In Bid Rigging Case, Former New York State University Official Gets Prison Time
By John Riley
Alain Kaloyeros, the ex-SUNY official who engineered an economic rebirth in Albany, was sentenced to 42 months in prison Tuesday in Manhattan federal court for bid-rigging that awarded nearly $1 billion in economic development funds to two major donors to Gov. Andrew M. Cuomo.
U.S. District Judge Valerie Caproni was unmoved by sniffles and choked-back tears from Kaloyeros, a physicist convicted of giving connected developers in Syracuse and Buffalo the inside track after he was assigned by Cuomo to lead the so-called Buffalo Billion upstate revitalization effort.
"He let his desire to earn Brownie points with the executive chamber overcome the normal, well thought-out processes that treated all developers fairly whether they were giving money to Cuomo campaign coffers or not," the judge said as she imposed sentence.
Kaloyeros, 62, who created and headed the SUNY Polytechnic campus in Albany as a center of nanoscience research, was once the state's highest-paid employee, nicknamed "AK-47" for his high-profile, hard-charging style.
He was convicted this year of conspiring with Buffalo builder Louis Ciminelli, Syracuse developers Joseph Gerardi and Steven Aiello, and lobbyist Todd Howe, a former aide to Cuomo who became a government witness, to steer contracts for a film hub and a solar-panel plant.
Caproni previously sentenced Ciminelli to 28 months, Gerardi to 32 months and Aiello to 36 months. She has not yet sentenced Howe, but in a related Albany corruption case, she sentenced former Cuomo aide Joe Percoco to 6 years for bribery.
The judge did grant Kaloyeros bail while he pursues his appeal, noting that the government's "right to control" legal theory in the case -- that even without proof of financial loss it is still fraud to deprive the state of information about special treatment in bidding -- might be overturned.
But she told reporters to not portray that as leniency, and as she did in previous sentencings told Kaloyeros that she aimed to send a strong message to officials who take advantage of the public trust. "This court will show you no mercy," she said.
After the sentencing, Kaloyeros lawyers Michael Miller and Reid Weingarten called their client an "innocent man" and pledged to appeal. "Alain committed no crimes," they said. "He attempted at every stage to make sure that the people of the state of New York got the right contractor for the right job at the right price."
Kaloyeros, in his statement to the judge, said he was appealing, but apologized for the "hurt and loss" he caused his family, SUNY, his students and the state. "I have let down the people of the state of New York,' he said.
One complicating factor in the case was that Kaloyeros got no personal benefit in the form of kickbacks. He largely went along with Howe, who got lucrative fees from SUNY and both developers, and the developers -- both six-figure Cuomo donors -- who stood to make profits.
The government's theory at trial was that Kaloyeros hired ex-Cuomo aide Howe to secure his SUNY power base and stay in the governor's good graces, and that Howe kept everyone happy by steering contracts to Cuomo contributors who were also his clients.
Weingarten said Kaloyeros was at worst a "passive participant" who just wanted competent builders, and allowed an organic form of "pay-to-play" to unfold that didn't include anything that cost the taxpayers more money. "This is how business is done in much of America," he said.
But Caproni repeatedly cited emails with Howe that Kaloyeros tried to delete when the investigation surfaced, and said she thought his desire to curry favor with Cuomo combined with an arrogance stemming from his successes in both science and development.
"Rules apply to boring drones, not to 'Dr. Nano,' who wants to get things done," she said. "Dr. Kaloyeros considers himself to be above the rules."
Kaloyeros, of Slingerlands, was fined $100,000 in addition to the prison term. Gerardi, 59, and Aiello, 60, both of Fayetteville, and Ciminelli, 63, of Buffalo, were each fined $500,000. Ciminelli, like Kaloyeros, was granted bail pending appeal. Howe's sentencing is scheduled for January.