The downfall of Alain Kaloyeros

Governor's Office

Alain Kaloyeros speaks in Rochester at the 2015 announcement of the Integrated Photonics Institute for Manufacturing Innovation.

A federal judge sentenced Alain Kaloyeros today to three and a half years in prison for his role in a bid-rigging scheme. Judge Valerie Caproni told him: “This prosecution … should serve as a warning to others who interact with the government everywhere. … (If) you remain at the public trough and you engage in corrupt means to get to public money, even if you did a good job for the public, the Court will show you no mercy.”

The downfall of Kaloyeros is a case study on the temptations of power.

Rachel Barnhart

Born in Beirut, Lebanon, Kaloyeros was recruited to the University at Albany physics department in 1988 by then-Gov. Mario Cuomo after receiving his doctorate from the University of Illinois. He began building the Albany NanoTech semiconductor research facility, which later became SUNY Polytechnic Institute. Kaloyeros was appointed the founding president in 2015.

During the 2000s, Kaloyeros developed a reputation for creating thousands of jobs by forming alliances with private industry. He attracted billions of dollars in research partnerships with GlobalFoundries, IBM and General Electric. The goal was to make the Albany region a center for nanotechnology research and manufacturing, which includes such industries as computer chips. The state provided expensive clean rooms for the companies to test out product designs.

“Alain Kaloyeros has been the single most powerful force in the Capital Region’s high-tech economy over the past two decades,” declared the Albany Times Union.

Gov. Andrew Cuomo called Kaloyeros a “one-man economic development department,” adding, “I think we should take out a life insurance policy on Dr. Kaloyeros.”

Kaloyeros was the highest-paid state employee, earning more than $1 million. He oversaw a $14 billion empire of campuses and labsacross the state. The college conducted much of its economic development business using nonprofit entities, which it claimed were off-limits from public scrutiny. Journalists had trouble accessing financial information, as SUNY Poly repeatedly denied open records requests.

Good government groups began to worry about Kaloyeros’ power, once issuing a joint statement: “By using a mixture of non-profit groups … the state is blurring responsibility and reducing the accountability for decisions worth hundreds of millions of dollars.”

Kaloyeros’ genius ran into trouble when he expanded his vision outside of Albany. The state spent $750 million to build a factory for Tesla’s SolarCity, which has fallen short on jobs and production. Kaloyeros promised thousands of jobs in Rochester on various deals that fell apart. In Utica, a promised chip maker never arrived. In Syracuse, the state spent $15 million to build a film hub that couldn’t attract any tenants, so the state was forced to sell the building for $1.

A federal investigation found Kaloyeros wrote the request for proposals for Buffalo and Syracuse projects to make sure only certain bidders qualified—politically-connected donors to the governor.

J. Patrick Dobel writes about the temptations facing public officials in his book “Public Integrity.” Kaloyeros fell victim to several of those temptations, which lead to poor policy decisions and corruption.

The first temptation is conflating oneself with the office or institution. Kaloyeros and his supporters saw him as indispensable because of his past successes creating much-needed jobs. This created an environment that allowed the SUNY Poly chief to operate without checks and balances. Kaloyeros engaged in secrecy, making sure transactions couldn’t be scrutinized by the press. He ignored or denigrated any questions about his actions.

The second temptation is feeling pressure to perform. Upstate New York was bleeding residents and jobs. The governor expected Kaloyeros to continue his prior successes. Kaloyeros was portrayed as a magician by the governor who said, “He has economic visions that other mere mortals can’t actually see.” Kaloyeros was expected to live up to an impossible ideal.

The third temptation is to make decisions with the goal of amassing political power. Prosecutors said Kaloyeros’ motive was to keep the governor happy. In return, the governor would continue to allow Kaloyeros to grow his empire. Kaloyeros wanted the continued adulation from state leaders. He wanted to keep “playing God” by making decisions about which cities would benefit from new factories and jobs.

Kaloyeros was not convicted of pocketing any money from his schemes. But he got something else—the ability to play the savior of upstate’s economy. It turned out that throwing billions of dollars at private companies and rigging bids couldn’t save upstate—or Kaloyeros’ exalted position in New York.

Rachel Barnhart is a veteran broadcast journalist and co-founder of Rochester for All, a nonpartisan organization dedicated to accountable, transparent and ethical government. A Democrat, she has been a candidate for state Assembly, Rochester mayor and congressional representative in New York’s 25th Congressional District.