They were both demanding, mercurial, prone to explosive outbursts. They shared a penchant for lofty rhetoric and a fondness for flashy cars. They liked to be in charge.
But only one was the governor of New York. And so the other, Alain E. Kaloyeros — the former president of New York Polytechnic Institute who became Gov. Andrew M. Cuomo’s “economic guru” — squelched his own alpha male personality and toiled to improve his standing with Mr. Cuomo.
He hired a lobbyist to learn how to curry the governor’s favor. He peppered his emails with glowing praise of Mr. Cuomo.
And then, as the point person behind the “Buffalo Billion,” the governor’s signature economic development project, Dr. Kaloyeros steered more than $600 million in state contracts to companies run by Mr. Cuomo’s donors, according to federal prosecutors.
In two interlinked corruption trials over the past six months, prosecutors have described a web of financial schemes that they say propelled the state’s most vaunted economic development projects. What has also emerged is a portrait of the culture that fueled those projects — one in which state officials, lobbyists and businessmen, driven by a potent mix of ambition and fear, vied to satisfy a governor’s office hungry for results.
In the ongoing trial of Dr. Kaloyeros, who is charged with wire fraud and wire fraud conspiracy, prosecutors say he was so worried about his standing with Mr. Cuomo that he hired a lobbyist with longstanding ties to the governor, and worked with that lobbyist to rig lucrative state contracts for the benefit of two firms — LPCiminelli of Buffalo and COR Development of Syracuse — whose executives had donated generously to Mr. Cuomo’s campaigns.
“Kaloyeros used to have a rocky relationship with the governor’s office. In fact, Kaloyeros was worried that he was going to lose his position as the head of that state college,” David Zhou, a prosecutor in Federal District Court in Manhattan, told jurors in his opening arguments last month. But after Dr. Kaloyeros hired the lobbyist, Todd R. Howe, Mr. Zhou continued, “that turned everything around.”
The governor has not been accused of any wrongdoing, in either the Kaloyeros trial or the trial earlier this year of Joseph Percoco, once one of Mr. Cuomo’s closest aides. (Mr. Percoco was convicted in March of soliciting and accepting more than $300,000 in bribes). But both trials have cast an unflattering spotlight on how the state went about awarding some of the contracts at the heart of the governor’s economic development efforts, including his flagship Buffalo Billion project.
By all accounts, Dr. Kaloyeros was loath to take orders from anybody. “Volatile,” “pugnacious” and “acerbic” were among the words used to describe him in court. He had worked for several governors as a star researcher, funding magnet and one of the state’s highest-paid employees — and, according to his lawyer, Reid Weingarten, had done so with “enormous discretion, enormous latitude.”
That changed with Mr. Cuomo. When the governor first took office in 2011, he had “reservations” about Dr. Kaloyeros, said Anthony Kennedy, the governor’s former deputy director for state operations, who testified in the trial’s first week.
“Was it because he was too independent?” Mr. Weingarten asked.
“A combination of independence, yes,” Mr. Kennedy replied.
“And was it because he wasn’t a political hack who kowtowed to anybody?” Mr. Weingarten pressed. (The judge did not allow Mr. Kennedy to answer.)
But if a failure to kowtow was perceived as a problem, Dr. Kaloyeros, it seemed, soon took steps to remedy that.
Not long after Mr. Cuomo’s election, Dr. Kaloyeros hired Mr. Howe, who had worked for both Cuomo governors. According to David Doyle, a former spokesman for Mr. Cuomo who testified last week, the governor’s office had agreed to let Dr. Kaloyeros stay on if he allowed Mr. Howe to serve as the governor’s “eyes and ears.”
Mr. Howe offered Dr. Kaloyeros some advice: He should learn “the importance of giving credit to the governor for the good stuff that was going on” in his projects, according to Kevin Schuler, a former executive with LPCiminelli, who said Mr. Howe relayed the conversation to him. Mr. Schuler has been cooperating with prosecutors after pleading guilty to participating in the bid-rigging scheme.
“Make sure the second floor, which is the governor’s office, is well aware of what you’re up to, so that they would be supportive, and that you’re giving them credit,” Mr. Schuler said Mr. Howe told Dr. Kaloyeros.
It worked. “As that unfolded and Dr. K was giving them credit,” Mr. Schuler said, “the trust was built up.”
Mr. Kennedy said that after Dr. Kaloyeros hired Mr. Howe, “projects that he was advancing got consideration.”
Richard Azzopardi, a spokesman for Mr. Cuomo, defended the culture of the governor’s office as an imperative for efficiency.
“It’s no secret that we’re a hard-charging administration, which is what has been needed to break through the gridlock that paralyzed New York for decades,” Mr. Azzopardi said in a statement.
But he also noted that Mr. Howe was “a convicted felon, liar and discredited manipulator” who had admitted doctoring emails and making up stories involving Mr. Cuomo and his father in order to make himself seem more important.
“Any claims from him are quite simply not credible,” Mr. Azzopardi said.
Defense lawyers have also repeatedly sought to discredit both Mr. Howe and Mr. Schuler, both of whom have acknowledged lying to law enforcement officials. Mr. Howe is not testifying at Dr. Kaloyeros’s trial; he was arrested after admitting on the witness stand during Mr. Percoco’s trial that he had tried to defraud his credit card company.
But other witnesses have also described treading lightly for fear of angering the governor’s office.
Several witnesses in Mr. Percoco’s trial said they had been told that if they tried to leave the governor’s office at an inconvenient time — for example, amid an exodus of other employees that was attracting media attention — Mr. Cuomo’s top aides would block their departure. Prosecutors said Mr. Percoco had threatened at least four state employees’ future employment prospects.
Other witnesses testified about receiving profane or verbally abusive emails from the governor’s top aides.
In Mr. Percoco’s trial, Mr. Howe had testified that Mr. Cuomo had yelled at him after the demise of a construction project in Syracuse.
“You didn’t think that was fair?” a lawyer asked Mr. Howe.
“I know the governor well enough to know what’s fair and unfair doesn’t really matter in a situation like this,” Mr. Howe replied.
For Dr. Kaloyeros, his efforts to secure Mr. Cuomo’s good will appeared to have succeeded by 2013. He had been working with Mr. Howe for some time, and the governor’s office considered him a “rock star,” according to Mr. Schuler. In May of that year, Mr. Cuomo would tap him to spearhead the Buffalo Billion.
But in the months leading up to that announcement, Dr. Kaloyeros still seemed to be wrestling with anxiety about his footing with the governor.
“This is about the big guy not trusting me and not ready/willing to pull the trigger,” Dr. Kaloyeros wrote in an email to Mr. Howe in March 2013. He followed up in another email: “Having the trust and faith of the administration in my unequivocal loyalty, discretion and allegiance to the cause is paramount. Otherwise, you don’t want me to be, nor can I be part of the team.”
Follow Vivian Wang on Twitter: @vwang3
