The federal investigation into one of New York Gov. Andrew M. Cuomo’s signature upstate economic development programs has come to focus on one of his former top aides, several people familiar with the matter said Friday.
The inquiry, the people said, is also focused on several other men and a company linked to the program, called the Buffalo Billion.
Federal prosecutors in Manhattan and the FBI are looking into whether the former senior aide, Joseph Percoco, and his wife failed to properly disclose thousands of dollars in income they had received from a company or companies doing business with the state, two of the people briefed on the matter said.
The inquiry strikes particularly close to Cuomo, who once described Percoco as “my father’s third son”; Percoco began his political career working for Mario M. Cuomo when he was governor and eventually worked for his son in several capacities.
The other people whose conduct is under examination in the investigation, two of the people said, include Alain E. Kaloyeros, the president of the State University of New York Polytechnic Institute, who was a central player in the Buffalo Billion; Todd Howe, a lobbyist and longtime associate of the governor and his father; Louis P. Ciminelli, a developer in Buffalo; and a company called Competitive Power Ventures.
Two of the people said the governor’s office was served in recent days with a federal grand jury subpoena for documents related to these issues. One of the people said no individual official in the office had received a subpoena.
After the scrutiny of Percoco and the others was reported Friday in The Daily News, the governor’s counsel, Alphonso David, issued a statement acknowledging the investigation. The statement said that the inquiry had “recently raised questions of improper lobbying and undisclosed conflicts of interest by some individuals which may have deceived state employees involved in the respective programs and may have defrauded the state.”
Authorities are investigating whether Percoco and his wife had received tens of thousands of dollars in income from a design and engineering company that worked on the project and failed to properly declare it, two of the people said. The company, according to a person familiar with the development program, worked on one of the main projects, a solar-panel factory for SolarCity, whose chairman is Elon Musk, the chief executive of Tesla Motors.
In January, Percoco left the Cuomo administration, where he made an annual salary of $169,000 as executive deputy secretary, to become a senior vice president at Madison Square Garden. A lawyer for Percoco, Barry A. Bohrer, said his client “was a dedicated and effective public servant, who is proud of the service that he rendered to the people of the state of New York.”
Daniel C. Oliverio, a lawyer for Ciminelli, who is a financial supporter of Cuomo, said his client was not involved in wrongdoing.
Oliverio also represents Ciminelli’s company, LPCiminelli, which is building the SolarCity factory. Oliverio said the company had not heard from prosecutors since it received one subpoena in June.
“It’s unfortunate that some of this stuff was going on, and we were the major contractor on the project,” he said. “But we have not been identified as a target or a subject, and we have provided the documents we were asked to provide.”
Howe could not be reached for comment. A lawyer for Kaloyeros, Richard M. Strassberg, declined to comment.
David said in his statement that the governor had ordered a full review of the development program, which has been under scrutiny by federal prosecutors for more than a year. The review will be conducted, the statement said, by Bart M. Schwartz, a former senior federal prosecutor.