Feds probing Buffalo Billion contracts

Reporting, analysis and commentary
by Jim Heaney, editor of Investigative Post

(Updated Saturday at 3:05 p.m.)

This is big.

U.S. Attorney Preet Bharara, who has tackled corruption in state government, is investigating the awarding of contracts under the Buffalo Billion program, The New York Post reports.

“It’s a comprehensive look at the bidding process,” said one source, who also told The Post that several companies have been issued subpoenas.

Meanwhile, The New York Daily News is reporting that the feds have subpoened records of the SUNY Polytechnic Institute, headed by Alain Kaloyeros, who is managing the Buffalo Billion program. The Daily News also reported SUNY has hired a criminal defense lawyer to represent the Polytechnic Institute.

Gov. Andrew Cuomo, reacting to the disclosure of the investigation, downplayed the situation in comments to State of Politics.

“You have to remember, I was the former attorney general. You can have investigations,” he said.  “It doesn’t mean that because there’s an investigation there’s anything wrong.”

At mid-afternoon, a spokesman for the SUNY Polytechnic Institute issued this statement:

The facts are clear: The Buffalo Billion will result in nearly 14,000 good paying and sustainable jobs in Western New York, $8 billion in new private investment and has changed the path of Buffalo now and for generations to come.

“We are confident that all processes regarding SUNY Poly projects in Buffalo were done appropriately.

“To our knowledge, neither SUNY Poly nor any of its employees are the target of any investigation.”

The New York Times, Albany Times Union, Buffalo News and WBFO also have produced noteworthy stories. The News reported that the investigation is part of a wider probe that includes $1.4 billion in work to rebuild Buffalo public school buildings. The developer of that work, LPCiminelli, is also developing several of the major Buffalo Billion projects.

The federal probe was almost certainly triggered by the reporting of Investigative Post over the past nine months. I first reported on the curious circumstances of the contract awards and the state’s outrageous efforts to thwart my reporting, and have been following up since.

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. 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.

Also noteworthy is our coverage of SolarCity, which the state is spending $750 million on to build and equip a solar panel manufacturing plant in Buffalo. It’s the centerpiece of the Buffalo Billion program. I reported in November that the company is losing money and under federal investigation. Just the other day I told Susan Arbetter of The Capital Pressroom that SolarCity’s losses have worsened and one industry analyst has declared the SolarCity project a “white elephant” in the making.

I’ll be posting updates throughout the day, so check back. And be sure to watch WGRZ tonight at 5 and 6 p.m., where I’ll discuss the day’s developments.

Claudine Ewing of WGRZ interviewed me this afternoon in front of the SolarCity plant in South Buffalo and I was struck at how huge it is. It goes on for what seems like blocks and blocks. Underscores just what a massive undertaking the project is and what’s at stake for both the state and the developer, LPCiminelli. To say nothing of taxpayers.