Gotham Gazette https://www.gothamgazette.com/component/tags/tag/1255 Wed, 22 Jan 2020 23:38:21 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) Final Signature Allows Implementation of Cuomo-DiNapoli Agreement to Restore Certain Contract Oversight Powers https://www.gothamgazette.com/state/9056-cuomo-dinapoli-state-entities-finalize-reestablished-comptroller-oversight-powers https://www.gothamgazette.com/state/9056-cuomo-dinapoli-state-entities-finalize-reestablished-comptroller-oversight-powers goccuomo con di

Cuomo & DiNapoli (photo: Governor's Office)


A resolution has finally been reached around how to deal with a thorny issue involving Governor Andrew Cuomo, contracting oversight, and the corruption that plagued some of the governor’s biggest economic development initiatives.

As of December 31, all relevant parties have agreed to comply with an August agreement between Cuomo and state Comptroller Thomas DiNapoli restoring the comptroller’s oversight of some large contracts entered into by SUNY and CUNY and their affiliates, and by the Office of General Services. The agreement is now expected to become operational in February, according to a spokesperson for the comptroller.

The memorandum of understanding was partially signed in August, but as recently as mid-December DiNapoli said SUNY Research Foundation, one of the entities coming under the comptroller’s purview, had not given the go-ahead to bring it from a “conceptual agreement,” as DiNapoli put it, to an actualized program. As of December 31, however, all parties had approved the new system, the spokesperson told Gotham Gazette.

“We have an agreement with the Executive, and we will start reviewing contracts in February 2020. All parties have acted (OGS/SUNY/CUNY/SUNY Construction/CUNY Construction/SUNY RF/SUNY Fuller Road & Fort Schuyler) and agreed to allow OSC to review their contracts,” the spokesperson wrote in a statement.

While representatives for several of the parties signed the memorandum in August, it still required approval by the boards of CUNY and SUNY affiliates, and for their policies to be updated in compliance. CUNY’s approval came on October 28, and two other SUNY-affiliated entities agreed on December 18. SUNY Research Foundation approved the agreement on December 31, just before the January deadline. No part of the deal could go into effect until all the parties had all agreed, DiNapoli said on the Capitol Pressroom in mid-December, calling the Research Foundation approval “the biggest sticking point.”

“As expected, all parties have signed the MOU and will be ready to enforce it this February,” wrote Jason Conwall, a spokesperson for the governor, in an email this week.

The agreement gives the state comptroller the authority to conduct “pre-audit” reviews of contracts procured by SUNY and CUNY and their affiliated construction funds, when they exceed $250,000. It also extends that authority over Office of General Services (OGS) centralized contracts over $85,000.

The memorandum also provides for the comptroller to send all executed contracts of $250,000 or more, with the exception of Common Retirement Fund contracts, to the state inspector general responsible for investigating fraud, corruption, and conflicts of interest in the executive branch and affiliated entities.

The new powers allow the comptroller to review contracts before they are executed to affirm that they are ethically and economically sound. During contract reviews, the comptroller’s office typically conducts due diligence to prevent fraud and waste, and promote competition. It looks at whether vendors have been found to engage in previous wrongdoing, prices for comparable goods and services elsewhere, and whether there are contract provisions that could increase an  agency’s liability.

The comptroller once had those powers for SUNY, CUNY, and OGS centralized contracts, but they were stripped with little public attention during budget negotiations in 2011, Governor Andrew Cuomo’s first year, as he sought to expand and expedite economic development.

In the mid-2010s when the Buffalo Billion scandal, in which bribes were exchanged for plum state construction contracts, implicated some of Cuomo’s closest allies and donors, good government advocates and DiNapoli himself called for the authority to be restored. Cuomo resisted. Lawmakers threatened legislative action, but nothing moved.

Then, during his 2019 State of the State speech, Cuomo surprised many by announcing that he and DiNapoli had agreed to pursue an agreement.

“Comptroller review may have prevented the $1 billion bid-rigging scandal involving upstate development projects resulting in the convictions of high-ranking state officials and major real estate and construction executives,” said John Kaehny, executive director of the good government group Reinvent Albany, in a statement commending the initial agreement in August.

The memorandum of understanding stipulates that SUNY will work with its Research Foundation to give the comptroller pre-audit review of contracts of $1 million or more. The Research Foundation includes SUNY-affiliated nonprofits Fort Schuyler and Fuller Road Management Corporation, which put out the rigged requests for proposals to build SolarCity, the $750 million solar panel plant at the center of the Buffalo Billion controversy and a key element in Cuomo’s signature upstate economic development agenda.

On the Capitol Pressroom in December, DiNapoli said, “I think the biggest piece that still has to be resolved is the SUNY Research Foundation has not taken the action to sign on...but I am very hopeful that once we get that SUNY piece closed down that we will actually be able to implement that more robust oversight that many people have called for and I think is overdue for us to have back.”

With the Research Foundation agreeing to the memorandum of understanding on December 31, it is now set to go into effect in February. While Ft. Schuyler and Fuller Road have been mired in controversy, the entity recently created to subsume and replace them, NY CREATES, is also covered under the agreement, according to DiNapoli’s office.

Unlike other powers that were restored in the deal, the state comptroller has never had pre-audit review authority over SUNY Research Foundation, the spokesperson said.

Cuomo has previously said that part of the reason for not restoring the comptroller’s power is the potential for delays in adding new bureaucratic hoops to jump through. The new agreement sets a time limit of 30 days for the comptroller’s pre-audit review, after which they become “valid and enforceable.” A report released by DiNapoli’s office last May, showed that the average contract review took between six and seven days.

In response to the Buffalo Billion scandal, state lawmakers introduced the Procurement Integrity Act to restore most of the comptroller’s pre-2011 authority, among other things. Year after year, it failed to gain enough traction to pass, but amid an ongoing drumbeat of criticism, especially after the convictions on corruption charges of two of his top former aides, Cuomo made the 2019 State the State announcement.

The agreement is voluntary and contains language stating it can be terminated within ten days by either the governor or comptroller. Good government advocates still want to see it codified into law.

“We hope momentum from completing this voluntary agreement continues and the Governor and Comptroller work together to pass a law in the 2020 session making the agreement permanent,” wrote Kaehny.

Neither codifying the agreement nor passing the Procurement Integrity Act were part of Cuomo’s very limited State of the State government ethics agenda, announced last week.

***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

Read more by this writer.

]]>
Final Signature Allows Implementation of Cuomo-DiNapoli Agreement to Restore Certain Contract Oversight Powers Thu, 16 Jan 2020 05:00:00 +0000
New York City Further Dominates State Job Growth; Rest of State Still Growing Slowly https://www.gothamgazette.com/130-opinion/8742-new-york-city-further-dominates-state-job-growth-rest-of-state-still-growing-slowly https://www.gothamgazette.com/130-opinion/8742-new-york-city-further-dominates-state-job-growth-rest-of-state-still-growing-slowly frst dep mayor ant sho

(photo: Michael Appleton/Mayoral Photography Office)


New York City is now utterly dominating job growth in the State of New York. In the past two-and-a-half years, 79% of all new jobs in the state have been created in New York City.

New York State Labor Department seasonally-adjusted data show that 230,000 of the nearly 293,000 jobs created in the state from December 2016 to June 2019 were in the city. The growth rate in the city for the two-and-a-half year period was 2.1% per year; for the rest of the state separate from the city, the growth rate was about one-half of one percent per year*.

The city's share of growth has picked up even more since the end of 2017; 138,000 of the 169,000 jobs created statewide from December 2017 to June 2019 were created in the city -- nearly 82%. The city's share of total state employment was 46.5% at the end of 2016; as of June 2019 its share was 47.5%.

In October 2018 I wrote about the increasing contribution of the New York City economy to the state's tax revenue, much of it due to its share of employment growth. The increasing share of jobs will only accelerate this trend. While the city economy has become the engine of the state's economic growth, the Cuomo administration has focused much of its attention to rescuing the Upstate New York economy, which faltered in the two recessions that occurred after 2000. 

   

NEW YORK EMPLOYMENT (000)

   
   

Dec.2010

Dec.2016

June.2019

   

New York State

8587.4

9493.6

9786.2

   

New York City

3781.1

4413.6

4643.9

   

Source: NY State Labor Department Seasonally Adjusted Employment

Job growth rates for both New York City and the rest of the state have slowed compared to the period between December 2010 and December 2016. The city gained 633,000 jobs in that six-year period and its growth rate was 2.8% per year, compared to 2.1% per year since December 2016. The rest of the state gained 274,000 jobs in those six years, a growth rate of just under 1% per year. The city was 70% of the state's job growth in those six years, quite dominant then, but its share of growth just keeps expanding. Comparable national job growth rates for December 2010 to December 2016 was 1.9% per year, and 1.6% from December 2016 to June 2019.

One reason for slower growth outside the city is that job growth rates in the New York City suburbs have fallen to about the same rates of growth as Upstate. Upstate New York is a big area and one should not generalize too much about it. The growth rates in Upstate New York vary greatly by metropolitan area; some areas are achieving modest growth, others hardly any growth at all nine years after the Great Recession ended.

Long Island gained about 100,000 jobs from December 2010 to December 2016, but just 19,000 jobs in the past two-and-a-half years. The Orange-Rockland-Westchester metropolitan area gained 50,000 jobs in the 2010-2016 period, but just 7,000 from the end of 2016 to this June. These two New York City suburban areas had their growth rates slow from 1.3-1.4% per year from 2010-2016, to under six-tenths of one percent per year in the past two-and-a-half years.

One of their possible challenges may be the competition from New York City itself, since the city has become such a powerful economic and social magnet and these suburban areas are right nearby.

   

SUBURBAN EMPLOYMENT(000)

     

Dec.2010

Dec.2016

June.2019

Nassau-Suffolk

 

1237.6

1338

1356.9

Orange-Rockland-Westchester

663.7

713.9

724.3

The four larger Upstate metropolitan areas are growing. The Syracuse metropolitan area has gained more than 9,000 jobs in the past two-and-a-half years, growing at a rate of 1.2% per year. The Buffalo-Niagara Falls area has gained 10,500 jobs since December 2016, for a growth rate of three-fourths of one percent per year. From 2010 to 2016, it gained 20,000 jobs, for a growth rate of six-tenths of one percent per year.

The Rochester area gained 7,300 jobs in the past two-and-a-half years, a growth rate of .55 of one percent per year. From 2010 to 2016, it had gained about 23,000 jobs and had a growth rate of .8 of one percent a year. The Albany-Schenectady-Troy area gained 7,700 jobs since the end of 2016, for a growth rate of .7 of one percent a year. It had done better in the 2010-2016 period, gaining nearly 34,000 jobs in those six years for a growth rate of 1.3% per year.

   

UPSTATE LARGE METRO AREAS (000)

     

Dec.2010

Dec.2016

June.2019

Buffalo-Niagara Falls

537.9

558

568.5

Rochester

 

509.9

533.1

540.4

Albany-Schenectady-Troy

432.7

466.5

474.2

Syracuse

   

308.9

316.8

326.1

Several other Upstate metropolitan areas are growing at more than 1 percent a year. The Ithaca metro area had the best sustained growth since 2010 in Upstate New York, gaining more than 7,000 jobs, including 2,600 since the end of 2016, for a sustained growth rate for the eight-and-a-half years of about 1.5% per year. Two Hudson Valley areas, Dutchess-Putnam and Kingston, have gained about 5,700 jobs over the past two-and-a-half years for a growth rate of 1.1% per year. They have gained 13,000 jobs since December 2010.

Five smaller Upstate metro areas are struggling. Binghamton, Utica-Rome, and Elmira have gained 2,200 jobs among them since the end of 2016, for a combined growth rate of just three-tenths of one percent a year. Glens Falls metro has lost jobs since the end of 2016 and Watertown-Fort Drum has only gained 100 jobs in the past two-and-a-half years. The combined employment base of these five metropolitan areas is about 368,000, making them combined just barely larger than the Syracuse metro area and smaller than each of the four larger Upstate metro areas.                      

   

OTHER UPSTATE METRO AREAS(000)

   

Dec.2010

Dec.2016

June.2019

Dutchess-Putnam

141.4

146.6

149.9

 

Utica-Rome

129

127.6

128.6

 

Binghamton

107.8

103.2

104.2

 

Ithaca

 

59.1

63.9

66.5

 

Kingston

 

59.8

61.9

64.4

 

Glens Falls

54.5

56.2

55.5

 

Watertown-Ft.Drum

42.9

42

42.1

 

Elmira

 

39.5

36.8

37.2

 

The Labor Department's estimates for the 12 Upstate metropolitan areas show job gains of 45,000 since the end of 2016 to June 2019, with employment rising from 2.512 million to 2.557 million, or a growth rate of seven-tenths of one percent a year. The metropolitan areas of Upstate New York include about five-sixths of total employment in Upstate New York.

State Labor Department estimates for the non-metro areas of Upstate New York from 2016-2018 show job gains of a little over 4,000, for a growth rate of about four-tenths of one percent per year. The non-metro areas of Upstate New York have a little more than 500,000 jobs. They are one-sixth of Upstate New York employment and about 5% of total New York State employment.

The loss of population continues to be a challenge for sustaining economic growth in Upstate New York.

Below is a population growth table taken from the New York State Assembly's annual Economic and Revenue report from early 2019. It shows that New York City was 95% of the state's population growth between 2010 and 2017. The Hudson Valley, the Capital Region, and Long Island had small but positive population growth, but the rest of the Upstate New York regions lost population. Clearly these regions would benefit from new immigrants and increases in the allowable number of refugees into the United States.

jbimage1

And what of the Cuomo administration's efforts to help Upstate New York? The administration's main initiatives have included the Buffalo Billion, the $1.5 billion Upstate Revitalization Initiative, the Downtown Revitalization Initiative (some projects are in the Downstate area), the Albany Nanotechnology Initiative (begun during the Pataki administration), infrastructure spending in transportation and water and sewer upgrades, Tax-Free New York, cheap hydropower allocations from the State Power Authority, new investments in renewable technologies, especially windpower in the Lake Ontario area.

Surely these initiatives, and there are many, have had a positive impact, and are ongoing efforts that are budgeted for several years of future investment. But for them, the Upstate New York economy would likely be in even weaker condition.

Since the end of 2010, the aggregate numbers for Upstate show a net gain of 156,000 jobs. The state had a $10 billion deficit in 2011, the first year of the Cuomo administration, and there were spending cuts that affected state and local government employment, especially local schools.

Upstate New York lost 37,000 government jobs between 2010 and 2016, with those jobs stabilizing around 2013. Government jobs have remained relatively flat since that time in Upstate New York, so private sector employment is higher than the 156,000 net gain, probably about a 190,000 increase. It should also be noted that the State Labor Department's separate regional metro data show somewhat higher job growth numbers*.

The most recent year-over-year growth rates by state, from 2017 to 2018, showed 16 states had growth rates of seven-tenths of one percent per year, the Upstate New York growth rate, or less. Twenty-three states had growth rates of less than one percent.  Upstate New York is not at the bottom of the nation in growth - it is slowly growing.

The state has also cut income, corporate, and property taxes, to the chagrin of progressives who would like to see stronger government spending. Governor Cuomo came into office in the aftermath of the Great Recession, and concern about whether New York taxes were undercutting business investment and encouraging out-migration affected early decision-making about how to grow the state's economy. More recently, recognition about the importance of infrastructure investment has replaced tax cuts as a priority, especially with the uncertain impact of federal tax reform on New York.

Since December 2010, the economy of the City of New York has essentially been carrying the state, with the city responsible for 863,000 of the 1.199 million jobs gained statewide.

(*The State Labor Department notes in its monthly employment press releases that the separate regional Metro area employment estimates do not match up (add up to the same numbers) as the aggregate employment numbers reported Statewide. The Statewide employment reports are estimated independently of the regional estimates. As a result there are discrepancies between subtracting New York City and its suburban areas from the statewide numbers to get the Upstate employment numbers, versus adding up each of the separate regional Upstate metro areas. Using aggregate numbers results in smaller employment growth totals for Upstate New York and the rest of the State outside New York City. The aggregate numbers show a growth rate of one-half of one percent a year; the regional numbers show .6-.7 tenths of one percent a year.)

***
Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

***
Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

]]>
New York City Further Dominates State Job Growth; Rest of State Still Growing Slowly Mon, 19 Aug 2019 23:52:32 +0000
Alain Kaloyeros, Cuomo’s Buffalo Billion Star, Found Guilty on All Charges https://www.gothamgazette.com/state/7802-alain-kaloyeros-cuomo-s-buffalo-billion-star-found-guilty-on-all-charges https://www.gothamgazette.com/state/7802-alain-kaloyeros-cuomo-s-buffalo-billion-star-found-guilty-on-all-charges Kaloyeros Cuomo Buffalo Billion

Alain Kaloyeros (photo via The Governor's Office)


Alain Kaloyeros, the former president of SUNY Polytechnic Institute who spearheaded key pieces of Governor Andrew Cuomo’s vaunted Buffalo Billion economic revitalization program, was found guilty in federal court on Thursday of bid-rigging state contracts in favor of upstate firms whose executives were major donors to the governor’s campaign.

Following a trial that lasted just under a month, a jury found Kaloyeros guilty on charges of wire fraud and conspiracy to commit wire fraud in connection with two separate schemes in which he colluded with a prominent lobbyist to manipulate state contract bids. Prosecutors charged Kaloyeros with rigging requests for proposals (RFPs) to favor prominent executives from two specific firms -- Louis Ciminelli from Buffalo-based LPCiminelli, and Joseph Gerardi and Steven Aiello from Syracuse-based COR Development. Ciminelli, Gerardi and Aiello also stood trial with Kaloyeros and were found guilty on Thursday as well. The defendants are all expected to be sentenced in October.

Kaloyeros, who the governor praised in lofty terms when appointing him to lead the Buffalo Billion and over the course of subsequent years, conspired on the two schemes with the developers and Todd Howe, a now infamous lobbyist with close ties to Cuomo. Howe was the government’s star witness in another federal corruption case earlier this year involving former top Cuomo aide Joe Percoco, who was also convicted. COR executives Gerardi and Aiello were co-defendants in that trial as well.

Prosecutors in the Kaloyeros trial relied on email records that showed the eccentric tech guru plotted to ensure that LPCiminelli received a contract to construct a solar panel factory, which eventually ballooned in cost to $750 million, and that COR development was awarded more than $100 million to build a manufacturing plant and film studio. The bid-rigging was done in apparent effort to please Cuomo, though the governor himself was not accused of committing any crimes.

In a statement, Geoffrey Berman, the U.S. Attorney for the Southern District of New York, whose office prosecuted the case, expressed pride that the Kaloyeros verdict was just the latest successful conviction won by the office’s Public Corruption Unit, following the conviction of Percoco and former state Assembly Speaker Sheldon Silver. “The guiding principle of the Southern District holds that true justice can only be achieved through independence from politics or influence, and that has never been more important than today,” he said.

All of the cases were originally brought by former U.S. Attorney Preet Bharara, who was fired by President Donald Trump and celebrated the verdicts on Twitter, writing, “All four Buffalo Billion defendants guilty on all counts. Congratulations to the team at SDNY for continuing to strike big blows against corruption in New York State.”

The two corruption cases involving Percoco, Howe, and Kaloyeros, among others, have been a black eye for Cuomo, though he was never accused of criminal wrongdoing in either one, and his political opponents have repeatedly used them to criticize both the governor and the pay-to-play culture in state government. In a harshly worded statement following the verdict, actor and activist Cynthia Nixon, the governor’s Democratic primary challenger, scoffed at the governor’s proclaimed ignorance of Kaloyeros and Percoco’s misdeeds. “Andrew Cuomo is either corrupt or he is spectacularly incompetent,” Nixon said. “Either way, the facts from the trials of Joe Percoco and Alain Kaloyeros lead to only one conclusion: We can’t clean up Albany until we clean out the governor’s mansion. Nothing is going to change until we change who’s in charge.”

Cuomo, who has said that he has not followed the case closely, said in his own 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 did not mention anyone by name or promise any reforms. He has not followed through on several governmental and campaign promises he made when the scandal broke.

In response to the verdict, government watchdogs warned that the lax state regulations that allowed Kaloyeros’ criminal actions remain unchanged. A coalition of groups including Reinvent Albany, Citizens Budget Commission, NYPIRG, and Fiscal Policy Institute issued a statement repeating calls for “clean contracting” reforms, saying that “evidence introduced at the federal trial of Alain Kaloyeros, the governor's former nano-czar, and executives from LP Ciminelli and COR Development highlight the vulnerability of the state’s economic development programs to corruption and abuse.”

“The convictions in the ‘Buffalo Billion’ trial underscore the huge corruption risks that continue to plague Albany,” read a statement from the New York Public Interest Research Group. “The Governor 's failure to produce meaningful reforms, coupled with the Legislature's inability to come to an agreement on its own, highlight the failures of the state's elected leadership to grapple with unending scandals.”

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

]]>
Alain Kaloyeros, Cuomo’s Buffalo Billion Star, Found Guilty on All Charges Thu, 12 Jul 2018 04:00:00 +0000
Buffalo Billion Trial Begins with Differing Portraits of Former SUNY Poly Mastermind https://www.gothamgazette.com/state/7747-buffalo-billion-trial-begins-with-differing-portraits-of-former-suny-poly-mastermind https://www.gothamgazette.com/state/7747-buffalo-billion-trial-begins-with-differing-portraits-of-former-suny-poly-mastermind cuomo and kaloyeros walking

Gov. Cuomo & Alain Kaloyeros (photo: The Governor's Office)


Lawyers presented starkly different portraits of Alain Kaloyeros, the former head of SUNY Polytechnic Institute, in opening statements of his corruption trial at federal court in Manhattan on Monday. Critics say the case -- and the related trial of Joseph Percoco, a longtime aide to Governor Andrew Cuomo found guilty in March of taking bribes -- show the governor’s multimillion-dollar economic development projects were fundamentally corrupt.

Kaloyeros rigged bids for development projects to avoid losing his job, expand his influence, and gain a promotion, Assistant U.S Attorney David Zhou argued.

“Kaloyeros decided that the rules didn’t apply to him, so he cheated and he lied to get the results he wanted,” the prosecutor said as Kaloyeros, sporting a blue suit and stubbly beard, sat at the front of the courtroom.

On the contrary, defense lawyer Reid Weingarten sought to depict Kaloyeros as a visionary who had personal flaws but committed no crimes.

“In truth, he’s not a saint. He’s a very, very complicated guy,” Weingarten said, adding that Kaloyeros, a physicist, had “wrought miracles” launching major tech projects in Albany. “What this case is about is the desire of Governor Cuomo to bring [Kaloyeros’] miracle to upstate New York.”

Federal prosecutors say Kaloyeros schemed to make sure a nonprofit charged with overseeing a huge swath of Cuomo’s development projects favored companies run by major Cuomo donors -- Louis Ciminelli of Buffalo-based LPCiminelli, along with Steven Aiello and Joseph Gerardi of Syracuse-based COR Development. The executives, who are on trial alongside Kaloyeros, have also pleaded not guilty to fraud charges; Gerardi is also accused of lying to FBI agents. Cuomo is not accused of criminal wrongdoing, but critics say that the Democratic governor knowingly presided over programs with insufficient checks and transparency, pushing through state funding, stripping the Comptroller of audit powers, and empowering Kaloyeros and others to run wild while his campaign coffers filled.

The prosecution’s case appears to hinge in large part on emails between Kaloyeros and the developers that allegedly show they conspired to rig the bids starting in 2013. LPCiminelli won a contract for a solar panel factory in Buffalo, as part of the governor’s Buffalo Billion program, the cost of which eventually rose to $750 million; while COR Development won contracts for a $90 million manufacturing plant and $15 million film studio, the latter of which the state recently sold for $1 after years of floundering.

Prosecutors say Kaloyeros ensured inclusion of measures like requiring the winner of the Buffalo request-for-proposals (RFP) to have 50 years of experience in an effort to ensure LPCiminelli would be the only company to even qualify to bid. In one email, he allegedly promised to “fine tune the development requirements” to guarantee only LPCiminelli could win, Zhou said on Monday.

However, Weingarten argued that emails between Kaloyeros and his client were perfectly legal.

He said for a nonprofit like the one doling out the upstate development grants, called Fort Schuyler Management Corporation, “the procurements can be any way you want them to be.” Weinstein added that the RFPs in the Kaloyeros case followed all procurement rules set by the federal government, Albany, and SUNY, which helped oversee the projects.

While Zhou highlighted Kaloyeros’ use of his personal email address instead of his SUNY account -- instructing one of his alleged collaborators, “please gmail, not email” -- Weinstein seemed to shrug off the matter.

It's "almost a sport in New York State government to put things on your private email so reporters can't get them,” the defense lawyer said.

Monday’s opening statements suggested the role of Todd Howe will be another turning point in the case.

Kaloyeros hired Howe, an Albany lobbyist and longtime member of Cuomo’s inner circle, to help work on the development projects -- and, prosecutors say, maintain friendly ties with Cuomo. Howe made a plea deal with the government, but is not expected to testify in the Kaloyeros case after he was arrested on new charges in the middle of the Percoco trial, where he was the government’s star witness.

Prosecutors say Howe helped Kaloyeros transform a SUNY college for nanotechnology into the sprawling SUNY Polytechnic Institute in Albany, where Kaloyeros launched an array of ambitious public-private tech partnerships in addition to the LPCiminelli and COR Development projects.

“Kaloyeros developed a strong relationship with the governor’s office after he hired a lobbyist named Todd Howe for SUNY,” Zhou said. “Howe was the key to the governor’s office.”

Weingarten and the other defendants’ lawyers assailed Howe’s credibility. “He was a master criminal,” Weingarten said of Howe. “He deceived virtually every relevant person in this courtroom.”

Lawyers for Aiello, Ciminelli and Gerardi echoed Weingarten’s lines of reasoning. Discussing Aiello and Ciminelli, Aiello’s attorney Steve Coffey said they “hardly knew each other in 2013.”

“What they have in common is they’re developers. And they’re Italian,” though he said no more about their heritage.

Cuomo previously said Percoco, who was found guilty of taking bribes in exchange for preferential treatment for developers, was like a brother. And the Kaloyeros trial centers on the governor’s most vaunted development programs -- Cuomo regularly heaped praise on Kaloyeros and ensured that he had a great deal of power. But prosecutors have not implicated Cuomo in any of the alleged crimes.

However, his political opponents were quick to link him with the Kaloyeros trial on Monday.

Cuomo’s Democratic primary opponent, Cynthia Nixon, referenced the trial repeatedly as she unveiled a campaign finance reform agenda from the steps of the Tweed Courthouse, where Cuomo had promised eight years ago to clean up state government.

“Despite others’ attempts to politicize, the US Attorney and Judge have repeatedly said that campaign contributions were not unlawful and were not part of the alleged criminality,” Cuomo campaign spokesperson Abbey Fashouer said in an emailed statement.

“Cuomo has enabled individuals who think that they must peddle influence and peddle resources and sell out New Yorkers to the highest bidder,” Marc Molinaro, the Republican nominee for governor, said outside the federal courthouse during a morning press conference.

Zephyr Teachout, who previously ran against Cuomo for governor and is now running for attorney general, spoke to reporters just ahead of Molinaro.

“This trial illustrates that we have an underlying corruption and ethics emergency in New York State,” she said. “This trial shows the ways in which corruption impacts people’s lives.”

Asked for comment on the trial, the campaign of New York City Public Advocate Letitia James, who is also running for state attorney general but is aligned with Cuomo, issued a statement touting James’ past anti-corruption work.

“Any act of corruption in government betrays the people of the state of New York and cannot be tolerated,” James spokesperson Delaney Kempner said in the statement. “As Attorney General, Tish will deploy the full arsenal of weapons at her disposal to fight corruption and will never shy away from tackling illegal behavior in government.” The statement did not directly address the Kaloyeros case.

***
by Shant Shahrigianh, Gotham Gazette
      

Read more by this writer.

]]>
Buffalo Billion Trial Begins with Differing Portraits of Former SUNY Poly Mastermind Mon, 18 Jun 2018 04:00:00 +0000
Max & Murphy Podcast: Lieutenant Governor Kathy Hochul https://www.gothamgazette.com/state/7737-max-murphy-podcast-lieutenant-governor-kathy-hochul https://www.gothamgazette.com/state/7737-max-murphy-podcast-lieutenant-governor-kathy-hochul mxm logo

Ben Max, left, of Gotham Gazette, and Jarrett Murphy, right, of City Limits


June 14, 2018 - Max & Murphy Podcast: Lieutenant Governor Kathy Hochul

kathy hochul 277

Kathy Hochul is in the fourth year of her first term as lieutenant governor, and, running alongside Governor Andrew Cuomo, seeking another term this fall. She's facing a primary challenge, however, from City Council Member Jumaane Williams. As she runs for reelection (the lieutenant governor and governor run separately in the primary but as a ticket in the general election), Hochul is touting the strength of her record as part of the Cuomo administration. She joined the podcast to discuss her background, the administration's work, especially in economic development, which she has a significant role in, the revitalization of Buffalo, which is in the congressional district she briefly represented in the House of Representatives, and much more.

Listen to the full conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the episode through the embedded audio below or download the episode wherever you get your podcasts.

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

]]>
Max & Murphy Podcast: Lieutenant Governor Kathy Hochul Thu, 14 Jun 2018 04:00:00 +0000
Post-Percoco Conviction, Kaloyeros Trial Likely to Further Stain Cuomo Administration https://www.gothamgazette.com/state/7558-post-percoco-conviction-kaloyeros-trial-likely-to-further-stain-cuomo-administration https://www.gothamgazette.com/state/7558-post-percoco-conviction-kaloyeros-trial-likely-to-further-stain-cuomo-administration Alain Kaloyeros

Alain Kaloyeros (photo: The Governor's Office)


Following the recent conviction of Governor Andrew Cuomo’s longtime aide Joseph Percoco on corruption charges – a humiliating blow for a governor who once campaigned on a promise to reform Albany – Cuomo quickly sought to shift attention from the executive to the legislative branch.

A day after Percoco was convicted of fraud and soliciting bribes, Cuomo called for ethics reform – in the Assembly and Senate.

“The single best ethics reform, which makes everything else moot, is no outside income in government,” he said, pointing to the State Legislature. Jobs there are considered part-time and outside income is allowed, though the Percoco trial had nothing to do with legislators’ outside income.

Cuomo called Percoco’s behavior an “aberration” for those in his administration, and said he himself was not mentioned at the trial; in fact, Cuomo’s name or title was invoked hundreds of times. The governor has sought to quickly put the Percoco news behind him, though there are a number of unanswered questions about what Cuomo either allowed to occur under his watch, didn’t know about, or empowered Percoco to do.

Just on the horizon, too, is the trial of Alain Kaloyeros, scheduled to start June 18, proceedings sure to raise further questions about the governor’s leadership and deepen the stain on the Cuomo administration. Valerie Caproni, the same judge who presided over the Percoco trial, will oversee the Kaloyeros case.

Kaloyeros, the eccentric scientist whom Cuomo empowered to lead key parts of his Buffalo Billion revitalization initiative, is accused of bid-rigging to help developers who donated to the Cuomo campaign. Expect the trial -- which also includes alleged Kaloyeros co-conspirators -- to reveal even more damning details about how members of Cuomo’s inner circle doled out hundreds of millions of dollars through Buffalo Billion.

Cuomo announced the initiative in 2012 in hopes of revitalizing the western New York city’s struggling economy.

“The billion dollars was important for shock and awe value,” the governor said as Buffalo Billion projects got underway. “They were so down, and they had heard everything for so long, and they were so distrustful that I needed to say something that would actually get their attention and allow them to think, ‘Maybe it’s different this time.’”

Though the biggest Buffalo Billion project, a solar panel factory called SolarCity, is at the center of the Kaloyeros trial, Cuomo recently launched a sequel called Buffalo Billion II that will focus on small- and medium-sized manufacturers.

The Kaloyeros trial could shed more light on an alleged pay-to-play culture in which developers were rewarded after donating to the governor, a key aspect of the Percoco trial.

Further, for all the attention Kaloyeros received during his years as a flamboyant tech-industry pioneer, there’s the question of why he allegedly helped rig bids to ensure major campaign contributors won state contracts – without being accused of taking bribes himself. The trial might provide answers about that, too.

The federal corruption investigation prompted Kaloyeros to resign as president of SUNY Polytechnic Institute in October. Prior to the scandal, he had gained notice for bringing expensive tech projects to the state starting during the Pataki administration. Kaloyeros’ ostentatious public profile, replete with luxury sports cars and awkward social media posts, drew bemused coverage from newspapers; The New York Times dubbed him “a dapper dervish of a scientist” in 2002. His knack for persuading huge companies to invest in the state led Cuomo to call him “the closest thing to a genius I’ve ever worked with.”

For his part, Kaloyeros was never modest about his work.

“The job requires being a scientist, being a psychiatrist, being a priest, being a cop, being a negotiator, being a business developer or manager, being a teacher, being an adviser and being an ego-kisser,” he said in 2011. “I’d like to think I do all of them very well.”

John Kaehny, executive director of Reinvent Albany, said Kaloyeros “stands out as a much more independent figure than Percoco.”

“He had his own aspirations as an empire-builder and his own vision of these gigantic multibillion-dollar chip factories that were going to spur a manufacturing renaissance,” Kaehny explained.

Kaloyeros allegedly collaborated with Albany insider Todd Howe, who made a plea deal in the Kaloyeros and Percoco cases, to rig bidding for hundreds of millions of dollars’ worth of state contracts.

The indictment from the U.S Attorney for the Southern District of New York describes a scheme in which two companies – COR Development and LP Ciminelli – paid thousands of dollars in bribes to Howe. In exchange, he and Kaloyeros allegedly ensured that the developers won a range of lucrative contracts – a $15 million film studio and a $90 million manufacturing plant for COR Development; and a $225 million solar panel plant for LPCiminelli, with the cost eventually rising to $750 million, according to the indictment. All of it came from taxpayer dollars allocated toward Cuomo’s signature economic development programs.

Last week, COR Development’s President Steven Aiello was found guilty of his role in the Percoco case, while the company’s general counsel Joseph Gerardi was found not guilty. LP Ciminelli executives did not face charges in that trial. The dollar figures in the Kaloyeros trial are much larger than those in the Percoco matter. The program at play, Buffalo Billion, is inextricable from Cuomo’s record as governor, unlike anything involved in the Percoco trial – except Peroco himself and the state’s porous campaign finance system.

The indictment notes that Kaloyeros hired Howe as a consultant at the College of Nanoscale Science and Engineering (CNSE), which later became SUNY Polytechnic, as the college was crafting requests for proposals for the development projects in 2013. COR Development and LP Ciminelli allegedly made its bribes to Howe, disguised as consultancy payments and bonuses, around the same time.

The nature of the relationship between the scientist and the former lobbyist, a longtime Cuomo ally and operator in the upper echelons of state government in spite of a 2010 bank fraud conviction,  could come into sharper focus during the upcoming trial.

“The question is why exactly did Kaloyeros hire Howe, what was Howe’s role and what was Howe telling Kaloyeros to do?” said Kaehny, whose organization closely monitors state government spending. “That’s what we’ll be looking for.”

It is also not entirely clear what Kaloyeros, who was not charged with receiving bribes himself, hoped to get out of the alleged scheme. Mention of Kaloyeros’ possible motives is limited to a single sentence in the 79-page indictment:

“For his part in the scheme, Kaloyeros was able to maintain his leadership position and substantial salary at CNSE and garner support from the Office of the Governor for projects important to him, including the creation of SUNY Poly.”

Blair Horner, executive director of NYPIRG, another good government group, speculated that Kaloyeros’ role in the alleged scheme could come down to love of his work.

“He was the highest paid staff person in the state, probably in the history of the state,” Horner said, referring to Kaloyeros’ combined annual salary of more than $800,000. “It wouldn’t surprise me if it turned out he loved what he was doing and did not want to lose it,” he added, emphasizing that the charges remain to be proven.

Thus far into the corruption scandal, both prosecutors and journalists have mostly focused on the alleged bribery, the players involved, and their ties to Cuomo.

But the investigation also raises questions about apparent favoritism for developers who gave big to Cuomo’s campaign accounts.

The indictment notes that Howe and Kaloyeros allegedly began crafting bids to favor COR Development and LP Ciminelli in 2013, after the governor had launched his Buffalo Billion initiative and executives from the companies “had each made sizable contributions to the Governor.”

The indictment does not detail the contributions, and none of the federal charges against Kaloyeros or the other defendants appear to directly stem from campaign finance law.

However, the investigations prompted Cuomo’s reelection campaign to “set aside” a total of roughly $350,000 in contributions from COR Development and LP Ciminelli. Last fall, a Democratic official told lohud.com the move would enable authorities to recover the funds, pending the outcome of the trials.

Discussing COR Development and LP Ciminelli’s campaign contributions, Kaehny said, “It’s fairly shocking that a business or a group could donate essentially unlimited amounts of money to the governor and legislature while they’re trying to get state contracts or state grants.”

“The [Percoco] trial spotlights state laws that are so weak that what’s unethical is legal,” he added. New York State has no “doing business” restrictions on campaign donations. In New York City, entities on the “doing business” list are limited to about $400 in donations to an individual candidate.

Government watchdogs, and a few elected officials, hope the trials will give renewed momentum to long-stalled proposals for a range of reforms.

“I think the most important questions are ones not only about how the state can prevent future wrongdoing, but also what investments make sense for the state going forward, which may or may not come out” of the trials, said David Friedfel, director of state studies for the Citizens Budget Commission. Corruption or not, there have been ongoing questions about the Cuomo approach to economic development spending.

Reinvent Albany, NYPIRG, and other watchdogs have long called for tighter controls on campaign contributions, including closing the so-called LLC loophole, which featured prominently during the Percoco trial. It emerged that developers were encouraged to donate heavily to Cuomo, through several limited liability corporations that would help mask the contributors.

Good government groups also emphasize the need for greater transparency for state spending, through measures like restoring the state comptroller’s power to pre-approve contracts. Cuomo and legislative leaders took away that power in 2011.

Additionally, watchdogs hope the trials will boost support of a proposed “Database of Deals” that would list all state projects awarded to companies and detail the return on investment to taxpayers.

Robin Schimminger introduced the Assembly bill to create the database. Asked about Percoco’s recent conviction and the upcoming Kaloyeros trial, the Buffalo-area Democrat took a wide view.

“The most important thing is that when people serve in government, they have a moral compass,” he said. “If people don’t have that compass, they’re going to go astray.

“However, there are things the state could and should be doing to deter and make it more difficult for those actions to occur. Those are actions that enhance transparency and accountability.”

While Cuomo has a long list of ethics reforms again in his platform this year, including closure of the LLC loophole, he has not been outspoken in pushing for them.

The governor’s campaign finances will again be on the stand, so to speak, during the Kaloyeros trial, which will begin as election season is heating up, with spring party nominating conventions.

Cynthia Nixon’s dramatic entrance into the gubernatorial race, challenging Cuomo in this year’s Democratic primary, included a focus on corruption. She named Percoco from the podium at her launch event in Brooklyn on Tuesday, leveling a variety of blistering criticism at the governor.

Nixon is likely to have ample opportunity to connect Cuomo to the trial, as will other gubernatorial candidates, like expected Republican nominee Marc Molinaro, currently Dutchess County Executive.

Whatever the long-term consequences of the Kaloyeros trial, observers expect it to go more smoothly than the Percoco case, in which jurors were deadlocked twice before reaching guilty verdicts on some of the counts.

Discussing the Kaloyeros case, Kaehny said, “It’s simpler, more straightforward, and the email evidence is quite strong in favor of the prosecution.”

***
by Shant Shahrigianh, Gotham Gazette
      

Read more by this writer.

Ben Max contributed to this article.

Note: this article has been updated to reflet the Kaloyeros trial being moved back one week, to a June 18 start.

]]>
Post-Percoco Conviction, Kaloyeros Trial Likely to Further Stain Cuomo Administration Wed, 21 Mar 2018 04:00:00 +0000
With Phase One Going on Trial, Cuomo’s Buffalo Investment Moves Ahead with Broken Reform Promises https://www.gothamgazette.com/state/7353-with-phase-one-going-on-trial-cuomo-s-buffalo-investment-moves-ahead-with-changes-and-broken-reform-promises https://www.gothamgazette.com/state/7353-with-phase-one-going-on-trial-cuomo-s-buffalo-investment-moves-ahead-with-changes-and-broken-reform-promises Cuomo jobs western new york

Gov. Cuomo (photo: Governor's Office)


As federal corruption trials loom for several associates of Governor Andrew Cuomo, the administration is forging ahead with Buffalo Billion II, the second phase in an ambitious plan to revitalize Buffalo’s beleaguered economy and help transform Upstate New York into a hub of technology innovation and jobs. The first phase saw the massive alleged bid-rigging and kickback scandal that rocked state politics when outlined in September 2016 by the Manhattan U.S. Attorney’s Office and will loom over Cuomo’s 2018 reelection campaign.

In April, the state Legislature approved $500 million in budgetary funds for the Buffalo Billion II, which marks a shift in the investment in Western New York. The initial Buffalo Billion program, touted by Cuomo as a major success in revitalizing that city despite the scandal, poured the bulk of the $1 billion in funds into a controversial solar panel factory, while Buffalo Billion II investments are diverse and largely infrastructural, including the development of waterfront and rail access, tourism, and job training initiatives.

Critics -- including lawmakers, financial analysts and good government groups -- acknowledge steps the Cuomo administration has since taken to improve the contracting process, but say they remain skeptical of the Buffalo Billion extension and how it is administered. Calling its approval “a blank check” to the governor with little oversight, they question why these small projects are not being funded through traditional means -- like via local governments -- and whether these investments are tax dollars well-spent. Meanwhile, other promises the governor made in the wake of the scandal were abandoned by Cuomo, who had promised unilateral action that did not materialize.

“There’s two problems here. One is the corruption problem, which is obviously paramount in the upcoming trials,” said David Friedfel, director of state affairs for Citizens Budget Commission, a nonpartisan watchdog. “But a second problem that we’ve voiced concern about, which is sort of getting lost in the conversation, is that a lot of these are a bad investment of state taxpayer dollars.”

The Buffalo solar panel factory, which received about $750 million in state subsidies, as well as a state-funded nanotechnology hub in Syracuse, are at the center of last year’s sweeping probe by then-U.S. Attorney Preet Bharara’s office, which ensnared nine men -- including two who had been powerful state officials -- whose trials may overshadow the 2018 legislative session in Albany, set to begin in January.

On January 8, jury selection is scheduled to start in the trial of Cuomo’s former close confidant and aide Joe Percoco, along with three construction and energy executives who had business before the state and are accused of arranging bribes for Percoco and his wife in exchange for Percoco’s government influence.

On May 15, jury selection for the trial of former SUNY Polytechnic Institute President and CEO Alain Kaloyeros, whom Cuomo empowered and praised over several years as a key architect of his upstate economic development efforts, and executives from LP Ciminelli, a construction company tied to the factory and Cuomo’ campaign coffers, will commence.

Two Syracuse developers, Steven Aiello and Joseph Gerardi, who run COR Development, will be defendants in both trials. Eight defendants in total have pleaded not guilty, while a ninth, lobbyist and former Cuomo ally Todd Howe, pleaded guilty to numerous felony charges and is cooperating with prosecutors. While Cuomo was not directly implicated in the federal complaint, prosecutors note that he received large campaign donations from the business people involved in the scheme, often at Howe’s behest. The governor also oversaw the economic development programs that were allegedly taken advantage of and dismissed calls for greater independent contracting oversight, both before and after the scandal broke, though he did make some relatively minor adjustments.

In November 2016, two months after the charges were outlined, Cuomo expressed dismay over the scandals that were threatening to undercut his signature economic development programs and vowed to quickly strengthen oversight and ethics, though all under his purview. Notably, Empire State Development, the state’s economic development authority, would immediately begin to oversee projects run by entities associated with SUNY Polytechnic, Fort Schuyler Management Corp. and Fuller Road Management Corp., state-affiliated nonprofits created to more quickly disburse economic development funding that Kaloyeros is accused of using to illegally direct contracts.

“I believe this public trust and integrity issue must be addressed – directly and forthrightly. I don’t believe in denial as a life strategy. I believe you must face your problems, no matter how unpleasant, and do your best to resolve them,” Cuomo said in a long statement outlining his response to the scandal and news of problems at CUNY. “It is time for action, not words.”

Cuomo promised a series of actions and proposals, some that would need legislative approval and others he categorized as “steps we can take immediately.” Most of those promised reforms did not materialize.

In the November 2016 statement, Cuomo vowed, “I will order my campaign and my party not to accept campaign contributions from companies once a Request for Proposals has been announced, and for six months following the conclusion for the winner,” adding, “I believe the other state offices and the legislature should do the same and will propose such a law.” According to Cuomo’s office, his pledge was not followed through on.

While his campaign did not follow through, in January of this year, Cuomo outlined his ethics platform and proposed creating such bans for all government leaders overseeing contracting processes. It did not pass.

In November 2016, under other ‘immediate’ actions he would be taking, Cuomo acknowledged that “[t]he contracting systems at CUNY and SUNY have become the focus of US Attorney and IG inquiries in the past several months. To insure more permanent supervision, I will create and appoint separate Inspector Generals for both SUNY and CUNY.” These IGs were not created.

Cuomo also said in November 2016, “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.” The governor did not appoint such an officer.

Instead of immediate action on these promises, they were turned into proposals in Cuomo’s 2017 agenda that did not pass in the April budget or June legislative agreements that followed. Asked about the lack of follow-through on the promises from November 2016, Cuomo’s office pointed to the Legislature. In the November 2016 statement Cuomo had classified the proposals among “actions I can take under my own authority."

Enacted or not, critics say that these appointments would make no substitute for outside oversight.

Two months later, during the Buffalo leg of his six-stop 2017 State of the State tour, Cuomo made no mention of the scandals or his ethics platform, painting a rosy picture of his administration’s efforts to revitalize the city, and vowing to “double down” on the projects.

“Buffalo Billion squared because it takes Buffalo Billion I and it takes Buffalo Billion II, and there’s a synergy between the two of them that will be exponential,” Cuomo said. “The principles of it are going to be to build on Western New York’s renaissance, which you’ve all accomplished already, help more small businesses in downtown areas and strategically invest in regional industries.”

As the next phase of those efforts unfold with the backdrop of the corruption trials, the new Buffalo Billion does appear less vulnerable to bid-rigging, in part due to a series of voluntary fixes adopted by Cuomo’s administration, and also because of increased scrutiny from the press and government watchdogs.

The shift of economic development projects from under SUNY-affiliated nonprofits to Empire State Development, which can be audited by the comptroller’s office, is a key step, and ESD, a public authority, has modified its own contracting protocols based on recommendations by state-contracted consultants from Guidepost Solutions. (Cuomo announced he was hiring Guidepost to do a review soon after the scandal broke.)

Asked for comment about the steps the administration has taken to address the corruption scandal in the Buffalo Billion and which Cuomo promises has followed through on as Buffalo Billion II moves ahead, a spokesperson for Cuomo provided some background information but pointed Gotham Gazette to prior public statements by state officials.

“We share your goal of preventing fraud, waste and abuse. ESD has taken substantive steps to strengthen applicable processes to address the concerns you have raised and to implement your recommendations, including our support of strengthened governance provided to non-profits associated with SUNY,” Zemsky of ESD wrote in a letter sent to Guidepost Solutions’ head Bart Schwartz in April.

According to the governor's office, those Guidepost-suggested changes include reforms related to procurement, construction, property and equipment acquisition, and grant compliance. More specifically, there are new controls and procedures to improve payment processing and project management‎, with a focus on project timelines, billing, budgeting, documentation verification, payroll, and how RFPs and bids are evaluated.

There has been little contract or spending activity related to Buffalo Billion II in 2017, according to records provided by the governor’s office, but a handful of relatively smaller projects have made it past the planning stage. A new building for University at Buffalo Jacobs School of Medicine, is expected to be completed in December and will house an incoming class of students for the semester commencing January 2018. A welcome center on Grand Island, which is expected to become a vital component of New York's tourism industry, drawing in $100 billion and “supporting more than 900,000 jobs,” is expected to be fully constructed and in use by August 2018, according to Cuomo’s office.

Government watchdogs and reformers commend the government’s efforts to create more accountability for these projects but say they are no replacement for long-term, independent oversight.

The watchdogs call for a “database of deals,” which would digitally compile every entity receiving funds from the state along with where each dollar is going; dramatic overhaul of the campaign finance system to eliminate the appearance or reality of pay-to-play; and a bill to restore the powers of the state comptroller to review procurement contracts for SUNY, CUNY, and Office of General Services before they are approved. That power was stripped by Cuomo and the Legislature in 2011, in part to expedite the flow of economic development funds aimed at upstate revitalization, a move that was criticized intensely when the corruption revelations came to light.

"As with all of the economic development programs subject to our review, we are closely looking at payment requests,” said Jennifer Freeman, a spokesperson for DiNapoli's office in a statement to Gotham Gazette. “The problem is not all contracts and payments are subject to our review, which is why State Comptroller DiNapoli is pushing for major procurement reforms to improve oversight."

These long-sought reforms appeared to have some momentum in the 2017 legislative session, but wound up going nowhere due to pushback from Cuomo, even as more economic development money was approved.

There is less pushback against Buffalo Billion II, in part because the state projects involved are less controversial and more diverse than those announced in 2012. At that time, many questioned the state’s decision to spend $750 million on the SolarCity manufacturing plant that made a splash when it was purchased by Tesla’s Elon Musk, but has failed to the deliver the promised jobs. However, those watching Albany, and Buffalo, say questions remain about why the state is overseeing projects typically done by a local development authority or industrial development authority.

“In Buffalo, you have the state economic development corporation calling the shots on dinky expenditures on small real estate and street improvement projects,” said John Kaehny, executive director of ReInvent Albany, a watchdog group that has focused on economic development spending, especially upstate. “Is Buffalo Billion II a good investment compared to traditional government spending on clean water, road repair and public transit?”

Kaehny added that it is still preferable that the government make many small bets on small businesses, which is the emphasis of Buffalo Billion II, rather than “rolling the dice on giant, high risk, corporate handouts like Buffalo Billion I did with Tesla, Riverbend.”

Cuomo, a Democrat who has said he’s seeking a third term in 2018 and appears to be considering a run for president in 2020, may see Buffalo as an opportunity to shape his national image as a leader who successfully resuscitated one of America’s largest, long-suffering post-industrial cities -- succeeding where many others have failed. Though that narrative is likely to be complicated by the corruption scandal, with more to be determined by the trials set to begin in 2018.

The governor has called his work in Buffalo successful, pointing to a declining unemployment rate in the formerly industrial city, a rate that dropped from 7.9 percent in October 2010 to a 15-year-low of 4.9 by October 2016, and there is a chorus of voices backing him up. But Western New York’s job growth continues to lag behind the national average.

Part of the boom is related to an increase in construction jobs. For the five-year period ending in 2015, the number of construction jobs in the Buffalo-Niagara Falls Metro Area rose by 10.1 percent, an all-time record, according to Cuomo’s office, and by 9.3 percent in Erie County. The state investment has generated buzz and created an air of optimism and excitement for both Buffalonians and outsiders, including companies that have eyed the state’s second largest city. The city has recently seen investments from General Motors, Geico, Goldman Sachs, General Mills, Sumitomo Rubber, and Moog and Entrepreneur Magazine recently ranked Buffalo second in the nation for start-up communities, according to the governor’s office.

The governor and his aides also say young people are flocking back to Buffalo: the number of young adults ages 20 to 34 in the Buffalo-Niagara region has increased by 8.3 percent since 2010.

Still, lawmakers whose districts should benefit from the funds have critiques of both phases of the program. Assembly Member Raymond Walter, a Republican from Amherst, has been a vocal critic of the Legislature’s approval of the Buffalo Billion II and has joined calls for reforms in the wake of the the 2016 scandal. While acknowledging that Western New York has been infused with optimism and entrepreneurship, Walter says he attributes some of the economic prosperity to initiatives that predate Cuomo.

“My biggest concerns are, from what I've seen, is an inability to actually provide any data that shows that the programs are working,” he said of the initial Buffalo Billion program, noting that SolarCity was initially intended to house many types of industries before it became a solar panel factory. add

“The idea all along was we don't want a silver bullet, there's not a silver bullet solution to the economic woes of Western New York. We can't just have one big project, but that's exactly what this is turned into,” said Walter, who got in a heated back and forth with ESD head Howard Zemsky last month at an Assembly hearing on the progress of Buffalo Billion and other economic development programs.

The governor’s office says it is creating a “comprehensive and diverse portfolio of investments that collectively is driving the future of Buffalo’s continuing economic recovery.”

But while Buffalo Billion II may provide more tangible investments into the area, Walter questioned why the funds were not lined out by project in the 2017 budget, and criticized the opaque process through which it was passed.

“We're giving a blank check to the governor, to the Empire State Development, to whoever is going to be administering these funds,” he said. “So yeah, I still have great concern because we've given up all legislative authority over how this money is going to be spent.”

Others, like Democratic Assemblymember Crystal Peoples-Stokes, of Buffalo, says she and her constituents welcome the investment from the state. While she recognizes concerns, Peoples-Stokes said she has witnessed a dramatic change in the long-struggling city in terms of opportunity, entrepreneurship, and investment from major companies, as well as college students choosing to remain in Buffalo’s downtown after graduation.

“For me, at the end of the day, to see economic development dollars have a meaningful impact in the core of our city, I’m satisfied with that,” she said. “Because for years, literally years -- this is not my first go around, I’ve been here for 15 years -- I’ve never seen the type of resources put into Buffalo as we’ve seen under Governor Cuomo.”

***
by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

Correction: An earlier version of this story mistated the trial date of the LP Ciminelli executives.

Note: this story has been updated with more information on the reforms adopted from the Guidepost recommendations.

]]>
With Phase One Going on Trial, Cuomo’s Buffalo Investment Moves Ahead with Broken Reform Promises Thu, 07 Dec 2017 05:00:00 +0000
DiNapoli, Seeking Restored Power, Points Finger at Only the System https://www.gothamgazette.com/state/6577-dinapoli-seeking-restored-power-points-finger-at-only-the-system https://www.gothamgazette.com/state/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.”

***
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.

]]>
DiNapoli, Seeking Restored Power, Points Finger at Only the System Sun, 16 Oct 2016 04:00:00 +0000
Federal Corruption Charges Confirm Systemic Flaws in State Economic Development System https://www.gothamgazette.com/state/6544-federal-corruption-charges-confirm-systemic-flaws-in-state-economic-development-system https://www.gothamgazette.com/state/6544-federal-corruption-charges-confirm-systemic-flaws-in-state-economic-development-system cuomo topping off buffalo

Cuomo in Buffalo (photo via The Governor's Office on Flickr)


After laying out multiple corruption and bribery charges against nine players involved with Gov. Andrew Cuomo’s signature economic development program, including his former aide and close friend Joe Percoco, family friend and confidante Todd Howe, and a number of major developers and Cuomo donors, U.S. Attorney Preet Bharara refused to say whether the governor is a target in the probe or if it is reasonable to hold him accountable for the conduct of the people he empowered. The prosecutor noted the case remains open as a “general matter.”

Alluding to things possibly to come, though, Bharara said, "I really do hope that there is a trial in this case, so that all New Yorkers can see, in gory detail, what their state government has been up to.”

Whether or not Cuomo is indeed being investigated, or will see charges, those brought by Bharara on Thursday are an indictment of a system that the governor has presided over, and one that other leaders in state government have done little to oppose.

Cuomo issued a statement lamenting the charges and promising justice will be served: “If the allegations are true, I am saddened and profoundly disappointed. I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard. Like my father before me, I believe public integrity is paramount. This sort of breach, if true, should be and will be punished.”

Cuomo and his administration have continuously responded to reports about corruption in his economic development programs as though they are surprising and have caught them off guard, but the administration has been receiving warnings for years that the system was being abused.

Watchdogs have been setting off alarms that the state’s economic development system is ripe for corruption, while the press has consistently reported what appeared to be instances of bid-rigging related to the Buffalo Billion and government favors for donors to Cuomo’s electoral campaigns.

All the while, the Cuomo administration has taken the criticism and spun it as attacks on the effectiveness of the investments and on the needy communities they benefit, especially Buffalo. And while the governor did hire an “independent” investigator, Bart Schwartz, to examine and oversee the system last Spring, it was only after the administration was rocked by a storm of subpoenas. Schwartz and his firm can earn up to $450,000 for their work examining the system, a job watchdogs say should have been carried out by the state Legislature, Comptroller, and Attorney General.

Schwartz’s office declined to comment on the charges or what his role will be going forward now that the charges have been unveiled.

“The real story here is the system is broken. Everything we thought was going on, was going on, and is actually worse than we thought,” said John Kaehny, executive director of Reinvent Albany, a group that has been pushing for major reforms to the state’s economic development systems and greater budget transparency.

Kaehny noted that the scandals related to bid-rigging in Buffalo, Syracuse, and Albany involve over $1.5 billion in taxpayer funds. “These indictments shine a light on a broken and corrupt system -- not a few bad apples,” said Kaehny.

Hundreds of millions of dollars in state funds flow through opaque non-profits that the state established, a practice that predates Gov. Cuomo but he has expanded. Large sums of cash are approved in the state budget with little debate and the money is given little scrutiny by the Legislature thereafter.

The major beneficiary of the alleged malfeasance, besides those charged with unfairly winning contracts and those accused of taking bribes, appears to be the Cuomo campaign. Developers involved in the scandal gave generously to Cuomo around the times they won state economic development contracts.

According to Reinvent Albany, three of the executives now charged in bid-rigging schemes are some of Cuomo’s biggest donors. Louis Ciminelli of LP Ciminelli has given Cuomo’s campaign $143,550 in contributions and received over $600 million worth of contracts through state-controlled non-profits. Joe Nicolla of Columbia Development has given Cuomo $320,000 while receiving $190 million in contracts through state-controlled non-profits and Steven Aiello of COR Development has given $338,500 to the Cuomo campaign while receiving $105 million through state-controlled non-profits.

Among those charged is Percoco, a childhood friend of Cuomo’s who has followed the governor throughout his various political positions. Percoco was known as the governor’s enforcer when he worked under him in the Capitol and later as a high-pressure fundraiser when he worked for Cuomo’s campaign. He is accused of using his position to take state action on behalf of contractors in exchange for bribes.

Alain Kaloyeros, now the former head of SUNY Polytechnic, which has awarded contracts to Buffalo Billion developers, was also charged Thursday. Kaloyeros is charged with bid-rigging.

Also charged were developers including Aiello, Ciminelli, and Joseph Gerardi.

Bharara’s office also unsealed a guilty plea by Todd Howe, a lobbyist and Cuomo family friend who has faced financial trouble over the years and was advocating for contractors while also overseeing and working with Kaloyeros.

Up until very recently the system allowed the state to funnel money to two non-profit entities overseen by SUNY Polytechnic. Those entities issued requests for proposal that in several instances were written specifically to only fit developers that had donated generously to Cuomo’s campaign. Bharara charges that Kaloyeros actually tipped his favorite contractors far in advance of issuing an RFP to give them a leg up.

The nonprofits have resisted transparency, only recently opening board meetings to the press. Additionally, the state appears to have been extremely lax in holding recipients of economic development funds to their promises, like how many jobs they plan to deliver or how much a project will cost.

Legislative leaders, the comptroller, and attorney general have raised little fuss about an economic development system that appeared to evade standard state contracting procedures by using a complicated system of nonprofits controlled by the State University to award bids and dole out funding.

Even with the spectre of Bharara’s investigation hanging overhead, the Legislature made no broad attempts to reform the system, instead mostly deferring to the Cuomo administration.

Comptroller Tom DiNapoli’s office raised concerns this year about its ability to audit economic development projects, but DiNapoli has a reputation as being non-confrontational. When an audit of his challenged the effectiveness and oversight of Cuomo’s Excelsior Jobs Program, the administration hit back hard, attacking the competence of DiNapoli’s staff. Cuomo said DiNapoli should “educate” himself and called his audits of economic development's “opinion.” DiNapoli has said he’s not intimidated and that he does his mandated job.

Cuomo and the Legislature actually stripped DiNapoli of the ability to review contracts issued by SUNY and CUNY ahead of time, part of creating a secretive system without clear checks and accountability.

On Thursday afternoon, Attorney General Eric Schneiderman unveiled bid-rigging charges of his own, these having to do with the construction of dorms near SUNY Albany, against Kaloyeros and Nicolla, of Columbia Development. Kaloyeros has spearheaded economic development programs under Cuomo and routinely appeared by Cuomo’s side for years.

According to Schneiderman’s office the investigation took a year and was performed in partnership with the probe by federal agents led by Bharara’s office. Schneiderman accused Kaloyeros, who was the state’s highest paid employee until being suspended without pay on Thursday, of rigging bids to go to developers who in turn directed grants and other benefits to SUNY Polytechnic. Kaloyeros’ compensation package was directly tied to the activity he oversaw at SUNY Polytechnic, therefore he benefited from the bid-rigging.

Last year Kaloyeros contacted this reporter by Facebook messenger after reading and apparently being upset by a story about the role he played in the Buffalo Billion. When asked if he would like to set up an interview to correct any misunderstandings or inaccuracies, he replied that he would like to give a tour of the nano facilities he oversees, but any discussion of federal investigations would be off limits. "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,” Kaloyeros wrote. “So that part we cannot comment on beyond what we were authorized to say publicly. The rest is not a problem.”

The article attracted attention to Kaloyeros and he later deleted his Facebook profile.

Now with the “gory” details of the charges out for all to see, Reinvent Albany is calling on the state to take quick action to fix the system. It wants the state to freeze any new economic development activity by SUNY Poly and its subsidiaries; a phase out of using state-controlled non-profits to oversee economic development funds; a uniform contract process by the state, public authorities, and SUNY; new pay-to-play controls limiting contributions from those doing business with state entities; the creation of a database that reports the details of state subsidies and contracts given to businesses; and restoration of the Comptroller’s ability to review contracts issued by all state entities before they are signed.

Asked for a comment on Reinvent Albany's reform suggestions in light of Thursday's charges brought by Bharara, a spokesperson for Gov. Cuomo did not respond.

Jennifer Rodgers, executive director of The Center for the Advancement of Public Integrity at Columbia Law School and a former prosecutor who served in Bharara’s office, said that the charges give proof that the state’s economic development system failed.

"As shown by the allegations in the indictment, there was a clear failure here in the oversight of the bidding procedures related to these Buffalo Billion projects,” Rodgers said in a statement. “We need greater transparency in these processes and stronger oversight; hopefully this will prevent recurrences of a situation where public funds made their way into the defendant's' pockets instead of being used for the benefit of the people of New York."

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

]]>
Federal Corruption Charges Confirm Systemic Flaws in State Economic Development System Thu, 22 Sep 2016 04:00:00 +0000
Two Months On, Buffalo Billion Investigator’s Contract Remains a Mystery https://www.gothamgazette.com/state/6408-nearly-two-months-on-buffalo-billion-investigator-s-contract-remains-a-mystery https://www.gothamgazette.com/state/6408-nearly-two-months-on-buffalo-billion-investigator-s-contract-remains-a-mystery cuomo buffalo main st

Gov. Cuomo (photo: The Governor's Office)


It has been two months since Gov. Andrew Cuomo announced that Bart Schwartz would conduct an “independent review” of the state’s signature Buffalo Billion economic development program and yet Schwartz’s contract with the state remains either unfinished or under wraps. On April 29, following the news that U.S. Attorney Preet Bharara had subpoenaed some of Cuomo’s closest allies in conjunction with an investigation into bid-rigging and other possible improprieties, Cuomo and Schwartz released a joint statement announcing that the former U.S. attorney was being hired.

Cuomo administration officials have repeatedly failed to respond to Gotham Gazette inquiries about the status of Schwartz’s contract since he was appointed. On May 24, Cuomo told reporters that the contract had yet been finalized, but that he would make it public when it was. Without seeing Schwartz’s contract it is impossible to know exactly what he has been tasked to review; the terms of his investigation; who he reports to; and how much Schwartz’s services are costing taxpayers.

Schwartz’s contract must legally be made public if it involves the use of taxpayer money.

“The contract should be made public,” said Dick Dadey, executive director of Citizens Union, a government reform group. “There hasn't been any kind of information on his retention and that is disappointing and inexplicable. The longer this drags out the more we have to question the arrangement.”

Watchdog groups note that Schwartz’s role could have been filled by numerous other existing state entities that investigate corruption, including Comptroller Tom DiNapoli, whose office oversees state finances and contracting. On Tuesday evening, The Times Union reported that Cuomo has empowered Schwartz under the Moreland Act, giving him "the power to issue civil subpoenas," which the Cuomo administration confirmed, though it still declined to make any documentation public. A Cuomo spokesperson told The Times Union that Schwartz's contract was still being finalized and that when it is done, it will be submitted to DiNapoli and made public.

In a statement to The Times Union, a Cuomo spokesperson said of Schwartz's review of the state economic development programs and development of new guidelines for fund disbersement, "Both processes are ongoing and, as the guidelines are being drafted, Mr. Schwartz has closely examined and signed off on payments before they were released. This is important work and we thank him for promptly commencing his review. It is also a complex and unique assignment and we expect the contract to be finalized and sent to the (state) comptroller shortly."

Anonymous Cuomo administration officials have been referenced in various publications saying that Schwartz is reviewing and approving all contracts and cash flow related to the Buffalo Billion and other economic development projects. For the second time this year, payments to the SolarCity project were recently made late and led to talk of possible layoffs and disruption of the project. An anonymous Cuomo administration official told The Buffalo News that Schwartz approved the cash for the project and that it was delayed during a review by DiNapoli. The comptroller’s office later denied it had anything to do with the delay.

The firm handling Bart Schwartz’s public relations declined to comment on the status of his contract, but pointed to Schwartz’s statement from April. “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.

When asked on May 24 if Schwartz’s findings would be made public, Cuomo said that decision would be up to Schwartz, but Cuomo’s press office later clarified the report would be made public as long as the U.S. attorney’s office approved.

“Is he working as a volunteer or getting paid without a contract? Will the public ever know?” asked John Kaehny, executive director of Reinvent Albany, a watchdog group that tracks the Buffalo Billion. “What exactly does [Schwartz] do for the governor?”

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

Note: this article has been updated with new information as reported by The Times Union.

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

]]>
Two Months On, Buffalo Billion Investigator’s Contract Remains a Mystery Tue, 21 Jun 2016 04:00:00 +0000