Governor Likely to Loom Large as Ex-Aide’s Graft Trial Begins

NEW YORK — Joseph Percoco was more than a mere loyalist to the former Gov. Mario Cuomo; he was like family — “my father’s third son,” New York’s current governor, Andrew Cuomo, once put it, “who I sometimes think he loved the most.”

Percoco, 48, later became a close adviser and gatekeeper to Andrew Cuomo, offering unswerving loyalty and friendship.

Percoco’s ties to the governor are likely to be harshly scrutinized over the next few weeks: On Monday, he faces trial in federal court in Manhattan on corruption charges, accused by federal prosecutors of taking at least $315,000 in bribes in return for official actions on behalf of an energy company and a developer that were worth millions of dollars.

The trial seems poised to expose Albany’s culture of secrecy and influence peddling, much like the 2015 trials of two former prominent state legislators: Sheldon Silver, a Democrat, who was the longtime New York Assembly speaker, and Dean G. Skelos, a Republican who was the Senate majority leader. (Both men’s convictions were overturned on appeal and they will be retried later this year.)

Although Cuomo, in public statements, has distanced himself from Percoco, he is nonetheless likely to loom large over the trial, which could carry risks for the governor, a second-term Democrat, particularly given his purported national ambitions.

Preet Bharara, the U.S. attorney when the criminal complaint was unsealed, said at the time that there were “no allegations of any wrongdoing or misconduct by the governor anywhere in this complaint.”

But Percoco and Cuomo were close political and personal allies for more than two decades, and Percoco’s presence in a federal courthouse has the potential to reflect badly on both Cuomo’s choice of friends and his choice of personnel.

The allegations against Percoco involve graft at the highest levels of the executive branch of state government.

“There is a lot for the public to be concerned about here,” said Susan Lerner, executive director of Common Cause New York. “This trial raises pay-to-play questions. This trial raises issues of using public resources for private gain.”

“It raises significant issues about how discretionary funds used for economic development are handled in our state, billions — literally billions — of taxpayer dollars," she added.

Percoco was indicted along with Alain E. Kaloyeros, the former president of the State University of New York Polytechnic Institute, and six executives of companies that had done business with the state; the defendants have all pleaded not guilty. Prosecutors had charged two overlapping bribery and fraud schemes, in a case that grew out of a federal investigation into the Cuomo administration’s upstate economic revitalization plan, known as the Buffalo Billion.

Percoco is to be tried with three of his co-defendants; a second trial, which will include Kaloyeros as a defendant, will be held in June.

“We think that a fair and open-minded finder of fact will conclude that Mr. Percoco is not guilty,” his lawyer, Barry A. Bohrer, said last week. “We look forward to the trial.” Michael C. Miller, a lawyer for Kaloyeros, had no comment.

In the trial, the prosecution’s star witness is expected to be Todd R. Howe, who pleaded guilty in 2016 to charges associated with the bribery scheme and has his own long-standing Cuomo connections.

A onetime aide to the governor's father, Howe had been friends with Percoco since Howe hired him out of college to work as an advance man for the elder Cuomo. Howe later worked for the younger Cuomo when he was the secretary of Housing and Urban Development in Washington and, in 2014, he and Percoco shared an office during Andrew Cuomo’s 2014 re-election campaign for governor, in which Percoco was the campaign manager.

Prosecutors said in a criminal complaint that in order to disguise the nature and source of the bribes that companies paid to Percoco, they funneled the payments in some cases through bank accounts and a shell company set up by Howe, who they had retained to help them obtain official state favors.

“This case is about a scheme that was cooked up between Todd Howe and Joe Percoco to line Joe Percoco’s pockets with money from clients of Howe, who had business before the state,” a prosecutor, Janis Echenberg, told Judge Valerie E. Caproni in December.

To conceal their schemes in their emails, Percoco and Howe used the code word “ziti” — a term used in “The Sopranos” — to refer to bribe payments, the complaint said.

Prosecutors have alleged that the energy company, Competitive Power Ventures, which was building a power plant in the Hudson Valley, paid more than $287,000 in bribes to Percoco, which were funneled through a “low-show” job for his wife, Lisa Toscano-Percoco, in return for official actions that benefited the firm. (She has not been charged.) The prosecutors also accused COR Development, a Syracuse-area developer, of paying about $35,000 in bribes to Percoco for his help in, among other things, reversing a decision by the state’s economic development agency.

As the governor’s go-to “enforcer” for political agendas, Percoco was responsible for tactics — persuasion in some cases, outright threats in others — that have engendered bad blood among many of Cuomo’s political opponents and even his friends. And few of those seemingly slighted by Percoco — and by extension, Cuomo — are likely to be running to the governor’s defense in the event that the trial generates negative headlines.

The Percoco case marked the second time that Cuomo’s administration had been investigated by the Southern District prosecutor’s office; in January 2016, Bharara announced the end of “a thorough investigation” into the governor’s interference with an anticorruption panel that he had created and then abruptly shut down, saying there was “insufficient evidence to prove a federal crime.”

“Cuomo’s political opponents could try to use this case to damage the governor, no matter the outcome,” said Hank Sheinkopf, a Democratic political strategist who has worked both for and against the governor in campaigns.

“He has done well to separate himself from the other Albany scandals,” Sheinkopf added, “and now a scandal created by someone close to him is going to trial.” In his 2014 memoir, “All Things Possible,” the governor described Percoco as “the total package: trained as a lawyer, he had the guts, brains and stick-to-itiveness necessary to attack any project — hard.” And Cuomo added that “during the worst of times,” Percoco could also “make us laugh.”

Cuomo said when the charges were announced that if they were true, he would be “saddened and profoundly disappointed.”

“I have zero tolerance for abuse of the public trust from anyone,” he said. “If anything, a friend should be held to an even higher standard.”