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The U.S. Supreme Court on Monday will consider a pair of cases that could make it harder to pursue public corruption prosecutions – bids by an ex-aide to Democratic former New York Governor Andrew Cuomo and a businessman to reverse bribery and fraud convictions.
The justices are set to hear arguments in the appeals by Joseph Percoco and Louis Ciminelli, who were charged in related cases in 2016 as part of a corruption crackdown by federal prosecutors in Manhattan centered on the halls of the state capital of Albany.
The eventual rulings by the justices, expected by the end of June, also will affect three co-defendants charged in corruption and fraud cases during Cuomo’s tenure as governor involving state contracts worth hundreds of millions of dollars.
Rulings favoring the defendants could curtail prosecutors from charging a variety of cases as wire frauds and limit their ability to pursue certain classes of bribery cases, according to Jaimie Nawaday, a former federal prosecutor now working at the Seward & Kissel law firm.
“Prosecutors could face a constriction of their ability to bring charges based on novel and expansive readings of the fraud statutes,” Nawaday said.
The Supreme Court in recent years has hemmed in prosecutors in political corruption cases including a 2020 decision to toss the convictions of two aides to Republican former New Jersey Governor Chris Christie relating to the “Bridgegate” political scandal. The court in 2016 also threw out Republican former Virginia Governor Robert McDonnell’s bribery conviction in another ruling narrowing the types of conduct that can warrant prosecution as corrupt.
The charges against Percoco and Ciminelli were brought in 2016 by then-Manhattan U.S. Attorney Preet Bharara, who also pursued corruption cases against top state lawmakers including former Assembly Speaker Sheldon Silver.
The case Bharara unveiled in 2016 cast a pall over Cuomo’s administration even though he was not charged. Cuomo resigned from office in 2021 in an unrelated sexual harassment scandal.
Percoco, a former Cuomo aide, was convicted in 2018 on bribery-related charges for seeking $315,000 in bribes in exchange for helping two corporate clients of an Albany lobbyist named Todd Howe pursue state benefits and business.
Prosecutors said Percoco referred to the payments as “ziti,” a term for money used by characters in “The Sopranos” mobster TV series. Percoco was sentenced in 2018 to six years in prison.
Howe pleaded guilty and cooperated with investigators. Percoco was convicted alongside an executive at a real estate developer, Steven Aiello, who prosecutors said orchestrated bribes to Percoco.
At the time of the actions at issue, Percoco was no longer serving in government as the governor’s executive deputy secretary but managing Cuomo’s 2014 re-election campaign, a fact his lawyers said meant he could not be convicted of bribery.
His lawyers argue that Percoco’s status as a private citizen meant that his acceptance of money to convince the government to do something indicated he was not a crook but a lobbyist, and that upholding his conviction would expose the profession of lobbying more broadly to criminal charges.
The New York-based 2nd U.S. Circuit Court of Appeals in 2021 upheld his conviction, finding that Percoco had a guaranteed job in Cuomo’s administration post-election and in the interim exercised enough influence over government decision-making to owe a duty to the public.
Ciminelli’s case focused on Howe’s role as a consultant hired to help administer Cuomo’s $1 billion revitalization initiative for the Buffalo, New York, area – dubbed the “Buffalo Billion.”
Prosecutors said executives at two companies including Ciminelli, who owned a construction firm, conspired with Howe and Alain Kaloyeros, who oversaw the Buffalo Billion grant application process, to rig bids to ensure contracts went to their firms.
Ciminelli was convicted at trial alongside Kaloyeros, the former president of State University of New York’s Polytechnic Institute, and developers Joseph Gerardi and Aiello. They also have asked the Supreme Court to reverse their convictions.
Ciminelli was sentenced to two years and four months in prison, Gerardi to 2-1/2 years, Aiello to three years and Kaloyeros to 3-1/2 years. A judge in July allowed all four to be released from prison on bail after the Supreme Court agreed to hear the case.
Defense lawyers have said prosecutors overreached by trying to fit their actions within the framework of the wire fraud statute, which criminalizes schemes to fraudulently obtain money or property.
The prosecutors relied on a legal theory of wire fraud called “right to control” in which it was not money at issue but instead economically valuable information in which a victim had an interest. Prosecutors identified the victim as Fort Schuyler Management Corp, an arm of SUNY Polytechnic Institute that oversaw the contracting process and that the government said was deprived of the ability to make fully informed decisions.
Ciminelli’s lawyers said such intangible information could not qualify as “property fraud” under Supreme Court’s precedents.
Copyright 2022 Thomson/Reuters