Witness: Kaloyeros sought Cuomo's favor
Posted June 22, 2018 7:03 a.m. EDT
NEW YORK _ SUNY Polytechnic Institute founder Alain Kaloyeros went from the Cuomo administration's doghouse to "rock star" status in two years _ and engaged in illegal bid-rigging, a former Buffalo construction executive testified Thursday.
Kevin Schuler, an ex-vice president at LPCiminelli, told jurors at Kaloyeros' corruption trial in U.S. District Court in Manhattan that he, his boss, Louis Ciminelli, and Kaloyeros committed crimes to fix a lucrative state project in Gov. Andrew Cuomo's "Buffalo Billion" initiative awarded in January 2014.
"We had significant influence on the project, we had influence into the RFP, influence in the process that was going to select the winner so that we would be chosen," Schuler testified, referring to requests for proposals.
Kaloyeros allegedly engaged in the bid-rigging of more than $850 million in projects in Syracuse and Buffalo through his control over projects funded by Fort Schuyler Management Corp., SUNY Poly's nonprofit development arm that receives substantial state funding and which approved the contracts.
Schuler, 47, who pleaded guilty last month to wire fraud charges and is cooperating with prosecutors, occupied the witness stand as Ciminelli watched from the defense table. Another firm executive, Michael Laipple, who was a defendant in the case until last month when all charges against him, were dropped, watched Schuler testify from the front row.
Schuler provided jurors with an expletive-laced example of Kaloyeros' alleged motive to rig bids: The scientist had once been in poor standing with the Cuomo administration and wanted to maintain his new status.
Schuler said he learned from lobbyist Todd Howe that one of Cuomo's top aides, Howard Glaser, wanted nothing to do with Kaloyeros when Howe told Glaser he wanted to work with him in 2011.
"Basically Mr. Glaser told him, 'There's no way you're going to be working for that (expletive) guy. We don't trust him. We don't know what's going on out there,'" Schuler testified.
Schuler said he understood Kaloyeros was "concerned he didn't have a good relationship" with the governor's office.
Schuler said Howe continued to press Glaser about working with Kaloyeros but for a while kept receiving the same response until Glaser eventually relented when Howe said the Albany lobbying firm he worked for, Whitman Osterman and Hanna, wanted to work with the SUNY Poly founder.
"OK, but you better keep your thumb on it," Glaser told Howe, according to Schuler.
By 2013, when the alleged bid-rigging began, Howe took credit for improving the relationship between Kaloyeros and the governor's office.
"By 2013, he was considered a rock star by the second floor," Schuler said, using the term for the governor's office in the state Capitol.
That April, Kaloyeros dined with Ciminelli in Buffalo _ several months before a bid for the Buffalo project went out. Kaloyeros and Ciminelli bonded over their love of cars, Schuler said.
"Louis said to Dr. K, 'We have a billion dollars in Buffalo and we can't figure out what to do with it and I see what you've done here is so impressive,'" Schuler recalled. He said Kaloyeros' response became legendary at LPCiminelli.
"The difference between you guys and me is I would have spent the first billion already and be on my way to the second billion and having the governor go find it," Kaloyeros said, according to Schuler.
Kaloyeros is on trial with Ciminelli and Steve Aiello and Joseph Gerardi, the president and general counsel with the Syracuse-based COR Development.
Schuler, who spoke fast and was told to slow down three times by a stenographer, testified at the end of a long day in the trial.
His appearance on the witness stand comes after days of testimony about emails Kaloyeros exchanged with Howe, the star witness at a trial earlier his year that ended in the convictions of former top Cuomo aide Joseph Percoco and Aiello for wire fraud conspiracy. Gerardi was cleared of all charges in that case.
Howe, a convicted felon, was arrested in the middle of the Percoco trial when it was revealed in his testimony that he swindled his credit card company for the cost of a $600 night's stay at the Waldorf Astoria in 2016 at the same time he was negotiating a cooperation deal with the prosecutors.
Earlier, emails showed a member of the Fort Schuyler board said he believed the board approved requests for contract bids without ever looking at them. "I don't recall the RFPs ever being presented to the board," Robert Geer, a SUNY Poly professor for 22 years, testified.
Kaloyeros sat on the Fort Schuyler board, but the level of his power became an issue Thursday.
Assistant U.S. Attorney David Zhou later asked Joseph Schell, an attorney who advised Fort Schuyler on procurement matters, what involvement he believed Kaloyeros had with the Fort Schuyler board.
"I believe he was the leader," Schell answered.
The government contends Kaloyeros and Howe conspired to give LPCiminelli and COR Development inside information _ including advance copies of the requests for proposals and allowing their executives to dictate language put in them.
Kaloyeros attorney Michael Miller grilled Schell on whether the RFP processes were fair, clear and competitive.
"The decision was fair," Schell answered.
Reid Weingarten, a lawyer for Kaloyeros, earlier asked Geer if he ever had contact with potential bidders before putting out an RFP for equipment. The witness said it could happen if information was needed.
"Did (Kaloyeros) ever influence your vote in any way, shape or form?" the lawyer asked Geer.
"Not that I can recall," Geer replied.
Kaloyeros recused himself from votes approving COR and LPCiminelli as successful bidders, the lawyer noted.
The trial will resume Monday.