Joseph Spector, and Jon Campbell

Democrat and Chronicle

ALBANY — Gov. Andrew Cuomo's Friday evening announcement that he plans to investigate his own office amid a federal probe rocked the state Capitol, a place well known for its layers of corruption.

Cuomo’s lawyers said his office would conduct an internal inquiry into potential improper lobbying and "undisclosed conflicts of interest" within his own executive chamber.

And U.S. Attorney Preet Bharara’s investigation appears to focus on some of Cuomo’s closest confidants, leading to questions about how widespread the problems may have been and how close it could get to Cuomo himself.

“It’s still way too early to know if there’s a ‘there’ there, and if there is, how big it is,” said Steven Greenberg, a Siena College Polling Institute spokesman.

At the center of the probe appears to be Joseph Percoco, who had been Cuomo’s right-hand man and most loyal aide for decades.

How close is Percoco to Cuomo? At former Gov. Mario Cuomo's funeral in January 2015, Andrew Cuomo — Mario's son — called Percoco "my father's third son who sometimes I think he loved the most."

What is going on?

Starting last fall, questions began to circulate about the bidding process and favoritism surrounding Cuomo’s hallmark upstate initiative: the Buffalo Billion — a $1 billion public investment to turn around the state's largest upstate city.

That led to a series of subpoenas from Bharara’s office. Cuomo at the time denied any quid pro quo rising from contracts and contributions to his campaign.

“I don’t know anything about that,” Cuomo said in September about Bharara’s investigation. “I know that we’ve had great success in Buffalo. Buffalo is really the poster child for the turnaround in upstate New York.”

Cuomo to investigate his office amid federal probe

The investigation appeared to center on contracts awarded through the SUNY Polytechnic Institute, the Albany- and Utica-based college that has spread its facilities to Rochester and Syracuse.

Several firms were subpoenaed, including SUNY Poly and LPCiminelli, a Buffalo-based company that is a Cuomo campaign contributor and was awarded the rights by SUNY Poly to build a massive solar plant in Buffalo.

Now it appears Bharara’s investigation is larger than the Buffalo Billion and is centered on potential malfeasance within the executive chamber.

What’s the latest?

Cuomo’s chief counsel Alfonso David put out an extraordinary and lengthy statement late Friday on the parameters of the internal investigation.

"(Bharara's) investigation has recently raised questions of improper lobbying and undisclosed conflicts of interest by some individuals which may have deceived state employees involved in the respective programs and may have defrauded the state,” David said.

Cuomo’s office received a subpoena Friday for documents in Bharara’s investigation, prompting the governor’s actions.

Bart Schwartz, a former federal prosecutor, was named to conduct the internal review.

And Schwartz’s own statement went even further, saying state officials have “reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interest by lobbyists and former state employees.”

Bharara’s office hasn’t commented about the investigation. But his office has been going after state corruption for years: The two former legislative leaders, ex-Assembly Speaker Sheldon Silver and ex-Senate Majority Leader Dean Skelos, are set for sentencing next month on corruption charges.

Who are the key players?

The Wall Street Journal and Daily News reported that investigators are looking into whether Percoco received outside income from companies that had business before the state while he was serving as the governor’s $169,000-a-year executive deputy secretary.

Percoco has worked under Cuomo since Cuomo's days as federal Housing and Urban Development secretary in the 1990s.

He left the state position earlier this year to work for The Madison Square Garden Co. Percoco, 46, grew up in New City, Rockland County, where he was a star linebacker and baseball player.

Even after leaving state office, he was still seen by Cuomo’s side at some public events, including the Democratic presidential debate in Brooklyn earlier this month.

Barry Bohrer, a white-collar criminal defense lawyer representing Percoco, issued a statement hailing Percoco's public work without mentioning the apparent investigation.

"Mr. Percoco was a dedicated and effective public servant, who is proud of the service that he rendered to the people of the state of New York," Bohrer said.

The Madison Square Garden Co. issued a statement calling Percoco a "man of good character" and "a respected executive at MSG.”

Officials confirmed that Cuomo’s office on Friday cut contact with Albany lobbyist Todd Howe, a former Cuomo aide, and Competitive Power Ventures, which is building a controversial plant in Orange County.

There was no comment from either of them, and it’s unclear how they fit into the investigation. Like Percoco, Howe has close ties to Cuomo, working as his deputy chief of staff in the Department of Housing and Urban Development.

Alain Kaloyeros, who heads SUNY Poly, is also being eyed because of contracts between vendors and the college. SUNY Poly is the lead agency for a $600 million photonics center in Rochester.

Photonics CEO concedes process 'looks a bit messy'

There was no immediate comment from SUNY Poly, but in September the institute denied any wrongdoing.

David said the SUNY nanotechnology work and the Buffalo Billion grants “will be thoroughly scrutinized — past, current or future.”

What’s next?

That’s the big question. Cuomo was absolved already once by Bharara: In January, the U.S. attorney said he could find no evidence of a federal crime amid allegations that governor’s office meddled with a now-defunct corruption-busting panel.

Now the Manhattan-based prosecutor has apparently narrowed in on Cuomo’s inner circle. Cuomo himself has not commented about the federal probe or the internal one by his office.

“We take violations of the public trust seriously, and we believe these issues must be resolved by further investigation by the U.S. attorney,” David said.

Bharara has blasted corruption at the Capitol, and he’s undertaking a series of investigations involving New York City Mayor Bill de Blasio, a Cuomo foe.

"When bids are rigged, your people suffer. When cronyism reigns, your people suffer," Bharara told mayors in Albany in February. "When transparency takes a backseat to backroom deals, your people suffer. They suffer in loss of faith. They suffer in higher taxes. They suffer in loss of services. They suffer in opportunities squandered."

Cuomo, who is in his second term, has also knocked corruption at the Capitol, and he’s asked the Legislature to agree to a series of ethics reforms before the legislative session ends in mid-June.

“Ethics is going to be the main focus between now and June,” Cuomo said in a conference call with upstate editorial boards April 1.