Legal Fees In Cuomo Investigations Mount

From Jimmy Vielkind at Politico NY:

ALBANY — The state’s economic development authority is tripling the amount of money it’s spending to deal with a federal probe of the Cuomo administration’s Buffalo Billion, documents show.

Empire State Development voted on Thursday to amend its contract with WilmerHale, which has been advising the authority since it received a federal subpoena for records last summer.

The firm was originally retained for $200,000, but the amount was increased by $400,000 in the final minute of Thursday’s board meeting. The unanimous vote came after 40 minutes of discussion in executive session. 

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The allocation by ESD is just one slice of taxpayer-covered legal payments related to Bharara’s probe. SUNY Poly has retained Richard Strassberg of Goodwin Procter, but a spokesman would not say how much he is being paid.

A spokesman for Gov. Andrew Cuomo last month confirmed that Elkan Abramowitz is still representing the governor, as was the case with an earlier Bharara probe. It’s unclear if Abramowitz will be paid by taxpayers or from the Democratic governor’s campaign war chest.

And there is an outside inquiry by Bart Schwartz that Cuomo commissioned after his executive chamber was subpoenaed on April 29. Schwartz and his firm, GuidePost, are examining what took place and are reviewing ongoing payments.

His contract has not been finalized.

Bharara warned executive branches in the state yesterday:

We have found that corruption is rife in a lot of institutions in New York and throughout New York,” Bharara said during a national TV interview.

“That’s true in the legislature. It’s also the case that there’s corruption, we believe, in the executive branches as well. And we’ll ferret it out wherever we find it.”

Clearly a bow shot at Cuomo, as well as de Blasio - no wonder the legal fee expenditures from Cuomo and his minions are mounting.

Bharara Looking To Redefine What Cuomo Says Is No Problem

Fred LeBrun in the Times Union:

U.S. Attorney Preet Bharara has a federal grand jury looking for corruption in the awarding of contracts and related dealings associated with the so-called Buffalo Billion, and on its face, there's a lot to look at.

Consider:

• A billion taxpayer dollars being handed out to spur economic development in the typical manner the Cuomo administration does business, with as little public disclosure of the nitty-gritty as they can get away with. There was a single applicant for the centerpiece development deal worth $750 million, a solar panel manufacturing plant for SolarCity. The single applicant was LPCiminelli, owned by Louis Ciminelli. He gave the governor nearly $100,000 in campaign donations over two terms. There was no competitive bidding on key subcontracts for building the SolarCity complex, instead, these subcontractors were hand-picked by LPCiminelli — with state approval.

• Three months after another developer, McGuire Development, received a contract for a different major Buffalo Billion project, the Cuomo campaign got a $25,000 contribution from the developer.

• All contract approvals, funds dispersal, and fiscal oversight of the Buffalo Billion family of projects are the exclusive domain of the Empire State Development Corporation, tightly controlled by the governor's office, with approval of the governor's Division of the Budget. In effect, the governor and a coterie of his closest advisors run it all.

• The governor, a particularly astute fundraiser, amassed a reported $47 million in campaign contributions during the last election cycle, much of it from those who in some fashion have done or will do business with the state.

Eye-opening stuff, yet not necessarily even improper by past standards. In fact, much of it is business as usual.

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As for the governor's political fundraising, the governor himself has repeatedly said there is no connection between contributions and expectations of any reward, between pay and play. He said donors in western New York can see his commitment to the region and would contribute out of general support and encouragement.

It's a system that "hasn't been a problem for the past 100 years, so I don't know why it would be today."

Then again, how naive is it to suggest contributors don't often want a tangible return on investment, or a way of saying thanks? So just maybe what the governor shrugs off as no problem is in fact at the heart of the so-called corrupt Albany political culture. If so, Bharara may well be about to try to redefine what is a problem.

That's good news for the public. Not so much for the governor.

One thing to amend in LeBrun's account - Ciminelli actually gave Cuomo $123,000, not $100,000.

Late last week, we learned that Shelly Silver's defense team plans to call nearly every power broker and politician in Albany as witnesses in his corruption trial.

Cuomo himself made the witness list.

Silver's defense in his corruption trial is essentially "Hey, this is the way Albany operates.  People give to get, they pay to play.  It may be unseemly, it may be ethically-challenged, but it is not illegal."

This is essentially Cuomo's argument too - it "hasn't been a problem for the past 100 years, so I don't know why it would be today."

Bharara has meant business so far in his investigations of two of the infamous "three men in a room" who rule the state.

Just last week we learned that Bharara got 150 subpoenas in his investigation of Dean Skelos, interviewing over 80 witnesses.

The break in the Skelos corruption case came from something Bharara learned from the Shelly Silver investigation, though the US attorney's office had already been investigating Skelos for a month before that new lead came.

Given the seriousness with which Bharara's office pursued both Silver and Skelos, there's little reason to think they aren't given the same breadth, scope and seriousness to the investigation into Cuomo's Buffalo Billion Project.

We know subpoenas went out to SUNY Polytech and the Empire State Development Corporation.

We know the feds are looking very closely at Cuomo's man at SUNY Polytech, the flamboyant Alain Kaloyeros, who has dubbed himself as "Dr. Nano" and makes over $800,000 a year as a state employee.

We know that the feds are looking closely at the contractors in the Buffalo Billion case as well and can be pretty sure they are the same contractors who donated to Cuomo's campaign concurrent to when they were receiving state contracts that looked rigged just for them.

Now maybe Bharara doesn't find any "smoking gun" in all of this and it gets swept away as "business as usual," the kind of stuff that has been going on for a 100 years, as Cuomo himself said.

Maybe.

But as LeBrun wrote in his Times-Union piece today, Bharara appears to be trying to redefine what is "business as usual" in Albany and what is corruption.

He undoubtedly has his own reasons for doing so, since he hasn't taken the same route with Wall Street and the financiers and con men there - cynics among us (including myself) think he's got his own political ambitions and taking out every member of the infamous "three men in a room" club in Albany would certainly serve him politically if he wants to, say, run for governor or something.

That said, his motivations don't detract from the practical effects of his actions.

He's already gotten two of the three men in the room criminally charged and awaiting trial - whether he can successfully get convictions of both is another matter.

And whether he can nail the third man in a room and take him down too, that's even harder to gauge at this point.

But I do think this much is true - he appears to aiming to do just that and given how hard he worked to take out both Silver and Skelos, you can bet he's working very hard at that too.

Bharara Targeting Campaign Fundraising - Especially Cuomo's

Jimmy Vielkind at Politico NY:

ALBANY — As his office investigates one of Gov. Andrew Cuomo's key programs, Preet Bharara is making war on campaign fund-raising as we know it.

The U.S. attorney for the Southern District issued a flurry of subpoenas earlier this summer, seeking information about how construction contracts were awarded on several big state projects in Buffalo, according to people familiar with the investigation and other published reports.

The New York Times reported Sunday that investigators subpoenaed Empire State Development, SUNY Polytechnic Institute and their subsidiaries. It's impossible to know exactly what Bharara is looking for — the prosecutor and his aides refuse to talk about their ongoing work — but his efforts are ensnaring campaign donors whose apparent sin is giving to politicians as they benefitted from state business.

“Their goal is to use the people that are paying to testify against the politicians. They're not after the company that is paying for the service,” said James Cohen, a longtime defense attorney and professor at Fordham Law School. “It's precisely what Bharara said he was going to do: he thinks that Albany and its various tentacles — which go both ways — are really dirty, and have been dirty for a real long time. New York has not shown any ability, in his mind, to attempt to clean it up.”

If Bharara is after the politicians on the other end of the donations and not the donors themselves, then we have a pretty good idea which politician he's targeting here - these are all Cuomo's donors he's looking into:

One of the recently subpoenaed firms is LPCiminelli, sources said, a stalwart contractor in Buffalo that is building a solar panel factory for SUNY Polytechnic Institute. Company president Louis Ciminelli and other entities he controls have given Cuomo $90,800 since 2011, making him one of the governor's 100 largest donors. The solar contract was originally written so only Ciminelli met the criteria; the request for proposals was subsequently amended, but Ciminelli still won.

The correlation between the donations and the award quickly aroused the interest of journalists; Ciminelli and SUNY Poly insist the contract awards were on the merits. Daniel Oliverio, who is representing Ciminelli, declined to confirm or deny the subpoena but said “unequivocally” that the firm and its owners were not the targets of any investigation.

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There's Ciminelli in Buffalo. In Albany, Joe Nicolla and Columbia Development gave Cuomo thousands as it won contracts to build new buildings for SUNY Poly and a convention center down the block from the Capitol. Other companies in the Capital Region held a fund-raiser for Cuomo before they won money in an economic development contest. Cuomo raked in $250,000 from developers in Kiryas Joel after he vetoed a bill that would have restricted the Hasidic enclave's growth.

 As for what Bharara may be looking to pin on Cuomo:

Paul DerOhannesian, a defense lawyer based in Albany, said the focus of honest services fraud is on the fraudulent and deceptive conduct of the public official who abuses a position of trust, and the government is not required to link any particular payment to a specific act on the part of the public official. The quid pro quo element is therefore satisfied if the public official understood that as a result of the payment, he of she was expected to exercise particular kinds of influence on behalf of the person directing the payments as opportunities arose, or when called upon to do so.

“It's murky,” he said.

Polls show that New York voters agree with Bharara, and even if it can't be declared strictly illegal, business as usual in Albany needs to change. If the attorney general has his way, that's going to apply to the entire elected class that thrives on and perpetuates the current system, from Cuomo on down.

I'm sure there's something Bharara knows that we don't know about all of this that has spurred his interest (as well as the subpoenas to Cuomo's donors as well as Empire State Development Corporation and Suny Polytechnic) and the rapid fire leaks are indication that what he knows is bad for somebody.

Bharara's leaks are strategic, often setting up the frame that somebody's got some legal trouble (e.g., Silver, Skelos.)

I would think the same thing is being done here and since the donors in question are all Cuomo's and the recipients of the subpoenas on the state end are allies of Cuomo (like Alain Kaloyeros at Suny) or entities essentially controlled by Cuomo (Empire State Development), the target of Bharara's investigation is pretty clear.