U.S. Supreme Court tosses former Cuomo aide's bribery conviction

FILE PHOTO: Joseph Percoco, former aid to New York Governor Andrew M. Cuomo, walks out of the Manhattan Federal Courthouse in New York

By Nate Raymond and Andrew Chung

(Reuters) -The U.S. Supreme Court on Thursday overturned the bribery conviction of Joseph Percoco, an ex-aide to Democratic former New York Governor Andrew Cuomo, in a ruling that further limits the ability of federal prosecutors to pursue corruption cases.

The justices ruled 9-0 in favor of Joseph Percoco, Cuomo's former executive deputy secretary who was charged in 2016 as part of a corruption crackdown by federal prosecutors in Manhattan centered on the halls of the state capital of Albany.

In Percoco's case, the jury was required "to determine whether he had a 'special relationship' with the government and had 'dominated and controlled' government business," conservative Justice Samuel Alito wrote in the court's opinion. "We conclude that this is not the proper test for determining whether a private person may be convicted of honest-services fraud, and we therefore reverse and remand for further proceedings."

Percoco was convicted in 2018 and sentenced to six years in prison for seeking $315,000 in bribes in exchange for helping two corporate clients of Albany lobbyist Todd Howe seeking state benefits and business.

Thursday's ruling represented the latest in recent years in which the court, which has a 6-3 conservative majority, has limited prosecutors in political corruption cases. In 2020, it overturned the convictions of two aides to Republican former New Jersey Governor Chris Christie in the "Bridgegate" political scandal. In 2016, it threw out Republican former Virginia Governor Robert McDonnell's bribery conviction.

The Supreme Court heard arguments in November in the case involving Percoco and a related one involving former construction company executive Louis Ciminelli. The justices also unanimously overturned Ciminelli's conviction on Thursday.

Percoco's attorney, Yaakov Roth, said he was "gratified" with the court's decision, calling the prosecution an abuse of the federal fraud statutes that "blurred the fundamental line between private citizens and public officials."

The U.S. Justice Department declined to comment.

Percoco was convicted alongside an executive at a real estate developer, Steven Aiello, who prosecutors said orchestrated bribes to Percoco. Howe pleaded guilty and cooperated with investigators. Prosecutors said Percoco referred to the payments as "ziti," a type of pasta that became a term for money by characters in "The Sopranos" mobster TV series.

At the time of the actions at issue, Percoco was no longer serving in government as Cuomo's aide but instead managing the governor's 2014 re-election campaign, a fact his lawyers said meant he could not be convicted of bribery.

Defense lawyers argued 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 criminal but a lobbyist who was free to be paid for his influence.

The New York-based 2nd U.S. Circuit Court of Appeals in 2021 upheld his conviction, finding 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.

The charges against Percoco and Ciminelli were pursued by former Manhattan U.S. Attorney Preet Bharara, an appointee of President Barack Obama. Bharara also brought corruption cases against top state lawmakers including former Assembly Speaker Sheldon Silver. Cuomo was not charged but resigned in 2021 in an unrelated sexual harassment scandal.

The case involving Ciminelli 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 conspired with Howe and Alain Kaloyeros, who oversaw the project's grant application process, to rig bids to ensure contracts went to their firms.

Ciminelli was convicted 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's lawyers argued that prosecutors relied on an invalid legal theory of wire fraud that involved depriving a victim not of tangible property but of economically valuable information.

(Reporting by Nate Raymond in Boston; Additional reporting by Andrew Chung in New York and John Kruzel in Washington; Editing by Will Dunham)