Perdido 03

Perdido 03

Saturday, April 30, 2016

What Dirt Does Joe Percoco Have To Dish On Andrew Cuomo?

Yesterday we learned that Governor Andrew Cuomo's former aide, Joe Percoco, a man Cuomo once described as so close to the Cuomo family that he was like a third son to dad Mario, is the subject of a federal investigation involving the governor's signature economic development program, the Buffalo Billion Project.

No sooner had Ken Lovett, Daily News reporter, learned that Percoco was under scrutiny in US Attorney Preet Bharara's probe into the Buffalo Billion Project that he got this doozy of a comment from another former aide to Cuomo, looking to distance the governor from Percoco:

Steven Cohen, Cuomo's former chief of staff in both the attorney general's office and the governor's office, said Cuomo won't put his friendship above "integrity and the obligation owed to the public."

"Friend or not, any instance of misconduct will be met with unambiguous action to ferret out the wrongdoing, correct the problem and ensure that law enforcement exacts the appropriate penalty," Cohen said.

How's that for Cuomo's throwing his "closest and most loyal" former aide under the bus quicker than you can say "Moreland"?

And yet, was Percoco actually Cuomo's former aide?

A report from a week back says not in all practicality.

Percoco left Cuomo's employ back in January for the private sector, allegedly to make more money than he was getting paid working for Cuomo ($169,000), but Erica Orden at the Wall Street Journal reported on April 21 that it almost seemed like Percoco hadn't left Cuomo's employ at all:

In January, one of New York Gov. Andrew Cuomo’s top aides departed to work as a senior vice president at Madison Square Garden Co., a company whose executive chairman is close with the governor and one that has a variety of business before the state.

It seems the staffer, Joseph Percoco, hasn’t left Mr. Cuomo’s side.

In recent months, Mr. Percoco has continued to function as the governor’s aide, in situations that some legal experts and ethics watchdogs say raise questions about potential conflicts of interest and his compliance with public-officers law. The law restricts his ability to appear before the executive chamber or receive compensation from his current employer for work before the governor’s office.
The Garden and Mr. Cuomo’s office disputed that Mr. Percoco’s actions were improper.

A week after beginning his new job at the Garden, Mr. Percoco was walking the floor at Mr. Cuomo’s State of the State address, a staff badge slung from his neck as he consulted with attendees.
In April, he appeared at Mr. Cuomo’s celebration of the state’s new minimum-wage law, huddling in the staff area with employees of the Cuomo administration. A person involved in the event confirmed Mr. Percoco had helped organize it.

Later in the month, Mr. Cuomo, a Democrat, held a ceremony at the Garden in which he signed a bill to legalize professional mixed martial arts. It is a matter in which the Garden has a significant interest, in part because the arena is set to host New York’s first fight. There, too, working the event on the Garden’s behalf, was Mr. Percoco.

That night, as Mr. Cuomo made his way through the Brooklyn Democratic presidential debate’s “spin room,” he was surrounded by a small group of aides who helped protect the governor and fend off reporters. Among them was Mr. Percoco, who stood watch as Mr. Cuomo conducted interviews. The others, aside from the governor’s daughter, were members of Mr. Cuomo’s executive-chamber staff.
The result is that, according to Albany observers, Mr. Percoco has operated simultaneously as an executive in the private sector and, effectively, as an aide to the governor, including on matters of interest to Mr. Percoco’s current employer.

How different was Percoco's role with Cuomo from January up until yesterday when the governor threw him under the bus after the Lovett report?

Not much different than when he was officially working for Cuomo reports Orden:

The role he has played for Mr. Cuomo in the past few months appears similar to the position he occupied in his administration, where for years he served as the governor’s political enforcer. He courted or admonished surrogates or others relevant to Mr. Cuomo’s affairs, managed events and handled more pedestrian matters, such as protecting the governor from reporters and others at parades.

That Cuomo threw Percoco under the bus so quickly yesterday is an interesting thing in light of Orden's Wall Street Journal report that Joe was as close as ever with Andy despite having officially left his job working for the governor.

What will U.S. Attorney Preet Bharara make of the Cuomo/Percoco relationship, particularly the post-government employ part of it?

I bet Andy's worrying about that exact thing:

His dual roles, say government watchdogs and public-officers-law experts, merit scrutiny for Mr. Percoco’s potential ability to exert undue influence with Mr. Cuomo on behalf of the Garden.

“If he is an employee in the private sector, he should not be involved in managing the public affairs of the governor,” said Dick Dadey, executive director of Citizens Union, a civic group. “His primary, arguably sole responsibility is to that of Madison Square Garden, and it becomes blurred when you see the close relationship continue in the way that it was when he was employed by the governor’s office.”


An even trickier—and permanent—restriction for Mr. Percoco is that he can’t “appear, practice, communicate or otherwise render services” on anything on which he worked directly while in the governor’s office. As one of Mr. Cuomo’s closest advisers, he had his hands in a variety of matters.

“If he talks to the governor and hangs out with the governor and brings up interests of the Garden…the lobbying, so to speak, doesn’t have to be formal,” said Stephen Gillers, a New York University law professor. “It doesn’t matter if he whispers in the governor’s ear or submits a formal brief, either one is within this language.”

The purpose of the law, he added, “is to prevent former officials from having, and from appearing to have, an advantage when they represent private interests before their former colleagues.”

Earlier today I wondered just what damaging information Percoco might have that he could use to lighten the legal load against him if Bharara decides to bring charges.

When I wrote that, I wasn't aware of the Orden piece in the WSJ that makes it sound as if Percoco never really left the governor's employ.

In light of the information from the Orden piece, I would bet Percoco has got lots of interesting things he could say to the feds, including some incidents/events/conversations that have transpired in recent months - you know, the ones since January when Percoco was supposedly no longer working for the governor.

Whether he tells those stories or not, well, that depends upon how strong a case Bharara's got against him currently and whether it makes sense for Joe to tell tales on his "brother" Andy.

But things sure have gotten interesting very quickly in Cuomoland - I wonder how much time Andy's giving this weekend to finding a ready primary opponent for his"friend" Bill de Blasio now that Cuomo's got his own scandal headlines to worry about?

Cuomo Scandal Could Widen Quickly

How ugly will the Cuomo scandal get now that the governor has thrown his former aide - whom he once described as like a third son to his father, Mario - under the bus in the Buffalo Billion scandal?

Jim Heaney at Investigative Post says real ugly.

Cuomo's announcement that he's launching his own investigation of his Buffalo Billion Project suggests that there is much more malfeasance to be found by the feds.

Here's Heaney:

Bharara’s deepening probe clearly has the governor rattled, as evidenced by his decision to launch an executive probe into the awarding of Buffalo Billion contracts. Of course, this amounts to the administration investigating itself, which does not exactly inspire confidence, especially given the way Cuomo undermined the Moreland Commission.

The U.S. Attorney launched his probe last fall in the wake of a series of stories produced by Investigative Post that published on our website and broadcast on WGRZ.

In December 2014, I reported on the curious circumstances of the state’s awarding of a contract to LPCiminelli to develop the SolarCity plant in Buffalo and the Cuomo administration’s outrageous efforts to thwart my reporting,

Other key stories have included the state’s continued lack of transparency on the program and its begrudging release of records in the face of a lawsuit we filed with WGRZ. I also did a story in June for a number of papers statewide, including the Rochester Democrat & Chronicle and the Albany Times Union that summed the whole thing up.

In addition to scrutinizing the awarding of contracts, we’ve taken a close look at SolarCity’s shaky finances, including this initial report in October 2014 and a recent update published in February in which I concluded:

“It’s becoming increasing clear that Gov. Andrew Cuomo took a big risk with taxpayer money to build SolarCity a $750 million plant.”

With news of the widening federal probe, it’s looking like Cuomo’s political future, as well as taxpayer funds, are at risk.

Read through the links from Heaney's Investigative Post piece - nobody did more to push this story forward and into prominence than Heaney, Investigative Post and WGRZ in Buffalo.

Tom Precious at the Buffalo News reports that with little seeming action from Bharara in the Buffalo Billion probe, the thinking within the administration was that they had dodged the investigative bullet and could move on:

Though quiet for months, the activity from Bharara’s office firmly puts an end to optimism within the Cuomo administration that the Buffalo Billion probe was running its course. The governor himself, after limiting travel to Western New York for a part of last year, has stepped up his trips to the region.

Indeed, I have the feeling that the leak of the Board of Elections "memo" written by Cuomo appointee Risa Sugarman detailing alleged felonious activity by Bill de Blasio and his campaign team in 2014 was part of Cuomo's feeling better about his own problems with the Buffalo Billion case.

Somebody leaked that story to the press last week (to Ken Lovett at the Daily News, who was also the person to receive the leak about Cuomo's cronies on the hook in the Buffalo Billion probe) and it didn't quite make sense that it would have been the legal entities - Manhattan D.A. Cyrus Vance and U.S. Attorney Preet Bharara - who were involved that.

I thought the leak had come from somebody close to Cuomo to further hammer his "friend" Bill de Blasio as reports surfaced that two de Blasio fundraisers were under investigation for corruption involving the NYPD.

Cuomo may have gotten more than he bargained for, however, since the Buffalo Billion probe was not at an end, just merely about to enter a new phase.

And what a phase it is:

Federal prosecutors in Manhattan and the Federal Bureau of Investigation are looking into whether the former senior aide, Joseph Percoco, and his wife failed to properly disclose thousands of dollars in income they had received from a company or companies doing business with the state, two of the people briefed on the matter said.

The other people whose conduct is under examination in the investigation, two of the people said, include Alain E. Kaloyeros, the president of the State University of New York Polytechnic Institute, who was a central player in the Buffalo Billion; Todd Howe, a lobbyist and longtime associate of the governor and his father; Louis P. Ciminelli, a developer in Buffalo; and a company called Competitive Power Ventures.

The administration wants the word out there that the governor himself is not under investigation and that nobody currently working on the second floor got a subpoena:

A source with knowledge of the investigation said Cuomo’s office received the Bharara subpoena on Friday. The source would not discuss what documents or information were being requested by Bharara, the same federal prosecutor who in December won the corruption convictions of former Assembly Speaker Sheldon Silver and former Senate Majority Leader Dean Skelos. Bharara also recently opened a probe into fundraising activities by the campaign of New York Mayor Bill de Blasio, one of Cuomo’s chief protagonists.

The source said the new subpoena was not directed at any individuals in the Cuomo administration, including the governor, but was sent to the executive chamber.

But the executive chamber subpoena was not the only one to go out:

Another source said subpoenas have been issued to at least two other entities during the past week; the source would not identify the recipients.

Here is who didn't get a subpoena:

LPCiminelli, through David C. Oliverio, the company’s attorney, said the firm has received no additional subpoenas since Bharara’s investigation first began nearly a year ago.

So, where does this go from here?

One thing we won't get is additional pronouncements from the governor about how swell his Buffalo Billion program is, like we got just a couple of weeks ago on April 6, when he called it the "Dawning of a new day" for the City of Buffalo. 

That's pretty certain.

After that, it's hard to say where this goes.

I will look forward to Jim Heaney's thoughts on the matter, as I'm sure many other readers out there will too.

But I would say this - it certainly could reach as high as the governor.

If anybody knows where the bodies are buried in Andrew Cuomo's closets, it's "his closest and most loyal" former aide, Joe Percoco.

With Cuomo throwing Percoco under the bus yesterday in both an official statement from the administration and comments from another former aide, Steven Cohen, to the NY Daily News, Percoco certainly will have some motivation to share stories with prosecutors.

Dunno about you, but if I had been Governor Cuomo's Luca Brasi for the last few decades and I heard the following, I might get an inkling to tell some stories about buried bodies and midnight whackings:

Steven Cohen, Cuomo's former chief of staff in both the attorney general's office and the governor's office, said Cuomo won't put his friendship above "integrity and the obligation owed to the public."

"Friend or not, any instance of misconduct will be met with unambiguous action to ferret out the wrongdoing, correct the problem and ensure that law enforcement exacts the appropriate penalty," Cohen said.

One thing we can be fairly certain of - the NY Post will not go hard and heavy on this Cuomo scandal the way they have with the de Blasio scandal.

Indeed, they don't even mention the Cuomo scandal today on the front cover today and barely cover it in the paper at all:

Let's imagine what the cover would look like had de Blasio cronies gotten caught up in a scandal like the Buffalo Billion probe?

Probably like this:

Or this:

Just want to note the Postie hypocrisy before closing the piece.

That's one thing you can always count on in this life - the Posties will go hard and heavy against political enemies while ignoring similar stories against friends, allies and associates.

In any case, depending upon what happens in the now widening Buffalo Billion probe, the NY Post may be forced to acknowledge the scandal on the front page and how it puts their criminal pal Andrew in the same scandalous boat as their favorite pinata, Bill de Blasio.

More as we get it - Perdido Street School blog will be back up and running for the Cuomo corruption story.

Friday, April 29, 2016

Cuomo Cronies, Former Top Aide Under Investigation In Buffalo Billion Probe

And just like that, we get this news from Ken Lovett of the New York Daily News:

ALBANY — A former top aide and several others close to Gov. Cuomo are being probed for potential improper lobbying and "undisclosed" conflicts of interest having to do with the governor's signature "Buffalo Billion" economic development program, the Daily News has learned.

A focus of the ongoing federal probe now appears to be former longtime Cuomo aide Joseph Percoco, Alain Kaloyeros, the politically connected head of a State University high-tech research center, lobbyist Todd Howe, who goes way back with Cuomo, Buffalo developer Louis Ciminelli, and an energy company called Competitive Power Ventures, a source with knowledge of the investigation told the News.

Percoco served as the governor's $169,000-a-year executive deputy secretary and had long been his political enforcer until leaving for a job at Madison Square Garden earlier this year. He once worked for Cuomo's father, former Gov. Mario Cuomo.


It's unclear what Percoco's role was with the Buffalo Billion projects. But a separate source said he may have been receiving unreported income that came through Howe related to business before the state.

Percoco, a third source said, might have been paid as a consultant through Howe while working for the governor.

"It sounds like there was self-dealing here," said one source.

The CPV project seems to be separate from the “Buffalo Billion,” the source said. It has to do with a power plant in Westchester County, the source said.

A former Cuomo aide said he was "shocked and devastated" given how loyal Percoco has been to the Cuomo family.

Percoco couldn't immediately be reached for comment. 

The Cuomo administration received a subpoena on Friday for documents related to the matter, the source said. Neither the governor nor any of his current staff have been personally served, the source said.
A Cuomo spokeswoman had no immediate comment.

It's so interesting to get this leak about Percoco and Company now, after a week of leaks about criminal investigations into NYC Mayor Bill de Blasio that all started with a leak of a "report" written by Cuomo crony Risa Sugarman at the Board of Elections that had been sent along to the Manhattan D.A. and US Attorney for criminal referral.

That leak went to Ken Lovett of the Daily News.

For a week since, we've gotten multiple disclosures about de Blasio, heard that the investigation into his fundraising was expanding, that his aides and close associates had been subpoenaed in the investigation, that both Manhattan D.A. Cyrus Vance and U.S. Attorney Preet Bharara were looking into him and his fundraising.

That the "report" alleging Team De Blasio had committed felonious acts in their coordinated efforts to raise funds for state Senate Democrats had been written by a Cuomo crony and perhaps greatly helped by Cuomo enforcer Joe Percoco (who had been included in Team De Blasio's emails during the election efforts) suggested to many, including me, that Cuomo was behind the report and the leak so as to do maximum damage to his "friend" Bill de Blasio.

De Blasio himself hinted that on WNYC today as he defended himself against the leaks and allegations of corruption:

New York City Mayor Bill de Blasio in an interview on WNYC this morning reiterated his defense of his fundraising activities, which have fallen under the scrutiny of state and federal investigators.

At the same time, de Blasio suggested there was a political motivation behind the recommendation by the prosecution referral made by the chief enforcement counsel at the state Board of Elections. Risa Sugarman, an appointee of Gov. Andrew Cuomo, concluded in a memorandum de Blasio’s political team violated campaign finance laws when aiding Senate Democrats’ efforts in taking over the chamber in 2014.

“Everything was done very carefully, meticulously, with legal guidance all along the way, and consistent with what so many other people have done,” de Blasio said. “So that’s why I’m saying it’s very interesting that now it becomes a subject of these questions.”

De Blasio has been at odds with both Cuomo as well as Senate Republicans since taking office in 2011.

Aides to the mayor, in aiding Democratic candidates, directed large-dollar contributions to county Democratic committees in upstate races, which then turned around and transferred the money to individual candidates.

The practice is a commonplace one, but de Blasio’s push was done a large-scale project that hadn’t been seen before.

“I think we have to figure out some of the motivations behind it, because if we specifically followed every step along the way — legal guidance — and did what other mayors and other leaders have done for years and years under the laws of this state, following the letter and spirit of the law,” de Blasio said. “Well, that is how we are supposed to comport ourselves.”

Now to see another leak, once again to Ken Lovett at the Daily News, this one saying that Cuomo's former most loyal aide, Joe Percoco, and other associates are under investigation for the Buffalo Billion mess (see here, here, here, here, here and here for previous Perdido Street School pieces on the Buffalo Billion probe) - well, that is something.

It's almost as if somebody were watching all the leaks and disclosures on de Blasio flying about and thinking to themselves that the guy behind all of those ought to maybe get a taste of his own medicine.

Gee, I wonder who that guy could be?

I mean, it would have to be somebody who could send subpoenas to the governor's office on a Friday and force the Cuomo administration to release this kind of statement:

More later - with this news, Perdido Street School blog is up and running again for the coverage of this story.

Cuomo Appears To Use Criminal Investigations To Punish His Enemies

Okay, one more...

As I posted a couple of days ago, the criminal investigation into Bill de Blasio's campaign fundraising appears to be politically motivated, stemming from a "report" written up by a Cuomo appointee at the Board of Elections, Risa Sugarman, that claimed felonious activities in Team de Blasio's 2014 attempts to take the state Senate for Democrats.

Capital NY reported that Cuomo's Luca Brasi, Joe Percoco, was part of that ill-fated attempt by Team de Blasio to coordinate fundraising efforts and help Democratic state Senate candidates around New York win their individual races.

Percoco, Cuomo's "closest and most loyal aide," according to the NY Daily News' Ken Lovett, of course fed back information about the coordinated campaign fundraising efforts to his boss, Andrew Cuomo, and while Cuomo appears to have taken little-to-no action at the time of the efforts, skeptics now see his hand behind Sugarman's BOE report alleging criminal activity by Team de Blasio and subsequent referral of those allegations to Manhattan D.A. Cyrus Vance Jr. and U.S. Attorney Preet Bharara.

News of that damning BOE "report" was leaked to Ken Lovett at the NY Daily News.

Vance and Bharara have subpoenaed many in de Blasio's circle, including his top aides, while Percoco does not appear to have received a subpoena in the investigation despite being a part of the fundraising effort.

That has raised the thought among cynics like myself that the Sugarman "report" was spurred by Cuomo, aided by information (and perhaps testimony) from Percoco, then leaked by somebody close to Cuomo to the press, all with the intent to irrevocably harm his "friend," Bill de Blasio, with whom he has been feuding for a few years now.

So far, it's been pretty successful.

The NY Post has pictured de Blasio in an orange jump suit on its front cover while the Daily News has hammered de Blasio daily for alleged corruption and malfeasance.

A Team De Blasio campaign lawyer blasted the Sugarman report over the weekend, claiming it was a political hit job and completely misconstrued (or misunderstood) campaign finance law and de Blasio followed that up on Monday by publicly questioning the motivation behind the leak of the report.

De Blasio continued that defense on WNYC today:

ALBANY -- New York City Mayor Bill de Blasio on Friday defended his fundraising efforts to help upstate Democratic Senate candidates in 2014 and questioned the motivation behind the state Board of Elections probe.

De Blasio’s team is under fire for using the county committees in Ulster, Putnam and Monroe counties to pump more money into the Senate candidates' elections.

"Everything was done very carefully, meticulously, with legal guidance – all along the way and consistent with what so many other people have done," de Blasio said on WNYC-AM in Manhattan. "That’s why I’m saying: It’s very interesting that now it becomes subject of these questions, and I think we have to figure out some of the motivations behind this."

Federal and state prosecutors are investigating a report from state Board of Elections chief enforcement counsel Risa Sugarman that charged de Blasio and his team skirted campaign-finance laws by getting donors to contribute to the county committees. Then the committees sent the money directly to four candidates who ultimately lost: then-Sens. Ted O'Brien of Irondequoit, Monroe County; Terry Gipson of Rhinebeck, Dutchess County, and Cecilia Tkaczyk of Schenectady County, as well as Justin Wagner, an attorney from Croton, Westchester County.

In all, more than $1 million in total contributions from New York City-based unions and political donors went to the three county committees in the weeks prior to the 2014 elections.

Sugarman is a former aide to Gov. Andrew Cuomo, who has been in a public battle with de Blasio over myriad issues between the city and the state.

De Blasio stopped short of pointing the finger at Cuomo over the election probe.

"I think people should dig into this question," de Blasio said. "I think they should ask the question of how does a state Board of Elections official single us out, apparently not understanding how state election law works, and then leaked their document to the media – which in and of itself may be a violation of law. I think that needs to be looked at. I find it telling."

Cuomo has not commented about the election probe.

Other observers have noted the selectivity of the criminal referral, pointing out how other politicians use similar tactics to the ones Team De Blasio used in 2014 (like former NYC mayor, Michael Bloomberg in various bids to aid his state Senate Republican allies, for example.)

In any event, de Blasio is the one facing the firestorm in the press, which is an interesting thing, because it all just sort popped up out of nowhere over the past two weeks, almost as if it were engineered by somebody with a grievance against the mayor.

Gee, I wonder who that guy with the grievance against the mayor would be?

Oh, right...  

Funny thing is, this may not be the only criminal investigation that Cuomo is using to settle scores.

The Syracuse paper reported the following this morning:

SYRACUSE, N.Y. Saying he does not intend to assist a "fishing expedition,'' an Onondaga County judge this week delivered a setback to District Attorney William Fitzpatrick and his efforts to investigate alleged wrongdoing at Syracuse City Hall.
County Court Judge Walter Hafner Jr. blocked Fitzpatrick's subpoena for emails, notes, drafts and other communications produced by Syracuse city lawyers, saying the DA made "no showing'' that the documents were part of any crime or fraud.

Hafner's decision was contained in a sealed order issued Tuesday, a copy of which was reviewed by

Fitzpatrick said he will submit a motion asking the judge to reconsider, and will appeal the decision if Hafner continues to block the subpoena.

The district attorney, who criticized Syracuse Mayor Stephanie Miner for bringing a lawsuit against COR Development Co., the Inner Harbor developer, has launched an investigation into Miner and some of her political allies.

Among other things, Fitzpatrick is looking for evidence of alleged wrongdoing connected with what he called "phony affidavits'' filed in the lawsuit by two city councilors who are friendly with Miner.
But in his ruling to decide what documents city hall must turn over, Hafner said Fitzpatrick has not produced evidence of wrongdoing to justify his demand to see communications between city lawyers and other city officials. Most of those records are protected from disclosure by attorney-client privilege, the judge wrote.

In response to the district attorney's request that Hafner review all the city hall materials privately to determine whether any should be forwarded to the grand jury, Hafner called that proposal "patently absurd.''

"It is not . . . the function of this court to assist the district attorney in a fishing expedition,'' Hafner wrote."

Fitzpatrick is an old Cuomo crony, having worked as an apologist for the governor on the Moreland Commission. State of Politics has a little more on the Cuomo-Fitzpatrick connection here. 

Miner, on the other hand, used to be friendly with Cuomo, having worked as the co-chair of the state Democratic Party, but has been on the outs with Cuomo since she publicly criticized him over policy.

So it certainly is interesting to see a Cuomo crony and apologist like Fitzpatrick go on what a judge just described as a "fishing expedition" to see what he can unearth around a real estate development gone bad to use against a Cuomo enemy, Stephanie Miner.

Does this constitute a pattern of Cuomo's using the criminal justice system to punish enemies?

Perhaps not a pattern, but certainly it gives an observer reason for pause.

Or, as Arsenio Hall used to say, "Things that make you go 'Hmmmm...'"

The other instance I can think of where a Cuomo enemy may have been punished via criminal investigation came as the former head of PEF, Susan Kent, publicly called for a primary candidate to challenge Andrew Cuomo, then supported Zephyr Teachout when the Fordham law professor announced a run.

U.S. Attorney Preet Bharara of Manhattan is investigating a former Public Employees Federation council leader who was accused of using a union debit card to run up thousands of dollars in questionable purchases at stores and restaurants.

The investigation, which is being led by the U.S. Department of Labor, was revealed last month when a federal grand jury subpoena was sent to the Rockland County PEF union formerly headed by Deborah J. Lee, whose purchases first drew scrutiny within her union's ranks two years ago.

The probe by Bharara's office comes as first-term PEF President Susan Kent, who faced criticism for her handling of Lee's case, is running for re-election to the top post in the state's second-largest public labor union.

Lee, 65, was cleared of wrongdoing last year by a union ethics panel appointed by Kent. The internal review rankled many PEF executive board members who accused Kent of appointing political allies to the ethics panel. The decision was later overturned by PEF's executive board, which voted to remove Lee from their union for at least three years.

Susan Kent lost a re-election bid and no longer runs PEF.

The man who beat her, Wayne Spence, has adopted a more conciliatory tone toward Cuomo.

Now I'm not an expert on PEF internal politics and I'm certainly not out to defend Deborah Lee for improper purchases on her expense account.

Nor am I saying Cuomo was definitely behind the Lee matter and the internecine battles that caused within PEF.

I just think it's interesting that Kent, after a publicly hostile contract battle with Cuomo and subsequent support of a primary challenger against him, got mired in this ethics investigation that helped to bring her down and bring into power a union head more friendly to the governor.

It surely is interesting how some of Cuomo enemies either face criminal investigations themselves or have criminal investigations of people around them that undercut their power.

De Blasio for sure, Miner almost for sure, Kent perhaps...

And of course the whole idea behind empaneling the Moreland Commission was to dig up dirt on his fellow Albany pols, then use it against them to get what he wanted out of them.

No wonder Michael Mulgrew and the UFT bend over backwards to remain on good terms with Cuomo (and yet nonetheless check the office for bugs just in case.)

You don't want to end up on Cuomo's shit list because the next thing you know, the people around you are getting subpoenas and somebody's leaking damaging information about you to the press.

Wednesday, April 27, 2016

Cuomo's Game Of Thrones: Using The BOE "Report" To Destroy De Blasio

I swear to you I had no plans to come out of retirement and write anything more at Perdido Street School.

But the attacks we've seen the past few days on Bill de Blasio stemming from a Board of Elections "report" that claims felonious activities around de Blasio's campaign fundraising and financing have pulled me back, at least temporarily, because I do not think these attacks should go by without comment.

When the story first leaked that a Board of Elections report alleging felonious activity around Bill de Blasio's fundraising had been sent along to Manhattan D.A Cyrus Vance for further investigation, it came on the heels of the scandal around two de Blasio fundraisers and potential quid pro quo activities with the NYPD.  For days, de Blasio had been getting beaten up publicly around that scandal, as well as one around a Lower East Side nursing home that now is to become luxury condos, so when the leak about the BOE report came, it seemed credible that investigations into de Blasio's fundraising were spiraling into something very big and very potentially damaging to the mayor and his team.

I wrote as much to James Eterno at ICEUFT blog, who posted that comment, but noted this as well:

This was a Cuomo appointee behind the January 4th memo that says felonies were committed by the De Blasio team in their fundraising, so of course it's a political attack from Cuomo.

By Monday, after a lawyer representing de Blasio's campaign apparatus fired back at the BOE claiming a political attack over what he claimed was not illegal activity, I started to see a conspiracy emanating from the governor:

The takeaway: You have a Cuomo appointee writing up a memo claiming felonies committed in de Blasio fundraising, then somebody leaking that memo to the press (as well the news of the Bharara and Vance investigations based upon the memo) so that the tabloids convict the mayor of criminality long before anybody knows if the claims in the memo are fair, accurate or legally sound.

Nice work from Cuomo.

Message: "Don't fuck with me, Billy Boy.  I'll destroy you."

Later, when I saw Fred Dicker's column that with the mayor in legal jeopardy over his fundraising, Cuomo was again reaching out to potential de Blasio challengers for a primary next year, I wrote the following to James which he again posted at ICEUFT blog:

If you read the NY Times piece, it's pretty clear that some of the commissioners on the BOE believe the board has been used as an attack vehicle in the past for Cuomo.  There's one current commissioner on record saying just that.

That makes me wonder, did Cuomo gin this up specifically to destroy BdB, have his hack at the BOE (who has a habit of including Cuomo aides in her email chain despite being "independent" of the Cuomo admin) write it up as a criminal referral, then leak the report exactly as the NYPD scandal was happening in order to do maximum damage to de Blasio.

Knowing what we know with previous interference with the BOE as well as every commission he's ever created (Moreland, LIPA, education, etc.), I would have to say that this is probably another Cuomo machination and so far, it's been pretty effective.

This was a masterful political attack if indeed it was engineered by Cuomo.

Regardless of how the legal inquiries into de Blasio and his team turn out, the political damage is a done deal - the NY Post has already convicted de Blasio of corruption and pictured him in an orange jump suit and handcuffs and the Daily News has jumped on board the "De Blasio's A Crook!" express, hammering the mayor daily with corruption stories.

De Blasio has got an election coming up in a year and a half - this is the very moment when he needs to be ratcheting up his fundraising, amassing a sizeable war chest (a la Andrew Cuomo and his re-election campaign) and scaring off any potential challengers with that.

But with de Blasio under scrutiny for fundraising, it's certainly going to be difficult for him to raise funds, and the political fallout has already been considerable - his poll numbers dropped on the NYPD scandal alone.

What will they look like after daily photos of de Blasio in an orange jump suit on the cover of the NY Post?

I'm no political scientist or polling expert, but the phrase "in the toilet" comes to mind when I think about what de Blasio's approval is going to look like in the next slate of polls to come out post-BOE report leak.

As of yesterday, the feeling I got was, de Blasio was finished, if not legally at least politically, and Cuomo was ascendant, having used his hack at the Board of Elections and a happily compliant media to finish off his former "friend."

All must be well on the second floor, in Cuomo's darkened room, as he contemplated the work he had done to settle his beef with de Blasio.

And then this story came this morning:

A former top aide to Governor Andrew Cuomo was included on a July 2014 memo that outlined a coordinated fundraising effort to help Democratic candidates for the state Senate, and on subsequent email updates about that effort, according to sources who have seen those documents.

The coordinated campaign — spearheaded by Mayor Bill de Blasio and his allies — is now the subject of a criminal inquiry, following a referral by Risa Sugarman, the chief enforcement counsel at the New York State Board of Elections, who was appointed by Cuomo.

The July 2014 memo, written by campaign lawyer Laurence Laufer, who was retained to represent some of the parties involved in the effort, detailed how the coordinated campaign would be structured and run, and how it intended to comply with existing state election law.

The recipients of the memo included Joe Percoco, a longtime Cuomo loyalist who served as a top aide to the governor until last year, and the state Democratic Party Committee, which is effectively controlled by the governor.

The memo was also sent to top de Blasio aides, the Senate Democratic Campaign Committee, representatives from key labor unions and consulting firms that were working on the State Senate races, many of whom are now the subject of an investigation by the Manhattan district attorney’s office. That investigation followed a criminal referral from Sugarman in January, which alleged that the group had illegally funneled donations to individual Senate candidates through county Democratic committees, which are not bound by the same strict donation limits.

Percoco and the state party were not included in that referral.

Sources familiar with the coordinated fundraising effort said Percoco, who took leave from his administration position to work on the Cuomo re-election campaign in 2014, served as a liaison between the Cuomo campaign and the coordinated effort, and was involved with, and aware of, the efforts to set up the arrangement.
Percoco routinely communicated with members of the coordinated effort and the state Democratic party in the months leading up to the November elections about how to spend the money the coalition raised.

So wait, Cuomo's right hand man, Joe Percoco, was a party to the alleged felonious campaign financing activity but wasn't included in the criminal referral that Cuomo's appointee at the Board of Election, Risa Sugarman, sent along to the Manhattan D.A.?

That is a curious thing, especially since we know that Percoco was closer than close to Andrew Cuomo - described by Ken Lovett at the Daily News as "Gov. Cuomo’s closest and perhaps most loyal aide."

You can be sure if Percoco knew of and was party to the campaign financing scheme Team de Blasio was engaging in with the state Senate races, then Cuomo was aware of it too.  And then there's the state Democratic Party - controlled by Cuomo - also in on the plan.

Why wasn't that campaign financing a problem at time but suddenly is now?  And why is it only a problem for those connected to de Blasio but not Percoco, Cuomo's "closest and perhaps most loyal" former aide, or the state Democratic Party?

This story gets more curious by the day, especially since it's a Cuomo appointee at the supposedly "independent" Board of Elections (an appointee who has kept the governor's office "in the loop" via email in the past, btw) writing that report up and sending it along for a criminal referral.

We also have this problem: Team de Blasio's campaign finance plan doesn't appear to be illegal and it appears to be a rather well-worn plan followed by other pols in the state (including former NYC Mayor Mike Bloomberg), but de Blasio is the only one being investigated for this kind of activity.

That is curious a thing - I wonder if there being a Cuomo appointee behind the criminal referral to the Manhattan D.A. had anything to do with the selectivity of the investigation?

Jim Dwyer wondered something similar in the NY Times today:

Now, bewilderingly, Mayor Bill de Blasio and his crew are said to be in an exotic pile of legal trouble faced by virtually no other politicians who have done just about the same thing.

In 2014, the mayor and allies raised millions of dollars in hopes of giving control of the State Senate to the Democrats. By law, there was a limit of $10,300 that an individual could give that year to a campaign. But the same person could give about $100,000 to larger political organizations, like state and county party committees.

Those committees can spend away on behalf of the candidates, but everyone has to pretend not to coordinate efforts to get around the limits.

A scorching report by Risa S. Sugarman, chief enforcement officer for the State Board of Elections, said the de Blasio team had committed “willful and flagrant” violations of the laws by using those committees. She sent it on to the Manhattan district attorney.

Her document is remarkably assiduous in places, and filled with flagrant, or at least gaping, holes in others.

For instance, Ms. Sugarman managed not to notice that the State Democratic Committee received $766,000 in 12 days in October 2014, much of it from organizations and people linked to Mr. de Blasio, and promptly spent it on a number of the same vendors and on behalf of the same candidates, according to reports filed with the elections board. Not a word appears in her report about the money that passed through that committee. As it happens, that committee is effectively controlled by the governor, Andrew M. Cuomo, who nominated her for her job.

Why was the state committee left out of such a meticulous report?

“I don’t comment on confidential memos,” Ms. Sugarman said.

If we are going to criminalize politics, why spare one committee from the opprobrium heaped on others?

“All my investigations and anything that goes on within my division is confidential,” Ms. Sugarman said.

Dwyer goes on to point out how Michael Bloomberg used a similar scheme to elect Republicans to the state Senate that Sugarman claims is evidence of de Blasio breaking the law to elect Dems to the state Senate:

Mr. de Blasio’s predecessor as mayor, Michael R. Bloomberg, sent $75,000 to the New York State Senate Republican Campaign Committee during the last days before a special election on Long Island in 2007. The check was delivered on Jan. 26, for an election held 11 days later. The money supported a single Republican candidate, in one campaign, with a donation many times the limit Mr. Bloomberg would have been permitted if he had given the money directly to the campaign.

Mr. Bloomberg spent heavily in similar fashion during his time as mayor to prop up the Republican Senate majority, using his own money. Mr. de Blasio has spent heavily in hopes of attaining a Democratic majority, though he has taken the precaution of using other people’s money.
If it seems strange that Mr. de Blasio is now on the griddle when so many others could just as easily have provided fixings for the same meal, it’s important to remember that the corrupting force of campaign money was part of the work of the Moreland Commission in 2013 and 2014.

Would that be the same Moreland Commission that Cuomo shut down in return for a budget deal even though it appeared to have found incriminating evidence on Shelly Silver (who later got convicted, in part, on evidence unearthed by the Moreland Commission?)

It would indeed be just that commission.

I would add that Bloomberg seemingly came right up to the line of campaign finance law with his relationship with the Independence Party as well, a story the Daily News covered back in 2012.

Bloomberg needed the Independence Party ballot line to ensure victory in 2001 and to help out in his 2005 and 2009 races for mayor.

In 2001, Bloomberg got on the Independence Party ballot line and received 59,000 votes - "almost twice the slim margin of victory that put him into City Hall."

In 2005, the Independence Party ballot line gave him 75,000 votes - less than he won by, but a help nonetheless.

Same thing happened in 2009, when Bloomberg got 150,000 votes.

What did the Independence Party get in return for the ballot line?

Money - and lots of it:

$400,000 to the personal accounts of Independence Party figures.
$650,000 in charitable contributions to charities run and/or affiliated with Independence Party figures.
$12.75 million in tax breaks to a charity run by an Independence Party figure.
$1.35 million laundered through the fundraising account of the Independence Party chairman, which the Independence Party used to re-elect three Republican state senators.  The Independence Party chairman paid himself $60,000 for enabling that money laundering scheme by the mayor.
$1.2 million to Independence Party operatives to intimidate voters at the polls - $1.1 million of which was "stolen" by John Haggerty.

John Haggerty was a Republican political consultant hired by Bloomberg for the 2009 race.

Haggerty was eventually convicted of stealing $1.1 million of Bloomberg's money, but his trial laid bare the scheming and games Bloomberg played with that dough, including having money seemingly earmarked for one purpose being used for another instead.

It was all quite unseemly.

As Bill Hammond wrote in the Daily News during the Haggerty trial:

Regardless of the outcome of Haggerty's trial, Bloomberg - who took the stand yesterday - doesn't come off smelling like a rose, either.  According to the prosecution's version of events - which Bloomberg confirmed under oath - the mayor and his campaign knowingly and intentionally exploited loopholes in the state's campaign finance laws to keep the public in the dark about some of their seamier tactics.

If what they did wasn't against the law, it sure as heck ought to be.

But Haggerty was the one convicted for a crime while Bloomberg was the "victim" - even though he was using Haggerty to exploit campaign finance law.

And guess who the Manhattan D.A. behind the indictment and eventual conviction of Haggerty was.

That's right - Cyrus Vance, the guy looking into de Basio now:

The indictment culminates a politically sensitive investigation by Mr. Vance. Before the indictment, there was buzz in the political world about the unusual way that the mayor’s campaign directed the payment, using personal checks from Mr. Bloomberg rather than the campaign’s official account.
Some lawyers and political analysts say the case could prove embarrassing to the mayor, in shining an unwelcome spotlight on one of his least favorite topics: how he spends his own money.

“The mayor filed a statement with the Board of Elections that he would only make campaign expenditures through his campaign committee,” said one lawyer familiar with the case who spoke on the condition of anonymity because of the investigation. “But what might have happened here is instead of doing that, he gave personal funds to political parties to make political expenditures for him, and that could be stretching the rules.”

Mr. Vance emphasized that his office had found “no criminal misconduct” on the part of the mayor or his campaign.

Bloomberg used some funky accounting and check writing to skirt the rules, but Vance found "no criminal misconduct."

How open-minded of the Manhattan DA.

You have to wonder, will Bill de Blasio will get the same open-mindedness from Mr. Vance?

In any case, the point around the BOE report leak on de Blasio is this:

De Blasio was playing the same dirty game every other politician in this state plays around campaign finance - including his predecessor Michael Bloomberg and his "friend" in Albany, Andrew Cuomo (who took $250K from politically connected men in the town of Kiryas Joel the same weekend he vetoed a bill those politically connected Kiryas Joel men wanted vetoed.)

Only de Blasio and the people around him are being called to account for this.

That's not defend the process here - just to point out the hypocrisy of only de Blasio going down for it.

To make matters worse, the criminal referral to Vance by the Cuomo appointee Sugarman deliberately leaves out Cuomo's "closest and most loyal aide," even though he was a party to the scheme, and conveniently leaves out how Team de Blasio used the same scheme to send money to the Cuomo-controlled state Democratic Party.

This is all very complex and it will likely go over the heads of most New Yorkers busy trying to live their lives, something which Cuomo knows and counts on.

Cuomo also counts on the tabloids to do his bidding for him, running pictures of de Blasio in handcuffs and detailing every act from Team de Blasio as if it were a criminal act (see this NY Post piece hammering de Blasio for sending $50K to state Senate candidate Todd Kaminsky days before a special election - a similar act to Bloomberg sending $75K to his candidate in a special election in 2007 that elicited no concern from the Posties.)

The media has dutifully complied with multiple stories daily about de Blasio's alleged criminality.

The political damage to de Blasio is enormous and perhaps mortal.

That was exactly what Cuomo wanted out of all of this.

But sometimes we get more than we want out of things, and while Cuomo has gotten the headlines convicting de Blasio of corruption before any charges are even filed, he may also get something he didn't count on - scrutiny for himself.

Preet Bharara has warned him publicly before about tampering with the Moreland Commission investigations.

You have to wonder what he makes of all this - the BOE report written up by a Cuomo appointee that ignores Cuomo connections to the alleged felonies, the leak of that report to do maximum damage to its target, Bill de Blasio?

If Cuomo's appointee, Risa Sugarman, is right that felonies were committed by Team De Blasio in their financing schemes, why weren't all the people and entities involved referred to the Manhattan D.A. for investigation?  How is it that Cuomo's ties were conveniently ignored and his loyal aide, Joe Percoco, and the Cuomo-controlled state Democratic Party sheltered from scrutiny?

If this sounds a bit like deja vu from the Moreland days, when the Cuomo administration was using the Moreland Commission to investigate others but steering it away from scrutinizing itself (and its donors), you'd be right about that.

It takes a certain kind of chutzpah to use an entity in the regulatory apparatus - in this case the Board of Elections - as a vehicle for a political attack after you've been warned about similar such actions in the past.

It also is a crime.

Cuomo's had his way for the first days after the leak of the report and the criminal referral to the Manhattan DA.

But now as it becomes pretty clear that his fingerprints are all over the BOE "report" and leak and, kinda just like with Moreland, he seems to have engineered it such that he and his people would avoid scrutiny even as he used the legal and regulatory apparatus of the state to attack his political enemies, you have to ask yourself, what will Preet do about that?

Last week, Bharara warned that he's got his sights set on executive branches of government in this state as well as the legislature.

That was taken as a direct warning to de Blasio that Preet's got him in his sights.

But that warning may have also been sent to another executive branch member, this one with a penchant for using commissions and regulatory bodies as political attack weapons while excluding himself and his allies from their scrutiny.

Cynics around the Internet think Bharara has been told Cuomo is off limits by the Obama administration, that they don't want to see a third consecutive Democratic governor go down in ethical flames in New York.

That may be so - it certainly appeared that way when Bharara gave Cuomo a clean bill of health around the Moreland tampering right before Cuomo was set to issue his State of the State/budget address in January.

So maybe Cuomo knows he's got no worries here, that his protectors in Washington will ensure he can act with impunity - take bribes from Kiryas Joel connections and give them a veto in return, for example, or conspire to use the BOE to destroy his enemy de Blasio - and nothing will befall him.

He may be right about that.

Given how Shelly Silver, Dean Skelos and now Bill de Blasio all got mired in corruption investigations (with Silver and Skelos getting convicted) while Cuomo rides high and clear from the mire, well, that is something isn't it?

Game of Thrones indeed.

You win or you die.