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Archive for September, 2016
Leading Watchdog Groups Flagged Corruption Risk of Upstate Business Subsidy Contracts a Year Before Indictments
In a September 2015 statement eight groups called for ending the use of state controlled non-profits and the state university system for awarding business subsidies.
A year before the indictment of top Cumo aides and important Upstate business leaders, leading transparency and fiscal watchdog groups warned that the state’s use of a mixture of non-profit groups like Fort Schuyler Management Corporation, SUNY Polytechnic and SUNY Research Foundation to award business subsidy contracts “[b]lurred responsibility and reduced the accountability for decisions worth hundreds of millions of dollars.”
In their September 23, 2015 statement the groups wrote:
We wonder, who exactly is making the crucial decisions about who wins these deals? What is the basis of these decisions and how can we be sure that the deals themselves are well conceived and fairly awarded?
In the same statement, the groups recommended “[i]ncreasing overall government accountability and transparency, by … ending the use of state controlled non-profit groups and the state university system in the contract award process.”
The September 2015 letter is downloadable here and was signed by: Citizen Action, Citizens Budget Commission, Citizens Union, Good Jobs New York, League of Women Voters of NY State, New York Public Interest Research Group, and Reinvent Albany.
Arrested CEO’s have at least $928m in State Econ Dev Contracts and are Gov. Cuomo’s biggest Upstate contributors
Today, three CEOs were indicted by U.S. Attorney Preet Bharara and NYS Attorney General Eric Schneiderman for bribing state officials and successfully conspiring to rig bids. Those CEOs own or control companies whose owners and executives are the governor’s largest Upstate campaign contributors. Prior to the indictments, all of their companies received large state construction contracts from the state controlled economic development programs run by SUNY Poly, SUNY Research Foundation and Fort Schuyler Management / Fuller Road Management.
Louis Ciminelli / LP Ciminelli
Campaign contributions to Andrew Cuomo: $143,550
State contracts from state controlled non-profits: $633m (note FSMC board meeting 09/13/16)
Joe Nicolla / Columbia Development Corporation
Campaign contributions to Andrew Cuomo: $320,000
State contracts from state controlled non-profits: $190m
Steven Aiello/COR Development
Campaign contributions to Andrew Cuomo: $338,500
State contracts from state controlled non-profits:$105m
Total contributions to Andrew Cuomo: $802,050
Total contract value/approved payments from state econ dev non-profits: $928m
Sources: NYS BOE data as compiled by Reinvent Albany. Downloadable spreadsheet.
Close to $2 Billion in public funds in play
Today’s sweeping indictments by federal and state prosecutors resoundingly confirm that the state’s use of non-profits and SUNY to award billions in state economic development contracts has created huge and systemic opportunities for corruption.
These indictments shine a light on a broken and corrupt system, not a few bad apples. It is a recipe for disaster to allow billions in state funds to be contracted through state controlled non-profits, including SUNY Poly, Fort Schuyler/Fuller Road Management and SUNY Research Foundation – all of which are exempt from the bidding rules for state agencies, and exist in a deliberately designed legal gray area of non-accountability.
Major reforms are needed, and we call for:
- Immediate freeze on new economic development activity by SUNY Poly, Fort Schuyler/Fuller Road Management Corp.;
- Phase-out of use of state controlled non-profits and SUNY as conduits for economic development funds;
- Use of uniform contract award process by state agencies, authorities, SUNY, and all state controlled non-profits;
- “Pay to play” controls which cap contributions from people doing business with New York State entities;
- Creation of “Database of Deals” which clearly reports and provides data for all state subsidies and contracts to a given business;
- Pre-contract review by the State Comptroller of contracts issued by all state entities, including all SUNY, all state non-profits and all state authorities.
Sweeping Federal and State Indictments Reveal Systemic Corruption In Governor’s Upstate Economic Development Program
By the end of today, the three biggest recipients of state economic development building contracts, plus the governor’s Upstate nano-tech czar and SUNY Poly President, and one of the governor’s closest aides will all be under federal or state indictment in a sprawling bribery and bid rigging scandal that involves close to $2B in state funds. For more than two years, Reinvent Albany has been spotlighting the systemic corruption risk in the subsidy empire operated by SUNY Poly’s Alain Kaloyeros and effectively controlled by the government’s office. The balloon has finally burst after months of watchdog groups and journalists pointing to what appeared to be — and were — rigged state construction contracts in Buffalo, Syracuse and Albany. U.S. Attorney Preet Bharara announced the indictments at a press conference this afternoon, followed by another press conference by State AG Eric Schneiderman. For a basic primer read this account by Politico’s Jimmy Vielkind.
We will have much more to come in the days and weeks ahead, but here are some basic sources: