Jury Convicts NY Governor’s Ex-Top Aide of Corruption

Joseph Percoco, a former top aide to New York Gov. Andrew Cuomo accused of bribery, leaves court on March 12, 2018. (AP Photo/Richard Drew)

MANHATTAN (CN) – Shaking up the New York political scene, a federal jury found Governor Andrew Cuomo’s former right-hand man Joseph Percoco guilty on Tuesday of taking bribes from heavyweight corporate donors.

Before his convictions today on three out of six counts of a 2016 indictment, Percoco had been an influential figure within New York’s most powerful political dynasty.

Former Governor Mario Cuomo, the sitting governor’s father, had considered Percoco a “third son,” earning him trust in New York’s highest seat of power for generations. The younger Cuomo, who tapped Percoco to manage both of his gubernatorial campaigns, meanwhile lamented Tuesday that the stain of corruption had hit so close to home.

“While I am sad for Joe Percoco’s young daughters who will have to deal with this pain, I echo the message of the verdict – there is no tolerance for any violation of the public trust,” the governor said in a statement. “There is no higher calling than public service and integrity is paramount – principles that have guided my work during the last 40 years.

“The verdict demonstrated that these ideals have been violated by someone I knew for a long time,” Cuomo acknowledged. “That is personally painful; however, we must learn from what happened and put additional safeguards in place to secure the public trust. Anything less is unacceptable.”

Although the anti-corruption crusade that brought down Percoco began in the administration of former U.S. Attorney Preet Bharara, the prosecutor’s successor championed Percoco’s conviction today.

Trading Bharara’s famous puns for platitudes, U.S. Attorney Geoffrey Berman noted in a statement that Percoco had been convicted of offering up “something priceless that was not his to sell – the sacred obligation to honestly and faithfully serve the citizens of New York.”

Prosecutors entered this photograph of teacher Lisa Percoco into the record during the corruption trial of her husband, Joseph Percoco, the former right-hand man of New York Governor Andrew Cuomo. From 2012 to 2016, the energy company Competitive Power Ventures paid Mrs. Percoco $90,000 a year for what the government has characterized as “low-show” work that was actually a bribe to her husband. Mrs. Percoco also received a $35,000 check from COR Development, a real estate company that also sought gubernatorial action.

Percoco, a 48-year-old resident of South Salem, now faces decades in prison for raking in more than $300,000 in bribes from political donors who provided his wife with low-show work.

Competitive Power Ventures paid the vast majority of that amount: Over the course of three years, Lisa Percoco collected more than $270,000 in income from the Maryland-based energy company by putting in roughly three hours of work a month on an educational initiative.

Percoco’s wife was never indicted, but the jury revealed Tuesday that they had deadlocked on a count each of bribery and conspiracy against Competitive Power Ventures executive Peter Galbraith Kelly, 54.

After a six-week trial and two weeks of jury deliberations, U.S. Attorney Berman has not yet revealed whether he will attempt to retry Kelly, whose attorney Dan Gitner has not released a statement on his client’s mistrial.

At Competitive Power Ventures, the educational initiative Lisa Percoco worked on involved soothing community opposition to the company’s fracked-gas power plant in New York’s Hudson Valley. Residents and activists there have protested outside of court for months over a fossil fuel plant that they believe to have been the product of a corrupt deal.

The chair of one of the these groups plant called Tuesday for New York Attorney General Eric Schneiderman to probe the project’s genesis.

“Clearly there were backroom deals and influence over the entire project,” Protect Orange County’s chair Pramilla Malick said in a statement. “Weak state laws allowed this to happen. While corruption is not new to Albany, the fact that this involved critical energy infrastructure with widespread environmental and public health implications makes it particularly egregious.”

Prosecutors also flagged a $35,000 check cut for Lisa Percoco by the Fayetteville, New York-based real estate company COR Development.

They said COR President Steven Aiello, 59, and general counsel Joseph Gerardi, 58, paid that money to win Joseph Percoco’s support for a variety of projects throughout the state, including a stadium in Syracuse, a revitalization of the Inner Harbor of Onandaga Lake, and a film hub in the State University of New York Polytechnic Institute in Albany.

Aiello was found guilty Tuesday on one count of conspiracy while Gerardi was acquitted.

Attorneys for both Percoco and Aiello vowed to appeal what they described as confusing results.

“There is an inconsistency in the verdict as we read it, and we are going to review it and figure out what means and what options are open to us,” Percoco’s attorney Barry Bohrer told reporters at a press conference outside the courthouse.

New York Gov. Andrew Cuomo (center right) stands with COR Development president Steven Aiello (left) at a construction site in Syracuse’s Inner Harbor of Onandaga Lake in September 2015. This photo was introduced into evidence in the corruption trials of Aiello and Joseph Percoco, the governor’s former “right-hand man,” in the words of federal prosecutors.

Although the jury cleared Percoco of soliciting bribes from COR, the panel convicted both men of entering into a bribery conspiracy.

Highlighting this apparent discrepancy, Aiello’s attorney Stephen Coffey noted that the jury told the judge that they were deadlocked twice before today’s verdict.

“I think they were there a long time, and they were going back and trying to reconcile something,” Coffey said. “And, you know, you had some horse-trading there.”

Gerardi’s attorney Milton Williams meanwhile called his client’s acquittal bittersweet.

“I am very relieved for Mr. Gerardi and his family, but very saddened for the others who did not fare as well with today’s verdict,” the attorney from Walden Macht & Haran said in an email.

Prosecutor Bharara’s anti-corruption cases also brought down former New York Assembly Speaker Sheldon Silver, a Democrat, and Senate Majority Leader Dean Skelos, a Republican. Though both were found guilty of bribery, their convictions were overturned after the Supreme Court loosened federal anti-corruption laws with a reversal for former Virginia Governor Bob McDonnell.

Together with Silver and Skelos, Cuomo formed the third of what Bharara blasted as the “three-men-in-a-room” culture of secret dealing pervasive in New York’s capital of Albany.

Cuomo has not faced any claims of wrongdoing, but good-government groups warned before today’s verdict that an acquittal for Percoco would eviscerate New York’s already porous anti-corruption laws.

Trial evidence illustrated how loopholes already make influence-peddling legal by allowing companies to funnel campaign contributions through dozens of alter egos known as limited liability corporations.

In the wake of the verdict, the watchdog group Reinvent Albany called to patch flaws such as the so-called “LLC loophole.”

“The conviction of top Cuomo aide Joe Percoco on a federal corruption charge confirms again that New York state has a pernicious problem with pay to play,” five watchdogs said in an unsigned statement. “But the real headline from his trial is that in New York, state laws are so weak that what is unethical is legal.”

New York Governor Andrew Cuomo’s former aide Joseph Percoco smiles broadly while holding a large tuna that he caught on a fishing trip in Montauk, New York. The man he’s posing with, disgraced lobbyist Todd Howe, showed the jury this photograph as the government’s star witness in a corruption trial that has embarrassed some big fish in New York’s political sphere.

Outside of court, John Kaehny of the group Reinvent Albany called upon Cuomo to take action.

“The hope is that it motivates the governor to actually lead the charge on transparency and accountability measures in the state instead of being an obstacle to it like he has been in the last year or so,” Kaehny said.

In a phone interview a day earlier, Kaehny predicted that the government will have an easier time with its next New York corruption case.

This spring, another Manhattan jury will hear charges against Alain Kaloyeros and three developers from the Buffalo-based firm LPCiminelli.

Kaloyeros had been a leader of Cuomo’s signature initiative “Buffalo Billion,” and is also the former president of the State University of New York Polytechnic Institute. Major Cuomo donor Louis Ciminello is a co-defendant, as are executives Kevin Schuler and Michael Laiple.

Prosecutors claim that Kaloyeros rigged bids to LPCiminelli by imposing a requirement for developers to have 50 years of proven experience.

After the requirement was reduced to 15 years, Schuler noted in an internal email that “50 was a bit obnoxious,” according to the complaint.

Kaehny noted that the Supreme Court’s McDonnell holding made it harder for prosecutors to prove intent to bribe without a smoking gun.

“We call it ‘speak into the microphone’ crimes,” he said.

Introduced as evidence in the bribery trial of Joseph Percoco, this prototype of a corporate logo for Competitive Power Venture was drawn by Percoco’s wife, Lisa Percoco, who made $90,000 a year from the energy company. “A picture is worth a thousand words, and this one was worth thousands of dollars,” Assistant U.S. Attorney David Zhou told the jury on Feb. 27.

Neither the Percoco nor the Kaloyeros cases feature wiretapped phone calls, making both cases reliant on the testimony of a shaky witness: disgraced lobbyist Todd Howe.

Facing more than 130 years for eight convictions already, Howe appeared to confess to another charge on the witness stand against Percoco. Howe’s arrest in the middle of his testimony put the future of his cooperation agreement in doubt.

With the dockets on these cases still open, Kaehny predicted that these controversies will trail the governor as he molds the annual budget and legislative agenda this year.

“Again, all eyes are on the governor because this is the governor’s most trusted top aide, and there’s a lot of restoring of public trust to be done right now,” he said.

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