Cuomo Administration Appears To Be Worried About Preet Bharara's Buffalo Billion Project Investigation

Really fascinating piece in the Buffalo News today by Tom Precious in which a "state official" with an interesting and distinctive speech pattern (i.e., he likes to ask rhetorical questions) gets the Cuomo administration's side of the Buffalo Billion Project bidding process on the record.

The "state official" says nothing untoward was done, the bidding process was just set-up for maximum "flexibility," there was plenty of state oversight and really, there's nothing to see here:

The state says the bidding process that began in the fall of 2013 was smarter than many procurement deals because it allowed Buffalo to get work – and jobs – moving more swiftly.

The Buffalo goal was simple, according to a New York State official: The state would pre-select companies that could act quickly once deals were made. That’s one reason state officials wanted someone with Buffalo development and construction experience. And, yes, the state official said, because of the desire for local companies the state did not seek as wide a pool of bidders as some other state procurement efforts.

The state official, who talked with The News in an extended interview on condition that he not be named, stressed that bidders knew from the start that the process was intentionally general. Further, bidders knew both in writing and from discussions that the state maintained the right to change what it was seeking in Buffalo Billion development because project ideas were evolving and Albany officials did not yet have precise information about what companies would locate in Buffalo or when, the official said.

What critics see as vague, the state official said, was really about flexibility. This flexibility was not only legal but is used often in other state and federal vendor bidding, and was the process used for similar state development plans in Rochester, Syracuse, and the Albany area – including with a preference for local contractors. There were several levels of approval or oversight from Cuomo’s budget division and economic development agency, the official said.

What’s more, the edict to act quickly was made clear in the October 2013 RFP, which sought companies able to “rapidly” move on projects.

Critics say the request for proposals (RFP) for the project was hidden deep in the Buffalo News instead of being placed where RFP's usually are placed - in the Contract Reporter:

When the state goes looking for bidders, which it does thousands of times a year for anything from office furniture to road paving, agencies often advertise in the New York State Contract Reporter to spread the word. The Contract Reporter is considered the bidding bible for government contractors.

But when the state in 2013 wanted to spread the word it was looking for developers for what would eventually become the $750 million RiverBend project, it took out a legal notice on page B11 of The Buffalo News, next to the crossword puzzle. To be fair, at the time of the bidding, nothing of the project’s eventual size was anticipated.

The state said in its legal ad it was seeking a company with “the credentials, experience, and capacity to design, construct, finance, market and lease state-of-the-art facilities and cutting-edge infrastructure as well as partner” with the state on “strategic economic development initiatives.”

There was no mention of what projects might be under consideration, or of a timetable, or of who might occupy the new facilities. While the ad said the state was looking for Buffalo-area developers, it wasn’t entirely clear that the projects would be in Buffalo. The ad directed interested parties to contact the Fort Schuyler Management Corp. in Utica to get a bidding package with more details in return for signing a confidentiality agreement.

One corporate executive said he only heard about the bid request from watching local TV news. Another said he only found out when a Buffalo News reporter called asking for comment.

The "state official" says, "What, it's a state secret if it goes next to the crossword puzzle?

The state official said the RFP was well-known in Buffalo circles.

“Is there a secret in Buffalo?” the state official said of the close-knit real estate and construction industries.

The "state official" does not respond to the questions around Cuomo's fundraising from the eventual winner of the Riverbend Project bid near the time the company was getting ready to bid on the project, just defends the selection of the Cuomo donors based on practicality:

The timeline is one that federal prosecutors are certain to try to unravel.

Three months before the Buffalo Billion RFP was issued, on July 3, 2013, the non-profit Fort Schuyler signed a confidential memorandum of understanding with green energy company Silevo, a California solar energy manufacturing firm, said the state official who spoke to The News. The original idea was to spend $25 million to convert an existing building on the former Bristol-Myers Squibb site on Forest Avenue in Buffalo. Environmental problems at the site killed that idea, the state official said.

When the RFP was issued on Oct. 15, 2013, no decision had been made about a Silevo location, the official said. That changed by Nov. 21, when Cuomo visited Buffalo to announce that Silevo, along with green lighting manufacturer Soraa, would locate facilities at RiverBend. The state would invest $225 million – $49 million of which would be for the construction costs – in a building that the SUNY Research Foundation would own, he said. When Cuomo announced the Silevo and Soraa project, he did not say who would build the facility because, the state official said, the bidding process was still under way. (Several weeks ago, Cuomo announced that Soraa would not move to Buffalo, but would instead locate outside Syracuse.)

Two days before that RiverBend announcement, Cuomo flew to Buffalo to raise money for his campaign at two fundraisers, including one that LPCiminelli’s owner Louis Ciminelli hosted at a Buffalo restaurant.

A month later, LPCiminelli, McGuire and Uniland became the only companies of those originally interested to submit bids on the RFP. The RFP did not change to reflect the new Silevo-Soraa project. The state official said the RFP did not change because the award was never intended to be RiverBend-specific, and that other unknown projects were to be included in the contract at some point down the road. 

LPCiminelli was selected for many reasons, the state official said, not the least of which was its ability to front large construction costs while waiting, sometimes many months, for the state to reimburse it. Ciminelli said the company fronted the state money especially in the early months of RiverBend construction.

The Empire Development Agency approved and funded the projects after the Fort Schuyler board approved the selection of LPCiminelli and McGuire, the official said.

Read the whole piece, it's interesting to say the least, coming less than a week after US Attorney Preet Bharara scored a seven count corruption conviction on former Assembly Speaker Sheldon Silver and a day or so before Bharara's prosecutors rest their corruption case against former state Senate Majority Leader Dean Skelos.

This article has the feel, in part, of a calculated attempt by Cuomo to get his side of the story out before the next leak from Bharara about the investigation comes.

The initial Buffalo Billion Project leak to the press went out on September 18 and according to the Buffalo News piece, the subpoenas to Cuomo's donors went out five months ago.

If the previous timelines Bharara followed in the Silver and Skelos cases are followed, we're due for some more leaks and/or action from the feds in the next few months.

Had the Silver trial ended in acquittal or with a hung jury, I thought the feds might go much slower or not at all with whatever they have in the Buffalo Billion investigation.

But with Silver down on all counts in a trial that never proved a direct quid pro quo between Shelly and his marks, all bets are off on what Bharara decides to do with the Buffalo Billion Project case.

Maybe nothing comes out of this, maybe Bharara decides he doesn't have enough to prosecute anybody, that nothing criminal occurred here and he just moves on, waiting for the next president to replace him as U.S. attorney.

But clearly "somebody" on Cuomo's end is worried because this "state official" with the penchant for rhetorical questions gave "an extended interview on condition that he not be named" and "provided dozens of documents intended to illustrate that the checks and steps the government took in awarding the project were on the up and up."

Sure sounds like somebody in the governor's administration is worried about where the Buffalo Billion investigation is going.