Percoco v. United States

Many people might have a pretty clear image of what corruption and bribery is and who can commit such acts. The reality is not so clear.


Percoco v. United States involved the longtime friend and aide to New York Governor Andrew Cuomo, Joseph “Joe” Percoco, and revolved around two schemes. In 18 U.S. Code § 1346, a “scheme” can be defined as an “artifice to deprive another of the intangible right of honest services.” The first scheme, “the CPV scheme”, began in 2012 involving the energy company, Competitive Power Venture. At the time, Joe Percoco served as a high level official in the Governor’s office. Percoco reached out to lobbyist Todd Howe inquiring if any of Howe’s clients would hire Percoco’s wife. Howe later approached Peter Galbraith Kelly, Jr., an executive at CPV. The energy company was hoping for a so-called “Power-Purchase Agreement” which would require New York State to purchase power from CPV. Percoco, Howe, and Kelly met over dinner and discussed what would later become a questionably unethical exchange. The resulting arrangement involved securing the sending of payments and employment for Percoco’s wife in exchange for Percoco agreeing to help CPV secure a Power-Purchase Agreement. Following this dinner, Percoco pressured Howe to secure the deal with Kelly so that Percoco and Howe could receive their “ziti”, a reference to the TV series, The Sopranos, in which the word is derived from a mafia code word for bribes. Percoco would put the “push on” Howard Glaser, the supervisor of New York’s State agencies and the man who would be in charge of a potential Power-Purchase Agreement. Howe pressured Percoco to, “hold Glaser’s feet to the fire” to “keep the ziti flowing.” Percoco’s wife would continue to receive payments of $7,500 a month for her few hours of work as an “education consultant,” though the payments were hidden with the omission of her last name from CPV documents. 

The second scheme began while Percoco was managing Governor Cuomo’s 2014 re-election campaign. Though not technically an employed government official, Percoco arguably remained relatively influential. Percoco agreed to help the interests of Steven Aiello’s real estate development company, COR Development Company. Aiello and COR Development transferred $15,000 dollars to an entity controlled by Howe from which he wrote a check to Percoco’s wife. COR Development was concerned with a potential Labor Peace Agreement. The Labor Peace Agreement was a potential costly deal between a local labor union and the company. Before Percoco made any moves regarding the Labor Peace Agreement, COR Development sent an additional $20,000 to Percoco through the same route. Percoco received both payments of $35,000 after having already told his bank he was planning to return to the Governor’s Office. Percoco used his network and influence to eventually settle the issue of the Labor Peace Agreement. Back in his official role working in the Governor’s Office, Percoco pressured state officials, subordinate to him, to prioritize funds the state owed to COR Development. He also saw to it that Aiello’s son, who worked in the Governor’s Executive Chamber, received a raise. 

In the Courts

In November 2016, a grand jury indicted Percoco, Aiello, Kelly, and another associate, Gerardi, for their roles in the alleged schemes. Among the others, Percoco was found guilty of committing honest-services wire fraud and solicitation of bribes and gratuities, and sentenced to 72 months in prison. Additionally, the US District Court for the Southern District of New York, ordered Percoco to forfeit funds later amounting to $320,000. 

Percoco and Aiello appealed to the Second Circuit Court of Appeals. The defendants challenged the conviction that they could be held liable for conspiracy to commit honest-services fraud as Percoco was not a formally employed government official at the time of the second scheme. However, on September 8, 2021 the Second Circuit Court affirmed the District Court’s ruling, “holding that a person who is not technically employed by the government may nevertheless owe a fiduciary duty to the public if he dominates and controls governmental business, and is actually relied on by people in the government because of some special  relationship.”

On February 17, 2021 Percoco appealed to the US Supreme Court, and on November 28, 2022, the US Supreme Court heard the oral argument. Percoco as the Petitioner presented the question: “Does a private citizen who holds no elected office or government employment, but has informal political or other influence over governmental decision making, owe a fiduciary duty to the general public such that he can be convicted of honest-services fraud?” Percoco’s lawyer argued that because at the time of his actions he was not in the capacity of an official government authority, he could not be held liable for bribery. In addition, Percoco’s camp emphasized that, “at the time of the agreement, they [the parties involved in the deal] actually were not anticipating that Percoco would return.” The outcome of the case is still pending a decision.


Percoco’s camp warns that the upholding of his conviction would be an overreaching expansion of federal bribery law. By rejecting the conviction in the Second Circuit Court, the Supreme Court could narrow the scope of federal bribery law. Therefore, a private citizen with political influence over government processes could not be held liable for bribery given that the citizen was not working for the government in an official capacity. It could be said that the decision made in the Second Circuit Court may be too broad in its language as it could include a field of people working in the political realm, though not necessarily for the government, such as lobbyists. The line for lawful lobbying and bribery can sometimes appear unclear, although depending on circumstance, that is for a jury to decide. The Justices raised several important questions concerning a, “hypothetical about the manipulative public official who goes in and out of office for an afternoon to peddle influence?” For certain, this case will be very important for deciding future parameters constituting just who is able to commit federal corruption. 

Madeleine McLean is from Arlington, VA, studying History

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