New Yorkers have been reading headlines about U.S. Attorney Preet Bharara’s probe into the activities of top Cuomo aide Joe Percoco and close Cuomo family friend and lobbyist, Todd R. Howe. Coverage of the probe has centered around payments to Percoco from firms with lucrative state economic development contracts. But in the last week, new revelations have raised huge questions about the accountability and basic integrity of the enormous economic development programs run by SUNY Poly president Alain Kaloyeros, and the SUNY Research Foundation’s role and responsibility in managing large state subsidy projects.
Here’s what we have learned in the last week:
- With no public notice, last September the job target for factory jobs for the heavily subsidized Buffalo Billion project was slashed from 1,460 to 500 jobs. The huge reduction in jobs was approved by the state-controlled non-profit, SUNY Research Foundation. The original job target was the governor’s justification for spending $750m in tax dollars on the RiverBend solar panel factory for Solar City. Given the $750m subsidy, each new Solar City factory job will cost New York tax payers $1.5m or $300k per year over five years. The huge reduction in jobs was discovered by reporters at Buffalo’s Investigative Post. They found the new target in regulatory filings submitted by Solar City to the Securities and Exchange Commission in October 2015. The much-reduced job target was agreed to by the SUNY Research Foundation, a state controlled non-profit. Which in turn raises a big question: why does the SUNY RF have the authority to completely rewrite the economic development targets that are the political and policy basis for huge state subsidies? How often is this done? And why should the public trust of any of these agreements going forward?
- The boards of directors of the state-controlled non-profits overseeing giant subsidy deals include people who are getting big contracts from these same non-profits or other state agencies. Executives from LP Ciminelli served on the board of the Empire State Development Corporation while LP Ciminelli was receiving hundreds of millions in state contracts. The president of EYP, an architecture firm with its offices inside the SUNY Polytechnic building in Albany, served on the board of Fuller Road Management, while his firm received millions in contracts from Fuller Road and from SUNY Poly. And, Joseph Nicolla, the president of Columbia Development Company serves on the board of SUNY Poly, though his company built SUNY Poly’s $190m ZEN center, and has a new contract from SUNY Poly to build college dorms in Albany. Both EYP and Columbia Development are under investigation by State Attorney General Eric Schneiderman.
- The State Ethics Commission, JCOPE, has given at least one permission slip to a top state official, which appears to allow conflict of interest when dealing with state subsidies. While he was the State’s Director of Operations, Howard Glaser was hired to teach at Columbia U. business school by William Eimicke, who was also working as a consultant for businesses receiving $100s of millions in state economic development contracts, including COR Development. While he was effectively Glaser’s boss at Columbia University, Eimicke met with Glaser on behalf of COR. (COR also paid Cuomo aide Joe Percoco $75k in consulting fees, while Percoco was on leave from the governor’s office running Cuomo’s campaign.) JCOPE’s three executive directors have all been top officials in the Cuomo administration prior to serving at JCOPE.