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What a New Supreme Court Review May Mean for Albany’s Culture of Graft


Joseph Percoco and his taste for “ziti.” Alain Kaloyeros, the flashy tech executive convicted in a fraud. Joseph Bruno and a no-good racehorse named Christy’s Night Out.

Albany spawned myriad tales of corruption over the past decade, as figure after figure — from the speaker of the Assembly to the leader of the State Senate — was convicted in trials focused on abuse of the public trust. Federal prosecutors in Manhattan doggedly pursued allegations of corruption in the capital, laying bare a culture of secrecy and self-dealing.

But in key rulings in the past dozen years, the U.S. Supreme Court narrowed the law governing corruption, resulting in the overturning of the convictions of at least three prominent former New York lawmakers. And with the court’s announcement June 30 that it would review the high-profile 2018 convictions of two men closely identified with former Gov. Andrew M. Cuomo’s administration, legal experts say the justices may be ready to further limit what constitutes graft — and therefore what’s illegal in New York’s capital.

“The court wants to prevent the criminalization of what it considers normal politics,” said Daniel C. Richman, a criminal law professor at Columbia Law School and former federal prosecutor. “But its narrow conception of what should be a federal crime often seems to leave out everything except the sale of one’s office for a sack of cash.”

In one case the Supreme Court will review, Mr. Percoco, a former senior Cuomo aide, was found guilty of accepting more than $300,000 in bribes from executives working for companies with state business. In the other, Mr. Kaloyeros, the state’s former nanotechnology czar, who was widely recognized for transforming Albany into an unlikely center for high-tech research, was found guilty along with three business executives in a bid-rigging scandal involving the so-called Buffalo Billion, Mr. Cuomo’s signature upstate revitalization plan.

On July 1, Judge Valerie E. Caproni of Federal District Court granted requests for release on bail by Mr. Kaloyeros and the three executives pending the Supreme Court’s review.

The decision to review the cases illustrates the difficulty of maintaining such convictions in an era in which the Supreme Court has placed federal corruption prosecutions under increasingly harsh scrutiny.

“It’s a skepticism or perhaps unease about how the law should draw the lines between money in politics and crime in a system that is awash in money that is intended to influence government, and is perfectly legal,” said Samuel Buell, a former federal prosecutor who teaches criminal law at Duke University in North Carolina.

A dozen years ago, the court narrowed the scope of a law used in corruption cases that makes it a crime to “deprive another of the intangible right of honest services,” limiting its use to offenses involving bribes and kickbacks.

After the ruling, a federal appeals court in New York vacated the conviction of Mr. Bruno, the State Senate’s former Republican majority leader, who had been found guilty in 2009 in Albany of two counts of mail fraud. Among the accusations was that he received tens of thousands of dollars in bribes from an Albany businessman disguised as a payment for Christy’s Night Out, a profoundly unsuccessful racehorse. Mr. Bruno was retried in 2014 and acquitted.

The trend continued in 2016, when the Supreme Court unanimously overturned the conviction of Bob McDonnell, the former Republican governor of Virginia, further narrowing the kinds of quid-pro-quo actions that could constitute corruption. There had to be formal and concrete actions taken by an official, like filing a lawsuit or making an administrative determination, not just routine political courtesies like arranging meetings, the court said.

In the wake of that ruling, the convictions of two of New York’s most prominent former lawmakers — Sheldon Silver, the once powerful Democratic assembly speaker, and Dean G. Skelos, another former Republican Senate majority leader, were vacated on appeal. Both men were retried, convicted and sentenced to prison.

And two years ago, in the so-called Bridgegate scandal, the Supreme Court unanimously overturned the convictions of two associates of New Jersey’s Republican governor, Chris Christie, for trying to punish one of Mr. Christie’s political opponents by creating traffic jams on the George Washington Bridge. The court called the act an abuse of power but not a federal crime.

The prosecutions of Mr. Percoco and Mr. Kaloyeros, along with Mr. Silver and Mr. Skelos, were all part of a widely heralded campaign against official corruption led by Preet Bharara, the U.S. attorney for the Southern District of New York, and his successors, leading to convictions and prison sentences for a string of state lawmakers.

“When politician after politician after politician elected by the voters falls to criminal charges, people lose faith,” Mr. Bharara said in 2015, the day after charges were announced against Mr. Silver.

The possibility that the latest New York verdicts are now imperiled has left veteran observers of Albany — so famed for malfeasance that it has an online museum devoted to it — all the more discouraged, particularly in the face of often weak efforts by New York lawmakers and governors to root out lawlessness and corruption.

“Between loophole-riddled state law, and a restricted ability of federal prosecutors to police corruption, you’re going to end up with even more of an ethical Wild West than it used to be,” said Blair Horner, the executive director of the New York Public Interest Research Group, a good government organization.

Mr. Percoco’s trial cast a shadow on the administration of Mr. Cuomo, though the governor was not accused of any wrongdoing. Email exchanges between Mr. Percoco and an associate showed them joking and fretting about bribes, which they referred to with the code-name ziti, a term lifted from the HBO drama “The Sopranos.”

“I have no ziti,” Mr. Percoco wrote in one message. In another, he demanded, “Where the hell is the ziti???”

Judge Caproni, before sentencing Mr. Percoco to six years in prison, said, “I hope that this sentence will be heard in Albany.”

The Supreme Court agreed to review a portion of Mr. Percoco’s case in which he was convicted of taking actions to benefit a Syracuse-area developer in exchange for $35,000 in bribes. His lawyers have argued that the acts occurred after Mr. Percoco left government to run Mr. Cuomo’s re-election campaign.

The solicitor general’s office, which represents the federal government in the Supreme Court, asked the court to deny review, arguing Mr. Percoco still effectively functioned as a public official after temporarily leaving his post. It said he kept his desk and phone in the governor’s executive chamber and “maintained control over official matters.”

Mr. Percoco’s lawyer, Yaakov M. Roth, said this week in a statement he was grateful that the case will be reviewed and he hoped the court “will both vindicate Joe and confirm, more generally, the fundamental line between public officials and private citizens.”

In the other case taken for review, Mr. Kaloyeros and three executives — Louis Ciminelli of LPCiminelli, a Buffalo construction management firm, and Steven Aiello and Joseph Gerardi of COR Development, a Syracuse-area firm — were all convicted in a conspiracy to steer lucrative state contracts in the Buffalo Billion project to the executives’ firms.

Prosecutors said the defendants tailored requests for proposals to include qualifications that would ensure the contracts would go to the firms. Left in the dark about the scheme was Fort Schuyler Management Corporation, a nonprofit real estate arm of SUNY Polytechnic Institute that oversaw the contracting process.

The prosecution hinged on a legal precept known as the “right to control,” in which the government argued that the fraud involved not money but economically valuable information, with Fort Schuyler the victim, unaware of the bidding manipulation.

“This case turns on Fort Schuyler’s right to control who they did business with and on what terms,” said Professor Richman, who noted that he consulted with Mr. Gerardi’s defense team.

In asking the court to review the case, the men’s lawyers argued there was no evidence the scheme had deprived Fort Schuyler of a fair price or quality workmanship. They said the federal fraud statutes prohibit only schemes targeted at money or property, not at mere deprivation of information.

Mr. Ciminelli’s lawyer, Michael R. Dreeben, said he was grateful the court would address their “challenge to the validity of the right-to-control theory used in the prosecution.” Michael C. Miller, a lawyer for Mr. Kaloyeros, said his client and his legal team “are very much looking forward to the Supreme Court’s decision in this important case.”

Alexandra A.E. Shapiro, a lawyer for Mr. Gerardi and Mr. Aiello, said she was pleased the court “will consider putting limits on the broad way some prosecutors have been wielding the federal fraud statutes.”

“It is one thing for prosecutors to focus on individuals who intend to cause economic harm, but quite another for them to spin theories about something as abstract and nebulous as the ‘right to control,’” she said. “Everyone benefits when the law has clear limits.”

The solicitor general’s office and the U.S. attorney’s office in Manhattan both declined to comment.

Jesse McKinley contributed reporting.



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