A federal jury on March 13 convicted a former top aide of New York Gov. Andrew Cuomo on felony charges related to "pay-to-play" bribery allegations, including receiving more than $280,000 in exchange for assisting with the permitting of a gas-fired power plant being built by Competitive Power Ventures Holdings LLC. The same jury deadlocked on related charges brought against a former executive of that company.
Following an eight-week trial, a jury seated at the U.S. District Court for the Southern District of New York in Manhattan handed down verdicts in a case involving Joseph Percoco, a long-time family friend of Cuomo, with whom Percoco reportedly remained close even after resigning from the governor's administration in 2015.
According to a news release issued by the U.S. Attorney's office, evidence showed that Percoco sold his political influence to support a lavish lifestyle starting in 2010, and the jury convicted him of conspiracy to commit honest services wire fraud and solicitation of bribes or gratuities. The jury found Percoco not guilty of conspiracy to commit extortion and extortion and was unable to reach a verdict on charges brought against former CPV Senior Vice President for External Affairs Peter Galbraith "Braith" Kelly Jr. Kelly was alleged to have orchestrated the payment of bribes to Percoco and was initially charged with conspiracy to commit honest services wire fraud as well as payment of bribes or gratuities.
Specifically, Kelly was accused of giving a "low-show," high-paying job to Percoco's wife in exchange for help in obtaining certain permits for the 720-MW, dual-fuel, combined-cycle CPV Valley Energy Center project in Orange County and another CPV-operated generation project in New Jersey, which local news reports identified as the gas-fired 779-MW Woodbridge Energy Center.
In addition to receiving money in connection with the CPV projects, Percoco, who in certain communications famously used the code word "ziti" when referring to cash bribes — much like the characters in the television series The Sopranos — also was charged with accepting $35,000 from real estate company COR Development in a separate bribery scheme. In that case, the jury found Percoco and COR executive Steven Aiello guilty of conspiracy to commit honest services wire fraud but acquitted COR executive Joseph Gerardi of that same charge. It also found Aiello and Gerardi not guilty of charges that they paid bribes or gratuities and made false statements.
The case against Percoco and all of the other defendants relied heavily on the testimony of convicted-lobbyist-turned-government-witness Todd Howe.
Tom Rumsey, CPV's senior vice president of external affairs, said in a statement that the alleged conduct of his predecessor does not reflect the company.
"In the course of our work, we make every effort to ensure we adhere to all applicable ethical and legal requirements," Rumsey said. "The CPV Valley Energy Center project permits were never alleged to have been obtained in an improper way, nor was any evidence provided suggesting they were. The validity of our project permits has been upheld by state and federal regulators and in state court, and claims to the contrary are without merit."
The verdicts came a day after a federal appeals court rejected a petition by the New York state government to quash orders by the Federal Energy Regulatory Commission that blocked a New York agency from intervening in the permitting process for the Millennium Pipeline Co. LLC natural gas lateral project. The upholding of the FERC orders paves the way for Millennium to start building the eight-mile project, which will transport natural gas to the nearly finished CPV Valley Energy Center plant.
U.S. Attorney Geoffrey Berman derided Percoco for shirking the "sacred" obligations of a government employee and betraying the trust of New Yorkers. "Government officials who sell their influence to select insiders violate the basic tenets of a democracy," Berman said in a statement. "We will continue relentlessly to bring to justice those public officials who violate their oaths by engaging in this especially offensive misconduct."
In response to the jury's findings with respect to Percoco, Cuomo released a statement saying they "demonstrated that these ideals have been violated by someone I knew for a long time."
"That is personally painful; however, we must learn from what happened and put additional safeguards in place to secure the public trust," Cuomo said. "Anything less is unacceptable."
Government watchdog Reinvent Albany called on Cuomo and lawmakers to end New York's "pernicious problem with pay to play" by increasing transparency, limiting outside income for lawmakers and executive staff, and closing a loophole that allows unlimited campaign contributions via limited liability companies.
"State laws are so weak that what is unethical is legal," said Reinvent Albany. "Percoco's trial spotlighted a state government riddled with pay to play, influence peddling and unethical behavior. Under state law, you can legally donate unlimited amounts of money to the governor and legislature, while trying to cash in on a giant state contract or get state funding."
Global Infrastructure Management Participation LLC acquired CPV's principal assets in May 2015. CPV's previous principal owner was private equity firm Warburg Pincus & Co.
