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Archive for October, 2016
Watchdogs call on Zemsky / ESD to stop using state affiliated non-profits and SUNY to award economic development contracts
On September 22, 2016 nine people, including Governor Cuomo’s former top aide, nano-tech subsidy czar and three largest Upstate campaign contributors were arrested for rigging close to $780 million in state funded construction contracts related to Buffalo Billion, SUNY Poly and nano-tech factories. The next day, the governor’s office provided a select group of reporters with the Summary Findings and Review Protocols developed by his consultant Bart Schwartz of Guidepost Solutions. Although the governor’s office has publicly referred to this document a number of times, it is not published on any state website. When we asked the governor’s office where we could get a copy they told us to file a Freedom of Information request.
Just the same, we got a copy of the report and are publishing below. We have a few quick observations about the Schwartz document, which is based on five “protocols” or checklists for state entities involved in Buffalo Billion and Nano-tech subsidies. Overall, Schwartz’s recommendations are focused on preventing fraudulent or poorly documented billing and not on preventing bid rigging of the kind alleged to have taken place. On page 6 of the document Schwartz includes a protocol for “Equipment and Construction Acquisition or Purchase Review ” that does include rules for bidding. Schwartz suggests bid documents should be publicized (to encourage competition) and a blackout period between state entities and vendors — which is also a good idea. However, oddly, only under the section on ” Sole Source Procurement” does Schwartz mention the need to ensure that bidding specifications are not written to favor a particular bidder, or to call for potential bidders to reveal their connections to government officials. In other words, Schwarz’s most important recommendations do not apply to competitively bid contracts — only to Sole Source contracts. According to the criminal complaints filed on September 22, the main way the bid between the state and LP Ciminelli was rigged was by writing bid specifications that only LP Ciminelli could meet — including one that required the bidder be in business in the Buffalo area for 50 years. In other words, it looks to us like Schwartz’s protocols would not stop the most common way government bids are rigged.
In September, U.S. Attorney Preet Bharara and NYS Attorney General Eric Schneiderman arrested nine people, including Joe, Governor Cuomo’s closest aide, and Alain Kaloyeros, the president of SUNY Poly and “nano-czar,” and three of the governor’s top campaign contributors from Upstate New York. Among other things, the criminal complaints revealed an alleged scheme to rig state contracts in Buffalo and Syracuse worth about $778 million. We think there are probably more rigged contracts that have not been revealed. SUNY Poly awarded a number of other large no-bid contracts to politically connected developers — including those whose executives have already been arrested.
Allegedly Rigged Contracts Included in U.S. Attorney’s Complaint
Riverbend Solar City Factory, Buffalo
Contract between: SUNY Poly/ Fort Schuyler Management and LP Ciminelli
Public funds rigged : Up to $663 million*
Film Hub, SORAA Factory, Syracuse
Contract between: SUNY Poly/ Fort Schuyler Management and COR Development
Public funds rigged : Up to $105 million
Total Public funds involved in bid rigging scandal as of 10/14/16: up to $778 million
*Amount approved by Fort Schuyler Management Corporation Board at 9/13/16 meeting. (See 8:45 on)
Watchdog groups call for emergency oversight hearings, release of Governor’s report on biggest bid rigging scandal in state history
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