Percoco Trial Reveals Some Unsavory But Legal Practices

Mar 6, 2018

Governor Andrew Cuomo’s former closest aide, Joe Percoco, is waiting to find out whether he’ll be convicted of bribery and other charges as a jury continues to deliberate in federal court.

Government reform groups say regardless of the verdict, the trial highlighted some questionable, but legal practices in New York that they say taint the Governor’s reputation and need to be fixed.

The trial testimony in the alleged bribery cases of Percoco and three other defendants, all business leaders who had dealings with the state, lifted the curtain on some of  the inner workings of the Cuomo administration.

Blair Horner, with the New York Public Interest Research Group, says the scene isn’t flattering. “We think the verdict is in on Albany,” Horner said. “And the verdict is, that New York has to overhaul its laws.”

FBI agents and current and former Cuomo administration officials testified that the leaders of the two companies, Competitive Power Ventures and COR Development, organized big ticket fundraisers for Cuomo, and lent the Governor the use of a private plane. They also took advantage of a loophole in campaign finance laws and bundled $125,000 in contributions, using limited liability companies, or LLCs, to hide the true amount of their donations. According to testimony, former Cuomo associate and ex lobbyist Todd Howe told the COR development officials, Steven Aiello and Joseph Gerardi, that they should use LLCs with titles that did not include the COR company name. He said that way they could hide the donations from the media and the public.

Horner says the testimony illustrates why the LLC loophole should be closed.

“The trial is exhibit A of what’s wrong with New York’s campaign finance system,” Horner said.

Witnesses have also testified that Percoco, while off the state payroll for a time in 2014 and managing the Governor’s re-election campaign, also frequented his former government offices, which are adjacent to the governor’s. According to testimony at the trial, Percoco consulted with other members of Cuomo’s staff on state matters.

Percoco was allowed to keep his state issued security swipe card and, according to FBI agents, made 837 calls from the state offices on 68 separate days.

Cuomo was also in those offices, when Percoco was there, on at least 12 of those days.

Susan Lerner, with the government reform group Common Cause, says there are no records of what Cuomo and Percoco talked about when they were both at the office, or even if they talked at all. But she says it’s at the very least an appearance of a conflict of interest when the campaign manager frequents a state office when he is not a government employee, and potentially a violation of the state’s public officers’ law.

“We don’t know what was actually was discussed,” Lerner said. “What we do know is that it is a clear violation of state law to use any government assets, including phones, computers, copier, printers and office space for campaign purposes. Period.”

The state entity that has the authority to investigate any alleged breaches of that statute is the Joint Commission on Public Ethics, or JCOPE. Cuomo appoints the majority of the commissioners on the ethics board. JCOPE spokesman Walter McClure has said he can’t comment “on anything that is or could be an investigatory matter.”

One of the governor’s political opponents has jumped on the information that’s come out at the trial. State Senator John DeFrancisco, who is a Republican candidate for governor, has held several events outside the federal courthouse as the trial went on.

DeFrancisco says the proceedings show that Cuomo presided over a pay to play culture, where large donors to his campaign were rewarded with special favors.

“What we have here is an atmosphere, that to do business in the state of New York, you have to in some way pay the piper,” DeFrancisco said.

Cuomo has refused to comment on the trial or any of the revelations revealed in the testimony, giving a standard answer when he is questioned by journalists.   

“We’re in the middle of a trial. I think it would be highly inappropriate for me to provide commentary at this time,” Cuomo said.

Horner, with NYPIRG, says while the governor should hold his tongue while a jury is reviewing evidence and deliberating, after the proceedings finish, Cuomo should speak out and make some major changes to his signature economic development programs.

“There should be an open process,” said Horner, who added that the governor’s economic programs need greater oversight by the State’s comptroller. And he said the ethics commission needs to be truly independent “not controlled by the governor and the legislative leaders.”

Cuomo has included in his state budget a provision that businesses seeking state contracts should no longer be allowed to give campaign donations. He also in the past has backed closing the LLC loophole, but the measure has died in the State Senate.

The Percoco trial is only the first in a string of legal proceedings scheduled for this year. In May, the governor’s multi-billion dollar economic development programs will be the focus of a corruption trial centering on the former head of those programs, former SUNY Polytechnic President Alain Kaloyeros.