ALBANY —  In light of the Joseph Percoco trial, government watchdogs are urging state leaders to repair what they call a frayed system for preventing corruption and ethical lapses at the statehouse.

Misconduct and bribe taking in state contract awards have allegedly been exposed at the federal trial of Percoco, a close advisor to Gov. Andrew Cuomo — creating political headaches for New York's chief executive at a time when he is gearing up to run for a third term.

A coalition of reform groups, including the League of Women Voters, Common Cause, Reinvent Albany, the New York Public Interest Research Group and Citizens Union, is insisting that lawmakers and Cuomo impose "pay to play" restrictions on state vendors, effectively shutting off their ability to make campaign donations if they are angling for state contracts.

INFLUENCE

Percoco is accused of accepting more than $300,000 in bribe money from three co-defendants in the case: Peter Galbraith Kelly, seeking state support for a Competitive Power Ventures energy plant, and Steve Aiello and Joseph Gerardi, two executives of a Syracuse construction firm, COR. All have pleaded not guilty.

While Cuomo himself has not been accused of illegal activity, his political rivals alleged he has allowed the contracting process to become a breeding ground for corruption while benefiting from campaign donations from companies seeking to do business with his administration.

Prosecutors charge that Percoco — apparently inspired by episodes of the TV series "The Sopranos" — frequently used the word "ziti" as a code word for bribe money while struggling to make mortgage payments after borrowing $800,000 to buy a house in South Salem in 2012.

POLITICAL STRATEGY

The political fallout from the Percoco case is likely to become a hindrance to Cuomo's reputed interest in running for the White House in 2020, said Grant Reeher, professor of political science and director of the Campbell Public Affairs Institute at Syracuse University.

"Of all the problems to have, having the whole Albany culture of corruption attached to him — and it will be attached to him — is one of the worst problems to have," Reeher said.

Cuomo would be prudent to "get out in front of it," acknowledge corruption took place within his administration and make a strong effort to drive through measures designed to deter such misconduct in the future, Reeher said.

But he said political strategists may convince Cuomo to avoid the topic because such proposals may remind voters that the ethics lapses took place while he was at the helm of state government.

Cuomo has declined to discuss the case, contending it would be "highly improper" to do so while the trial is underway.

ETHICS COMMISSION

Though the Percoco trial involves alleged violations of federal statutes, government watchdogs say the testimony illustrates that state ethics laws were violated when the defendant did campaign work for the governor in state offices.

They argue such lapses would have been less likely to have occurred if the state had an independent agency to probe ethics violations.

Cuomo appointed six of the 14 commissioners on the Joint Commission on Public Ethics, as well as its director, lawyer Seth Agata.

Reformers pointed out that Agata had previously helped get state approval for a book contract between the governor and the publishing company Harper Collins.

After Cuomo made his income-tax returns public last year, it was reported that he collected more than $780,000 from the book deal, though his memoirs sold only 3,200 copies.

Having a Cuomo-controlled agency to investigate misconduct by appointees and other state employees "ensures we are never going to have strong ethics enforcement," said John Kaehny, director of a nonprofit group advocating for reforms, Reinvent Albany.

'WRONG PEOPLE'

Meanwhile, Albany lawyer David Grandeau, former director of the now defunct state Lobbying Commission, has filed a complaint with Joint Commission on Public Ethics, alleging Agata violated the state Public Officers Law by giving legal advice to Percoco in 2014 while Percoco was doing campaign work for Cuomo and Agata was then a counsel to Cuomo.

Agatha had advised Percoco that he could work for a private law firm as long as the work did not involve state projects. Grandeau alleged Percoco used the advice he got from Agata to further his alleged corrupt scheme.

"Having Agata run JCOPE is like having El Chapo (the accused Mexican cocaine kingpin) run the Drug Enforcement Administration," Grandeau said, arguing New York's ethics laws are being violated because the "wrong people" are the enforcers.

Joint Commission on Public Ethics spokesman Walt McClure, a Cuomo appointee, said he could not discuss whether his agency is investigating any of the alleged misconduct that has been mentioned in the Percoco trial.

He noted his agency was designed by legislation approved by lawmakers and Cuomo.

McClure also declined to comment on the allegations against Agata, his boss.

TRANSPARENCY URGED

Percoco has been Cuomo's campaign manager in both 2010 and 2014 and had previously worked with Cuomo both while the latter served as state attorney general and was the federal housing secretary during the Clinton administration.

Testimony showed that Percoco often used the governor's suite of offices and state telephones while he was off the state payroll and running the governor's re-election campaign.

The New York Times argued in an editorial that Cuomo has been tainted by the Percoco case and contended he has "trouble keeping his deeds fully in sync with his words on ethics" by taking campaign cash from donors exploiting loopholes in contribution limits.

Blair Horner, legislative director of the New York Public Interest Research Group, said the contract scandals during Cuomo's tenure should be addressed with far greater transparency requirements on the bidding process and other accountability measures.

He noted the Percoco trial is the first of several corruption trials involving former state government figures — among them, two former political powerhouses, former Assembly Speaker Sheldon Silver and former Senate GOP Leader Dean Skelos, both of whom are slated to be retried this year on bribery charges.

Another looming trial will focus on alleged corruption by Alain Kaloyeros, who, as former head of the State University Polytechnic Institute, oversaw several upstate development projects involving the expenditure of hundreds of millions of dollars.

Horner said that even if Percoco is exonerated, the corruption issue is "still a headache for the governor.

"The case has raised lots of questions about the deeply flawed way the state handles its contracting process," he said.

Jury deliberations in the Percoco case are slated to resume Thursday after the judge cited a forecast for a major snowstorm Wednesday in delaying the trial.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com

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