Criminal complaint puts cloud over Buffalo Billion investments

For Gov. Andrew Cuomo, a once-touted initiative may now become a topic to avoid.

With company executives from LPCiminelli wrapped up in the federal indictment that rocked the state Thursday morning, uncertainty has crept in on the momentum that has been building in the region around the many development projects, both big and small, that have been directly funded or indirectly influenced by the Buffalo Billion, Cuomo’s marquis economic development program.

Western New York politicians, almost unanimously, have pointed to the program as a force for good that has helped to change the image and the fortunes of the long-struggling region. But now, as Louis Ciminelli, the CEO of LPCiminelli, and two other executives have been named as defendants, charged by U.S. Attorney Preet Bharara’s office in a bid-rigging and fraud scheme involving state funded projects, a shadow has been cast over the entire program, calling into question whether the development momentum will continue or falter.

The charges are tied directly to the Riverbend project, a 1 million-square-foot, state-owned manufacturing facility, where SolarCity is slated to begin making solar panels sometime next year.

Assemblywoman Crystal Peoples-Stokes, one of many strong advocates of the Buffalo Billion program in the Legislature, said she was disappointed that the investigation was tied to the program, but wasn’t sure if it would have any effect on the positive image the city has been projecting in recent years.

“I hope that it has no impact at all,” Peoples-Stokes, said, reached by phone from New York City. “I really do, because I like the way the economy’s been going and I don’t want to see it stop.”

Indeed, the city’s image and economy have both improved in recent years, with much of the credit assigned by politicians, business people and some analysts and economists to the injection of capital brought on by the Cuomo initiative. Newspapers from around the nation and the world, from the Washington Post to the Guardian, have remarked at how surprisingly pleasant the “new Buffalo” is, flying in the face of the frozen-over, post- industrial wasteland so often portrayed in years past.

While the Western New York economy still lags behind the rest of the country, it has been moving in a positive direction. Job growth has been steady and unemployment has fallen to the lowest numbers in about a decade.

Assemblyman Sean Ryan held a press availability at his Buffalo offices late in the afternoon, where he told reporters he finds the allegations “disturbing,” but that he believes the alleged crimes and ensuing legal proceedings should be viewed as separate from the overall program.

“Let’s remember, there’s no allegations or charges connected to the overall value of these projects,” Ryan said. “SolarCity and the rest of the Buffalo Billion projects are good initiatives and good for our economy.”

The only place where the alleged corruption crept in was in the building portion of the Riverbend project. The economic evaluation of the project and design portion were based on solid research and information, he said.

“The corruption only began during the execution phase,“ Ryan said.

Later, in a conversation with City & State, Ryan reiterated that, not only are the charges limited to a singular phase in the Riverbend site process, but that there are many other projects funded by Buffalo Billion money that have been working to help the region.

“It would be a real shame if political opportunists used this to cast aspersions on the entire program,” Ryan said. “It’s really hard to argue that Buffalo hasn’t advanced tremendously as a result of the Buffalo Billion and the real specific attention the governor has put on Buffalo and Erie County.”

And, Ryan argued, with this indictment, other area developers, who complained that the RFP process was predetermined on the Riverbend project, may now feel more confident going forward that their bids will be assessed fairly.

“What the contractors are striving for is a clear and clean and open bidding process,” Ryan said.

While Western New York lawmakers may try and separate the corruption from the project, it may be a much tougher task for Cuomo to make that argument to the entire state legislature and the media, where he has already faced criticism over whether the investment was a wise use of money.  

Cuomo may also be hesitant to speak too loudly touting the program going forward, even though U.S. Attorney Preet Bharara was clear to say that the governor was not involved in any wrongdoing related to the Buffalo Billion. In a statement from his office Cuomo expressed disappointment, saying he will wait for the legal process to play out and they will continue to cooperate with investigators.

“I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone,” he said.

At least one Buffalo area player with skin in the game voiced criticism of the criminal complaint, saying the work of the U.S. Attorney could temper some of the momentum built through the state funding in recent years.

Paul Brown, president of the Buffalo Building Trades, called Bharara’s charges “ridiculous” and a “witch hunt” when reached by phone. He said the prosecution has already caused the state, along with some developers and contractors, to slow projects for fear that they may become a target of federal prosecutors.

“He’s probably going to cost Western New York, if not the whole state of New York, thousands of jobs, because he just wants to get the governor,” Brown said. “That’s it as far as I’m concerned.”