains Unclear http://www.gothamgazette.com/?id=6363:role-of-cuomo-s-independent-investigator-remains-unclear http://www.gothamgazette.com/?id=6363:role-of-cuomo-s-independent-investigator-remains-unclear cuomo purple tie

Gov. Cuomo (photo: Kevin P. Coughlin, Governor's Office)


In trying to stifle the blaze that has become U.S. Attorney Preet Bharara’s investigation into the Buffalo Billion economic development program, Governor Andrew Cuomo has repeatedly invoked the name of Bart Schwartz, a former federal prosecutor the administration has retained (or is in the process of retaining) to carry out an “independent” review of the project.

In acknowledging that people close to him were being investigated in relation to the Buffalo Billion, Cuomo announced Schwartz’s hire on April 29.

When the Public Authorities Control Board met this week and approved without debate another $485 million for a key Buffalo Billion project, the administration quickly reminded reporters that Schwartz would now provide another layer of oversight by considering approval of disbursement of the funds.

The day before, Cuomo told reporters he had yet to finalize Schwartz’s contract. The governor also appeared unsure whether Schwartz would make his findings public. Administration officials later clarified Schwartz would release his findings as long as doing so wouldn’t interfere with Bharara’s investigation, which appears to be focused on bid-rigging and a web of relationships among private and public entities.

Even as Schwartz’s presence is held up as a measure of confidence in the Cuomo administration and the state’s vast economic development apparatus, several questions about Schwartz’s role and power remain. These include whether Schwartz has already started his work; when his contract will be available to the public; if his efforts are duplicative of the U.S. attorney’s office’s; and what authority Schwartz will invoke to audit the nonprofits that oversee the Buffalo Billion, which are said to be independent from the Governor’s Office.

Both the Cuomo administration and Schwartz’s recently-hired public relations firm failed to respond to Gotham Gazette’s questions about Schwartz’s role.

“In the real world someone doesn’t start work before they have a contract,” said Blair Horner of The New York Public Interest Research Group.

In conjunction with Cuomo's office, Schwartz issued a statement April 29 detailing some of his plans and saying he would begin immediately.

“The state has reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interest by lobbyists and former state employees,” Schwartz wrote, in apparent reference to Cuomo associates Joseph Percoco and Todd Howe.

“As the state needs to continue operating these important programs, they have asked me to commence an immediate review of all grants and approvals – past, current and future – in certain programs and operations including the Buffalo Billion/Nano Economic Development Program,” Schwartz wrote.

It remains unclear exactly what Schwartz will be reviewing and how he will conduct his work. Part of the uncertainty and unease around Schwartz’s role held by some stems from Cuomo’s messaging around the investigation and various long-standing concerns about the Buffalo Billion.

There are three major questions about the Buffalo Billion raised by watchdogs and, it seems, Bharara’s office: Was the contracting process designed to benefit Cuomo campaign donors? Did Cuomo loyalists use their connections to play both sides of the contracting process? Are SUNY Polytechnic, the college that oversees the distribution of Buffalo Billion funds, and its associated nonprofits doing enough to make sure corporations like SolarCIty make good on their jobs promises and other deliverables. SolarCity recently appeared to revise the number of jobs it expects to host in its Buffalo Billion-funded factory and pushed back the factory’s open date.

Cuomo himself appears to have introduced a fourth question, which goes something like: Did someone steal money? It's a question watchdogs see as misdirection given that many of them doubt any money was actually secretly taken by lobbyists or contractors - they are more concerned about contracts being awarded improperly.

While Cuomo is calling it a measure to ensure integrity, Schwartz’s appointment is seen as a smokescreen by many legislators and watchdogs who are concerned about the Buffalo Billion. The governor has continued to tell the press that the investigations by Bharara and Schwartz will examine the possible wrongdoing of “one or two” individuals while analysts say Bharara’s subpoenas indicate an investigation into systemic corruption.

“This is a major effort the state is running that is working extraordinarily well and is vitally important to upstate New York,” Cuomo told reporters in Syracuse on Wednesday of the Buffalo Billion. “There is no reason to stop investing in upstate New York, to hurt the upstate economy, because a couple of people may or may not have done something wrong.” He went on to say: “You have questions raised about the conduct of several individuals. That’s now being investigated by the U.S. attorney. We also started our own internal investigation by a former prosecutor.”

Cuomo has also said he will “throw the book” at anyone found to have violated the public trust, and that he holds every Buffalo Billion dollar as “sacred.”

Without seeing Schwartz’s contract it won’t be possible to ascertain what Cuomo has actually tasked him with investigating. It also won’t be clear what the public is actually paying him to investigate a project that watchdogs say should have already been monitored by the state Comptroller.

“It’s ironic that [Cuomo] has gone out and hired someone who apparently will have access to contracts and information that the Comptroller of New York, who is independent, doesn’t have access to,” said E.J. McMahon, president of the Empire Center for Public Policy. McMahon did note that Schwartz isn’t “political” or “one of the governor’s people,” though.

When Schwartz’s role was first announced on April 29, Cuomo Counsel Alphonso David said of the Buffalo Billion, “Any grants made by this program will be thoroughly scrutinized – past, current or future.” David’s statement accompanied Schwartz’s in the same release to the media.

Schwartz may indeed be performing duties that once belonged to the Comptroller, Thomas DiNapoli, who was formerly allowed to review SUNY and CUNY contracts. That ability was stripped by Cuomo and the Legislature in 2011. SUNY Polytechnic has created two nonprofits to distribute state cash to various economic development projects across New York.

John Kaehny of Reinvent Albany, a group that has been closely tracking the Buffalo Billion, said that it is unclear to him what problems the governor has asked Schwartz to examine, especially because Schwartz’s contract has yet to be made public. “Where is his contract? Exactly what does it say?” Kaehny asked, wondering whether Schwartz is focused on everyday expenditures or aspects of possible pay-to-play and conflict of interest in the awarding of contracts.

After news broke this month that Bharara had subpoenaed Cuomo’s office, DiNapoli unveiled a series of reform proposals that watchdogs say would upend how the Buffalo Billion is administered and overseen by the state. His plan would ban lump sum appropriations, create a council to plan capital spending, and require economic development program proposals to be scored and ranked in a public database.

“Public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight,” reads a release from DiNapoli’s office detailing the reforms. “DiNapoli’s proposal would require state-funded public authority projects to be scored and ranked using measurable and objective criteria. His proposal also requires more disclosure of public authorities’ spending and financing activities.”

DiNapoli also recently indicated that he may investigate parts of the Buffalo Billion.

“Why, other than Cuomo saying so and Schwartz saying so, is there any reason to think that Schwartz is completely independent of the governor's office?” asked Kaehny. “Schwartz is not a court appointed monitor, nor is he reporting to a board of directors. He is effectively reporting to a CEO with no board whose top associates are under federal investigation.”

Dick Dadey, executive director of government reform group Citizens Union, said it is critical for the integrity of Schwartz’s work to make the terms of his employment clear. “If this investigation is about transparency it should start by making this contract public to reassure people that there will not be a repeat of the Moreland Commission where the governor promised independence but abruptly shuttered it.”

Cuomo told reporters on Tuesday “We're doing a contract that's being finalized now. When it's finalized we’ll give it to you.” He added negotiations were about “the dollars.”

The use of nonprofits to disburse government funds has led many to question the application of state procurement rules requiring an open request for proposals process. The RFPs for two major Buffalo Billion projects appeared tailored for the two firms that won them, both of which donated generously to Cuomo.

Kaehny, in a press release, asked members of the Public Authorities Control Board, a five-member group appointed by the governor, four of whom are recommended by heads of the Legislature’s majority and minority conferences, that is tasked with approving funding for state economic development projects, to pose that very question in their meeting on Wednesday. It was not asked.

However, the Assembly Democrats' representative on the board said she was voting for disbursing the funds with several conditions of more transparency and oversight.

SUNY Poly has previously insisted that the nonprofits do abide by those rules.

“SUNY Poly and our related entities follow New York state government’s well-established and legally defined procurement procedures — to the letter,” David Doyle, a spokesman for SUNY Poly, told the Times Union in a September letter.

State Attorney General Eric Schneiderman’s office declined to comment on whether the office believes the law actually applies to the nonprofits.

For the first time, on Wednesday Cuomo denied having influenced the contracting process for the Buffalo Billion. “The way it worked...the state didn't do any of the contracts," Cuomo was quoted as saying by The Post Standard. "It's all done through SUNY, the state university system. They are the ones that actually managed the contracting process. They are the ones who ran the contracts, ran the competitions, made the selections," he said. "I had absolutely nothing to do with that. It was done by SUNY.”

However, as Cuomo distances himself from SUNY Poly and its decisions in contracting, his appointment of Schwartz brings into question just how much control the governor does have over the SUNY nonprofits. It appears, in a sense, by hiring Schwartz Cuomo is saying he has direct authority over all the entities involved despite legal and rhetorical framework painting them as independent.

Kaehny said he doesn’t believe Cuomo has “the legal authority” to direct the Empire State Development Corporation or SUNY’s nonprofits to allow Schwartz to review their contracts or approve them. “ESDC is a public authority with a legally independent board and the nonprofits also have legally independent boards,” said Kaehny. “If they want to vote to subject themselves to control by Schwartz, they could do that, but that would be abdicating their fiduciary duty to a consultant to the governor, which raises questions of separation of powers. Are these entities independent of the governor or not? If they are not, then why are they exempt from state contracting and conflict of interest rules?”

SUNY Poly and a representative of Fort Schuyler Management, one of SUNY Poly’s nonprofits that administers the Buffalo Billion, failed to return requests for comment on whether Schwartz had begun his work and whether the boards of Fort Schuyler Management and Fuller Road Management had decided to give Schwartz access to their decision making processes.

On Tuesday Cuomo was asked about the scrutiny of his use of nonprofits and whether he would consider changing the process. “What's interesting is that all predated me, right?” Cuomo said to reporters. “That went back to Governor Pataki, who was a saint. That was all in place and we used the existing mechanism; we did not design that mechanism.”

Watchdogs say this is another misdirection by Cuomo as the particular system he has used to expedite Buffalo Billion was pioneered by SUNY Poly head Alain Kaloyeros during Cuomo’s time in office.

“The governor said the structure was here when he got here,” said McMahon of the Empire Center. “That isn’t true. It was set up by a very ambitious college president [Kaloyeros] who wanted to expedite the construction of his empire. The governor has used it because he can get done what he wants to get done faster. It avoids the niceties that usually go into spending public money.”

Dadey said there should be no mistake that Schwartz’s full task is to examine systemic issues in the Buffalo Billion and not just look for possible wrongdoing. “The SUNY cartel is hard to follow and that is a problem. Bart Schwartz's task is not just to find out if someone did something wrong, but to examine this opaque system and suggest ways to improve it, so voters can have faith in it.”

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

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Role of Cuomo’s ‘Independent Investigator’ Remains Unclear Thu, 26 May 2016 04:00:00 +0000
IBM Hired Influential Lobbyist Months Before Securing Buffalo Billion Deal http://www.gothamgazette.com/?id=6356:ibm-hired-influential-lobbyist-months-before-securing-buffalo-billion-deal http://www.gothamgazette.com/?id=6356:ibm-hired-influential-lobbyist-months-before-securing-buffalo-billion-deal IBM sign

IBM (photo: Patrick via Flickr)


International Business Machines (IBM) has a long history in New York - its headquarters is located on the New York-Connecticut border in Armonk; it used to be one of the largest employers in the state; and it was part of a 2011 deal to bring $4.4 billion in investments to upstate New York through the creation of a high-tech computer chip manufacturing plant. The success of the company and the overall state economy have travelled similar paths, both flourishing at times, but when IBM laid off scores of employees, the state suffered.

Given its massive business interests it isn’t surprising that the company contracts with a host of New York-based lobbying firms. But IBM’s choice of a new firm in 2013 is raising eyebrows.

That year, as Gov. Andrew Cuomo ramped up his Buffalo Billion economic development program, IBM retained Whiteman Osterman & Hanna LLP. A few months later, IBM was part of a September 2013 Buffalo Billion deal that saw the state pledge $55 million to create information technology infrastructure in the beleaguered western New York city Cuomo had targeted for roughly a billion dollars of investment. In turn, IBM pledged to bring 500 information technology jobs to the area.

Whiteman Osterman & Hanna is one of Albany’s largest firms, with 75 attorneys, a wide variety of service offerings, and a location across the street from the state capitol. The firm has been influential in securing development deals with SUNY Polytechnic and its nonprofits that oversee the distribution of Buffalo Billion funds.

The Washington, D.C. subsidiary of Whiteman Osterman & Hanna, formerly run by lobbyist Todd Howe, is a target of the federal probe into the Buffalo Billion by the office of U.S. Attorney Preet Bharara, and the Cuomo administration has banned state employees from interacting with that subsidiary, WOH Government Solutions.

Whiteman, Osterman & Hanna is deeply involved in a web of relationships surrounding the Buffalo Billion program. Hiring the company is an apparent gateway to major business with state entities.

IBM retained WOH for the first time in early 2013, according to filings with the Joint Commission on Public Ethics (JCOPE), a state regulatory body that tracks lobbying. In September of that year SUNY Poly entered into a deal with IBM, which would see the state invest $55 million into the Buffalo Information Technologies Innovation and Commercialization Hub. The hub is being designed and built by the state and IBM, other information technologies firms will have access to its resources. Cuomo announced the project in February 2014.

IBM promised in return to bring the 500 new information technology jobs to Buffalo by September of 2020. Company officials have stressed that not all of the jobs will be IBM employees - they expect some to be provided by firms that deliver services to the technology center.

Essentially, the state funded the creation of a ready-to-use research center and has handed it over to IBM while expecting other businesses and state agencies to also utilize the infrastructure.

“New York State will commit, through CNSE (College of Nanoscale Science and Engineering), $55 million, which includes $25 million to establish an open innovation facility and $30 million to purchase IT equipment and software to be used at the Buffalo Information Technologies Innovation and Commercialization Hub,” reads a February 2014 announcement from the Cuomo administration. “The Hub will be owned by New York State with IBM as the first anchor tenant and made available to all IT units at all state agencies. The facility will open in early 2015 in downtown Buffalo.”

Jerry Gretzinger, spokesperson for SUNY Polytechnic, said that funding for the project is going towards purchase of the building, infrastructure, equipment, and installation. “IBM has taken up residence in Buffalo with hundreds of employees working in Key Tower. The company is receiving no funding, which is consistent with the state's economic development model,” Gretzinger told Gotham Gazette.

The federal probe into the Buffalo Billion appears to be examining possible bid rigging around the construction contracts for both the SolarCity project and the information technology innovation center. There are concerns the requests for proposals (RFPs) for both projects were designed specifically for large Cuomo donors to win. McGuire development, winner of the information technology innovation center contract, donated $35,500 to Cuomo from December 27, 2013 to October 12, 2014. The project was announced in February 2014. The largest single donation from McGuire Development, $25,000, came in May of 2014.

McGuire development wasn't the only major Cuomo donor to benefit from IBM's participation in the Buffalo Billion. The New York Times reported on Tuesday that Ciminelli Real Estate lost a major tenant at its property, The Key Tower, in 2013 - IBM has since moved in to the tower as part of its deal with the state. Paul Ciminelli, head of Ciminelli Real Estate, has donated $9,000 to Cuomo. His brother Louis Ciminelli, head of LPCiminelli, donated $29,200 to Cuomo in January 2014, just before the firm was awarded a contract, now reported to be under federal investigation, to develop parts of the Buffalo Billion. The Times found that the Ciminellis and their associates have donated $150,000 to Cuomo's various campaigns.

Recent subpoenas appear to target the relationship between former Cuomo aides Todd Howe, the aforementioned lobbyist, and Joe Percoco and work they did lobbying for clients to win Buffalo Billion contracts. No one, including IBM, has been charged with any wrongdoing.

Three sources familiar with the workings of the Buffalo Billion program say that WOH and Howe’s D.C. subsidiary were seen as critical in getting the attention of the Cuomo administration on Buffalo Billion projects. IBM did not return requests for comment, neither did WOH. WOH’s website advertised Howe and the services he could provide for New York clients until the page was removed after news broke of Bharara’s probe into Howe’s relationships and dealings.

JCOPE filings show IBM paid WOH a combined $240,000 in 2013 and 2014 and $120,000 in 2015. WOH was the only new New York-based lobbying firm IBM hired in 2013. The filings do not list any lobbying activity by WOH on behalf of IBM on any specific legislation or issue. However, the WOH employee listed on the disclosure, Richard Leckerling, a partner at WOH specializing in government contracts and government relations, is listed as managing the account. Another WOH lobbyist listed on the disclosure, William Crowell, is shown to have the sole area of practice as government relations according to the firm’s site. Leckerling did not respond to requests for comment.

Leckerling also serves on the board of the SUNY Poly’s children’s museum along with three members of SUNY Poly.

The Investigative Post has detailed Leckerling’s involvement with the two nonprofits that SUNY uses to funnel money to Buffalo Billion projects.

Fuller Road Management Corporation, one of Suny Poly’s nonprofits, paid $330,000 in legal fees to WOH from 2012 to 2014, according to The Investigative Post. Meanwhile, Leckerling has attended meetings of SUNY Poly’s other nonprofit, Fort Schuyler Management Corp.

Robert Samson, former head of IBM’s global public sector, serves on the board of Fort Schuyler Management Corp. Samson has served as a technology advisor to Cuomo and has donated to Cuomo’s campaigns. He joined the Fort Schuyler board in 2014.

The Whiteman Osterman & Hanna website advertises its government affairs work and ability to help clients land government business. “Whiteman Osterman & Hanna’s focus on matters at the intersection of the private and public sectors has led to the natural development of a vibrant practice of advising and assisting commercial enterprises and public entities through the state and municipal procurement processes. Based in Albany, New York, the Firm has represented commercial enterprises in a wide range of commodity and service procurements, including telecommunications, information technology, industrial supplies, food commodities, and environmental and financial services,” reads the firm’s site.

State law bans lobbying on procurement after the state issues requests for proposals, but IBM’s residency in the technology center did not come about as the result of an RFP. Like a host of other subsidy projects aimed at large corporations, negotiations around IBM’s involvement in the Buffalo Billion appear not to have taken place in public or through a public process.

SUNY Polytechnic reported doing business with WOH in 2015 for $2,056. The work is listed as lobbying related to “higher education” and involving the Assembly, Senate and executive branch. SUNY Poly’s founding president and chief operating officer, Dr. Alain Kaloyeros, is also a target of the U.S. Attorney’s investigation.

As the Buffalo Billion probe has ramped up and become more public, Whiteman Osterman & Hanna fired Todd Howe, a Cuomo family confidante who worked on at least one of Andrew Cuomo’s campaigns. Howe worked with SUNY Polytechnic as well as a number of firms with business before the state that won contracts with the Buffalo Billion while he ran the WOH subsidiary in D.C.

Howe worked for former Governor Mario Cuomo for a decade and is reported to have been a key member of the Cuomo clan. He worked for Andrew Cuomo during his time at HUD and on his reelection campaign and has done fundraising work for him. Howe landed major clients as a lobbyist because of his status as a Cuomo insider. At the same time, a recent New York Times profile painted a picture of someone struggling to hide a serious personal financial crisis while maintaining the image of a successful lobbyist. The Cuomo administration issued statements acknowledging there may have been improper lobbying involving Howe and Percoco, who was a long-time aide to Andrew Cuomo.

Cuomo has sought to distance himself from Howe. “I wouldn’t call us close friends,” the governor told reporters earlier this month. “He worked for the state for a number of years, but I had no knowledge of his personal situation.”

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

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IBM Hired Influential Lobbyist Months Before Securing Buffalo Billion Deal Tue, 24 May 2016 04:00:00 +0000
Spurred by Buffalo Billion, Reformers Look to Fix State Business Subsidies http://www.gothamgazette.com/?id=5940:spurred-by-buffalo-billion-reformers-look-to-fix-state-business-subsidies http://www.gothamgazette.com/?id=5940:spurred-by-buffalo-billion-reformers-look-to-fix-state-business-subsidies Cuomo Buffalo thank you

Cuomo in Buffalo (photo: Governor's Office via flickr)


United States Attorney Preet Bharara's attention has been drawn away from his normal stomping grounds to Buffalo, intrigued by what critics say is a shadowy network of state authorities and state-controlled non-profits handing out large business subsidies and contracts with little to no oversight.

Watchdogs say that Gov. Andrew Cuomo, through SUNY Polytechnic head Alain Kaloyeros, is essentially rewarding campaign donors with major contracts while using state cash to win political favor in economically-depressed areas. That sense has been exacerbated by a forceful push back against transparency by both the Cuomo administration and Kaloyeros.

Last legislative session the renewal of the 421-A tax break for real estate developers was the center of debate over business subsidies thanks to Bharara's indictments of former Assembly Speaker Sheldon Silver and former Senate Majority Leader Dean Skelos. Both face corruption charges stemming from their involvement with a major donor who sought renewal of the tax break.

But Bharara's interest in Buffalo Billion has shifted the gaze of some reformers and legislators to discretionary subsidies that are controlled by the Governor. At the heart of the U.S. Attorney's investigation appears to be requests for proposals written in a way to ensure one company, led by a major donor to the governor, would win the lucrative contract at stake.

"We believe many of these programs are out of control," said John Kaehny of Reinvent Albany, a group that has been focused on these subsidies. Kaehny said the programs have been "generally wasteful and driven more by pay-to-play or interest in providing local pork than derived from sound public policy."

Kaehny, a number of other reformers, and a small group of legislators want to pull back the curtain on these deals and create a system of true accountability that would show how contracts are awarded, how many jobs the contracts create, and how much state money is spent per job. Kaehny isn't exactly holding his breath, though, because he believes the current system was designed specifically to obfuscate and confuse.

"We do not see any reasonable motivation for the convoluted governance structure created by the governor other than to avoid oversight," Kaehny told Gotham Gazette. Kaehny said Cuomo has "created a legal fiction" involving SUNY Research Foundation and the Fort Schuyler Management Corporation, which sign contracts "on behalf of" state agencies like SUNY Poly. The state funnels money for a number of programs from Empire State Development Corporation, a state-run authority that has virtually no legislative or public oversight.

"Funding also comes from theoretically independent state authorities like NYSERDA and the Power Authority, which are told by the governor to provide money, power and land to SUNY Poly, which then gives resources away to select businesses," said Kaehny. "We believe this complexity is a deliberate effort to avoid transparency and accountability by the governor."

Some lawmakers are in the early stages of exploring legislative changes to how the state approves business subsidies. A few of them have been motivated by an Investigative Post report that the Cuomo administration dropped requirements to hire workers of color in one Buffalo Billion contract from 25 to 15 percent.

Others have been troubled by Cuomo's efforts to entice General Electric (GE) to move its headquarters back to the state. So far Cuomo has refused to detail what kind of incentives he has offered the company. Some legislators are concerned the company has yet to make good on its pledge to clean up the PCBs it poured into the Hudson River years ago and that its headquarters would have no economic benefit for the state.

"We have a real problem in New York with learning from history," said Ron Deutsch of the Fiscal Policy Institute. He said that New York has given businesses like GE, IBM, and Globalfoundries major incentives only to see them cut jobs, or move overseas. "We do nothing to hold anyone accountable" in the end, he said.

Cuomo has made it clear in conversations with the press that he sees no reason to scrutinize the Buffalo Billion program. Asked if he thought any procedures needed to be changed because of the investigation, Cuomo responded: "Do you know if there was any problem? No. If you knew there was a problem, then you would fix the problem. But we don't know any problem."

Good Jobs First, a national policy group that tracks business subsidies, actually rated New York 8th out of all 50 states on transparency for subsidy disclosures in a report released in January of last year.

Another study by the group found that New York spends more on "megadeals" than any other state. Megadeals are defined as subsidy agreements with businesses that cost $75 million or more. The 2013 report by Good Jobs First found that New York had spent $11.4 billion on such deals from 1984 to 2013.

When asked where New York's subsidy programs rank overall compared to other states, Greg LeRoy, executive director of Good Jobs First, replied, "Pick your metric."

SUNY Poly issued the following statement:

"In fact, neither SUNY Poly nor its affiliates have ever been in a position to unilaterally approve a single Buffalo project, including Buffalo project contracts or expenditures. The New York State system simply does not allow it. There are checks and balances at every step, layers of state oversight, internal and external audits, public hearings, public board meetings, and public votes."

So what can be done to prevent both the appearance and the reality of conflicts of interest; restore transparency and confidence in the system; and make sure someone is accountable for the way billions of dollars of taxpayer money is spent? Reformers have some suggestions.

One simple reform would be to ban businesses that win subsidies from donating large amounts to elected officials. The state need only look to New York City to see an effective model. In 2007, then City Council Speaker Christine Quinn and Mayor Michael Bloomberg reached a campaign financing deal that drastically reduced the amount any government contractor or group with business before the city can give to any campaign.

"Even the appearance of conflict of interest is a problem," said Deutsch, of the Fiscal Policy Institute.

Another piece of the puzzle could be eliminating the LLC loophole so that businesses cannot create multiple fronts to pour cash into the campaign coffers of state electeds.

To enhance transparency, advocates say the convoluted route by which money goes from the state to businesses needs to be simplified.

Kaehny said he wants to see the Empire State Development Corporation become a one-stop shop for business subsidies. Preventing state-controlled non-profits from distributing state funds would theoretically increase transparency by streamlining the decision-making process.

Both the Comptroller and Attorney General do have some oversight capabilities, but the Comptroller had some authority stripped away in 2011 by a bill that limited the office's ability to audit SUNY and CUNY as well as its hospitals and construction funds. Fort Schuyler and SUNY Poly have led the distribution of Buffalo Billion funds.

DiNapoli noted the situation during a recent appearance on WCNY's Capitol Pressroom with Susan Arbetter. "Our authority in some of these areas was curtailed a few years ago," DiNapoli said. "We complained about that at the time."

Kaehny said he wants to see the Comptroller and the Attorney General push publically on the issue of transparency. It isn't totally obvious how hard the Comptroller has been pushing for this information or not. If we had a right-wing Republican in the office I'm fairly sure we would see someone pushing relentlessly and using their bully pulpit when they weren't given the answers," Kaehny said, referring to the fact that all of the statewide offices are controlled by Democrats.

"The Comptroller could speak up clearly and directly and say: 'Here is what we don't know. Here are the dark spots. Here is where we see these structures created to defeat transparency,'" Kaehny said.

Still, many calling for change would like the Comptroller's office to have complete oversight over all subsidy deals.

One final, and perhaps farfetched possibility would be creating a State Independent Budget Office in the model of New York City's that would actually weigh the risks and possible rewards of highly nuanced tech and other business deals so that legislators and the public would understand where state money may be going. Deutsch said that someone needs to start asking a basic question: "How much is a job worth?"

The Cuomo administration has repeatedly stated that the Buffalo Billion will create 14,000 reliable jobs and attract $8 billion in investment as a result of the roughly $1 billion state expenditure.

It seems unlikely any of the reforms being discussed to the subsidy process will pick up steam in an election year, especially as Albany waits to see if Bharara's investigation leads to criminal charges.

"There are simple solutions," said Kaehny, "but they are very hard to get done because there is no will."

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

Note: this article has been updated with a clarification from John Kaehny that Reinvent Albany beieves "many," not "most," of the subsidy programs are "out of control"

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Spurred by Buffalo Billion, Reformers Look to Fix State Business Subsidies Mon, 19 Oct 2015 00:37:47 +0000
Buffalo Billion Boss Offers, Cancels Interview; Claims 'Threat of Jail' http://www.gothamgazette.com/?id=5925:buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail http://www.gothamgazette.com/?id=5925:buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail Cuomo Kaloyeros Buffalo

Cuomo and Kaloyeros, both pointing (photo: Governor's Office via flickr)


In response to a recent profile of him, Alain Kaloyeros, president of SUNY Polytechnic and the man Gov. Andrew Cuomo chose to administer his Buffalo Billion program, invited Gotham Gazette to meet him for a tour of the SUNY Poly campus. In doing so, Kaloyeros explained that he faces "the threat of jail" if he discusses the U.S. Attorney's investigation into the Buffalo redevelopment program, an investigation that is creating headaches for the governor and thrusting Kaloyeros into the spotlight.

After setting up a date and time for the tour, Kaloyeros' office abruptly canceled a few days later, without providing a reason.

A number of sources and other news outlets have confirmed that U.S. Attorney Preet Bharara's office is investigating how contracts were awarded in the Buffalo Billion initiative, where concerns arose that some requests for proposals were tailored only to fit specific Cuomo campaign donors. Cuomo has denied that he or his staff have been subpoenaed and SUNY Polytechnic has denied Kaloyeros is the subject of any inquiry.

Kaloyeros contacted this reporter by Facebook messenger in response to an article published on September 29 that detailed how a number of officials and observers are concerned with a lack of checks and balances over Kaloyeros and the feeling that he operates with complete impunity and little regard to the fact that he is a public employee handling major sums of taxpayer money.

"Ooo...so you're the one who thinks I act like a teenager...cute," Kaloyeros wrote, referring to mention in the article of his predilection for Facebook posts of bathroom selfies and complaints about slow drivers accompanied by photos of traffic that he appears to take while driving.

After a back-and-forth Kaloyeros suggested that a tour and chat about oversight of the Buffalo Billion project might rectify his concerns with the article. When this reporter pointed out having reached out to SUNY Poly before publishing the article, Kaloyeros responded:

"The issue we have is confidentiality. We were instructed in no uncertain terms not to comment on the inquiry from down South with the threat of jail which is being interpreted as we are the target of an investigation. So that part we cannot comment on beyond what we were authorized to say publicly. The rest is not a problem."

Kaloyeros did not reply when asked if he had a particular issue with the article or thought an individual part of the investigation was being misrepresented in the press.

Gotham Gazette reached out to Kaloyeros via an official email address he provided and a spokesperson set up a meeting and tour for October 19.

In the days following, Kaloyeros continued to post to Facebook traffic photos with clear view of his dashboard and radar detector in the windshield along with complaints. This reporter tweeted one of those photos and Kaloyeros' complaint which apparently caught Kaloyeros' attention (even though he does not appear to be a public Twitter user).

"Since you seem so fascinated with my traffic posts and deem them newsworthy, here's one for you to post," Kaloyeros messaged this reporter over Facebook on Wednesday, October 7 at 11:39 a.m., with another photo included.

Later that day, Gov. Andrew Cuomo took a number of questions from the Albany press on the Buffalo Billion investigation by U.S. Attorney Preet Bharara. Cuomo was asked if he looked into the project after hearing reports of an investigation and he said he hadn't and wouldn't.

Cuomo appeared to waver when asked if he or his staff had been subpoenaed in the case. He denied that he had been, but declined to answer questions about his staff. "Well, you said, 'and staff.' I have not, but I don't want to get into commenting on a U.S. attorney's investigation," Cuomo said before repeatedly telling reporters to ask Bharara's office.

Later, Cuomo spokesperson Rich Azzopardi issued a statement saying, "Just to be clear, neither the Governor, nor his staff has been questioned or subpoenaed on the Buffalo Billion project. Going forward any questions should be referred to the U.S. Attorney."

Around that time this reporter responded to Kaloyeros' message that included a picture of traffic and asked who had warned him he could face jail if he spoke to the press.

Shortly after, Gotham Gazette received an email from Kaloyeros' spokesperson saying the tour and meeting set for the 19th had been canceled. Gotham Gazette reached out to both Kaloyeros and the spokesperson asking why, but neither responded. Kaloyeros appears to have now blocked this reporter on Facebook.

Bharara's office declined to comment on anything regarding the Buffalo Billion investigation when Gotham Gazette asked whether it had threatened Kaloyeros with jail if he spoke out on the investigation.

Jennifer Rodgers, a former prosecutor who served as deputy chief of Bharara's appeals unit, told Gotham Gazette that it was extremely unlikely that the U.S. Attorney's office would warn Kaloyeros not to speak to the press. Rodgers is now executive director of Columbia University's Center for the Advancement of Public Integrity.

"I don't know what was said in this particular case, but generally prosecutors don't tell witnesses or suspects what they should or shouldn't say to the press," Rodgers told Gotham Gazette. "Usually they have a lawyer who would advise them on those matters."

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Buffalo Billion Boss Offers, Cancels Interview; Claims 'Threat of Jail' Wed, 07 Oct 2015 22:29:25 +0000
Alain Kaloyeros, Powerful Centerpiece of Buffalo Billion, Could Become Household Name http://www.gothamgazette.com/?id=5912:alain-kaloyeros-powerful-centerpiece-of-buffalo-billion-could-become-household-name http://www.gothamgazette.com/?id=5912:alain-kaloyeros-powerful-centerpiece-of-buffalo-billion-could-become-household-name Kaloyeros Cuomo Buffalo

Alain Kaloyeros (photo via the Governor's Office on flickr)


It is easy to spot Alain Kaloyeros, head of SUNY Polytechnic, around Albany. You can often see him jetting around Stuyvesant Plaza, an upscale shopping center basically next door to the campus he built, which features a spaceship-like structure rising out of the dirt of constant construction.

It doesn't hurt that he drives a Ferrari Spider with the license plate "Dr. Nano." He is New York's highest paid state employee.

Working with five governors, and powerful legislative allies like former Assembly Speaker Sheldon Silver, Kaloyeros has overseen the development of the nano school while attracting millions of dollars of outside investment. He oversees over $14 billion worth of campuses, labs, and scientific "clean rooms" across the state. Under Gov. Andrew Cuomo, Kaloyeros added to his portfolio helping the state direct the Buffalo Billion program that has attracted major investments from IBM and SolarCity - and now, from U.S. Attorney Preet Bharara.

As Kaloyeros' power and influence has grown many who observe and are involved in state government say that checks and balances around his decisions have evaporated.

"The governor loves this guy. He's got carte blanche," said one legislator who is particularly interested in Kaloyeros' work and requested anonymity in discussing it. Kaloyeros makes more than $800,000 a year - Cuomo earns $179,000 annually, while state legislators earn just under $80,000.

Kaloyeros' cavalier attitude, flaunting his extensive power, and what some say is a focus on promoting profits over academia and rewarding allies appear to have earned his projects the attention of federal investigators led by Bharara.

Bharara's office has subpoenaed SUNY Polytechnic and insiders say the focus of the probe is the request-for-proposal process and whether officials tailored RFPs to award contracts to major political donors and allies. While SUNY Polytechnic says that Kaloyeros has not been subpoenaed, watchdogs are concerned that there is not enough oversight in place to prevent Kaloyeros from benefiting himself in these deals.

SUNY Polytechnic issued a statement saying the organization doesn't believe it or any of its employees are under investigation. and claiming they have been transparent. Asked about the investigation last week, Gov. Cuomo told reporters, "You can have investigations but that does not mean there's any 'there' there, or that anyone did anything wrong."

Journalists who have attempted to scrutinize contracts and requests for proposal have had their freedom of information requests refused, or been given censored documents by the Cuomo administration and Kaloyeros' organizations, raising further concerns about the transparency surrounding the investment of millions of dollars in taxpayer funds into private business.

Good government groups including Reinvent Albany, Citizen Action, NYPIRG, and League of Women Voters have called on reforms to peel back the layers of opaqueness that surround the the state's investment in semi-private and private entities, which is the essence of the Buffalo Billion project meant to stir the city's economy.

"By using a mixture of non-profit groups—including Ft. Schuyler and the SUNY Research Foundation—and academic institutions like SUNY Polytechnic, the State is blurring responsibility and reducing the accountability for decisions worth hundreds of millions of dollars," the groups said in a recent statement. "Subsidy deals are complex, often involve a real risk to public funds, and have the potential for significant conflict of interest. We wonder, who exactly is making the crucial decisions about who wins these deals? What is the basis of these decisions and how can we be sure that the deals themselves are well conceived and fairly awarded?"

Kaloyeros has repeatedly rebuffed interview and information requests from the Investigative Post's Jim Heaney, who has doggedly reported on Buffalo Billion spending from the start. "I told you once and I told you a million times. We are not political operatives nor do we respond to perceived threats and terrorism," Kaloyeros told Heaney in an email.

At public events, Kaloyeros has refused to take questions from the press about Bharara's interest in his work. He told a Syracuse reporter that it isn't polite to ask off-topic questions.

Kaloyeros' behavior has frightened some of his colleagues involved in the partnerships between academia and state government who feel he has far too much power over the state's investments. Further, they say that his public displays of wealth and power are not becoming of someone in his position and they expected it to draw the attention. Kaloyeros is not known to be an easy boss.

Some critics point to Kaloyeros' Facebook page that some say can resemble that of a teenager. The page is a mixture of bathroom selfies, memes about slow drivers, and pictures of sports cars and Darth Vader.

Kaloyeros has touted his lifestyle as funded by proceeds from his patents in interviews with The Buffalo News and The New York Times.

Kaloyeros was raised in East Beirut, Lebanon. A Times Union article from 2012 describes how as a 19-year-old college student Kaloyeros was attacked by what he assumed were members of the Palestinian Liberation Organization at the start of the Lebanese Civil War. His face was sliced and he was left for dead. One of his friends was actually killed. Later he said he joined a Christian militia and was trained by Israeli forces in tanks and artillery, later commanding a group of two dozen street fighters.

That part of Kaloyeros' life appears to have been balanced by his love for science. His father was a school teacher and his mother worked in marketing for Sanyo and SONY. Kaloyeros left Lebanon in 1980 to attend graduate school in the U.S. and in 1988 earned a doctorate from the University of Illinois.

In 2002, Kaloyeros told the Times that the "in crowd" in his high school was made up of the smart kids. ''Better be nice to geeks,'' he said, ''because the way the world is going, chances are you're going to end up working for one.''

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Alain Kaloyeros, Powerful Centerpiece of Buffalo Billion, Could Become Household Name Tue, 29 Sep 2015 01:44:06 +0000