NEW YORK — A former top adviser who Democratic Gov. Andrew Cuomo once likened to a brother was among eight men arrested Thursday in a bribery and fraud case that threatens to tarnish Cuomo’s efforts to spur the upstate economy and darken a reputation that until now has been spared from a federal prosecutor’s anti-corruption crusade.
U.S. Attorney Preet Bharara announced the charges and said another former Cuomo aide, a ninth defendant, pleaded guilty and was cooperating. The prosecutor spoke sparingly when questioned specifically about Cuomo, saying, “There are no allegations of wrongdoing on the part of the governor.”
Some of the most serious allegations in a Manhattan federal court criminal complaint were brought against Joseph Percoco, formerly Cuomo’s executive deputy secretary and one of his most loyal advisers.
Percoco also worked for Cuomo’s father, Gov. Mario Cuomo. At the former governor’s funeral last year, Andrew Cuomo called Percoco “my father’s third son, who sometimes I think he loved the most.”
The court papers allege Percoco took more than $315,000 in bribes from 2012 through 2016 from Syracuse-based COR Development and Competitive Power Ventures, an energy company looking to build a power plant in the Hudson Valley.
Todd Howe, a consultant for the two companies and a former Cuomo associate, set up bank accounts and a shell company to funnel bribes, including payments to Percoco’s wife, the complaint said. Howe pleaded guilty Tuesday.
Cuomo said if the allegations are true “I am saddened and profoundly disappointed.”
“I hold my administration to the highest level of integrity,” he said. “I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard.”
Percoco’s attorney, Barry Bohrer, called the case “an overreach of classic proportions.”
“Mr. Percoco performed services honestly and within the bounds of the law at all times,” he said, predicting his client will be exonerated.
The federal probe revealed a web of people and businesses tied to Cuomo and poised to profit from the Buffalo Billion, Cuomo’s effort to boost New York’s second-largest city, and Nano, a high-tech jobs initiative led by defendant Alain Kaloyeros, president of SUNY Polytechnic Institute.
Howe pleaded guilty to charges including conspiracy to commit extortion, bribery and wire and tax fraud. His attorney, Richard Morvillo, said he will “testify truthfully if called upon.”
In an apparent reference to Howe, Bohrer said the case against Percoco is “based on information provided by someone of utterly unreliable credibility.”
Percoco resigned as Cuomo’s executive deputy in 2014 to lead Cuomo’s re-election campaign. He rejoined the administration in late 2014 before leaving again in January to become a vice president at Madison Square Garden. In a statement, the Garden said, “We believe Joe is a man of good character and hope to see this matter resolved in a timely manner.”
According to state financial disclosures, Percoco made up to $125,000 by becoming a consultant for COR Development and CHA Consulting, firms involved in Buffalo Billion and Nano. The firms also are big Cuomo political donors.
Peter Galbraith Kelly Jr., an executive at Competitive Power Ventures, is accused in the complaint of conspiracy and paying bribes to Percoco. The Braintree, Massachusetts, company didn’t immediately reply to requests for comment.
Authorities accused Percoco of conspiring with Kaloyeros and Howe in the Buffalo Billion project to deceive Fort Schuyler, the state-funded entity awarding the contracts, so bids would go to COR Development and Buffalo contractor LPCiminelli. They said Kaloyeros retained Howe to help him, and Howe in turn solicited and received bribes.
Kaloyeros, who Cuomo said was suspended without pay Thursday, was released from custody on $300,000 bail. Percoco was released on $100,000 bail.
Kaloyeros’ attorney, Michael Miller, said his client is innocent and looks forward to being exonerated.
Miller said Kaloyeros “has always sought to make sure the right company was doing the right job on the right project. He committed no crimes along the way.”
Also charged were COR Development executives Steven Aiello and Joseph Gerardi and LPCiminelli executives Michael Laipple, Kevin Schuler and CEO Louis Ciminelli. Laipple, Schuler and Ciminelli were released after court appearances Thursday, and their lawyers said they’re innocent.
LPCiminelli said company officials “acted appropriately and legally” and will be vindicated. COR didn’t respond to a request for comment. Kaloyeros wasn’t available for comment.
Democratic Attorney General Eric Schneiderman brought separate state charges against Kaloyeros and a real estate developer not charged in the federal case, saying Kaloyeros steered or agreed to steer contracts to hand-picked companies, rigging the bidding process for three multimillion-dollar contracts.
In Bharara’s crackdown on political corruption in Albany he successfully prosecuted last year the former Senate majority leader and the ex-Assembly speaker, two men who worked closely with Cuomo as the three most powerful men in the state.
Klepper reported from Albany. Associated Press writers Michael Virtanen in Albany and Carolyn Thompson in Buffalo contributed to this report.