POLITICS ON THE HUDSON

Cuomo to investigate his office amid federal probe

Joseph Spector
Albany Bureau Chief
Gov. Andrew Cuomo talks to the media  outside his office at the state Capitol on March 30.

ALBANY -- Gov. Andrew Cuomo's office said it will launch its own investigation into alleged improper lobbying and "undisclosed conflicts of interest" amid what appears to be a growing federal probe into the state's development projects in Buffalo and elsewhere.

The late Friday afternoon announcement comes amid an investigation by U.S. Attorney Preet Bharara into Cuomo's hallmark "Buffalo Billion" project that is using $1 billion of public money to revitalize New York's largest upstate city.

Cuomo's office was served a subpoena Friday for documents related to the federal investigation, and then Cuomo's office said it would launch its own internal review, officials said.

But the federal investigation appears to be broader than the Buffalo Billion and reaches some of Cuomo’s most trusted aides during his tenure in office since 2011.

It also appears to hit on Cuomo’s efforts to expand nanotechnology across upstate through the SUNY Polytechnic Institute based in Albany, which is leading plans for a $600 million photonics center in Rochester.

“The U.S. Attorney for the Southern District has an ongoing investigation focused in upstate New York (commonly referred to as the Buffalo Billion and Nano investigation),” Cuomo’s counsel Alphonso David said in a statement.

“This investigation has recently raised questions of improper lobbying and undisclosed conflicts of interest by some individuals which may have deceived state employees involved in the respective programs and may have defrauded the state,” he continued.

Bart Schwartz, a former federal prosecutor, was named by David to conduct the internal review, which Cuomo’s office suggested would focus in part on potential bid rigging.

“We take violations of the public trust seriously, and we believe these issues must be resolved by further investigation by the U.S. Attorney,” David said.

The step by Cuomo’s office is the latest turn amid Bharara’s focus on corruption in state government. Bharara is also investigating New York City Mayor Bill de Blasio and his staff for myriad issues, including campaign contributions to upstate Senate Democratic candidates in 2014.

Bharara last year won the convictions of the two former legislative leaders, former Assembly Speaker Sheldon Silver and ex-Senate Majority Leader Dean Skelos. They are set for sentencing next month in the separate cases.

In January, Bharara absolved Cuomo of wrongdoing into a federal investigation of whether Cuomo steered a corruption-busting commission away from the Democratic governor’s allies.

But at the time, Bharara said he would continue to investigate state corruption.

"What has been going on in state government lately is simultaneously heartbreaking, head scratching and almost comic," Bharara said during a speech in February in Albany. "Albany is unquestionably suffering from a crisis of corruption."

The investigation appears to be centered on bids for the Buffalo Billion and perhaps in other places.

Administration officials said the office on Friday barred any state contact with Albany lobbyist Todd Howe, a former Cuomo aide, and suspended communication with Competitive Power Ventures, a private company building a controversial plant in Orange County.

There was no immediate comment from either of them.

The Daily News reported that the investigation is also centered on Cuomo’s former top aide Joseph Percocco, who grew up in Rockland County, and Alain Kaloyeros, who heads SUNY Poly.

“Any grants made by this program will be thoroughly scrutinized – past, current or future,” David said.

He continued, “Ensuring the integrity of the contracting process for this program is paramount, so that the Buffalo Billion and Nano program can continue creating new jobs and revitalizing upstate’s economy.”

Since last fall there have been reports that the federal inquiry was eyeing contracts awarded for the high-tech developments in Buffalo, including plans for a massive manufacturing facility by SolarCity as part of the Riverbend public-private project.

Several firms were issued subpoenas, including documents that were sought from SUNY Poly, which has high-tech research and development facilities in Buffalo, Rochester, Syracuse and Utica.

A report last June by The Investigative Post, a journalism organization based in Buffalo, found that at least one of Cuomo’s top campaign contributors who owns the firm LPCiminelli was awarded the rights by SUNY to build the solar plant.

Schwartz said in a statement said state officials ”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 said he would report his findings “to the U.S. Attorney and the administration. The administration has made it clear to me that they have zero tolerance for any violation of the public trust from any actor or entity and I should follow the facts.”