Alain Kaloyeros, the former President of the State University of New York Polytechnic Institute whom Governor Cuomo once referred to as a "genius," was sentenced to 42 months in Federal prison Dec. 11 for his role in the bid-rigging that awarded hundreds of millions of dollars in state contracts to three businessmen who were longtime campaign contributors to Mr. Cuomo.

Federal prosecutors emphasized during the trial last summer that there was no evidence that the Governor had done anything improper. But his former Deputy Director for State Operations, Anthony Kennedy, testified during the trial that because Mr. Cuomo had concerns that Mr. Kaloyeros was too independent, Todd Howe, a lobbyist who had previously worked first with his father, three-term Gov. Mario Cuomo, and later with Andrew when he was U.S. Housing Secretary during the Clinton Administration, was tapped to serve as his “eyes and ears.”

How Bids Were Stacked

According to a former executive with LP Ciminelli, one of the firms at the center of the bid-rigging scheme, Mr. Howe’s advice when Mr. Kaloyeros asked how he could improve his relationship with the Governor was to make sure Mr. Cuomo got credit for whatever went right with the project. Mr. Howe also, in collaboration with Mr. Kaloyeros, tailored the contracts so that the specifications virtually eliminated other potential bidders from qualifying for the awards.

In other respects, things did not go so smoothly. The state reaped relatively few new jobs from the $850 million in contracts it awarded to the two firms whose principals had long been donors to the Governor’s campaigns. All three of those men were convicted July 12 along with Mr. Kaloyeros.

Mr. Cuomo at that point did his best to distance himself from the four defendants, saying he had “no tolerance for those who seek to defraud the system and advance their own personal interests.”

Steven Aiello, founder of the real-estate firm COR Development, was sentenced to 42 months in prison earlier this month—a longer term than the other businessmen received because he also was involved in the attempt to bribe the Governor’s former top aide, Joseph Percoco, in a separate economic-development scheme.

Joseph Gerardi, Mr. Aiello’s founding partner in the Syracuse-based COR Development, was sentenced to 30 months in prison, and Louis Ciminelli, the former chairman and CEO of LV Ciminelli, received a 28-month term.

Judge’s Stern Warning

When Mr. Aiello was sentenced, U.S. District Judge Valerie Caproni, who also presided over the trials that ended in convictions of Mr. Percoco and former Assembly Speaker Sheldon Silver, said she wanted the sentence for the businessman “to be heard around the state.” The message to other businessmen seeking government contracts, she said, was that “you have to be purer than Caesar’s wife, because the money you were trying to get comes from the hardworking men and women of New York State. If you can’t live with that standard, then stick with private-sector work, because if you remain at the public trough and you engage in corrupt means to get to public money, even if you did a good job for the public, the Court will show you no mercy.”

As to Mr. Kaloyeros, she said his insecurity about his standing with the Governor did not excuse his crimes. "He let his desire to earn Brownie points in the executive chamber overcome the normal, well-thought-out processes that treated all developers fairly, whether they were giving money to Cuomo campaign coffers or not."

Her sentence for Mr. Kaloyeros includes two years of supervised release once he completes his prison term and a $100,000 fine.

U.S. Attorney Geoffrey S. Berman said following that proceeding in lower Manhattan, “Public corruption—especially at such a disconcertingly high level in Albany—contributes to the frustration and eroding faith of the people of New York in the integrity of their government. We will continue to do everything within our power to ensure that funds intended for the greater good of New Yorkers will be used for just that—and not to line the pockets of influence-peddlers with high-level access.”


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