The eight-week bribery trial of ex-Cuomo administration aide Joseph Percoco presented a complex case that almost naturally ended with a complex jury verdict.
The eight-week trial on bribery-related charges—in which Percoco and three businessmen were the defendants—often cast the culture of New York state politics in an unflattering light.
Percoco, once regarded as the right-hand man to Gov. Andrew Cuomo, was convicted on Tuesday of two counts of conspiracy to commit honest service wire fraud and solicitation of bribes, but was found not guilty of soliciting bribes, extortion under color of official right and a related conspiracy charge.
He faces up to 50 years in prison, according to the U.S. Attorney’s Office.
Percoco—who according to trial testimony has long been close with the Cuomo family, beginning with the current governor’s father, Gov. Mario Cuomo—was accused of taking part in a pay-to-play scheme in which he allegedly used his position to help executives whose companies had business before the state obtain government contracts.
Cuomo, a Democrat seeking election this year to a third term—and who is widely rumored to be considering a run for the White House in 2020—was not accused of any wrongdoing in the schemes.
Percoco stood trial alongside Peter Galbraith Kelly Jr., a former executive for Competitive Power Ventures, which sought a power purchase agreement with the state for its power plant in Orange County; and former COR Development executives Steven Aiello and Joseph Gerardi.
The COR executives were accused of funneling $35,000 in bribes to Percoco for his help in securing contracts for projects in the Syracuse area and Kelly was accused of setting up a plum “low show” job for Percoco’s wife as an education consultant for CPV that paid $90,000 per year.
With regard to the counts against Kelly, the jury deadlocked on charges of paying bribes and conspiracy to commit honest services wire fraud, and U.S. District Judge Valerie Caproni of the Southern District of New York, who presided over the case, declared a mistrial on both counts.
Gerardi was found not guilty on all counts.
Aiello was found not guilty of paying bribes and making false statements, but was found guilty of conspiracy to commit honest services wire fraud.
The verdict comes after what appeared to be intense deliberations among the jury of five men and seven women, which issued two notes through the deliberations stating that they had deadlocked. One day early in deliberations, three jurors asked to be dismissed from the case.
Assistant U.S. Attorneys Janis Echenberg, Robert Boone, David Zhou and Matthew Podolsky handled the prosecution of the case.
In a statement released after the verdict, Interim U.S. Attorney Geoffrey Berman of the Southern District of New York said that Percoco was convicted of taking bribes and for selling a “sacred obligation to honestly and faithfully serve the citizens of New York.”
“As every schoolchild knows, but he corruptly chose to disregard, government officials who sell their influence to select insiders violate the basic tenets of a democracy,” Berman said.
The U.S. Attorney’s Office did not respond to a request to comment on whether or not it would retry Kelly.
Percoco is scheduled to be sentenced on June 11 and Aiello is scheduled to be sentenced on June 14.
Cuomo has been silent about his top aide’s indictment and, when asked by reporters, he has said he’d let the judicial process take its course before commenting. Following the verdict, though, his office issued a statement in which he said there is “no tolerance of a violation of the public trust.”
“The verdict demonstrated that these ideals have been violated by someone I knew for a long time,” Cuomo said. “That is personally painful; however, we must learn from what happened and put additional safeguards in place to secure the public trust. Anything less is unacceptable.”
Schulte Roth & Zabel partner Barry Bohrer, who represented Percoco, said the defense found an inconsistency in the jury’s verdict and that it is reviewing its appellate options.
“It was a difficult time and place to be trying a case involving Albany politics, there is no question about that,” Bohrer said. “We think that it was a much closer case than some were led to believe and I think the jury’s verdict is a reflection of that.”
Dennis Vacco, former New York attorney general who is now with the Buffalo-based Lippes Mathias Wexler Friedman and who followed the case, said that, for sentencing in the case, it is likely that the government will seek to base the loss valuation in the case on the government contracts procured in the schemes, rather than the roughly $300,000 that Percoco received.
Vacco also said an interesting wrinkle in the verdict is the fact that they deadlocked on whether Kelly was guilty of the counts against him regarding the low-show job for Percoco’s wife, but that Percoco was convicted of the same honest services wire fraud conspiracy for which Kelly was charged. The inconsistency appears to leave a “ripe issue for appeal,” Vacco said.
“It’s another interesting twist that will give the defense team a lot to think about,” Vacco said.
Throughout the case, jurors heard testimony that showed a darker side of dealmaking in state government that included a pricey fishing trip and a fundraiser in a garage full of Corvettes—a car for which Cuomo’s affinity is known, according to trial testimony—that resulted in a $125,000 in campaign donations from COR that was split into five chunks and filtered through LLCs without COR in the name.
Much of the drama in the case occurred during the testimony of Todd Howe, the government’s star witness a former lobbyist for Whiteman Osterman & Hanna whose friendship with Percoco goes back decades, when the two men worked on the campaign for Gov. Mario Cuomo, Andrew Cuomo’s father.
As part of his cooperation agreement with the government, Howe pleaded guilty to eight counts related to the alleged pay-to-play schemes.
In addition to providing details about the schemes and his own role in facilitating meetings between Percoco and his co-defendants, Howe testified that Percoco continued using his state government office while he worked for the re-election campaign and that Percoco would call state employees while he was working for the re-election campaign.
The prosecution also relied heavily in the case on the colorful emails—often laden with code words and private jokes«that circulated among Percoco, Howe and the trial’s co-defendants. One of those code words, according to prosecutors, was “ziti” (sometimes spelled “zitti”)—a nod to a quote from the HBO television series “The Sopranos”—which stood for alleged bribe money.
Prosecutors said the emails made it appear that Percoco, Howe and Percoco’s co-defendants were engaging in a criminal conspiracy.
In emails, which made up the bulk of the government’s exhibits in the case, Howe and Percoco jokingly referred to each other as “Herb,” a reference to Herb London, who was defeated in the 1990 gubernatorial election as the Conservative Party candidate
The evidence showed they also made cracks about Kelly’s weight, referring to him as “fatso” and calling the arrangement “Operation Fat Man.”
In the prosecution’s summation, Zhou portrayed the language used in the emails as the speech of criminals rather than public servants.
For their part, the defense attorneys put their efforts into eroding the credibility of Howe, focusing on his myriad financial and legal troubles that includes a past wire fraud conviction and a slew of nonpayment lawsuits from mortgage lenders,
Howe was arrested on Feb. 9 after admitting on the stand that he had neglected to disclose his past wire fraud conviction while filling out an application for disability insurance in 2014 and that he had fraudulently contested the purchase of a hotel room at the Waldorf Astoria in Manhattan, apparently in violation of his cooperation agreement with the government. Key testimony in the case also came from Linda Lacewell, Cuomo’s chief of staff, who said that Percoco continued to use his executive chambers office in Manhattan while he was managing Cuomo’s 2014 re-election bid and not working in state government.
Assembly Speaker Carl Heastie, when speaking with reporters in Albany regarding the verdict, made no pledges that the verdict would inspire calls for new ethics legislation, saying that, while there “always seems to be a thirst for a new bill” the counts against the defendants in which the jury found them guilty were already against the law.
“When there’s a verdict that says there’s a violation of the public trust, it’s a tough day in Albany,” Heastie said.
But state Sen. John DeFrancisco, a Syracuse Republican who is running for governor, said the verdict shows that there should be a “change at the top” and that it should be a catalyst for reforms such as giving the state comptroller more oversight, increasing oversight on proposed economic development contracts and limiting the powers of the governor.
“The Senate has to reject every single additional attempt for the governor to be able to do what he wants to do when he wants to do it, whether right or wrong or legal or illegal,” DeFrancisco said.
— Josefa Velasquez contributed to this article.