The Percoco trial: a primer

The Percoco trial: a primer

During his State of the State speech last Wednesday, in a brief segment one reporter called “increasingly moldy” and another called “rote,” Gov. Andrew Cuomo talked about government ethics reform.

“With all we have to do as a government, it is more important than ever that we have the public trust,” Gov. Cuomo said. “I know the Legislature feels that we have done much on ethics reform, and they are right…But we must do more anyway.”

If more is done by Cuomo and the Legislature this session, it may overlap with at least six public corruption trials involving former New York politicians, according to a calendar put on display at the state Capitol by good government groups the day after the governor’s speech.

The first trial, now slated to begin Jan. 22, involves, among three other defendants, Joseph Percoco, a former top aide to Gov. Cuomo. Long regarded as the governor’s “enforcer,” he is accused of taking more than $300,000 worth of bribes from two companies with business before the state.

The governor has not been accused of any wrongdoing, and it is unclear if he is one of the dozens of witnesses the government may call at trial, which is expected to last at least a month. But the long, lurid criminal complaint unsealed more than a year ago, along with a steady stream of pretrial court filings, has already provided considerable fodder for the media, watchdogs, and Cuomo’s political adversaries.

Percoco and the other defendants maintain their innocence and have pleaded not guilty to all charges; the case—particularly in the wake of a 2016 Supreme Court ruling that made public corruption allegations more difficult to prove—appears far from a cakewalk for prosecutors. Last year, federal appeals panels overturned convictions of two longtime power brokers, former state Senate Majority Leader Dean Skelos and former Assembly Speaker Sheldon Silver, dealing a potential blow to the legacy of former U.S. Attorney Preet Bharara, who had earned a fearsome reputation around Albany. (Those two retrials appear on the calendar distributed by advocates.)

After the speech, Cuomo’s office pointed to past “landmark transparency reforms” and said his interest in other changes, like limiting lawmakers’ outside income and lowering campaign contribution limits, has not dwindled. But it seems unclear if the succession of corruption trials will spur sweeping legislative action on ethics, given that the federal complaint detailing charges against Percoco and seven others gained national attention months before last year’s session, where nevertheless “lawmakers failed to take up a raft of ethics proposals included in the governor’s executive budget,” The New York Times reported.

Percoco left state government for the private sector in early 2016. His longtime boss (and honorary “brother”), however, is up for reelection this year and is believed to have presidential ambitions. Four years ago, Cuomo’s abrupt dissolution of the Moreland Commission to Investigate Public Corruption became an issue on the campaign trail, though it ultimately did not prevent him from winning a second term.

The charges against Percoco and others were swiftly cast as a “stain on his inner circle,” but it remains to be seen if the spectacle of the trial—let alone any yet-unknown, unflattering details about his administration it may reveal—will hamper Cuomo’s attempt to win once again.


Back in 2010, as Cuomo prepared to enter the governor’s race, the Times ran a profile of the then-attorney general’s special counsel, a former high-school linebacker virtually unknown “outside of New York political circles” who was “intensely devoted to Mr. Cuomo and quick to respond to slights, real or perceived.”

Around that time, a “call about Mr. Percoco frequently [yielded] a hurried clarification that the conversation is off the record, followed by protestations of his gentle nature,” the Times reported. One union official described Percoco as having “no other interest or agenda except in being the man behind the man.”

This commitment to Cuomo’s career may have wavered due to financial strain. By mid-2012, according to the criminal complaint, Joseph Percoco “was struggling to pay his bills.” He and his wife had purchased an $800,000 home in Westchester County, and toward the fall of that year, the couple’s monthly expenses were exceeding their income by about $10,000. Their savings was “close to being depleted.”

Around that same time, Competitive Power Ventures, where Peter Galbraith Kelly, Jr. oversaw government relations, was seeking to obtain a power-purchase agreement from New York, which would have guaranteed “a significant and long-term stream of income” for a power plant the company was building in Orange County, according to the complaint.

Leading up to this confluence of circumstances, Kelly had sought for several years to “cultivate access” with Percoco, the complaint says. A key figure in that effort was a lobbyist named Todd Howe.

In mid-2010, CPV retained Howe—now the prosecution’s star cooperating witness, having pleaded guilty to a bevy of charges—to help navigate the state government bureaucracy. Howe, who worked alongside Percoco for Gov. Mario Cuomo decades ago, had “touted his long-standing personal and professional connections to the then-favored gubernatorial candidate, his senior aides (including Mr. Percoco), and State officials who were already in power,” Kelly’s defense attorneys said in a recent court filing. “Based on those relationships, Mr. Howe persuaded Mr. Kelly and CPV that he could not only assist the company in its efforts to obtain financing for its power plant, but could also bring CPV to the attention of the Governor’s office.”

The complaint details a Montauk fishing trip, a steak lunch, and a private jet trip—but all this predated the alleged bribe. After months of pressure from Percoco, the government says, and after Kelly falsely told other CPV executives that he had obtained an “ethics opinion” from the governor’s office approving the arrangement, the company began to pay Percoco’s wife $7,500 per month to teach fourth graders at elementary schools in New Jersey about a nearby power plant the company was developing. The payments began in December 2012 and continued through January 2016.

In return, Joseph Percoco took a series of actions intended to benefit CPV, prosecutors say—namely, he helped it secure emission reduction credits and tried to help it obtain the lucrative power-purchase agreement. Despite his efforts, by the end of 2013, Howe and Percoco “had learned that a PPA would not be forthcoming,” according to the complaint, yet successfully managed to “maintain the illusion” that a deal was imminent, at least until the spring of 2015. This, allegedly, was extortion.

The defense has indicated that it will argue that these payments to Percoco’s wife were warranted and lawful—that is, that they were not bribes. The “award-winning education program,” they said in a recent filing, “demystifies the fuel sources and generation processes of CPV’s plants, increasing understanding of the plant in the local community and reducing opposition to it.”

Percoco’s wife “performed real work” to launch and sustain the program, which still exists today, the defense says. And contrary to the government’s claim that the post was a “low-show” job—“Percoco taught the curriculum less than a dozen times on average, with each class typically lasting less than [two] hours,” the government said recently—the defense maintains that her “compensation was reasonable,” an opinion shared by an economist it intends to call as an expert witness.

In addition to eliciting testimony from two current teachers with the education program who “have always been paid substantially less than what Percoco’s wife was paid for performing similar work,” the government will likely seek to undercut the notion that the payments were bonafide by citing alleged efforts at concealment. For instance, according to the complaint, an “external affairs manager” at the company “purposefully” omitted Percoco’s wife’s last name from education program brochures and directed her “to refer to herself by her first name when in classrooms.”

That Percoco and Howe, in emails, allegedly sometimes referred to cash payments as “ziti,” a term borrowed from The Sopranos, also may not help the defense’s cause.


Notwithstanding his wife’s new job, Percoco “remained in a difficult personal financial situation,” the complaint says. And so, beginning in January 2014, he allegedly began to have discussions with Howe about how to take payments from Syracuse-based COR Development, which had begun pursuing large state contracts about one year earlier.

According to the complaint, in exchange for $35,000 in bribe payments to Percoco from COR executives Steven Aiello and Joseph Gerardi (through an LLC set up by Howe), Percoco took official actions that benefitted COR Development, including helping to resolve an issue with the state’s top economic development agency relating to a potentially costly labor agreement. (Prosecutors have said they expect the executives “to argue that they did not know that Howe,” who they had retained as a lobbyist, “was passing their payments along to Percoco.”)

One potential wrinkle in the government’s case is the fact that Percoco left state service in April 2014 to work on Cuomo’s re-election campaign, returning only after the election—and after the alleged bribes were paid.

But the judge overseeing the case, ruling on a host of pretrial motions, found this distinction somewhat immaterial, since Percoco, according to the government, “continued to function in a senior advisory and supervisory role with regard to the Governor’s Office, and continued to be involved in the hiring of staff and the coordination of the Governor’s official events and priorities.”

court-house-2aPERCOCO: A “BULLY”?

Late last year, federal prosecutors said they may introduce evidence at trial to show that Percoco “threatened at least four New York State employees…who were considering leaving their current jobs or State service entirely, by claiming that [he] would use his extensive influence…prevent them from finding future employment.”

Percoco’s attorneys called the claims “baseless,” arguing they “serve only to falsely and unfairly portray Percoco as a bully.” The government subsequently upped the ante, citing a fifth employee Cuomo’s enforcer allegedly threatened. Prosecutors say they will introduce evidence regarding three of the state workers, though it is unclear if they themselves will testify.

The alleged hostile behavior, even if it appears to comport with Percoco’s preexistent public persona, serves as an example of the kind of unflattering material the trial may dredge up. State agencies have racked up millions of dollars in outside legal fees reviewing and producing documents, but so far the public has seen only snippets or logs of the millions of pages of records related to the case, like emails excerpted in the complaint.

Last month, the Syracuse defendants publicized an exhibit list containing thousands of emails, most of which were sent to or from Todd Howe. Even though, oddly enough, the content of those emails has apparently been lost thanks to a technological hiccup—the defense wants to ask Howe about what was said—the disclosure of mere subject lines, senders, and recipients still generated a story in the Times Union about Howe’s emails to top Cuomo officials’ private accounts.


“How big of a deal are campaign contributions in this case?” Judge Valerie Caproni asked at a pretrial hearing last month.

“Not a big deal at all, Judge,” an attorney for Peter Galbraith Kelly, Jr. replied.

“I assume he is being facetious,” said Stephen Coffey, an attorney for one of the Syracuse defendants.

The judge ruled earlier the same month that the government would be allowed to admit evidence at trial related to the defendants’ donations to the Cuomo campaign, which it believes will help explain “the genesis and evolution” of their relationships with Howe and Percoco. Since 2010, Cuomo’s election campaign received $85,000 from the Syracuse defendants and more than $69,000 from Competitive Power Ventures, the Daily News has reported.

The defense had countered that prosecutors—though “reciting, as [they] must, that campaign contributions are lawful”—have sought to “put a veneer of criminality on perfectly legal conduct” by casting the contributions as a kind of “gateway” to bribery.

Prospective jurors will be asked on a soon-to-be-finalized questionnaire if they “have any strong feelings about people who contribute to political candidates that might make it difficult” for them to be fair and impartial. Defense attorneys appear concerned that a general weariness about money in politics could pose a challenge for their clients.

“I cannot imagine anybody is going to say, ‘I really think that is terrific that people are making large contributions to politicians,’” Coffey said at the pretrial hearing. “If they have a feeling, my guess is it is a negative feeling.”

Meanwhile, Gov. Andrew Cuomo enters 2018 with a campaign war chest of around $25 million, having mastered, as the Times recently reported, the art of wooing large donors. Over the past two years, nearly all of his campaign funds have come from thousand-dollar-plus contributions, which seems a far cry from the kind of small-donor-driven operation typified by Sen. Bernie Sanders’ campaign in the last Democratic presidential primary.

“Andrew Cuomo is sort of off his balance right now,” Zephyr Teachout, a Fordham Law School professor who challenged him in the last Democratic gubernatorial primary, recently told The Young Turks. “In some ways I think he’s like a ‘90s politician who walked into this revolutionary moment in American society.”

Percoco’s trial seems unlikely to help Cuomo find his equilibrium. And in June, the two Syracuse defendants, real-estate developers from Buffalo, and former SUNY Polytechnic Institute president Alain Kaloyeros will stand trial on corruption allegations related to the Buffalo Billion, one of the governor’s signature economic development initiatives. (There’s also a separate federal probe of the administration’s hiring practices, the Times Union reported last month.)

“This is the year we want [Cuomo and lawmakers] to deliver” on ethics reform, said Blair Horner, executive director of the New York Public Interest Group, at a press conference last week.

He added: “We think the monthly, high-profile corruption cases will drive the message home to the public.”

Leave a Reply

Your email address will not be published. Required fields are marked *


More In News