Suppression of Buffalo Billion Spending Records

Gov. Andrew Cuomo wants everyone to know he’s spending $1 billion to revitalize the Western New York economy. But the bureaucrats he’s charged with managing the Buffalo Billion are refusing to account for how they are spending $855 million earmarked for the program’s big-ticket projects.

Three developers, all significant contributors to Cuomo’s gubernatorial campaign, have been selected to build and equip facilities that will house companies recruited to set up shop in Buffalo.

But the state-affiliated non-profit corporation managing that work has refused to release contracts and other documents to Investigative Post that detail, among other things, how the contractors were selected and the amount they’re getting paid. The Fort Schuyler Management Corp. contends it doesn’t have to abide by the Freedom of Information Law, a point disputed by the state’s open government director. 

Meanwhile, a second state-affiliated non-profit heavily censored the contracts of five companies that have been recruited to establish operations in Western New York using Buffalo Billion funds. One confidential source previously provided Investigative Post copies of two of the contracts, one of which turned out to be a draft. But when I requested updated versions of all five agreements from the SUNY Research Foundationthe documents I received were so heavily redacted that information Cuomo had discussed at press conferences had been removed.

These two state entities, who work closely with Alain Kaloyeros, the Albany nanotech guru who oversees the Buffalo Billion program, are attempting to treat the $855 million earmarked for the three big-ticket projects as a state secret.

Yes, we know from Cuomo’s press conferences how much money the state and companies have promised to invest and how many jobs will be created. But few additional financial details have been released.

I have never, in my nearly four decades as a reporter, encountered such heavy handed tactics to thwart the release of information.

FOI requests have not been honored.

Interview requests have gone unanswered.

A story was “leaked” to another news outlet in an apparent attempt to head off the story you are reading now.

And Kaloyeros, who has not hidden his displeasure over my pursuit of documents, sent me an email last month in which he declared he does not “respond to perceived threats and terrorism.”

Let me tell you how this chain of events began.

Unusual developer requirement

Once upon a time, the Empire State Development Corp. oversaw major economic development projects funded by the state. The development corporation’s board is appointed by the governor and subject to the state’s open meetings and freedom of information laws, assuring at least some degree of transparency.

But this being New York, the state of of more than 1,000 authorities, responsibility for major development projects was diffused after Cuomo took office in 2011. And thus the shell game began.

Cuomo wants to take the model used to develop the nanotech industry in Albany and replicate it elsewhere upstate, starting in Buffalo. Accordingly, he has shifted responsibility for spending much of the money Empire State Development might otherwise manage to a trio of entities involved in the Albany effort.

A state university school, in this case, the Albany-based Colleges of Nanoscale Science and Engineering, which is lead by Kaloyeros, heads up the Buffalo Billion initiative. It works with two nonprofit subsidiaries. One, the SUNY Research Foundation, handles research, development and commercialization. The other, the Fort Schuyler Management Corp., manages facility construction and operation.

Fort Schuyler solicited companies in October 2013 to submit their qualifications to develop facilities that have turned out to be a solar panel manufacturing plant near Buffalo’s waterfront that will be operated by SolarCity and a technology hub in Key Center in downtown whose first tenant will be IBM. Cuomo has committed $750 million to the SolarCity project and $55 million to the IBM undertaking.

Something caught my eye in the request for developer qualifications, a requirement that limited the pool of respondents to those based in Buffalo who have been in business for at least 50 years.

Fifty years? That struck me as an awfully long time.

Who would meet such stringent criteria? My preliminary research indicated only one company met the criteria – LP Ciminelli, whose president, Louis Ciminelli, just so happens to be one of Cuomo’s biggest campaign contributors In Western New York. He has contributed $96,500 to Cuomo’s campaign during his two races for governor.

(By way of full disclosure: LP Ciminelli has contributed $12,500 to Investigative Post during our nearly three years in operation.)

I called Kaloyeros to quiz him about the 50-year requirement. What’s the 50 years all about and do you realize only one company appears to qualify?

Kaloyeros insisted the state had no intention of limiting the field to just one candidate and that the 50 year proviso would not be enforced. It turns out some developers interested in the work had squawked to Fort Schuyler, as well, and the 50 year requirement was reduced to 15 years. The bureaucrats chalked it up to a clerical error.

Deletions in documents

Nine companies initially expressed interest in the work. The field was whittled down and, lo and behold, LP Ciminelli was selected for what turned out to be the SolarCity project at Riverbend. McGuire Development was selected for renovations to Key Towers to accommodate IBM.

Unlike LP Ciminelli, McGuire wasn’t a big-time Cuomo contributor, having donated only $2,000 to his campaign four years ago. But last May, three months after being awarded the Buffalo Billion work, McGuire wrote the Cuomo campaign a check for $25,000.

Also unlike LP Ciminelli, and Ciminelli Real Estate Corp.  (more about them later), McGuire officials granted me an interview. President James Dentinger said the donation to Cuomo was “absolutely not” related to the company being awarded work. He also described the selection process as “very vigorous.”

The selection of McGuire and LP Ciminelli was not surprising, considering they are large, accomplished firms. But a confidential source associated with one of the unsuccessful submitters contacted me to question the review process.

I followed up with a call to Kaloyeros, who assured me the selection process was on the up and up and properly documented. I asked for the records and he agreed to provide them. I reached out to Kaloyeros at least three times when I didn’t receive the documents, but I got nothing but the silent treatment.

So, on July 30, I filed a request under the state Freedom of Information Law with the SUNY Research Foundation seeking the documents related to the developer selection process and the contracts involving the companies who had agreed to set up operations here under the Buffalo Billion program.

I waited. And waited.

After a month-and-a-half, an official informed me the Research Foundation would need at least another couple of weeks to respond to my request. I filed an appeal, contending the delay amounted to an effective denial of my request. And what do you know, but the Foundation sent me a response the very next day that included the contracts with the companies who had contracted to set up shop in Buffalo.

Problem was, however, the contracts were heavily redacted – with large sections completely blacked out. I picked up the phone and called Carl Kempf, a $143,850 a year subordinate of Kaloyeros who had sent the documents and asked him why the contracts were so heavily redacted. To protect trade secrets, he said.

I knew better, having seen versions of two of the contracts that had been previously provided by my source. Yes, some of the redactions appeared to be permissible under the FOI Law. But many of the redactions appear to have gone above and beyond what the law allows for.

The redactions were only half the problem, however.

The official runaround

The Research Foundation failed to provide any of the documents I had requested involving the selection of LP Ciminelli and McGuire as developers. I asked Kempf about the omission and he said the Research Foundation did not make the selections and therefore did not have the documents. Rather, he said, the selections were made by Fort Schuyler. Kempf told me if I wanted the documents, I’d have to request them from Fort Schuyler.

While talking with him on the phone I called up the management corporation’s website, which consists of a single page with no contact information. I asked him for the name and contact information of the person I would file a FOI request with. He said he’d have to get back to me. When I didn’t hear back from him, I emailed him and again requested contract info. Again, no response.

Undeterred, I hunted down Fort Schuyler’s 990 form online and obtained the name and phone number of its president, Alicia Dicks, who made $127,086 in 2013.

I called her and left a message. No response.

I called her again. No call back.

I called her a third time. Nothing.

I’m thinking: this is nuts. Am I going to have to file a FOI request with the Research Foundation to get the name and address of Fort Schuyler’s FOI officer?

I called the foundation’s press officer, Peter Taubkin, who made $113,370 in 2013. No return call.

I then called the office of the foundation’s president, Timothy Killeen, who was paid $309,066 last year, and was assured by an aide that Taubkin would get back to me.

He didn’t.

In the meantime, I let the governor’s press operation know what was going on and of my intent to write about it if the records weren’t forthcoming shortly. I received a one-page summary of activity related to the selection process, but none of the documents I requested under FOI.

I also tracked down an email address of Dicks at Fort Schuyler Management Corp. and sent her an FOI request on Nov. 20 seeking assorted documents, including those detailing the developer selection process.

This time I also requested records documenting the selection of LP Ciminelli and Ciminelli Real Estate – separate companies owned by brothers – to build space at the Conventus Building on the Buffalo Niagara Medical Campus to accommodate AMRI, a drug research and development firm recruited with $50 million in Buffalo Billion money. (Paul Ciminelli and his development company have donated $10,500 to Cuomo’s gubernatorial campaigns in recent years and $5,000 to Kathy Hochul, his running mate this year.)

A week after submitting my FOI request, I received a response informing me that Fort Schuyler was a non-profit corporation “not subject to FOIL.” The management corporation said it would get back to me by Dec. 29 regarding anything it might want to voluntarily release.

I was informed as such by – get this – Kempf, the Kaloyeros subordinate who had earlier told me he wasn’t sure who to contact at Fort Schuyler about FOI matters.

Does Fort Schuyler, in fact, have a right to withhold documents because it’s a non-profit?

Absolutely not, said Robert Freeman, executive director of the state Committee on Open Government.

“Courts have held in several instances that related economic development management corporations, despite their corporate status as nonprofits, are covered by the Freedom of Information Law when they serve as extensions of a government agency,” Freeman said.

Attorneys for the Gannett Company – owner of WGRZ, an Investigative Post partner – filed an appeal Friday on our behalf of the Fort Schuyler denial.

Stonewalling continues

SUNY officials haven’t been content to simply stonewall my FOI requests.

In a last-ditch effort to get them to talk, I contacted spokesmen for the SUNY system and Cuomo administration and let them know I was close to publishing. They did not release documents or grant an interview. Instead, they cooperated with The Buffalo News on a story published last Tuesday that portrayed the developer selection process in a favorable light.

Might someone in the state camp have leaked the story in the hopes of heading off mine? Sure looks that way.

And there’s more.

After refusing to talk to me since early this year, Kaloyeros emailed me in early November, upset that I had contacted Cuomo’s press people in an effort to obtain documents.

Kaloyeros’ e-mail began: “I told you once and I told you a million times. We are not political operatives nor do we respond to perceived threats and terrorism.”

Terrorism? Really?

Kaloyeros finally called me last last week, essentially asking if we could kiss and make up. I asked him if he would release the documents and grant me an on-the-record interview. He said “no.” We talked a little more and found little to agree on. He ended the conversation by hanging up on me.

I guess he really doesn’t want to tell me the details of how he’s spending that $855 million.

I’m frustrated with the stonewalling.

Taxpayers should be too. After all, it’s their money.

Jim Heaney is the editor of Investigative Post, a nonprofit investigative reporting center.