WASHINGTON (CN) — The Supreme Court on Thursday agreed to take up two cases from former associates of New York Governor Andrew Cuomo and will hear arguments next term from one of his aides convicted of bribery and a private developer convicted of fraud.
In the case of Cuomo’s former right-hand man Joseph Percoco, the high court will consider whether private citizens can owe a fiduciary duty to the public and whether Percoco's bribery conviction should be overturned if the court finds private citizens with influence can’t be prosecuted on public corruption charges.
Convicted of three bribery-related felonies, Percoco received a six-year sentence for corruption in 2018 after serving two generations of New York’s most powerful political dynasty. Percoco has since been released to a halfway house in 2021. Part of his case revolved around $35,000 he’d taken from a developer in the Syracuse area while he was privately employed to work on Cuomo’s 2014 reelection campaign, after previously holding a post as Cuomo's executive deputy secretary.
During his more than two-decade-long political career, Percoco served the gubernatorial administrations of father Mario Cuomo and son Andrew Cuomo before being charged with raking in more than $300,000 in bribes from companies that had business with the state.
Prosecutors also charged him with secretly pushing for favorable treatment of two corporate backers: Energy company Competitive Power Ventures and real-estate firm COR Development.
Competitive Power Ventures paid the vast majority of that amount through what prosecutors called a low-show job for Percoco’s wife. Over the course of three years, Lisa Percoco collected more than $270,000 in income by putting in roughly three hours of work a month, soothing community opposition to the energy company’s fracked-gas power plant in New York’s Hudson Valley. Angry letters from residents of that region’s Orange County poured into court, complaining they were living with the pollution-spewing product of a dirty deal.
Petitioning the high court to take up the case in February, Percoco’s attorney Jacob Roth of Jones Day wrote that the Second Circuit’s ruling backing Percoco’s conviction infringed upon his client’s right to free speech.
“As to the First Amendment, the Government says there is no concern about chilling private advocacy, as Percoco was a ‘government official’ who took ‘bribes’ to pressure ‘subordinate’ officials. Literally every quoted word just assumes the conclusion: that de facto control makes one a ‘government official’ who has ‘subordinates’ and can be ‘bribed,’’” wrote Roth. “If this theory is valid, the same could be said of any influential lobbyist, donor, informal advisor, or constituent. That blurring of the public-private distinction carries major First Amendment risks, as courts and scholars agree.”
The court will likewise hear the appeal next term of Louis Ciminelli, a powerful Buffalo developer who poured hundreds of thousands into the younger Cuomo's campaigns and was convicted of wire fraud.
Ciminelli, former chairman and CEO of the eponymous development firm LP Ciminelli, was a generous Cuomo donor who became cast as a central figure in a prosecution of the governor's most trusted aides and allies beginning in 2016.
Between December 2009 and January 2014, Ciminelli and his immediate family contributed at least $100,000 to Cuomo's election campaigns, and the developer also hosted a fundraising dinner that added roughly $250,000 to the governor's reelection war chest, prosecutors say.
By the time of that November 2013 fundraiser, LP Ciminelli already had a bid under consideration to become a preferred developer for the "Buffalo Billion" project.
Announced during Cuomo's 2012 State of the State address, the initiative flushed $1 billion into the western New York metropolis bordering Lake Erie in an effort to restore the bustling economic hub to its former grandeur. But the funds intended for Buffalo instead wound up in the pockets of well-connected firms like LP Ciminelli.
The former developer, represented by attorney Michael Dreeben of O’Melveny & Myers, is pressing the Supreme Court to weigh in on the “right-to-control” theory that led to his conviction — under which a property fraud conviction can take place if someone doesn’t inform a victim completely before they make an economic decision.
“The right-to-control theory eviscerates the core requirement of wire fraud—that the object of the scheme is to deprive the victim of money or property — and permits conviction based on deception about information that a party might consider valuable before transacting. This is not a deprivation of any property, tangible or intangible — it is a purely informational deprivation (one that Congress has not criminalized),” Dreeben argued in his client's June 2022 petition to the court.
Dreeben said in an email Thursday that his team is excited to present Ciminelli’s argument to the court next term.
“Our team is gratified that the Supreme Court has agreed to hear Mr. Ciminelli’s case, which will allow the Court address our challenge to the validity of the right-to-control theory used in the prosecution,” he said.
Ciminelli initially made few headlines at the time of his arrest in 2016 because of the other high-profile defendants involved in the Buffalo Billion project.
Topping the list of Albany's nine boldfaced names charge that day was Percoco, as well as Alain Kaloyeros, the former president of the State University of New York Polytechnic Institute. Kaloyeros also has an appeal pending before the court.
The Second Circuit has upheld convictions for those involved in the scheme.
Although he denied wrongdoing, Cuomo resigned from the governorship in 2021 following a five-month investigation that found he’d sexually harassed women in his administration.
Roth did not immediately respond to a request for comment Thursday about the Supreme Court taking up Percoco's case. Nor did representatives from the Department of Justice, which represents the United States in both cases.
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