Update: Fuller Road counsel challenges accuracy of AG affidavit

Update: Fuller Road counsel challenges accuracy of AG affidavit

UPDATE 11/17: On Nov. 16—one day after this story first appeared online—the U.S. Attorney’s office said in a court filing that it had received an email the same day from “counsel for Fuller Road Management Corporation,” a nonprofit affiliated with SUNY Polytechnic Institute, claiming that the May 2016 search warrant application (quoted in this story) “contains incorrect assertions regarding FRMC [document] productions to” the state attorney general’s office.  

A state investigator said in that 2016 affidavit that four emails were not produced by SUNY Poly or FRMC in response to a subpoena. However, according to the U.S Attorney’s office, FRMC counsel said Thursday “that three of the four emails…had in fact been produced to NYAG on or about March 11, 2016,” more than two months before the date of the affidavit.

Further, the fourth email—the one sent on Oct. 30, 2014 by Joseph Nicolla to Alain Kaloyeros, described in more detail below—“was not included in FRMC’s document collection and therefore was not produced by FRMC to NYAG.”

We have reached out to FRMC counsel and a SUNY Poly spokesperson—both of whom we emailed prior to this article’s initial publication but did not receive responses—and will update this article accordingly if we hear back.

As of Nov. 17, it was unclear how the letter from FRMC counsel would impact the current battle, described further below, between the federal government and attorneys for Alain Kaloyeros over the latter’s efforts to suppress search warrant evidence. The federal government said in the Thursday court filing that “[n]one of the information provided by FRMC Counsel has any bearing on the validity” of the 2016 state warrant or the federal warrant obtained earlier this month.

A spokesperson for the AG, when asked for comment Friday, referred us to the same passage, which says the AG’s “source for those emails is wholly irrelevant to the State court’s determination that the emails’ contents, along with the other facts described in the State Affidavit, established probable cause to search and seize Kaloyeros’s iPhone.” (The spokesperson did not immediately respond to a follow-up question as to whether FRMC counsel was correct in saying that three out of the four emails were actually produced prior to the affidavit.)

By contrast, an attorney for Kaloyeros, in a filing Friday evening, characterized the government’s letter as a “concession” that the warrant’s “supporting affidavit contained fundamental inaccuracies,” undermining “its other factual assertions and any good faith reliance defense.”

We have changed this story’s headline—which originally read, “AG: SUNY Poly didn’t produce emails responsive to subpoena”—to reflect the new information provided by FRMC counsel via the U.S. Attorney’s office’s Thursday letter.

SUNY Polytechnic Institute and Fuller Road Management Corporation, an affiliated nonprofit that owns and manages facilities at the school’s Albany campus, did not produce certain emails responsive to a subpoena from the state attorney general’s office, according to footnotes in a May 2016 search warrant application recently filed in federal court.

The AG reportedly subpoenaed the two entities in Sept. 2015, after Albany real-estate developer Columbia Development Cos. submitted the lone proposal to build a student housing complex near campus. In the year leading up to the request for proposals’ issuance, Columbia, through a subsidiary, spent nearly $4 million buying up parcels on or near Loughlin Street, a dead end lined with ranch homes just south of the school.

When questioned by media about these purchases, Columbia president Joseph Nicolla maintained that they reflected shrewd forecasting, rather than collusion. But in Sept. 2016, state Attorney General Eric Schneiderman’s office offered a different explanation, alleging in a criminal complaint that Nicolla and SUNY Poly president Alain Kaloyeros had rigged the bidding process for the prospective dorm project.

The warrant application contains footnotes appended to four discrete emails or email chains that read, “Had SUNY Poly or FRMC maintained a copy of this email, it would have been responsive to the OAG’s subpoena, yet they did not produce this email to us.” Those emails are:

¶ An internal Columbia discussion on the status of parcel assemblage, forwarded by Nicolla to Kaloyeros on Oct. 30, 2014.
¶ A Nov. 18, 2014 email chain—between Kaloyeros, Nicolla, lobbyist Todd Howe, and then-FRMC president Jerry Barber—where participants comment on a solicitation from another developer.
¶ A Feb. 9, 2015 digital meeting request (topic: “Student Housing”) sent by an FRMC secretary to Barber, Nicolla, SUNY Poly finance officer Scott Bateman, a Columbia lawyer, and investment banker John Puig.
¶ A Feb. 20, 2015 email from Kaloyeros to Barber and three SUNY Poly employees directing them “to prepare an RFP for student housing.”

The emails are mentioned (or shown, partly redacted, in the case of the Feb. 20 email) in the Sept. 2016 state complaint. But only the Nov. 18 email chain is said to have been obtained, pursuant to subpoena, from SUNY Poly. The rest were obtained from Columbia.

“At this time, I do not know whether the email was within SUNY Poly’s or FRMC’s possession at the time the subpoena was issued,” a state investigator writes in one footnote. “We plan to further explore this with SUNY Poly’s and FRMC’s joint counsel in this matter.”

Jay Himes, a former chief of the AG’s antitrust bureau who is now in private practice, told The Alt that apparent omissions of records in response to subpoenas are increasingly common in the digital age and not necessarily indicative of anything nefarious.

“The searches, while they’re supposed to be thorough, are bounded by time and practicality,” Himes said. Prosecutors, once they confirm the existence of specific records through other means, might simply ask subpoena recipients to search again. But if certain records known to exist are never found or produced, “that’s, you know, interesting,” Himes added.

SUNY’s records retention and disposition schedule, which is approved by the State Archives, indicates the length of time certain records must legally be kept. One section pertaining to “executive records” says that the correspondence of campus presidents and other administrators is required to be preserved for at least six years.

It appears the Cuomo administration’s controversial 90-day, automatic email deletion policy, revoked in mid-2015, could not have been a factor here, since it “never extended to SUNY,” a spokesman for the governor previously told the New York Daily News.

A spokesperson for Empire State Development, which now oversees FRMC, said the agency does not comment on litigation. A SUNY Poly spokesperson, an AG spokesperson, Nicolla, and Columbia Development did not respond to requests for comment. Barber could not be reached for comment.

John Puig, a recipient of the Feb. 2015 meeting request, also did not respond to a request for comment. Puig was recently mentioned in a Times Union story as one of two “municipal financing experts” who had “assisted the [FRMC] board navigate financing issues” for multiple “large construction projects.”

Warrant dispute in federal case prompts revelations

This batch of emails, though described in the complaint, had not yet been fully published until this month.

The state case, more than year after the complaint was filed, has not yet resulted in any indictments, though Kaloyeros and Nicolla both pleaded not guilty. But a federal case against Kaloyeros, in which he is accused of rigging bids for higher-profile projects in the Syracuse and Buffalo areas, has continued apace, with a trial set for next June. (He has pleaded not guilty.)

In that case, Kaloyeros’ attorneys have sought to suppress evidence gathered through the state search warrant, the fruits of which the AG shared with federal prosecutors. This is the warrant that corresponds to the now-public application cited in this article.

Once apprised of Kaloyeros’ motion to suppress, which claims the warrant was issued without probable cause and is overbroad, the feds announced in a footnote of a 180-page memo that they would seek their own search warrant to obtain the same materials.

The feds obtained this new warrant on Nov. 9, according to a recent court filing, which includes the application for the disputed state warrant, along with the emails cited above, as part of an exhibit. It remains to be seen what the court will decide as to the evidence’s admissibility.   

Details on Loughlin St. deals

The Oct. 2014 email chain shows Columbia Development executives discussing the status of their efforts to acquire all necessary parcels for the potential student housing project. When an employee notified Nicolla that the owners of 11 Loughlin St. had just signed a contract, the company president wanted to know where things stood.

“Does this leave 8-12 left plus cemetery,” Nicolla asked.

Yes, the employee replied. Nicolla forwarded the exchange to Marc Goldstein, Columbia’s director of real estate. “What is status [sic],” Nicolla asked.

The company would also soon make the owner of 12 Loughlin St., who had recently “showed a slight chink in his armor,” a new offer, Goldstein said. “For an idea of his mindset feel free to read the below message that he sent” to a realtor working on the Columbia subsidiary’s behalf, “keeping in mind that he is a philosophy professor at UAlbany.”

The 800-word email, in which the professor extols his short commute and the home’s “great back yard for gardening,” works toward a pointed conclusion: “You haven’t yet made us an offer that would let us buy a house that comes close to fitting our needs as well as this one, covers the time and expense involved in moving and starting up again somewhere else, and compensates us some for the loss of our dream house.”

The realtor had floated an offer in the range of $350,000 to $380,000, according to the professor. In a few months’ time, Mercer Properties LLC, the Columbia subsidiary, bought the property for $465,000—the most it spent on any parcel related to the assemblage. The professor and his wife had purchased the home for less than half that in 2012.

“Everything we say in that letter is true,” the professor, P.D. Magnus, recalled in a recent phone interview. “We just loved that house—for all the reasons we elaborated.”

The email exchange, on one hand, presents a funny anecdote about an academic outwitting a fleet of real-estate dealmakers, but the fact that it was forwarded by Nicolla to Kaloyeros on Oct. 30, 2014—the date mentioned in the complaint as the start of the duo’s collusion—may prove problematic for the defendants.

Incidentally, Columbia never acquired the cemetery mentioned by Nicolla (likely the one owned by Congregation Beth Abraham-Jacob, though there’s another on the other side of Fuller Road). The synagogue did not respond to a request for comment, but a representative told UAlbany’s student newspaper last year that the “cemeteries will be there forever, and ever and ever.”

“If shackles taken off”

When Kaloyeros received what appears to be a clumsy, cold pitch (“What time works for you to discuss this program?”) in Nov. 2014, he forwarded it to Nicolla, Todd Howe, and Jerry Barber.

“Do we know these people?” Kaloyeros asked.

“I do not but there are many like them,” Nicolla replied. “If shackles taken off I can do all this tough in our environment [sic].”

“Would trust Joe to do this,” Todd Howe chimed in. “These organizations will come out of the woodwork once word is out housing is needed.”

“I don’t plan to respond,” Kaloyeros said. “Was just curiosity.”

The email exchange, absent this level of specificity, was cited by the AG in the complaint as “evidence” that Kaloyeros “colluded with Columbia…to give it an unfair competitive advantage.”

Other newly revealed materials mentioned in the complaint include a handwritten memo detailing potential plans for Loughlin Street and a site drawing.

Those documents, along with the new search warrant application, can be viewed here.

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