Bid-Rigging Charges Take Toll on Ciminelli
The federal bid-rigging trial of former executives of one-time Buffalo, N.Y., regional contracting giant LPCiminelli won’t start until late spring, more than 18 months after they were indicted, along with others, on bribery, corruption and fraud charges in a New York state contract “pay for play.”
But the firm’s alleged role in the scam has already drastically altered the 57-year-old company.
Ranking at No. 120 on ENR’s 2016 Top 400 Contractors list with $614 million in 2015 revenue—its latest appearance—the firm auctioned its equipment fleet, tools and other assets in mid-December and ceased general contracting operations soon after.
Under new President Kyle Tuttle, LPCiminelli now has focused on program management and development. In an emailed statement, he said, the firm “has made the business decision to close our general contracting company.” Tuttle did not answer further questions and other company spokespersons did not return requests for comment.
The former LPCiminelli executives—Louis Ciminelli, chairman and CEO; Michael Laipple, president; and Kevin Schuler, senior vice president—were charged with paying Alain Kaloyeros, then president of the State University of New York’s Polytechnic Institute in Albany, and former state lobbyist Todd Howe, to secretly rig the bidding process to favor the company as construction manager for a $750-million Tesla solar panel manufacturing plant near Buffalo, the signature project in the state’s Buffalo Billion economic development plan.
The defendants pleaded not guilty.
The economic toll dates to September 2015, when, after press reports that LPCiminelli had been subpoenaed by a federal grand jury related to Buffalo Billion, the firm immediately lost about 14 projects with a total value of $950 million, company attorney Daniel Oliverio said in a federal court document.
The firm lost a total of about $3.9 billion in contracts, mostly general construction work, and inventory, according to court documents. As a result, LPCiminelli had to lay off 10% of its 200-person workforce, says its attorney. It did not appear on ENR’s 2017 Top 400 Contractors list.
Ciminelli stepped down as CEO in January 2017 and soon after created a successor firm, LPC Infrastructure Development. Laipple and Schuler also left to join the new firm, which “will leverage LPCiminelli infrastructure and resources in pursuit of development outside of New York,” Oliverio said.
Also departing LPCiminelli last year was Frank Ciminelli, who had become president in April 2016 before his father and the others were indicted. He now has formed Arc Building Partners, a CM firm he planned to operate in parallel with the established firm.
Tuttle, a former LPCiminelli senior vice president, succeeded him in mid-November.
The alleged NewYork bribe scheme, now playing out in a Manhattan courtroom, also involves Joseph Percoco, a former executive deputy to Gov. Andrew Cuomo (D), and three executives of developers of projects not involving LPCiminelli.
They are Steven Aiello, president of Syracuse, N.Y.-based COR Development; Joseph Gerardi, COR’s attorney; and Braith Kelly, a power plant developer executive at Competitive Power Ventures (CPV), who are charged with bribing Percoco and ex-lobbyist Todd Howe to win state contracts.
The indictments, issued in 2016 in a 79-page federal criminal complaint, involve wide-ranging and overlapping criminal schemes, in which LPCiminelli, COR and CPV had been preselected to win contracts, according to the charges.
Kelly is charged with seeking influence to win a $100-million power agreement with the state to gain financing for a $900-million gas-fired plant in upstate New York that now is under construction.
Howe pleaded guilty and is cooperating with prosecutors on alleged bribe details, although he was arrested in early February on bail violations after the trial began.