A federal prosecutor told jurors Monday that SUNY Polytechnic Institute founder Alain Kaloyeros was motivated by «power and hubris» — and the fear of losing his job — when he decided to rig the bids on more than $850 million in state contracts for favored developers in Syracuse and Buffalo.
In his closing argument, Assistant U.S. Attorney Matthew Podolsky said Kaloyeros brought aboard now-disgraced business consultant Todd Howe, who had decades-old ties to Gov. Andrew Cuomo, in an attempt to win favor.
«Kaloyeros thought he was going to be fired, so what did he do? He hired Todd Howe,» Podolsky said, noting testimony that said Howe was the Cuomo administration’s «eyes and ears» at SUNY Poly.
Howe worked for SUNY Poly, as well as the companies Kaloyeros allegedly hooked up: COR Development in Syracuse and LPCiminelli in Buffalo.
The allegedly «cooked» contracts were part of Cuomo’s «Buffalo Billion» initiative, his signature upstate economic development program.
Podolsky portrayed Kaloyeros as a man angling to win support from Cuomo, whose administration, witnesses testified earlier in the trial, was initially cool to working with the longtime leader of the high-tech school.
«(Howe) was the one that Kayoleros needed to keep the money flowing,» Podolsky said, «to keep the governor’s support.»
The prosecutor alleged Kaloyeros was the «inside man» for the developers. «These men did not want to play by the rules,» he said. «They were not willing to play fair and honest.»
Michael Miller, an attorney for Kaloyeros, later told jurors his client had no motive to commit the crimes he stands accused of.
«Why would Alain Kaloyeros turn his back on everything he had built for 20 years to rig the bid for Buffalo and Syracuse?» Miller said. «Does it make sense that he would turn his back on all that? Alain Kaloyeros did not benefit, did not stand to benefit, from what happened in Syracuse and Buffalo. I’m at a loss to understand how Alain Kaloyeros could have done that. And the reality is, he didn’t.»
Podolsky had earlier noted he did not have to prove motive on the part of the defendants. Still, he said, for Kaloyeros, «It is about power and hubris.»
Kaloyeros, 62, is on trial with COR Development President Steve Aiello, 60; COR General Counsel Joseph Gerardi, 58; and Louis Ciminelli, 62, of LPCiminelli. All are charged with wire fraud and wire fraud conspiracy. Gerardi is also charged with lying to federal officers.
Miller and Podolsky both spoke for about three hours as the corruption trial before U.S. District Court Judge Valerie Caproni neared its end.
At close to 5 p.m., Miller told the judge he would like to break and continue his summation Tuesday morning.
«Oh no — you are going to finish today,» said Caproni, who gave him an additional 20 minutes.
The prosecution’s case is based largely on emails sent while SUNY Poly was preparing requests for proposals (RFPs) for projects as part of the Buffalo Billion.
Podolsky focused on a Sept. 9, 2013, email from Kaloyeros to Ciminelli in which Kaloyeros sent a draft RFP and asked Ciminelli to «fine tune» the requirements. Ciminelli later deleted the message.
Miller had said Kaloyeros merely made the mistake of being «tone deaf» and using «unfortunate language» in emails without considering how that might be perceived down the road.
Podolsky urged the jury to not be distracted by misrepresentations he said the defense would offer, and pointed to three elements: the defendants’ «own words» in emails; «lies, concealment and destruction of evidence;» and the testimony of Kevin Schuler, a former executive at LPCiminelli who in May decided to cooperate with prosecutors.
Kaloyeros is accused of using Fort Schuyler Management Corp., a nonprofit development arm of SUNY Poly, to steer contracts to the two firms. In December 2013, The board approved a non-specific request for proposal (RFP) for future development in the Syracuse area. In late January 2014, the board approved a similar one for LPCiminelli.
Both companies got an advance copy of the RFPs for their areas before they went out — and dictated qualifications to suit their own needs to ensure they would be awarded, Podolsky said.
«(Kaloyeros) was defrauding Fort Schuyler. He was funneling work to Gerardi, Aiello and Ciminelli,» Podolsky said.
Miller, however, said the board’s former chairman Dean Fuleihan, now a top aide to New York City Mayor Bill de Blasio, was involved in basically every step of of the bidding process — including having a dinner with Kaloyeros and Howe a week before the Syracuse RFP was issued.
«If Dean is in the know, there’s no fraud,» Miller said.
Miller alluded to the shadowy nature of deal-making in state government: «We can have a philosophical discussion, but the reality is that’s the environment Alain Kaloyeros was operating in. That environment is not on trial. That system is not on trial. That’s why we vote every four years.»
When defense attorneys for Gerardi, Aiello and Ciminelli have concluded their summations on Tuesday, Assistant U.S. Attorney Robert Boone will offer a rebuttal.