Behind the Buffalo Billion: Kaloyeros no longer at center of decision-making

Jun 9, 2016

Until recently, Dr. Alain Kaloyeros, leader of the SUNY Polytechnic Institute, has been the darling of Gov. Andrew Cuomo’s administration.

But now, he’s one of the figures at the center of federal and state investigations into alleged pay-to-play schemes for economic development projects and is increasingly on the outs with the administration. 

 

Alain Kaloyeros, president and CEO of SUNY Polytechnic Institute, has been a key player in developing economic development projects in New York — some of which are now being investigated.
Credit SUNY Polytechnic Institute

Kaloyeros was recruited to New York in the 1990s by the current governor’s father, former Gov. Mario Cuomo, to develop the then-experimental nano computer chip technology as part of the State University at Albany. He’s been tight with state leaders ever since, including Govs. George Pataki, Eliot Spitzer, David Paterson — and until recently, Andrew Cuomo, whom Kaloyeros is quick to praise.

“The man I’m proud to call my mentor, our leader, your governor,” Kaloyeros said in an introduction during an event last summer in Rochester with Vice President Joe Biden to announce a SUNY-designed and owned photonics hub.

 

Cuomo’s been eager to return the compliments, as he did during a speech at the topping-off ceremony at the giant SolarCity plant in Buffalo, also last summer, where he called Kaloyeros his “economic guru.”

“He has economic visions that other mere mortals can’t actually see,” Cuomo said.

 

Alain Kaloyeros, left, and Gov. Andrew Cuomo have been quick to praise each other in the past, but it appears the governor is now distancing himself from the SUNY Polytechnic leader.
Credit SUNY Polytechnic Institute

Under Cuomo, the prestige and the autonomy of what’s now the independent SUNY Polytechnic Institute grew; President Barack Obama even visited during his 2012 re-election campaign. Kaloyeros, president and CEO, is paid over a million dollars a year from SUNY and the university’s Research Institute.

He’s been a key player in designing the state’s Buffalo Billion and other economic development projects and is credited with inventing the opaque nonprofit management model that is now under scrutiny by U.S. Attorney Preet Bharara. It’s estimated that he at one time oversaw over $43 billion in such projects.

John Kaehny, with the reform group Reinvent Albany, says it’s grown into a system that is ripe for corruption.

“It’s out of control, basically,” said Kaehny.

Kaloyeros, who did not agree to talk for this story, was born in the late 1950s and grew up in war-torn Lebanon. According to a 2012 profile in the Albany Times-Union, he survived a terrorist attack as a teenager and for a time joined the Christian militia before emigrating to the United States and eventually getting a doctorate in experimental condensed matter physics from the University of Illinois.

During the past two decades in the Albany area, the colorful and charismatic Kaloyeros has often been seen driving to the local Starbucks and other places in his Ferrari, with custom license plates that read “Dr. Nano.”

But since the federal probe and an additional investigation by the state attorney general has begun, Kaloyeros appears to have fallen from grace within the Cuomo administration.

State Attorney General Eric Schneiderman is investigating a SUNY Poly plan to build dormitories for potential pay-to-play arrangements, as well as other economic development projects. Politico New York reports that Kaloyeros’ smartphone was confiscated in a recent raid by the attorney general’s investigators.

In May, he was stripped of all authority in making economic development deals, according to a letter from Cuomo’s top counsel. Alphonso David said in the May 2 letter to top SUNY officials that “all decisions” made in the future by SUNY Poly and the SUNY Research Foundation regarding the Buffalo Billion on nano programs “shall be subject to review and approval” by Cuomo’s own specially appointed investigator, Bart Schwartz.

 

Alain E. Kaloyeros, center, visits with Upstate Medical University officials at the Central New York Biotech Accelerator in 2013.
Credit Ellen Abbott/WRVO

Earlier this year, Kaloyeros resigned from the boards of two nonprofit management groups that awarded the contracts.

Cuomo has publicly distanced himself from Kaloyeros. They no longer appear together at economic development announcements.

When reporters asked the governor on May 25 in Syracuse about economic development contract awards to politically connected campaign contributors — a matter that’s at the heart of the federal probe — Cuomo said SUNY made those decisions, not him.  

“They are the ones who ran the contracts,” said Cuomo, “and I had absolutely nothing to do with it.”

Cuomo said he still thinks Kaloyeros’ work has been “extraordinary” in turning around upstate, but when asked twice by reporters whether he still has confidence in the SUNY Poly leader, the governor did not directly answer.