Gov. Andrew Cuomo’s campaign has generally refused to answer questions about an ongoing federal investigation into Crystal Run Healthcare, which has given $400,000 in campaign donations to the governor and received an extraordinary $25.4 million in state grants.
In a meeting with the Times Union editorial board on Tuesday, Cuomo did answer a question his campaign has evaded for weeks: Crystal Run officials, the governor said, have not approached him about any potential legal problems with their donations.
By contrast, U.S. Rep. Sean Patrick Maloney — currently running for the Democratic nomination for state attorney general — has publicly stated that Crystal Run approached him about irregularities with more than $35,000 in donations its made to the congressman.
“Well, then,” Cuomo said of Crystal Run’s disclosure to Maloney, “they admitted to a crime.”
“Which is sort of incredible for me to believe as a former prosecutor and an attorney general,” Cuomo said. “Why somebody would call up and say to a congressman, ‘I committed a felony. Just thought you should know.’ Especially since nobody’s been charged. I mean, who would make that phone call?”
Maloney’s decision to turn over Crystal Run’s legally problematic donations to the U.S. Treasury has put Cuomo – who has refused calls to return any portion of his own Crystal Run donations – in the position of having to rationalize that stance.
On Tuesday, Cuomo theorized that Maloney’s statements about Crystal Run admitting legal troubles were not accurate.
“How much do you want to bet,” he said, “the Crystal Run people never called Maloney and said that?”
In response to Cuomo’s comments, Maloney’s office on Tuesday provided the Times Union with a letter from a Crystal Run attorney that disclosed issues with the company’s donations but insisted they were inadvertent.
Listen to Cuomo discuss Crystal Run in a meeting with the Times Union’s editorial board:
No one from Crystal Run has been charged with any wrongdoing.
Following a series of Times Union articles last year, the Manhattan U.S. Attorney’s office and FBI are investigating Crystal Run over its manner of giving to Cuomo. The investigation has also brought allegations of pay-to-play behavior from the governor’s electoral challengers this year: The company in 2016 landed $25.4 million in state grants for projects it was already building without taxpayer subsidies.
Cuomo maintains the prodigious campaign giving of Crystal Run and other donors – totaling $49 million for his current reelection bid – has never impacted state policy decisions.
The ongoing criminal investigation of Crystal Run is examining whether its officials were reimbursed by company bonuses for a flurry of $25,000 donations they made to Cuomo’s campaign in 2013. If that occurred, it would be a potential violation of state election law.
On Tuesday, Maloney’s office provided more information about how it came to return the Crystal Run-connected donations.
The Orange County-based company this spring asked Maloney to give back some of its officials’ past campaign donations to the congressman. In response, Maloney’s office asked for more information.
In April 2018, an outside counsel for Crystal Run, David Frulla of the firm Kelley Drye, wrote a letter to an attorney for Maloney.
“Upon review, Kelley Drye determined it was appropriate to request the enumerated refunds, but have no reason to believe that Maloney for Congress was privy to any of the information or actions that caused the refund request,” Frulla said in the letter. “Crystal Run has made a sua sponte” – or voluntary – “submission to the Federal Election Commission regarding this matter.”
“Further, we requested the refunds because our review found that (Crystal Run), and its officers, partners, and employees, did not fully or accurately understand campaign finance law and regulations applicable to partnerships,” the lawyer wrote. “Any resulting failure to comply with the applicable law or regulations was, accordingly, inadvertent.”
Maloney’s office has also said that Crystal Run acknowledged the donations were “incorrectly attributed” in campaign filings.
A Crystal Run spokesman did not respond to a request for comment on Tuesday.
Cuomo, meanwhile, has declined to heed calls from his political opponents, actress and Democratic primary opponent Cythnia Nixon and Republican Marc Molinaro, that he also return Crystal Run’s money.
The governor stated again on Tuesday that he would return the company’s money if legal wrongdoing was found.
“The Crystal Run situation is this,” Cuomo said. “Two years ago, I don’t know which office started an investigation on a doctor as a ‘straw donor.’ Our contribution form, on our website, says ‘Do not do straw donors.'”
“That was two years ago,” Cuomo said, noting he had heard little since. “As soon as there is a finding that somebody did something wrong, I will return the contributions.”
Over a two-day period in October 2013, Crystal Run officials, doctors or their spouses gave Cuomo 10 donations of $25,000 apiece. The donations came during a Cuomo fundraiser, though the governor’s campaign has repeatedly refused to discuss its location and details such as whether it was an exclusive Crystal Run event.
Of the 10 Crystal Run donors to Cuomo, seven had not made a donation in a New York election in at least a decade.
On Tuesday, Cuomo stated for the first time that Crystal Run officials threw a fundraiser for him in 2013. He also said it was not unusual for so many people, who had not given in New York elections before, to give him the 10 identical $25,000 checks.
“If you do a fundraiser for me, you’re going to go to your neighbors and your friends and say, ‘Do me a favor — Andrew Cuomo’s a good guy, he’s a friend of mine, come over and contribute,'” Cuomo said. “Yeah, so the company did a fundraiser.”
Cuomo also addressed the fact that Crystal Run was granted $25.4 million in 2016 by the state Department of Health to build two health care facilities — in Monroe, Orange County, and West Nyack, Rockland County — that it was already constructing without taxpayer subsidies.
Cuomo said the agency’s decisions in handing out $1.2 billion in health care capital funds grants statewide had been made by civil service employees.
“It’s done on objective criteria, pursuant to a 2014 law. And that’s how the program works,” Cuomo said. “I haven’t gotten into it well enough. But there is no suggestion that they got the grant from Health because of the contribution.
“The only suggestion is this guy was a straw donor,” Cuomo said of the investigation. “That was two years ago.”
The Times Union first wrote about the Crystal Run donations to Cuomo in February 2017, about 18 months ago.
On Tuesday, the Times Union reported that for the two projects, Crystal Run had attempted to get taxpayer reimbursement of the $25 million in grants for a number questionable expenses, from artwork and “mood music” systems to plastic flowers for a lobby. While the Cuomo administration has not repaid the company for those purchases, it did reimburse Crystal Run — one of New York’s fastest-growing private medical firms — for $6 million, including $1.2 million in corporate office furniture.
“Not another a dime of taxpayer money should go from the Cuomo administration to Crystal Run while the FBI and Orange County are investigating this,” said Molinaro, the Dutchess County executive, in a statement responding to the story. “And, Gov. Cuomo: You won’t have enough money in your campaign arsenal in November to explain away the dirty $400,000 you’re holding. Mark my words: New Yorkers have had enough.”
Cuomo campaign spokeswoman Abbey Collins responded that “Trump mini-me Marc Molinaro should look in the mirror. He’s taking a page from Trump’s playbook by taking contributions from business with local contracts, doling out tax breaks in return, and handing out favors to his friends and family.”
At the Times Union, Cuomo said Maloney had only returned the more than $35,000 because he is currently running in the heated Democratic primary for state attorney general, the state’s top law enforcement job.
“I think it was just a political decision,” Cuomo said. “It was a PR decision.”
“There’s been no charge,” Cuomo added. “And also, straw donor cases are also sort of an open-and-shut case. It’s ‘Dr. Smith, you gave $25,000 to Sean Patrick Maloney. Did the company reimburse you?’ That’s it. And, ‘Is there a check that goes to you for the $25,000?'”
“This has been two years! If they have that case, that’s the case,” he said.
