Gotham Gazette Gotham Gazette is an online publication covering New York policy and politics as well as news on public safety, transportation, education, finance and more. http://www.gothamgazette.com/component/tags/tag/contracting 2017-10-23T02:33:56+00:00 Webmaster webmaster@gothamgazette.com Stringer Updates Transparency Website to Show More Subcontracting 2017-07-27T04:00:00+00:00 2017-07-27T04:00:00+00:00 http://www.gothamgazette.com/?id=7092:stringer-updates-transparency-website-to-show-more-subcontracting Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/stringer_podium.jpg" alt="stringer podium" width="600" height="400" /></p> <p>Comptroller (photo via @NYCComptroller)</p> <hr /> <p>New York City Comptroller Scott Stringer is modifying the website showing city spending to include more information on sub-vendors, providing an added layer of transparency to the tool that helps shed light on hundreds of billions of dollars in city contracting. <a href="http://www.checkbooknyc.com/spending_landing/yeartype/B/year/118" target="_blank" rel="noopener noreferrer">Checkbook NYC</a>, the financial accountability portal run by the comptroller’s office with real-time data on the city’s complicated web of spending, contracts, and vendors, will get this updated starting Friday, Stringer is set to announce.</p> <p>The site, which consists of a series of interactive charts and graphs displaying city agency spending and contracts, already features a dashboard of sub-vendors with information on payments by agency, contract, and primary vendor.</p> <p>Stringer’s office is adding information on the number of contracts that require sub-vendor data and how many have submitted it; the number of proposed sub-vendors approved or rejected by agency chief contracting officers (CCOs); the numbers of sub-vendors at different stages of approval at each agency; and the general number of sub-contracts by prime vendors by agency.</p> <p>Additionally, the entry for each individual contract will indicate whether the contractor is required to report sub-vendor information, if that information has been submitted, and where proposed sub-vendors are in the approval process.</p> <p>“This is the start of the process – not the end. Right now, there’s a small amount of sub-vendor information in Checkbook. It won’t be filled overnight. Over time, we know more information will be added and we know it will yield a more open government,” Stringer said in a statement announcing the Checkbook expansion.</p> <p>These sub-vendors are entities hired by a contract’s primary vendor to complete certain tasks. For example, the city’s Department of Design and Construction might hire a large construction firm to work on city-owned buildings. The construction firm, in turn, might pay consultants, engineering firms, and equipment firms as part of their city contract; these would be sub-vendors. According to data on the portal, they have been collectively paid over $450 million so far in fiscal year 2017.</p> <p><a href="http://www.checkbooknyc.com/spending_landing/yeartype/B/year/118" target="_blank" rel="noopener noreferrer">CheckbookNYC</a> was officially launched in 2010 by then-comptroller John Liu in an effort to increase fiscal transparency. It’s evolved since; this will be the third update made by Stringer, a first-term Democrat, since taking office at the beginning of 2014. An August 2014 update brought in data on contracts with the city’s Economic Development Corporation and a February 2015 update included information on minority and women-owned business and created the sub-vendor dashboard.</p> <p>Not all the data will be immediately available. According to the comptroller’s office, “not every prime vendor and agency is in compliance with Citywide reporting rules.” The new feature is in part targeted at increasing reporting compliance.</p> <p>

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by Felipe De La Hoz, Gotham Gazette
     

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<p><img src="http://www.gothamgazette.com/images/graphics/stringer_podium.jpg" alt="stringer podium" width="600" height="400" /></p> <p>Comptroller (photo via @NYCComptroller)</p> <hr /> <p>New York City Comptroller Scott Stringer is modifying the website showing city spending to include more information on sub-vendors, providing an added layer of transparency to the tool that helps shed light on hundreds of billions of dollars in city contracting. <a href="http://www.checkbooknyc.com/spending_landing/yeartype/B/year/118" target="_blank" rel="noopener noreferrer">Checkbook NYC</a>, the financial accountability portal run by the comptroller’s office with real-time data on the city’s complicated web of spending, contracts, and vendors, will get this updated starting Friday, Stringer is set to announce.</p> <p>The site, which consists of a series of interactive charts and graphs displaying city agency spending and contracts, already features a dashboard of sub-vendors with information on payments by agency, contract, and primary vendor.</p> <p>Stringer’s office is adding information on the number of contracts that require sub-vendor data and how many have submitted it; the number of proposed sub-vendors approved or rejected by agency chief contracting officers (CCOs); the numbers of sub-vendors at different stages of approval at each agency; and the general number of sub-contracts by prime vendors by agency.</p> <p>Additionally, the entry for each individual contract will indicate whether the contractor is required to report sub-vendor information, if that information has been submitted, and where proposed sub-vendors are in the approval process.</p> <p>“This is the start of the process – not the end. Right now, there’s a small amount of sub-vendor information in Checkbook. It won’t be filled overnight. Over time, we know more information will be added and we know it will yield a more open government,” Stringer said in a statement announcing the Checkbook expansion.</p> <p>These sub-vendors are entities hired by a contract’s primary vendor to complete certain tasks. For example, the city’s Department of Design and Construction might hire a large construction firm to work on city-owned buildings. The construction firm, in turn, might pay consultants, engineering firms, and equipment firms as part of their city contract; these would be sub-vendors. According to data on the portal, they have been collectively paid over $450 million so far in fiscal year 2017.</p> <p><a href="http://www.checkbooknyc.com/spending_landing/yeartype/B/year/118" target="_blank" rel="noopener noreferrer">CheckbookNYC</a> was officially launched in 2010 by then-comptroller John Liu in an effort to increase fiscal transparency. It’s evolved since; this will be the third update made by Stringer, a first-term Democrat, since taking office at the beginning of 2014. An August 2014 update brought in data on contracts with the city’s Economic Development Corporation and a February 2015 update included information on minority and women-owned business and created the sub-vendor dashboard.</p> <p>Not all the data will be immediately available. According to the comptroller’s office, “not every prime vendor and agency is in compliance with Citywide reporting rules.” The new feature is in part targeted at increasing reporting compliance.</p> <p>

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by Felipe De La Hoz, Gotham Gazette
     

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What's The [DATA] Point? $780 Million, with Comptroller DiNapoli 2017-06-29T04:00:00+00:00 2017-06-29T04:00:00+00:00 http://www.gothamgazette.com/?id=7034:what-s-the-data-point-comptroller-dinapoli Super User <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The Data Point? Episode 3 -- $780 million, with Comptroller Tom DiNapoli. [You can download What's The Data Point? wherever you get your podcasts, including on iTunes]</strong></p> <p>For the third episode of What's The [Data] Point? we were joined by New York State Comptroller Tom DiNapoli, the state's chief fiscal watchdog. With hosts Ben Max and Maria Doulis, DiNapoli discusses his thus far unsuccessful efforts to reform the state's contracting processes in the wake of the $780 million bid-rigging scandal that broke last year with federal charges brought against nine associates of and donors to Governor Andrew Cuomo. DiNapoli also talks state budget matters and the importance of monitoring how taxpayer dollars are spent.</p> <p>Listen and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax">@TweetBenMax</a>), Maria Doulis (<a href="https://twitter.com/MariaDoulis">@MariaDoulis</a>) of CBC, and special guest state Comptroller Thomas DiNapoli (<a href="https://twitter.com/NYSComptroller" target="_blank" rel="noopener noreferrer">@NYSComptroller</a>):</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/330797658&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;visual=true" width="100%" height="300" frameborder="no" scrolling="no"></iframe></p> <p>

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by Ben Max, Gotham Gazette
     

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</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The Data Point? Episode 3 -- $780 million, with Comptroller Tom DiNapoli. [You can download What's The Data Point? wherever you get your podcasts, including on iTunes]</strong></p> <p>For the third episode of What's The [Data] Point? we were joined by New York State Comptroller Tom DiNapoli, the state's chief fiscal watchdog. With hosts Ben Max and Maria Doulis, DiNapoli discusses his thus far unsuccessful efforts to reform the state's contracting processes in the wake of the $780 million bid-rigging scandal that broke last year with federal charges brought against nine associates of and donors to Governor Andrew Cuomo. DiNapoli also talks state budget matters and the importance of monitoring how taxpayer dollars are spent.</p> <p>Listen and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax">@TweetBenMax</a>), Maria Doulis (<a href="https://twitter.com/MariaDoulis">@MariaDoulis</a>) of CBC, and special guest state Comptroller Thomas DiNapoli (<a href="https://twitter.com/NYSComptroller" target="_blank" rel="noopener noreferrer">@NYSComptroller</a>):</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/330797658&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;visual=true" width="100%" height="300" frameborder="no" scrolling="no"></iframe></p> <p>

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by Ben Max, Gotham Gazette
     

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</p>
Mayoral Control or Not, Calls Continue for Contracting Reform at City Department of Education 2017-06-22T04:00:00+00:00 2017-06-22T04:00:00+00:00 http://www.gothamgazette.com/?id=7021:mayoral-control-or-not-calls-continue-for-contracting-reform-at-city-department-of-education Samar Khurshid <p><img src="http://www.gothamgazette.com/images/34245950295_dc5da482b5_z.jpg" alt="34245950295 dc5da482b5 z" width="600" height="399" /></p> <p>Schools Chancellor Carmen Fariña and Mayor de Blasio (photo: Michael Appleton/Mayoral Photography Office)</p> <hr /> <p>New York City elected officials and independent watchdogs continue to voice concerns about the Department of Education’s transparency and contract procurement process. The issue became a flashpoint in the debate over mayoral control of New York City schools, which Albany lawmakers have yet to extend despite a June 30 expiration date. Like other powers over the schools, education-related contracting -- totaling billions of dollars per year -- has been centralized under the Mayor and the DOE through the mayoral control model of school governance.</p> <p>In the recently adopted city budget for fiscal year 2018, which begins July 1, about one-third of the $85.2 billion of operating funding is allocated to the DOE. Most of that funding goes to personnel, but there is a significant sum, about $7 billion, which will be devoted to outside contracts. While there have been no major recent scandals, the process by which the DOE awards those contracts, as well as the availability of information about the contracts, continues to draw criticism.</p> <p>Chief among those critics have been Comptroller Scott Stringer and City Council Member Helen Rosenthal, who chairs the Council’s Committee on Contracts. They are joined by nonprofit leaders who have scrutinized DOE practices for years, including under Mayor Michael Bloomberg, who first won mayoral control of city schools in 2002, ending the old Board of Education system. While there have been multiple high-profile contracting scandals, recently the concern has been a constant stream of smaller-scale, everyday contracts awarded without proper processes, critics say.</p> <p>Stringer has repeatedly and publicly pressured the DOE to disclose more information and clean up its procurement practices. Most recently, Stringer did so in testimony to the City Council as the new budget was being debated. In part, Stringer said that as revenue growth to the city is slowing, there is heightened need for the DOE to be sufficiently scrupulous.</p> <p>According to Stringer, the Department still does not pay enough attention to ensuring the DOE’s billions in contract funding is spent efficiently. “Time and time again, my office finds that current departmental processes are inadequate,” Stringer stated in his testimony, citing $6.7 billion for fiscal year 2018. “Whether it is through an audit of DOE or a review of DOE’s contracts, we find a lack of transparency and a lack of detail that is frightening when you are talking about billions of dollars earmarked for our children.”</p> <p>“The DOE claims to have a system of checks and balances,” Stringer continued, “but if you dig into the details you will find a lack of independent review, a lack of accountability and whole lot of rubber stamps.”</p> <p>Stringer also called the DOE “one of the least transparent agencies in the government,” adding he felt the DOE would “rather hide everything than open up their books." (Stringer’s statements were quickly used by state Senate Majority Leader John Flanagan, a Long Island Republican, against Mayor Bill de Blasio in the mayoral control debate. The comptroller quickly reiterated his support for mayoral control in no uncertain terms.)</p> <p>When pressed for specifics, a spokesperson for Stringer pointed to wasted funds on technology initiatives, failure to detect collusion to drive up prices by food suppliers, late release of 70% pre-kindergarten contract information prior to the 2014 school year, and overpaying on custodial supplies, which Stringer has pointed out over the last three-plus years since he took office as Comptroller and de Blasio became Mayor.</p> <p>Along with these examples, there have been several other instances in which improper contracting practices have cost the city and harmed the DOE’s reputation. In 2008, the city Special Commission of Investigation (SCI) found the DOE had squandered $437,000 on payments to DynTek, a vendor for the DOE’s Department of Instructional and Information Technology which had been paying computer consultants employed by ERS Systems without the DOE’s authorization. “ERS billed DynTek for these services and DynTek, in turn, marked up these costs before billing the DOE,” according to the SCI. Three years later, a consultant Willard (Ross) Lanham was charged with funneling $3.6 million of DOE funds into his own pockets.</p> <p>In 2015, Custom Computer Specialists, a contractor the DOE considered, almost received a $1.1 billion deal to provide hardware and software to schools despite questions about the size of the contract and process involved, as well as the firm's indirect connection to an overbilling scheme. Outcry, led by education activist Leonie Haimson and Council Member Rosenthal, killed the potential deal. Most recently, in May, the Comptroller’s office released an analysis that revealed that after spending over $347 million on upgrading internet services, 45 percent of teachers said their schools’ internet quality “did not meet their instructional needs,” a survey of middle school teachers found.</p> <p>At a May City Council hearing regarding the 2018 budget, Rosenthal asked if the city Office of Management and Budget has unearthed similar problems to the ones in 2015, such as approval of “specious contracts.” “I would like to know that the OMB is doing a regular audit of its contracts,” Rosenthal said.</p> <p>“I would want to know that the DOE is regularly being investigated,” said Rosenthal. “If we were to do that more systematically then we would have more available to us to spend on things we so desperately need.”</p> <p>Rosenthal, who chairs the contracts committee and sits on the education committee, credits Haimson with calling attention to chronic DOE contracting deficiencies. As a response to Haimson bringing awareness to the issue, she has headed efforts to ignite change in the Department. Rosenthal, however, declined to explicitly comment on Stringer’s testimony, and separated herself from the Comptroller's narrative. The Manhattan Council member believes that the DOE has actually improved considerably of late in contracting and openness, especially since she's undertaken efforts to bend the department toward better practices.</p> <p>“I do thank you for what’s been done,” Rosenthal said to Dean Fuleihan, Director of the OMB. She framed the situation by contending the previous mayoral administration had “dug a hole,” and the current one is in the process of getting New York City public education out of it.</p> <p>"What I’ve seen is positive steps that have allowed for more oversight and transparency,” Rosenthal said in an interview with Gotham Gazette.</p> <p>The Upper West Side lawmaker emphasized that, in her view, DOE has allowed City Hall to both scrutinize the Department and collaborate with it. "They have made the contracting process more transparent...they have improved, I think, the oversight relationship with the city agencies,“ she said. Rosenthal noted that if capital and service contract costs rise, that information is now relayed to the City Council. "That's a big change.”</p> <p>According to Rosenthal, contracting practice woes have been ameliorated and their details brought into the limelight in recent years, as evidenced by the Department beginning to post contract information online.</p> <p>Still, while Rosenthal was clear that the DOE has progressed, there is room for improvement. "Is it perfect yet? Of course not,” she said. “But is it much better? Absolutely.” Rosenthal was optimistic about the prospect of additional improvements. She said the City Council and DOE have a “good constructive relationship moving forward.”</p> <p>Nonetheless, Haimson, executive director of Class Size Matters, a nonprofit advocacy group, is not as satisfied with the DOE as Rosenthal. “The budget is still increasing with little or no transparency," Haimson said in an email to Gotham Gazette. By phone, Haimson expressed skepticism about how the DOE manages its enormous budget and its forthrightness in doing so.</p> <p>“I am very disappointed in the whole process because we’ve been sounding the alarm for years now about the lack of transparency with these huge contracts that go through the PEP [Panel for Educational Policy],” she said.</p> <p>The PEP is a body consisting of 13 members appointed by elected officials, predominantly by the Mayor. Mayor Michael Bloomberg created the Panel to replace the Board of Education after the city gained mayoral control of schools. The PEP is designed to conduct independent oversight of the Department of Education but has not necessarily functioned in that manner.</p> <p>As the <a href="http://nypost.com/2016/05/08/school-spending-panel-doe-bullies-us-to-side-with-de-blasio/" target="_blank" rel="noopener noreferrer">New York Post</a> reported last summer, one former PEP member alleges the group is comprised of members who were not equipped to properly review the budget and were pressured into doing the Mayor’s bidding. And, in Haimson’s opinion, the PEP still does not properly vet contracts, allowing the DOE to act with impunity. "I don't think it’s ever turned down a contract in its existence,” Haimson said, referring to the reputation the PEP has as a rubber stamp, both on policy and contracting. "It hasn't gotten better in some ways and in many ways it has gotten worse," she said of the DOE overall.</p> <p>The DOE engaging in sloppy, questionable dealings in secret is not new, said Haimson, who has worked as an education activist since the early aughts. Like Rosenthal, she alleges these problems became rampant under Mayor Bloomberg. “[A]s the budget rose dramatically and the oversight was more critical, Bloomberg didn't want any more scrutiny,” she said.</p> <p>However, unlike Rosenthal, Haimson says the DOE’s forthcomingness has gotten worse, not better, with de Blasio at the helm. “Under Bloomberg, I was able to go to OMB meetings,” she said, alleging she had been barred from these meetings in recent years. "The fact that the Mayor’s Office has more oversight may be good. [But] [w]e don't even know," Haimson said. “There doesn't seem to be anyone looking over their shoulders," she said, adding that providing ample DOE oversight would necessitate an independent commission.</p> <p>The Department of Education disputes claims that it is not careful or candid in its contracting processes. “Our procurement process is transparent and has strong oversight mechanisms, while delivering essential services to students and schools,” a DOE spokesperson said in a statement to Gotham Gazette.</p> <p>Though not related to contracting practices, Council Member Ben Kallos <a href="https://www.nytimes.com/2017/02/27/nyregion/nyc-public-schools.html?_r=0" target="_blank" rel="noopener noreferrer">introduced</a> a <a href="http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2962029&amp;GUID=DB5A6F41-42F2-4EC8-9AC9-3DD4F67004CE&amp;Options=ID%7CText%7C&amp;Search=Education" target="_blank" rel="noopener noreferrer">bill</a> in February that would require the DOE to more thoroughly disclose information about applications and enrollment to New York City public schools. The bill was pre-considered, and a hearing was held on it before it was introduced.&nbsp;</p> <p>"The bill has received some internal support, it has had its hearing and negotiations are ongoing to possibly move it forward," said a spokesperson for Kallos regarding the bill’s status.</p> <p>A representative for City Council Member Daniel Dromm, who chairs the Committee on Education, did not respond to multiple requests for comment about the status of the Kallos legislation, along with inquiries pertaining to DOE transparency and contracting practices.</p> <p>“We have our own issue with DOE," Kallos’ spokesperson said. "Obviously Council Member Kallos wouldn’t have released the bill if [the DOE] was a model of transparency.”</p> <p> </p> <p>Note: This article has been updated to clarify the status of the bill introduced by Council Member Ben Kallos.<br />Note: This article has been updated to more accurately depict the situation involving Custom Computer Specialists and a potential contract it was being considered for.</p> <p><img src="http://www.gothamgazette.com/images/34245950295_dc5da482b5_z.jpg" alt="34245950295 dc5da482b5 z" width="600" height="399" /></p> <p>Schools Chancellor Carmen Fariña and Mayor de Blasio (photo: Michael Appleton/Mayoral Photography Office)</p> <hr /> <p>New York City elected officials and independent watchdogs continue to voice concerns about the Department of Education’s transparency and contract procurement process. The issue became a flashpoint in the debate over mayoral control of New York City schools, which Albany lawmakers have yet to extend despite a June 30 expiration date. Like other powers over the schools, education-related contracting -- totaling billions of dollars per year -- has been centralized under the Mayor and the DOE through the mayoral control model of school governance.</p> <p>In the recently adopted city budget for fiscal year 2018, which begins July 1, about one-third of the $85.2 billion of operating funding is allocated to the DOE. Most of that funding goes to personnel, but there is a significant sum, about $7 billion, which will be devoted to outside contracts. While there have been no major recent scandals, the process by which the DOE awards those contracts, as well as the availability of information about the contracts, continues to draw criticism.</p> <p>Chief among those critics have been Comptroller Scott Stringer and City Council Member Helen Rosenthal, who chairs the Council’s Committee on Contracts. They are joined by nonprofit leaders who have scrutinized DOE practices for years, including under Mayor Michael Bloomberg, who first won mayoral control of city schools in 2002, ending the old Board of Education system. While there have been multiple high-profile contracting scandals, recently the concern has been a constant stream of smaller-scale, everyday contracts awarded without proper processes, critics say.</p> <p>Stringer has repeatedly and publicly pressured the DOE to disclose more information and clean up its procurement practices. Most recently, Stringer did so in testimony to the City Council as the new budget was being debated. In part, Stringer said that as revenue growth to the city is slowing, there is heightened need for the DOE to be sufficiently scrupulous.</p> <p>According to Stringer, the Department still does not pay enough attention to ensuring the DOE’s billions in contract funding is spent efficiently. “Time and time again, my office finds that current departmental processes are inadequate,” Stringer stated in his testimony, citing $6.7 billion for fiscal year 2018. “Whether it is through an audit of DOE or a review of DOE’s contracts, we find a lack of transparency and a lack of detail that is frightening when you are talking about billions of dollars earmarked for our children.”</p> <p>“The DOE claims to have a system of checks and balances,” Stringer continued, “but if you dig into the details you will find a lack of independent review, a lack of accountability and whole lot of rubber stamps.”</p> <p>Stringer also called the DOE “one of the least transparent agencies in the government,” adding he felt the DOE would “rather hide everything than open up their books." (Stringer’s statements were quickly used by state Senate Majority Leader John Flanagan, a Long Island Republican, against Mayor Bill de Blasio in the mayoral control debate. The comptroller quickly reiterated his support for mayoral control in no uncertain terms.)</p> <p>When pressed for specifics, a spokesperson for Stringer pointed to wasted funds on technology initiatives, failure to detect collusion to drive up prices by food suppliers, late release of 70% pre-kindergarten contract information prior to the 2014 school year, and overpaying on custodial supplies, which Stringer has pointed out over the last three-plus years since he took office as Comptroller and de Blasio became Mayor.</p> <p>Along with these examples, there have been several other instances in which improper contracting practices have cost the city and harmed the DOE’s reputation. In 2008, the city Special Commission of Investigation (SCI) found the DOE had squandered $437,000 on payments to DynTek, a vendor for the DOE’s Department of Instructional and Information Technology which had been paying computer consultants employed by ERS Systems without the DOE’s authorization. “ERS billed DynTek for these services and DynTek, in turn, marked up these costs before billing the DOE,” according to the SCI. Three years later, a consultant Willard (Ross) Lanham was charged with funneling $3.6 million of DOE funds into his own pockets.</p> <p>In 2015, Custom Computer Specialists, a contractor the DOE considered, almost received a $1.1 billion deal to provide hardware and software to schools despite questions about the size of the contract and process involved, as well as the firm's indirect connection to an overbilling scheme. Outcry, led by education activist Leonie Haimson and Council Member Rosenthal, killed the potential deal. Most recently, in May, the Comptroller’s office released an analysis that revealed that after spending over $347 million on upgrading internet services, 45 percent of teachers said their schools’ internet quality “did not meet their instructional needs,” a survey of middle school teachers found.</p> <p>At a May City Council hearing regarding the 2018 budget, Rosenthal asked if the city Office of Management and Budget has unearthed similar problems to the ones in 2015, such as approval of “specious contracts.” “I would like to know that the OMB is doing a regular audit of its contracts,” Rosenthal said.</p> <p>“I would want to know that the DOE is regularly being investigated,” said Rosenthal. “If we were to do that more systematically then we would have more available to us to spend on things we so desperately need.”</p> <p>Rosenthal, who chairs the contracts committee and sits on the education committee, credits Haimson with calling attention to chronic DOE contracting deficiencies. As a response to Haimson bringing awareness to the issue, she has headed efforts to ignite change in the Department. Rosenthal, however, declined to explicitly comment on Stringer’s testimony, and separated herself from the Comptroller's narrative. The Manhattan Council member believes that the DOE has actually improved considerably of late in contracting and openness, especially since she's undertaken efforts to bend the department toward better practices.</p> <p>“I do thank you for what’s been done,” Rosenthal said to Dean Fuleihan, Director of the OMB. She framed the situation by contending the previous mayoral administration had “dug a hole,” and the current one is in the process of getting New York City public education out of it.</p> <p>"What I’ve seen is positive steps that have allowed for more oversight and transparency,” Rosenthal said in an interview with Gotham Gazette.</p> <p>The Upper West Side lawmaker emphasized that, in her view, DOE has allowed City Hall to both scrutinize the Department and collaborate with it. "They have made the contracting process more transparent...they have improved, I think, the oversight relationship with the city agencies,“ she said. Rosenthal noted that if capital and service contract costs rise, that information is now relayed to the City Council. "That's a big change.”</p> <p>According to Rosenthal, contracting practice woes have been ameliorated and their details brought into the limelight in recent years, as evidenced by the Department beginning to post contract information online.</p> <p>Still, while Rosenthal was clear that the DOE has progressed, there is room for improvement. "Is it perfect yet? Of course not,” she said. “But is it much better? Absolutely.” Rosenthal was optimistic about the prospect of additional improvements. She said the City Council and DOE have a “good constructive relationship moving forward.”</p> <p>Nonetheless, Haimson, executive director of Class Size Matters, a nonprofit advocacy group, is not as satisfied with the DOE as Rosenthal. “The budget is still increasing with little or no transparency," Haimson said in an email to Gotham Gazette. By phone, Haimson expressed skepticism about how the DOE manages its enormous budget and its forthrightness in doing so.</p> <p>“I am very disappointed in the whole process because we’ve been sounding the alarm for years now about the lack of transparency with these huge contracts that go through the PEP [Panel for Educational Policy],” she said.</p> <p>The PEP is a body consisting of 13 members appointed by elected officials, predominantly by the Mayor. Mayor Michael Bloomberg created the Panel to replace the Board of Education after the city gained mayoral control of schools. The PEP is designed to conduct independent oversight of the Department of Education but has not necessarily functioned in that manner.</p> <p>As the <a href="http://nypost.com/2016/05/08/school-spending-panel-doe-bullies-us-to-side-with-de-blasio/" target="_blank" rel="noopener noreferrer">New York Post</a> reported last summer, one former PEP member alleges the group is comprised of members who were not equipped to properly review the budget and were pressured into doing the Mayor’s bidding. And, in Haimson’s opinion, the PEP still does not properly vet contracts, allowing the DOE to act with impunity. "I don't think it’s ever turned down a contract in its existence,” Haimson said, referring to the reputation the PEP has as a rubber stamp, both on policy and contracting. "It hasn't gotten better in some ways and in many ways it has gotten worse," she said of the DOE overall.</p> <p>The DOE engaging in sloppy, questionable dealings in secret is not new, said Haimson, who has worked as an education activist since the early aughts. Like Rosenthal, she alleges these problems became rampant under Mayor Bloomberg. “[A]s the budget rose dramatically and the oversight was more critical, Bloomberg didn't want any more scrutiny,” she said.</p> <p>However, unlike Rosenthal, Haimson says the DOE’s forthcomingness has gotten worse, not better, with de Blasio at the helm. “Under Bloomberg, I was able to go to OMB meetings,” she said, alleging she had been barred from these meetings in recent years. "The fact that the Mayor’s Office has more oversight may be good. [But] [w]e don't even know," Haimson said. “There doesn't seem to be anyone looking over their shoulders," she said, adding that providing ample DOE oversight would necessitate an independent commission.</p> <p>The Department of Education disputes claims that it is not careful or candid in its contracting processes. “Our procurement process is transparent and has strong oversight mechanisms, while delivering essential services to students and schools,” a DOE spokesperson said in a statement to Gotham Gazette.</p> <p>Though not related to contracting practices, Council Member Ben Kallos <a href="https://www.nytimes.com/2017/02/27/nyregion/nyc-public-schools.html?_r=0" target="_blank" rel="noopener noreferrer">introduced</a> a <a href="http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2962029&amp;GUID=DB5A6F41-42F2-4EC8-9AC9-3DD4F67004CE&amp;Options=ID%7CText%7C&amp;Search=Education" target="_blank" rel="noopener noreferrer">bill</a> in February that would require the DOE to more thoroughly disclose information about applications and enrollment to New York City public schools. The bill was pre-considered, and a hearing was held on it before it was introduced.&nbsp;</p> <p>"The bill has received some internal support, it has had its hearing and negotiations are ongoing to possibly move it forward," said a spokesperson for Kallos regarding the bill’s status.</p> <p>A representative for City Council Member Daniel Dromm, who chairs the Committee on Education, did not respond to multiple requests for comment about the status of the Kallos legislation, along with inquiries pertaining to DOE transparency and contracting practices.</p> <p>“We have our own issue with DOE," Kallos’ spokesperson said. "Obviously Council Member Kallos wouldn’t have released the bill if [the DOE] was a model of transparency.”</p> <p> </p> <p>Note: This article has been updated to clarify the status of the bill introduced by Council Member Ben Kallos.<br />Note: This article has been updated to more accurately depict the situation involving Custom Computer Specialists and a potential contract it was being considered for.</p> City Council Considers Subcontractors Bill of Rights 2017-06-22T04:00:00+00:00 2017-06-22T04:00:00+00:00 http://www.gothamgazette.com/?id=7022:council-considers-bill-of-rights-for-subcontractors Samar Khurshid <p><img src="http://www.gothamgazette.com/images/12331075774_34a53d8c6d_z.jpg" alt="12331075774 34a53d8c6d z" width="600" height="411" /></p> <p>Council Member Helen Rosenthal (photo: William Alatriste/New York City Council)</p> <hr /> <p>The City Council’s Committee on Economic Development and the Committee on Contracts held a joint hearing on Thursday to discuss proposed legislation that would create a bill of rights for subcontractors working with the city.</p> <p><a href="http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3055671&amp;GUID=B9076E52-649D-4461-A4B1-0A057750D97F&amp;Options=&amp;Search=" target="_blank" rel="noopener noreferrer">Intro.1615</a>, sponsored by Council Members Laurie Cumbo, Robert Cornegy, Jr., and Helen Rosenthal, would require the Department of Small Business Services to create a bill of rights that clearly lays out expectations for prime contractors and subcontractors, and makes it easier for subcontractors to find out what services and resources are available to them should they have a problem or concern with their contract. The legislation would apply to any contracts worth more than $100,000.</p> <p>“[Contracting] is the heart of so much of what we do here -- construction of public infrastructure and affordable housing, a whole range of human services from pre-K all the way up to senior services,” said Rosenthal, chair of the contracts committee, in her opening statement. “The contracting process is an essential part of how New York City government works.”</p> <p>The city has registered 12,949 expense contracts worth $20.3 billion in the 2017 fiscal year, which runs through June 30, and subcontractors accounted for $558 million of that sum, according to data available on the comptroller’s <a href="http://www.checkbooknyc.com/contracts_landing/status/A/yeartype/B/year/118/dashboard/ss" target="_blank" rel="noopener noreferrer">Checkbook NYC</a> website. These subcontractors often face a number of hurdles including a lack of access to adequate legal representation to navigate contracts, receiving late payments, and not being able to apply for loans. This is especially true for subcontractors working in human services.</p> <p>“Contractors often pay subcontractors late because they cannot disburse government funds prior to completion of the service they are paying for, and they themselves are paid late,” explained Tracie Robinson, a senior policy analyst at the Human Services Council of New York, in her testimony. HSC represents thousands of nonprofits in New York and advocates for human services providers as a whole. “[Subcontractors] operate in the context of a broken contracting system. Only if we address the underlying causes of subcontractor instability -- problems at the government-contractor level -- will we be able to set prime contractors and subcontractors alike up for success.”</p> <p>Many subcontractors are nonprofit organizations and small businesses that are overshadowed by larger entities and do not have the same access to credit and fundraising. Intro. 1615 would make sure that subcontractors get an overview of the payment process, know the points of contact between government agencies, and can get the appropriate documents necessary to get the information and assistance they need.</p> <p>“Many smaller nonprofit organizations do not have in-house attorneys or staff with experience understanding and administering government contracts,” said Laura Abel, senior policy counsel for Lawyers Alliance for New York, a provider of business and legal services for nonprofits. “City contracts are long, dense, and full of legalese. As a result, nonprofit organizations may take on obligations that they do not understand and cannot fulfill.”</p> <p>Abel also added, “I have asked clients dealing with an unexpected development what their contract says about that issue, only to hear, ‘Oh, it’s all boilerplate, it’s no help.’ A subcontractor bill of rights can help by encouraging subcontractors to consult counsel before entering into a contract, and whenever they have questions during the life of the contract.”</p> <p>In addition, subcontractors are frequently minority- and women-owned businesses, commonly referred to as M/WBEs. The city has been trying to encourage the growth and development of M/WBEs to ensure a more equitable distribution of city money. M/WBEs also tend to be more familiar with local community needs compared to larger contractors. M/WBEs accounted for $245.8 million in subcontracts registered in fiscal 2017. Mayor Bill de Blasio’s <a href="https://onenyc.cityofnewyork.us" target="_blank" rel="noopener noreferrer">OneNYC plan</a> includes a commitment to award at least 30 percent of city contract dollars to M/WBEs by 2021 and to award $16 billion in city contracts to M/WBEs by 2025.</p> <p>Michael Owh, director of the Mayor’s Office of Contract Services and the city’s chief procurement officer, said the de Blasio administration supports the bill and that it “is a step in the right direction toward providing information to businesses and connecting them with resources.”</p> <p>When asked by Council Member Daniel Garodnick, the chair of the Committee on Economic Development, if the bill warranted any changes or edits, Owh emphasized that it would need input from all the stakeholders. “[We] want to make sure that we get enough feedback from not just our agencies but also the community, the contracting community, as well as the subcontracting community to make sure that we are able to take in all of the various factors,” Owh said.</p> <p> </p> <p><img src="http://www.gothamgazette.com/images/12331075774_34a53d8c6d_z.jpg" alt="12331075774 34a53d8c6d z" width="600" height="411" /></p> <p>Council Member Helen Rosenthal (photo: William Alatriste/New York City Council)</p> <hr /> <p>The City Council’s Committee on Economic Development and the Committee on Contracts held a joint hearing on Thursday to discuss proposed legislation that would create a bill of rights for subcontractors working with the city.</p> <p><a href="http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3055671&amp;GUID=B9076E52-649D-4461-A4B1-0A057750D97F&amp;Options=&amp;Search=" target="_blank" rel="noopener noreferrer">Intro.1615</a>, sponsored by Council Members Laurie Cumbo, Robert Cornegy, Jr., and Helen Rosenthal, would require the Department of Small Business Services to create a bill of rights that clearly lays out expectations for prime contractors and subcontractors, and makes it easier for subcontractors to find out what services and resources are available to them should they have a problem or concern with their contract. The legislation would apply to any contracts worth more than $100,000.</p> <p>“[Contracting] is the heart of so much of what we do here -- construction of public infrastructure and affordable housing, a whole range of human services from pre-K all the way up to senior services,” said Rosenthal, chair of the contracts committee, in her opening statement. “The contracting process is an essential part of how New York City government works.”</p> <p>The city has registered 12,949 expense contracts worth $20.3 billion in the 2017 fiscal year, which runs through June 30, and subcontractors accounted for $558 million of that sum, according to data available on the comptroller’s <a href="http://www.checkbooknyc.com/contracts_landing/status/A/yeartype/B/year/118/dashboard/ss" target="_blank" rel="noopener noreferrer">Checkbook NYC</a> website. These subcontractors often face a number of hurdles including a lack of access to adequate legal representation to navigate contracts, receiving late payments, and not being able to apply for loans. This is especially true for subcontractors working in human services.</p> <p>“Contractors often pay subcontractors late because they cannot disburse government funds prior to completion of the service they are paying for, and they themselves are paid late,” explained Tracie Robinson, a senior policy analyst at the Human Services Council of New York, in her testimony. HSC represents thousands of nonprofits in New York and advocates for human services providers as a whole. “[Subcontractors] operate in the context of a broken contracting system. Only if we address the underlying causes of subcontractor instability -- problems at the government-contractor level -- will we be able to set prime contractors and subcontractors alike up for success.”</p> <p>Many subcontractors are nonprofit organizations and small businesses that are overshadowed by larger entities and do not have the same access to credit and fundraising. Intro. 1615 would make sure that subcontractors get an overview of the payment process, know the points of contact between government agencies, and can get the appropriate documents necessary to get the information and assistance they need.</p> <p>“Many smaller nonprofit organizations do not have in-house attorneys or staff with experience understanding and administering government contracts,” said Laura Abel, senior policy counsel for Lawyers Alliance for New York, a provider of business and legal services for nonprofits. “City contracts are long, dense, and full of legalese. As a result, nonprofit organizations may take on obligations that they do not understand and cannot fulfill.”</p> <p>Abel also added, “I have asked clients dealing with an unexpected development what their contract says about that issue, only to hear, ‘Oh, it’s all boilerplate, it’s no help.’ A subcontractor bill of rights can help by encouraging subcontractors to consult counsel before entering into a contract, and whenever they have questions during the life of the contract.”</p> <p>In addition, subcontractors are frequently minority- and women-owned businesses, commonly referred to as M/WBEs. The city has been trying to encourage the growth and development of M/WBEs to ensure a more equitable distribution of city money. M/WBEs also tend to be more familiar with local community needs compared to larger contractors. M/WBEs accounted for $245.8 million in subcontracts registered in fiscal 2017. Mayor Bill de Blasio’s <a href="https://onenyc.cityofnewyork.us" target="_blank" rel="noopener noreferrer">OneNYC plan</a> includes a commitment to award at least 30 percent of city contract dollars to M/WBEs by 2021 and to award $16 billion in city contracts to M/WBEs by 2025.</p> <p>Michael Owh, director of the Mayor’s Office of Contract Services and the city’s chief procurement officer, said the de Blasio administration supports the bill and that it “is a step in the right direction toward providing information to businesses and connecting them with resources.”</p> <p>When asked by Council Member Daniel Garodnick, the chair of the Committee on Economic Development, if the bill warranted any changes or edits, Owh emphasized that it would need input from all the stakeholders. “[We] want to make sure that we get enough feedback from not just our agencies but also the community, the contracting community, as well as the subcontracting community to make sure that we are able to take in all of the various factors,” Owh said.</p> <p> </p> With Session Ending and Trial Looming, No Legislative Response to Bid-rigging Scandal 2017-06-18T04:00:00+00:00 2017-06-18T04:00:00+00:00 http://www.gothamgazette.com/?id=7007:with-session-ending-and-trial-looming-no-legislative-response-to-bid-rigging-scandal Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/24253948132_378146d4bd_z_1.jpg" alt="Cuomo Flanagan Heastie" width="600" height="400" /></p> <p>Flanagan, Cuomo, Heastie (photo: The Governor's Office)</p> <hr /> <p>With just three scheduled days left in the legislative session and the corruption trial of several close associates of Governor Andrew Cuomo for their roles in a bid-rigging scandal scheduled to commence in October, the Legislature has yet to pass any meaningful legislation to prevent such abuses of the procurement process.</p> <p>State Comptroller Tom DiNapoli has introduced a comprehensive bill to address the issue, which is the basis for a Senate bill sponsored by Senator John DeFrancisco, a Syracuse Republican, and sister legislation by Assemblymember Crystal Peoples-Stokes, a Buffalo Democrat. The legislation would restore authority of the Comptroller to pre-audit all state contracts over $250,000, particularly for SUNY and CUNY affiliated non-profits, a power that was stripped in 2011.</p> <p>That year, Cuomo and legislative leaders (who are now headed to jail) said that the scaling back of oversight was necessary in order to expedite approval for the governor’s signature economic development initiatives. The idea that the Comptroller’s contract review slows down projects is misguided, according to budget watchdogs. The Comptroller has up to 30 days to approve a contract, but on average approves contracts within six days, according to April figures provided by DiNapoli’s office.</p> <p>The absence of an independent oversight body appears to have cleared the way for the massive $800 million bribery scheme that took down close Cuomo associate and friend Joe Percoco, as well as then-SUNY Polytechnic President Alain Kaloyeros, who Cuomo had heaped praise and responsibility on, and several major donors to Cuomo who were awarded large contracts. The alleged scheme was uncovered by the office of then-U.S. Attorney Preet Bharara.</p> <p>More recently, Bart Schwartz, head of Guidepost Solutions LLC, who was hired by Cuomo to probe the contracting process and what might have gone wrong, found significant flaws. In his review of the $417 million awarded to vendors at Buffalo’s SolarCity project and other upstate initiatives, he found that at least $49 million was awarded using a “sloppy process.” The Buffalo News <a href="http://buffalonews.com/2017/06/15/report-cuomo-outlines-states-sloppy-buffalo-billion-billing-process/" target="_blank" rel="noopener noreferrer">first reported</a> the details of Schwartz’s report, which the Cuomo administration had failed to make public, but was obtained through the Freedom of Information Law (FOIL). Schwartz was paid as much as $1 million for his investigative work and the Cuomo administration has indicated that it accepted his recommendations for cleaning up contracting processes.</p> <p>While DeFrancisco’s bill has passed the Senate’s finance committee, and the Assembly on Wednesday tweaked its version of the bill to match the Senate’s, legislative leaders offered reserved endorsements of the legislation, and it has yet to be calendared for a floor vote in either house.</p> <p>Both Republican Senate Majority Leader John Flanagan and Democratic Assembly Speaker Carl Heastie have said they support the restoration of pre-auditing powers to the comptroller’s office, but that they are working towards a “three-way agreement” with the governor before advancing the legislation, which is backed by good government groups and many rank-and-file lawmakers.</p> <p>Meanwhile, the governor has been defiant, saying that the powers should not be returned to the Comptroller. Instead, Cuomo in his 2017 policy book proposed expanding the oversight powers of the state inspector general to include procurement at CUNY and SUNY nonprofits, as well as new inspectors general, appointed by and reporting to the executive branch. In the aftermath of the scandal, Cuomo also vowed to create a chief procurement officer in the executive branch.</p> <p>“The proposed legislation does not address the issue and is both burdensome and duplicative,” said Cuomo’s counsel, Alphonso David, in a statement to Gotham Gazette. “The vast majority of these contracts are subject to OSC [Office of the State Comptroller] post-award oversight and these measures only add significant delays and increase costs for New York taxpayers.”</p> <p>David’s statement highlights a key difference between the governor’s proposal and the “clean contracting” legislation backed by the comptroller and government reformers, which emphasizes prevention, making SUNY and CUNY projects subject to the same early scrutiny and standards as other state-funded projects, rather than after-the-fact oversight.</p> <p>“The governor's proposal utterly and totally misses the point because it creates addition inspector generals who are appointed by the governor,” said John Kaehny, executive director of the government reform group ReInvent Albany. “The problem...was bid-rigging; the state contracts were rigged to favor one vendor over the others, and that could have been prevented by independent, pre-contract review.”</p> <p>Representatives from the Reinvent Albany, New York Public Interest Group, League of Women Voters, and Citizens Budget Commission gathered at the Capitol this past Wednesday, with the blessing of other government reform groups, to call on Albany to pass the legislation -- with or without the governor’s support.</p> <p>“If lawmakers are at all serious about addressing the problems that happened with last year’s bid-rigging scandal they need to support prevention of these crime -- and that means independent pre-contract review,” said Kaehny.</p> <p>They noted that the Legislature is granted power to enact legislation without the governor’s support, first by passing it through both houses. If Cuomo does not then sign or veto the bill, it would automatically become law in 10 days. If the governor vetoes it, the Legislature could independently reconvene to override his veto. More than a majority, two-thirds of each house, must vote in favor in order pass legislation rejected by the governor. As a result, veto overrides are rare; <a href="http://www.nytimes.com/2006/04/27/nyregion/legislature-overrides-most-budget-vetoes-but-pataki-says-he-will.html" target="_blank" rel="noopener noreferrer">the last time</a> the Legislature successfully overrode a gubernatorial veto was in 2006, during a tumultuous budget negotiation that took place during the last year of Governor George Pataki’s final term, when legislative leaders went to bat over a property tax rebate and cuts to state university funding.&nbsp;</p> <p>Among those who floated the idea of the Legislature passing the bill without the governor’s support is Senator DeFrancisco, who expressed frustration the procurement reform legislation was not calendared earlier.</p> <p>“I try to advocate for it all the time. I know the governor is apoplectic against it and he’d rather have an inspector general that he can control,” DeFrancisco told reporters at the Capitol on June 12. “Hopefully reason will prevail.”</p> <p>When asked to elaborate on the problems with the governor’s proposal, DeFrancisco said, “What he wanted in the budget was to have an independent inspector general, appointed by him to review his contracts. I don’t think you have to be a lawyer, you just have to be somewhat sane to realize that that’s not a check and balance on anybody. He doesn’t want to lose that control and have that oversight. There’s no other logic why he wouldn’t do it.”</p> <p>Speaker Heastie, in an interview with Gotham Gazette, remained coy about the possibility of passing the legislation and reconvening to override a potential gubernatorial veto.</p> <p>"Those are always options, that are there but again you are asking me what you are going to do on failure, I don’t like to report on failure,“ he said, adding that there is always “the summer” and “next session” to pass legislation.</p> <p>“The end of session is a deadline, but it’s not the end of the world if there is ever a need for us to do anything legislatively. We said we’ll come back if the actions in Washington dictate us to come back,” he said. “If we have to come back, the members will come back."</p> <p>Majority Leader Flanagan expressed only slightly more enthusiasm about the idea of procurement reform. Calling the oversight measure “extraordinarily important,” Flanagan said, “I expect we will have procurement reform before the end of the session, whether it’s [legislation proposed by] Senator DeFrancisco or a variation of that bill, I expect we will move in that direction.”</p> <p>The bill has widespread support in the Legislature; minority leaders say they also support the comptroller-backed proposal, which also ends contracting for non-academic purposes by state-controlled non-profit organizations, and transfers all economic development awards to the the Empire State Development Corporation.</p> <p>However, Independent Democratic Conference (IDC) Leader Senator Jeff Klein struck a different tone Thursday, saying he opposed DeFrancisco’s legislation. The IDC and GOP have a power-sharing alliance in the Senate. Klein said he intends to introduce a new bill this week, which instead of restoring the comptroller’s powers would appoint an independent investigator to look at claims of misconduct. When pressed, he did not clarify how this proposal differed from the governor’s proposal.</p> <p>“Right now the power of the comptroller is post-audit -- so what I would assume is if there is any problem in the procurement process, you’d be able to spot any problem post-audit. Then why would you need to have pre-audit ability?” said Klein. “I think what we need is a downright investigator -- someone who has the power to investigate the contracting process as it moves forward, to make sure there’s no favoritism, to make sure there’s no bribery.”</p> <p>This past week, the bill’s Assembly sponsor, Peoples-Stokes, also expressed second thoughts about how the legislation could slow the approval for contracts for minority- and women-owned businesses that are awarded grants by the state’s Empire State Development Corporation, or impact healthcare organizations like Roswell Park Cancer Institute, a public not-for-profit that would be subject to increased scrutiny.</p> <p>“The last thing we want is processes to slow down their ability to grow...At first blush, it seems like great legislation, when you delve in there’s some things that need to be tweaked,” said Peoples-Stokes. “I’m grateful there’s some lawyers and a team around here that can help me straighten something out. I think what happened in 2011, that maybe we should takes some looks at, but all these other things.”</p> <p>Earlier this year, a month after talks of a long-awaited pay raise for lawmakers turned sour, legislative leaders seemed ready to take a different approach than they are now, vowing to stand up to the executive branch.</p> <p>In January, during his remarks on opening day of the 2017 session, Flanagan urged his fellow lawmakers to stand up to the governor over the economic development programs, which were marred by the alleged bid-rigging scandal and other accountability problems. Urging his fellow legislators to “ask tough questions” on the progress of economic initiatives like Start-Up NY and Regional Economic Development Councils, Flanagan cited the Legislature’s power as a check on the governor.</p> <p>“It’s very simple, the legislative power of the state is vested in the Senate and the Assembly,” Flanagan said in January. “Not the attorney general, not the controller, and not the governor.”</p> <p>In the budget deal passed in April, Cuomo’s signature economic development and infrastructure programs were fully-funded and no new oversight measures were passed.</p> <p><a href="https://www.nysenate.gov/legislation/bills/2017/s6613" target="_blank" rel="noopener noreferrer">Another bill</a>, sponsored by Senator Thomas Croci, a Long Island Republican, would create a searchable “database of deals,” cataloguing all businesses that have been awarded state subsidies -- a system in place in six other states -- has made no headway in the Senate or Assembly.</p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/24253948132_378146d4bd_z_1.jpg" alt="Cuomo Flanagan Heastie" width="600" height="400" /></p> <p>Flanagan, Cuomo, Heastie (photo: The Governor's Office)</p> <hr /> <p>With just three scheduled days left in the legislative session and the corruption trial of several close associates of Governor Andrew Cuomo for their roles in a bid-rigging scandal scheduled to commence in October, the Legislature has yet to pass any meaningful legislation to prevent such abuses of the procurement process.</p> <p>State Comptroller Tom DiNapoli has introduced a comprehensive bill to address the issue, which is the basis for a Senate bill sponsored by Senator John DeFrancisco, a Syracuse Republican, and sister legislation by Assemblymember Crystal Peoples-Stokes, a Buffalo Democrat. The legislation would restore authority of the Comptroller to pre-audit all state contracts over $250,000, particularly for SUNY and CUNY affiliated non-profits, a power that was stripped in 2011.</p> <p>That year, Cuomo and legislative leaders (who are now headed to jail) said that the scaling back of oversight was necessary in order to expedite approval for the governor’s signature economic development initiatives. The idea that the Comptroller’s contract review slows down projects is misguided, according to budget watchdogs. The Comptroller has up to 30 days to approve a contract, but on average approves contracts within six days, according to April figures provided by DiNapoli’s office.</p> <p>The absence of an independent oversight body appears to have cleared the way for the massive $800 million bribery scheme that took down close Cuomo associate and friend Joe Percoco, as well as then-SUNY Polytechnic President Alain Kaloyeros, who Cuomo had heaped praise and responsibility on, and several major donors to Cuomo who were awarded large contracts. The alleged scheme was uncovered by the office of then-U.S. Attorney Preet Bharara.</p> <p>More recently, Bart Schwartz, head of Guidepost Solutions LLC, who was hired by Cuomo to probe the contracting process and what might have gone wrong, found significant flaws. In his review of the $417 million awarded to vendors at Buffalo’s SolarCity project and other upstate initiatives, he found that at least $49 million was awarded using a “sloppy process.” The Buffalo News <a href="http://buffalonews.com/2017/06/15/report-cuomo-outlines-states-sloppy-buffalo-billion-billing-process/" target="_blank" rel="noopener noreferrer">first reported</a> the details of Schwartz’s report, which the Cuomo administration had failed to make public, but was obtained through the Freedom of Information Law (FOIL). Schwartz was paid as much as $1 million for his investigative work and the Cuomo administration has indicated that it accepted his recommendations for cleaning up contracting processes.</p> <p>While DeFrancisco’s bill has passed the Senate’s finance committee, and the Assembly on Wednesday tweaked its version of the bill to match the Senate’s, legislative leaders offered reserved endorsements of the legislation, and it has yet to be calendared for a floor vote in either house.</p> <p>Both Republican Senate Majority Leader John Flanagan and Democratic Assembly Speaker Carl Heastie have said they support the restoration of pre-auditing powers to the comptroller’s office, but that they are working towards a “three-way agreement” with the governor before advancing the legislation, which is backed by good government groups and many rank-and-file lawmakers.</p> <p>Meanwhile, the governor has been defiant, saying that the powers should not be returned to the Comptroller. Instead, Cuomo in his 2017 policy book proposed expanding the oversight powers of the state inspector general to include procurement at CUNY and SUNY nonprofits, as well as new inspectors general, appointed by and reporting to the executive branch. In the aftermath of the scandal, Cuomo also vowed to create a chief procurement officer in the executive branch.</p> <p>“The proposed legislation does not address the issue and is both burdensome and duplicative,” said Cuomo’s counsel, Alphonso David, in a statement to Gotham Gazette. “The vast majority of these contracts are subject to OSC [Office of the State Comptroller] post-award oversight and these measures only add significant delays and increase costs for New York taxpayers.”</p> <p>David’s statement highlights a key difference between the governor’s proposal and the “clean contracting” legislation backed by the comptroller and government reformers, which emphasizes prevention, making SUNY and CUNY projects subject to the same early scrutiny and standards as other state-funded projects, rather than after-the-fact oversight.</p> <p>“The governor's proposal utterly and totally misses the point because it creates addition inspector generals who are appointed by the governor,” said John Kaehny, executive director of the government reform group ReInvent Albany. “The problem...was bid-rigging; the state contracts were rigged to favor one vendor over the others, and that could have been prevented by independent, pre-contract review.”</p> <p>Representatives from the Reinvent Albany, New York Public Interest Group, League of Women Voters, and Citizens Budget Commission gathered at the Capitol this past Wednesday, with the blessing of other government reform groups, to call on Albany to pass the legislation -- with or without the governor’s support.</p> <p>“If lawmakers are at all serious about addressing the problems that happened with last year’s bid-rigging scandal they need to support prevention of these crime -- and that means independent pre-contract review,” said Kaehny.</p> <p>They noted that the Legislature is granted power to enact legislation without the governor’s support, first by passing it through both houses. If Cuomo does not then sign or veto the bill, it would automatically become law in 10 days. If the governor vetoes it, the Legislature could independently reconvene to override his veto. More than a majority, two-thirds of each house, must vote in favor in order pass legislation rejected by the governor. As a result, veto overrides are rare; <a href="http://www.nytimes.com/2006/04/27/nyregion/legislature-overrides-most-budget-vetoes-but-pataki-says-he-will.html" target="_blank" rel="noopener noreferrer">the last time</a> the Legislature successfully overrode a gubernatorial veto was in 2006, during a tumultuous budget negotiation that took place during the last year of Governor George Pataki’s final term, when legislative leaders went to bat over a property tax rebate and cuts to state university funding.&nbsp;</p> <p>Among those who floated the idea of the Legislature passing the bill without the governor’s support is Senator DeFrancisco, who expressed frustration the procurement reform legislation was not calendared earlier.</p> <p>“I try to advocate for it all the time. I know the governor is apoplectic against it and he’d rather have an inspector general that he can control,” DeFrancisco told reporters at the Capitol on June 12. “Hopefully reason will prevail.”</p> <p>When asked to elaborate on the problems with the governor’s proposal, DeFrancisco said, “What he wanted in the budget was to have an independent inspector general, appointed by him to review his contracts. I don’t think you have to be a lawyer, you just have to be somewhat sane to realize that that’s not a check and balance on anybody. He doesn’t want to lose that control and have that oversight. There’s no other logic why he wouldn’t do it.”</p> <p>Speaker Heastie, in an interview with Gotham Gazette, remained coy about the possibility of passing the legislation and reconvening to override a potential gubernatorial veto.</p> <p>"Those are always options, that are there but again you are asking me what you are going to do on failure, I don’t like to report on failure,“ he said, adding that there is always “the summer” and “next session” to pass legislation.</p> <p>“The end of session is a deadline, but it’s not the end of the world if there is ever a need for us to do anything legislatively. We said we’ll come back if the actions in Washington dictate us to come back,” he said. “If we have to come back, the members will come back."</p> <p>Majority Leader Flanagan expressed only slightly more enthusiasm about the idea of procurement reform. Calling the oversight measure “extraordinarily important,” Flanagan said, “I expect we will have procurement reform before the end of the session, whether it’s [legislation proposed by] Senator DeFrancisco or a variation of that bill, I expect we will move in that direction.”</p> <p>The bill has widespread support in the Legislature; minority leaders say they also support the comptroller-backed proposal, which also ends contracting for non-academic purposes by state-controlled non-profit organizations, and transfers all economic development awards to the the Empire State Development Corporation.</p> <p>However, Independent Democratic Conference (IDC) Leader Senator Jeff Klein struck a different tone Thursday, saying he opposed DeFrancisco’s legislation. The IDC and GOP have a power-sharing alliance in the Senate. Klein said he intends to introduce a new bill this week, which instead of restoring the comptroller’s powers would appoint an independent investigator to look at claims of misconduct. When pressed, he did not clarify how this proposal differed from the governor’s proposal.</p> <p>“Right now the power of the comptroller is post-audit -- so what I would assume is if there is any problem in the procurement process, you’d be able to spot any problem post-audit. Then why would you need to have pre-audit ability?” said Klein. “I think what we need is a downright investigator -- someone who has the power to investigate the contracting process as it moves forward, to make sure there’s no favoritism, to make sure there’s no bribery.”</p> <p>This past week, the bill’s Assembly sponsor, Peoples-Stokes, also expressed second thoughts about how the legislation could slow the approval for contracts for minority- and women-owned businesses that are awarded grants by the state’s Empire State Development Corporation, or impact healthcare organizations like Roswell Park Cancer Institute, a public not-for-profit that would be subject to increased scrutiny.</p> <p>“The last thing we want is processes to slow down their ability to grow...At first blush, it seems like great legislation, when you delve in there’s some things that need to be tweaked,” said Peoples-Stokes. “I’m grateful there’s some lawyers and a team around here that can help me straighten something out. I think what happened in 2011, that maybe we should takes some looks at, but all these other things.”</p> <p>Earlier this year, a month after talks of a long-awaited pay raise for lawmakers turned sour, legislative leaders seemed ready to take a different approach than they are now, vowing to stand up to the executive branch.</p> <p>In January, during his remarks on opening day of the 2017 session, Flanagan urged his fellow lawmakers to stand up to the governor over the economic development programs, which were marred by the alleged bid-rigging scandal and other accountability problems. Urging his fellow legislators to “ask tough questions” on the progress of economic initiatives like Start-Up NY and Regional Economic Development Councils, Flanagan cited the Legislature’s power as a check on the governor.</p> <p>“It’s very simple, the legislative power of the state is vested in the Senate and the Assembly,” Flanagan said in January. “Not the attorney general, not the controller, and not the governor.”</p> <p>In the budget deal passed in April, Cuomo’s signature economic development and infrastructure programs were fully-funded and no new oversight measures were passed.</p> <p><a href="https://www.nysenate.gov/legislation/bills/2017/s6613" target="_blank" rel="noopener noreferrer">Another bill</a>, sponsored by Senator Thomas Croci, a Long Island Republican, would create a searchable “database of deals,” cataloguing all businesses that have been awarded state subsidies -- a system in place in six other states -- has made no headway in the Senate or Assembly.</p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p>
Government Watchdogs Push 'Clean Contracting' Reform in Albany 2017-05-10T04:00:00+00:00 2017-05-10T04:00:00+00:00 http://www.gothamgazette.com/?id=6927:government-watchdogs-push-clean-contracting-reform-in-albany Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/25944005563_4e277f7372_z_1.jpg" alt="Kaloyeros infrastructure" width="600" height="400" /></p> <p>Alain Kaloyeros in 2016 (photo: The Governor's Office)</p> <hr /> <p>A coalition of budget and transparency watchdog groups are calling on the Legislature to pass, and for Governor Cuomo to sign, comprehensive “clean contracting” legislation in response to the bid-rigging scandal that rocked the state Capitol last year and continues to reverberate.</p> <p>Specifically, at a Wednesday press conference the groups called for restoration of reviewing powers to State Comptroller Tom DiNapoli for all state contracts exceeding $250,000, an end to non-academic contracting by state-controlled non-profit organizations, the creation of a comprehensive “database of deals,” and a prohibition against state authorities, corporations, and affiliated non-profits doing business with their board members.</p> <p>The organizations -- including Reinvent Albany, New York Public Interest Group, Citizens Union, League of Women Voters, Fiscal Policy Institute, Common Cause, and Citizens Budget Commission -- are also urging state leaders to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone seeking a state contract. Nineteen states and New York City -- but not the state -- already have these anti-pay-to-play laws in place.</p> <p>“The moment of truth has arrived. State and federal prosecutors say $800 million in state economic development contracts were rigged, but so far, the Legislature and governor have yet to act,” said John Kaehny, executive director of Reinvent Albany, standing in the state Capitol. “It’s time they pass common sense legislation that includes independent oversight over state contracts, uniform contracting rules, and transparency that will prevent corruption and abuse before it happens.”</p> <p>In 2016, an investigation into a sprawling alleged pay-to-play scheme connected to the Governor Cuomo’s Buffalo Billion economic development program resulted in charges against nine men, including a former top aide to Cuomo, Joe Percoco, and the former president of SUNY Polytechnic Institute, Alain Kaloyeros, a close government partner of Cuomo’s, on bid-rigging, bribery, and other charges.</p> <p>In the aftermath of the scandal, DiNapoli called for comprehensive procurement reforms, including the restoration of his office’s powers to review contracts with CUNY- and SUNY-affiliated non-profits -- a power that was stripped by Cuomo and the Legislature in 2011. The governor and lawmakers had reasoned that they could more quickly move economic development funds to important projects, especially in previously downtrodden Buffalo, where Cuomo has dedicated so much focus since taking office.</p> <p>Following the enactment of the 2017 state budget, DiNapoli issued a statement noting the lack of procurement reform. “Hopefully before the end of session, the procurement reforms my office has advanced will be addressed,” he said. The Legislature is in session until mid-June. Legislative leaders are looking at some procurement reform measures, while Cuomo remains opposed to what DiNapoli and government watchdogs are calling for.</p> <p>At the time of the arrests, Cuomo vowed sweeping reform, and proposed a slew of them in his 2017-2018 executive budget. However few of these oversight and transparency measures -- which are different from those being proposed by legislators, DiNapoli, and reform groups -- made it into the agreed-upon spending plan, announced in early April. Additionally, at least one other key oversight and transparency provision -- a mandated report on the governor’s Start-Up NY program -- was actually removed. Instead of focusing on reform, the governor <a href="http://www.gothamgazette.com/state/6875-ramped-up-economic-development-funding-less-transparency-in-new-state-budget" target="_blank" rel="noopener noreferrer">has continued boosting</a> the his signature economic development programs and infrastructure projects, to which the state is dedicating billions of dollars every year.</p> <p>Senator John DeFrancisco, a Republican from Syracuse and deputy majority leader, has proposed legislation encompassing the Comptroller’s Clean Contracting Bill, which has been approved by the Senate Finance Committee, and some form of it is expected to pass the Senate. A similar bill sponsored by Assemblymember Crystal Peoples-Stokes, a Buffalo Democrat, is currently being considered in the Assembly.</p> <p>Assembly Speaker Carl Heastie, a Bronx Democrat, and Senate Majority Leader John Flanagan, a Long Island Republican, both expressed support for the legislation during a joint appearance at the Times Union’s new media center in Colonie on Tuesday.</p> <p>“I truly believe the comptroller plays an absolutely critical role in public policy in New York,” Flanagan said.</p> <p>“You don’t always have to wait for something bad to happen to restore confidence to the public,” added Heastie.</p> <p>The “database of deals” -- which has long been advocated by good-government organizations -- was supported by both the Senate and Assembly in their one-house budget resolutions, and the governor agreed in the budget to create a report by January 2018 detailing the spending by each economic development program. However, critics say the database should go further, providing data on the benefits received by each company.</p> <p>Cuomo, in his executive budget, proposed prohibiting campaign finance contributions to the executive by vendors when they are bidding on and negotiating contracts, and expanding the power of the Office of the Inspector General to include the SUNY Research Foundation and CUNY-affiliated nonprofits. He also proposed instituting a Chief Procurement Officer who would be appointed by the governor, a position that many called redundant and less effective than the position of Comptroller.</p> <p>“How many scandals and indictments are needed before we enact any meaningful reforms,” asked Ron Deutsch, executive director of the Fiscal Policy Institute, a think tank. “We need to restore the public’s trust and put real accountability measures in place to ensure that we have full transparency and a solid return on investment before we continue to provide billions of taxpayer dollars to private businesses under the guise of economic development.”</p> <p>The legislation is currently facing opposition <a href="http://www.nystateofpolitics.com/2017/04/suny-opposes-procurement-reform-bill/" target="_blank" rel="noopener noreferrer">from SUNY</a>. A spokesperson for Cuomo’s office said the governor finds the legislation “duplicative” and “overly broad,” and believes it does not address the core of the process on contracting reform. She noted that the comptroller can already perform audits on all procurement contracts before they are paid, he just cannot slow down the initial contracting process when awards are made.</p> <p>Flanagan <a href="http://www.nystateofpolitics.com/2017/05/flanagan-wants-middle-ground-on-procurement-reform/" target="_blank" rel="noopener noreferrer">has indicated</a> that there may be room for negotiation on the final bill. Heastie has been vague as he plans to discuss the issue with his majority conference.</p> <p>Cuomo’s former aides, associates, and donors are set to go on trial late this year.</p> <p>Another spokesperson for the governor, Rich Azzopardi, sent Gotham Gazette a statement attacking the watchdog groups. "This is the same crew who preaches transparency for others and then sues to overturn state law and keep their benefactors secret. If we need a crash course on hypocrisy we know who to ask," he said.</p> <p>“To create needed independence and effective oversight, the governor and the Legislature must enact sensible clean-contracting reforms,” said Dick Dadey, executive director of Citizens Union. “Not to do so would be an unfortunate and careless shirking of their greatest responsibility to ensure that government operates in the interest of the people. Stronger oversight and increased transparency in the awarding of state contracts, including providing the state Comptroller with increased independent authority for oversight and approval, are principles that a strong and effective democracy must embrace.”</p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p> <p> Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. </p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/25944005563_4e277f7372_z_1.jpg" alt="Kaloyeros infrastructure" width="600" height="400" /></p> <p>Alain Kaloyeros in 2016 (photo: The Governor's Office)</p> <hr /> <p>A coalition of budget and transparency watchdog groups are calling on the Legislature to pass, and for Governor Cuomo to sign, comprehensive “clean contracting” legislation in response to the bid-rigging scandal that rocked the state Capitol last year and continues to reverberate.</p> <p>Specifically, at a Wednesday press conference the groups called for restoration of reviewing powers to State Comptroller Tom DiNapoli for all state contracts exceeding $250,000, an end to non-academic contracting by state-controlled non-profit organizations, the creation of a comprehensive “database of deals,” and a prohibition against state authorities, corporations, and affiliated non-profits doing business with their board members.</p> <p>The organizations -- including Reinvent Albany, New York Public Interest Group, Citizens Union, League of Women Voters, Fiscal Policy Institute, Common Cause, and Citizens Budget Commission -- are also urging state leaders to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone seeking a state contract. Nineteen states and New York City -- but not the state -- already have these anti-pay-to-play laws in place.</p> <p>“The moment of truth has arrived. State and federal prosecutors say $800 million in state economic development contracts were rigged, but so far, the Legislature and governor have yet to act,” said John Kaehny, executive director of Reinvent Albany, standing in the state Capitol. “It’s time they pass common sense legislation that includes independent oversight over state contracts, uniform contracting rules, and transparency that will prevent corruption and abuse before it happens.”</p> <p>In 2016, an investigation into a sprawling alleged pay-to-play scheme connected to the Governor Cuomo’s Buffalo Billion economic development program resulted in charges against nine men, including a former top aide to Cuomo, Joe Percoco, and the former president of SUNY Polytechnic Institute, Alain Kaloyeros, a close government partner of Cuomo’s, on bid-rigging, bribery, and other charges.</p> <p>In the aftermath of the scandal, DiNapoli called for comprehensive procurement reforms, including the restoration of his office’s powers to review contracts with CUNY- and SUNY-affiliated non-profits -- a power that was stripped by Cuomo and the Legislature in 2011. The governor and lawmakers had reasoned that they could more quickly move economic development funds to important projects, especially in previously downtrodden Buffalo, where Cuomo has dedicated so much focus since taking office.</p> <p>Following the enactment of the 2017 state budget, DiNapoli issued a statement noting the lack of procurement reform. “Hopefully before the end of session, the procurement reforms my office has advanced will be addressed,” he said. The Legislature is in session until mid-June. Legislative leaders are looking at some procurement reform measures, while Cuomo remains opposed to what DiNapoli and government watchdogs are calling for.</p> <p>At the time of the arrests, Cuomo vowed sweeping reform, and proposed a slew of them in his 2017-2018 executive budget. However few of these oversight and transparency measures -- which are different from those being proposed by legislators, DiNapoli, and reform groups -- made it into the agreed-upon spending plan, announced in early April. Additionally, at least one other key oversight and transparency provision -- a mandated report on the governor’s Start-Up NY program -- was actually removed. Instead of focusing on reform, the governor <a href="http://www.gothamgazette.com/state/6875-ramped-up-economic-development-funding-less-transparency-in-new-state-budget" target="_blank" rel="noopener noreferrer">has continued boosting</a> the his signature economic development programs and infrastructure projects, to which the state is dedicating billions of dollars every year.</p> <p>Senator John DeFrancisco, a Republican from Syracuse and deputy majority leader, has proposed legislation encompassing the Comptroller’s Clean Contracting Bill, which has been approved by the Senate Finance Committee, and some form of it is expected to pass the Senate. A similar bill sponsored by Assemblymember Crystal Peoples-Stokes, a Buffalo Democrat, is currently being considered in the Assembly.</p> <p>Assembly Speaker Carl Heastie, a Bronx Democrat, and Senate Majority Leader John Flanagan, a Long Island Republican, both expressed support for the legislation during a joint appearance at the Times Union’s new media center in Colonie on Tuesday.</p> <p>“I truly believe the comptroller plays an absolutely critical role in public policy in New York,” Flanagan said.</p> <p>“You don’t always have to wait for something bad to happen to restore confidence to the public,” added Heastie.</p> <p>The “database of deals” -- which has long been advocated by good-government organizations -- was supported by both the Senate and Assembly in their one-house budget resolutions, and the governor agreed in the budget to create a report by January 2018 detailing the spending by each economic development program. However, critics say the database should go further, providing data on the benefits received by each company.</p> <p>Cuomo, in his executive budget, proposed prohibiting campaign finance contributions to the executive by vendors when they are bidding on and negotiating contracts, and expanding the power of the Office of the Inspector General to include the SUNY Research Foundation and CUNY-affiliated nonprofits. He also proposed instituting a Chief Procurement Officer who would be appointed by the governor, a position that many called redundant and less effective than the position of Comptroller.</p> <p>“How many scandals and indictments are needed before we enact any meaningful reforms,” asked Ron Deutsch, executive director of the Fiscal Policy Institute, a think tank. “We need to restore the public’s trust and put real accountability measures in place to ensure that we have full transparency and a solid return on investment before we continue to provide billions of taxpayer dollars to private businesses under the guise of economic development.”</p> <p>The legislation is currently facing opposition <a href="http://www.nystateofpolitics.com/2017/04/suny-opposes-procurement-reform-bill/" target="_blank" rel="noopener noreferrer">from SUNY</a>. A spokesperson for Cuomo’s office said the governor finds the legislation “duplicative” and “overly broad,” and believes it does not address the core of the process on contracting reform. She noted that the comptroller can already perform audits on all procurement contracts before they are paid, he just cannot slow down the initial contracting process when awards are made.</p> <p>Flanagan <a href="http://www.nystateofpolitics.com/2017/05/flanagan-wants-middle-ground-on-procurement-reform/" target="_blank" rel="noopener noreferrer">has indicated</a> that there may be room for negotiation on the final bill. Heastie has been vague as he plans to discuss the issue with his majority conference.</p> <p>Cuomo’s former aides, associates, and donors are set to go on trial late this year.</p> <p>Another spokesperson for the governor, Rich Azzopardi, sent Gotham Gazette a statement attacking the watchdog groups. "This is the same crew who preaches transparency for others and then sues to overturn state law and keep their benefactors secret. If we need a crash course on hypocrisy we know who to ask," he said.</p> <p>“To create needed independence and effective oversight, the governor and the Legislature must enact sensible clean-contracting reforms,” said Dick Dadey, executive director of Citizens Union. “Not to do so would be an unfortunate and careless shirking of their greatest responsibility to ensure that government operates in the interest of the people. Stronger oversight and increased transparency in the awarding of state contracts, including providing the state Comptroller with increased independent authority for oversight and approval, are principles that a strong and effective democracy must embrace.”</p> <p>

***
by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p> <p> Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. </p>
Nonprofit Funding Boost, Pre-K Pay Parity Left Out of City Budget 2016-06-13T04:00:00+00:00 2016-06-13T04:00:00+00:00 http://www.gothamgazette.com/?id=6394:nonprofit-funding-boost-pre-k-pay-parity-left-out-of-city-budget Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2014/03/27452273962_8306fbd7b0_z.jpg" width="600" height="399" alt="de blasio council budget question" /></p> <p>Mayor &amp; Council members announce budget deal (photo: Ed Reed, Mayor's Office)</p> <hr /> <p dir="ltr">In the weeks leading up to Wednesday’s <a href="http://www.gothamgazette.com/index.php/city/6385-de-blasio-city-council-shake-on-82-billion-budget" target="_blank">budget agreement</a> between Mayor Bill de Blasio and the City Council, a number of Council members decried what they said was underfunding of top Council priorities including summer youth employment, cultural institutions, libraries, senior services, and more. Consequently, the mayor conceded to most of those funding requests in the final deal.</p> <p dir="ltr">Most, but not all. Two major issues -- additional funding for human services nonprofits contracted by the city and funding to ensure pay parity for pre-kindergarten providers -- were absent from the deal, leaving Council members, advocates, and those at relevant organizations reeling.</p> <p dir="ltr">“I’m extremely disappointed,” said Council Member Helen Rosenthal of the lack of additional nonprofit funding. “We ask these providers to do serious work for 2.5 million New Yorkers. When we underfund them, we’re shortchanging New Yorkers.”</p> <p dir="ltr">The city contracts with nonprofits to provide a range of services including after-school programs, mental health services, food pantries, and senior care. Nonprofit providers have been <a href="http://www.gothamgazette.com/index.php/city/6364-push-continues-for-budget-boost-to-city-contracted-nonprofits" target="_blank">warning</a> of a crisis in the sector if the government does not step in to increase funding - they say that the city is not paying them for the full costs of their services. In January this year, Mayor Bill de Blasio took one big step in announcing a $15 an hour minimum wage for employees of nonprofits contracted by the city, but the contracts that the city awards must reflect these added compensation costs, along with rising rent and other operational fees, those who run these organizations say.</p> <p dir="ltr">Rosenthal, who chairs the Council’s committee on contracts, has been stressing the issue throughout the budget season. Last month, she led 46 other Council members in signing a letter to the mayor pushing him to baseline the additional funding, which would amount to about $25 million or a 2.5 percent increase. This funding would go to Other Than Personal Services (OTPS) costs, such as rent, supplies, maintenance and technology. If the city doesn’t help nonprofits cover those costs, Rosenthal said, “We’re going to have fewer staff and dirtier conditions."</p> <p dir="ltr">Nonprofit closures, the worst case scenario, are also not that unlikely. About 18 percent of the city’s roughly 3,700 nonprofits faced insolvency in 2013 and 27 percent operated on a deficit in 2014, according to <a href="http://www.humanservicescouncil.org/Commission/HSCCommissionReport.pdf" target="_blank">a report</a> by the Human Services Council (HSC), a coalition of nonprofit providers.</p> <p dir="ltr">“The human services sector is in crisis that has a lot to do with government underfunding of contracts,” said Allison Sesso, executive director of HSC. “We’re relying on these nonprofits to address some of the city’s most pressing issues like homelessness. How can they help struggling families if they’re struggling themselves?” Sesso said the city missed an opportunity to “turn the tide in the right direction,” but she was hopeful that efforts by advocates would yield results in the November modification to the budget.</p> <p dir="ltr">Mayoral spokesperson Freddi Goldstein confirmed in an email that the funding was not included but said that “the administration is committed to the city’s nonprofit sector and the New Yorkers it serves, including many of our most vulnerable. That is why we have made unprecedented investments in human services, including securing our contractors on the road to $15 an hour. We are always looking for ways to strengthen nonprofits and will continue to do so moving forward.”</p> <p dir="ltr">Another significant funding demand the administration did not meet in the budget is ensuring pay parity for pre-kindergarten providers, a long-running gripe for employees of Community Based Organizations (CBOs) who administer the city’s universal pre-kindergarten mandate but whose employees receive lower pay and benefits than Department of Education employees doing the same work. A number of elected officials have supported the cause, including multiple City Council members and Public Advocate Letitia James. A spokesperson for the Council Speaker’s office said though the funding wasn’t in the budget for both pre-k pay parity and nonprofits, conversations on both issues are ongoing.</p> <p dir="ltr">“If they want community-based programs to survive then they need to put the money forward,” said Andrea Anthony, executive director of the Day Care Council of New York, which represents nonprofits that provide childcare services at city-funded centers. “You can’t have the DOE competing with small nonprofits for the same pot of professionals and children.”</p> <p dir="ltr">Currently, the Day Care Council is engaged in union contract negotiations with the Council of School Supervisors and Administrators (CSA), which is one reason the administration stated it hadn’t included funding for pay parity in the budget. “The City is engaged in those discussions and supportive of the negotiations underway – but it’s a collective bargaining process between the providers and the unions,” said Goldstein, the mayoral spokesperson, by email.</p> <p dir="ltr">Several Council members who have been vocal on the issue did not comment for this article. Council Member Rosenthal said she wasn’t familiar with progress on the contract negotiations. A spokesperson for Council Member Stephen Levin said they were waiting for final budget documents to be posted and Council Member Elizabeth Crowley was unavailable for comment.</p> <p dir="ltr">Anthony of the Day Care Council said union negotiations over salary and benefits would likely be concluded within a month and the union has been supportive of reaching parity levels for pre-k teachers. “They understand that without certified teachers, these organizations cannot function,” she said.</p> <p dir="ltr">CSA Director of Communications Clem Richardson said the union wasn’t averse to raises for teachers but that their primary concern was the directors at CBOs who often make less than pre-kindergarten teachers. “We believe everyone who takes care of children deserve a living wage in this very expensive city that we live in,” he said in a phone interview. He said there had been no progress at a negotiation meeting on Monday but another meeting was scheduled for later this month. He was also optimistic that the final 2017 budget would include funding to accommodate these raises. The City Council is set to vote the budget through on Tuesday, though there is always the November budget modification. The fiscal year begins July 1.</p> <p>Richardson’s optimism was echoed by Stephanie Gendell, associate executive director of the Citizens Committee for Children, an advocacy group. “We remain hopeful as labor negotiations continue,” she said, “that the city will come to an agreement that includes salary parity for the early childhood education workforce.”</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2014/03/27452273962_8306fbd7b0_z.jpg" width="600" height="399" alt="de blasio council budget question" /></p> <p>Mayor &amp; Council members announce budget deal (photo: Ed Reed, Mayor's Office)</p> <hr /> <p dir="ltr">In the weeks leading up to Wednesday’s <a href="http://www.gothamgazette.com/index.php/city/6385-de-blasio-city-council-shake-on-82-billion-budget" target="_blank">budget agreement</a> between Mayor Bill de Blasio and the City Council, a number of Council members decried what they said was underfunding of top Council priorities including summer youth employment, cultural institutions, libraries, senior services, and more. Consequently, the mayor conceded to most of those funding requests in the final deal.</p> <p dir="ltr">Most, but not all. Two major issues -- additional funding for human services nonprofits contracted by the city and funding to ensure pay parity for pre-kindergarten providers -- were absent from the deal, leaving Council members, advocates, and those at relevant organizations reeling.</p> <p dir="ltr">“I’m extremely disappointed,” said Council Member Helen Rosenthal of the lack of additional nonprofit funding. “We ask these providers to do serious work for 2.5 million New Yorkers. When we underfund them, we’re shortchanging New Yorkers.”</p> <p dir="ltr">The city contracts with nonprofits to provide a range of services including after-school programs, mental health services, food pantries, and senior care. Nonprofit providers have been <a href="http://www.gothamgazette.com/index.php/city/6364-push-continues-for-budget-boost-to-city-contracted-nonprofits" target="_blank">warning</a> of a crisis in the sector if the government does not step in to increase funding - they say that the city is not paying them for the full costs of their services. In January this year, Mayor Bill de Blasio took one big step in announcing a $15 an hour minimum wage for employees of nonprofits contracted by the city, but the contracts that the city awards must reflect these added compensation costs, along with rising rent and other operational fees, those who run these organizations say.</p> <p dir="ltr">Rosenthal, who chairs the Council’s committee on contracts, has been stressing the issue throughout the budget season. Last month, she led 46 other Council members in signing a letter to the mayor pushing him to baseline the additional funding, which would amount to about $25 million or a 2.5 percent increase. This funding would go to Other Than Personal Services (OTPS) costs, such as rent, supplies, maintenance and technology. If the city doesn’t help nonprofits cover those costs, Rosenthal said, “We’re going to have fewer staff and dirtier conditions."</p> <p dir="ltr">Nonprofit closures, the worst case scenario, are also not that unlikely. About 18 percent of the city’s roughly 3,700 nonprofits faced insolvency in 2013 and 27 percent operated on a deficit in 2014, according to <a href="http://www.humanservicescouncil.org/Commission/HSCCommissionReport.pdf" target="_blank">a report</a> by the Human Services Council (HSC), a coalition of nonprofit providers.</p> <p dir="ltr">“The human services sector is in crisis that has a lot to do with government underfunding of contracts,” said Allison Sesso, executive director of HSC. “We’re relying on these nonprofits to address some of the city’s most pressing issues like homelessness. How can they help struggling families if they’re struggling themselves?” Sesso said the city missed an opportunity to “turn the tide in the right direction,” but she was hopeful that efforts by advocates would yield results in the November modification to the budget.</p> <p dir="ltr">Mayoral spokesperson Freddi Goldstein confirmed in an email that the funding was not included but said that “the administration is committed to the city’s nonprofit sector and the New Yorkers it serves, including many of our most vulnerable. That is why we have made unprecedented investments in human services, including securing our contractors on the road to $15 an hour. We are always looking for ways to strengthen nonprofits and will continue to do so moving forward.”</p> <p dir="ltr">Another significant funding demand the administration did not meet in the budget is ensuring pay parity for pre-kindergarten providers, a long-running gripe for employees of Community Based Organizations (CBOs) who administer the city’s universal pre-kindergarten mandate but whose employees receive lower pay and benefits than Department of Education employees doing the same work. A number of elected officials have supported the cause, including multiple City Council members and Public Advocate Letitia James. A spokesperson for the Council Speaker’s office said though the funding wasn’t in the budget for both pre-k pay parity and nonprofits, conversations on both issues are ongoing.</p> <p dir="ltr">“If they want community-based programs to survive then they need to put the money forward,” said Andrea Anthony, executive director of the Day Care Council of New York, which represents nonprofits that provide childcare services at city-funded centers. “You can’t have the DOE competing with small nonprofits for the same pot of professionals and children.”</p> <p dir="ltr">Currently, the Day Care Council is engaged in union contract negotiations with the Council of School Supervisors and Administrators (CSA), which is one reason the administration stated it hadn’t included funding for pay parity in the budget. “The City is engaged in those discussions and supportive of the negotiations underway – but it’s a collective bargaining process between the providers and the unions,” said Goldstein, the mayoral spokesperson, by email.</p> <p dir="ltr">Several Council members who have been vocal on the issue did not comment for this article. Council Member Rosenthal said she wasn’t familiar with progress on the contract negotiations. A spokesperson for Council Member Stephen Levin said they were waiting for final budget documents to be posted and Council Member Elizabeth Crowley was unavailable for comment.</p> <p dir="ltr">Anthony of the Day Care Council said union negotiations over salary and benefits would likely be concluded within a month and the union has been supportive of reaching parity levels for pre-k teachers. “They understand that without certified teachers, these organizations cannot function,” she said.</p> <p dir="ltr">CSA Director of Communications Clem Richardson said the union wasn’t averse to raises for teachers but that their primary concern was the directors at CBOs who often make less than pre-kindergarten teachers. “We believe everyone who takes care of children deserve a living wage in this very expensive city that we live in,” he said in a phone interview. He said there had been no progress at a negotiation meeting on Monday but another meeting was scheduled for later this month. He was also optimistic that the final 2017 budget would include funding to accommodate these raises. The City Council is set to vote the budget through on Tuesday, though there is always the November budget modification. The fiscal year begins July 1.</p> <p>Richardson’s optimism was echoed by Stephanie Gendell, associate executive director of the Citizens Committee for Children, an advocacy group. “We remain hopeful as labor negotiations continue,” she said, “that the city will come to an agreement that includes salary parity for the early childhood education workforce.”</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

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</p>
Buffalo Billion Probe: Bad Apples or Broken System? 2016-05-12T04:00:00+00:00 2016-05-12T04:00:00+00:00 http://www.gothamgazette.com/?id=6331:buffalo-billion-probe-bad-apples-or-broken-system Ben Max <p><img src="http://www.gothamgazette.com/images/25963023556_3de267387f_z.jpg" width="600" height="399" alt="cuomo buffalo billion" /></p> <p>Gov. Cuomo in Buffalo (photo via The Governor's Office)</p> <hr /> <p>As U.S. Attorney Preet Bharara’s office issues a storm of subpoenas to the administration of Governor Andrew Cuomo and his close associates in relation to the state’s Buffalo Billion economic development program, the governor and his aides have delivered a consistent message: the investigation targets the dealings of a few bad apples, the governor wasn’t aware of any wrongdoing and he wants to get to the bottom of the situation as quickly as possible.</p> <p>“I’ve said to all my people, and I’ve said to the U.S. attorney, any way we can find out and be helpful and be cooperative, we will be,” Cuomo told reporters during a press conference in the Adirondacks on Tuesday. “Nobody wants the facts more than us. That’s why we started our own private investigation. We know the questions: did two people act improperly? Did they represent companies they shouldn’t have? Was there undue influence for those companies? Those are the questions, we now need the answers and we don’t have the answers.”</p> <p>The message rings as spin to a number of expert observers who insist Cuomo has long overseen a system that allows, at the very least, for the appearance of pay-to-play to flourish as mini-economies have popped up around the state where connected consultants work with both state government entities and those looking to win state contracts, and where the state funnels money through non-profits, allowing them to avoid scrutiny and standard state contracting procedures.</p> <p>Bharara’s probe appears to have also spurred inquiries into surrounding issues by Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli - all of whom, like Cuomo, are Democrats.</p> <p>It is unclear whether the two men who have been reported to be at the center of the probe - longtime Cuomo aide Joe Percoco and Cuomo family associate and lobbyist Todd Howe - violated the law or how Bharara’s many subpoenas that have targeted the executive chamber, former Cuomo aides, consultants, and businesses involved in the Buffalo Billion all fit together. However, the scope of the investigation and the deep layers of connections between and among some of the players involved makes it fairly clear that the target of Bharara’s investigation is not simply two Cuomo associates.</p> <p>Unlike New York City, New York State has no restrictions on what is referred to as “pay-to-play.” Donors with business before the state are allowed to contribute the same amount as anyone else to a candidate campaign.</p> <p>Meanwhile, the checks that exist on how the state awards contracts have been subverted by the use of non-profit entities that aren’t subject to the same regulations. State Comptroller Tom DiNapoli and other government and budget watchdogs have criticized the proliferation of these entities and called for reform.</p> <p>When acknowledging that investigators are looking into actions by individual actors and decisions that were made by state entities, Cuomo also announced “our own investigation with a private investigator who was from the U.S. attorney’s office originally, Mr. Bart Schwartz.” Though it is being explained differently, the move is seen by some watchdogs as designed only to target specific contracts and not intended to address what they say is a flawed system plagued by the appearance and risk of corruption, if not worse.</p> <p>“The governor is trying to get in front of this issue and is saying a couple of people did something wrong, but the reality is that the entire system is ripe for corruption,” said Ron Deutsch, executive director of The Fiscal Policy Institute, an independent group that analyzes New York fiscal issues.</p> <p>Cuomo spokesperson Dani Lever declined comment, but pointed Gotham Gazette to a statement issued by Cuomo counsel Alphonso David. (Another Cuomo aide emailed a sarcastic comment to Gotham Gazette.)</p> <p>Alphonso David issued a statement just as <a href="http://www.nydailynews.com/news/politics/cuomo-aides-probed-shady-lobbying-conflicts-interest-article-1.2619360" target="_blank">the New York Daily News broke a story</a> April 29 revealing that Percoco is a target of Bharara’s probe, acknowledging allegations and announcing the independent investigation.</p> <p>“This [federal] investigation has 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,” David wrote. “We take violations of the public trust seriously and we believe these issues must be resolved by further investigation by the U.S. Attorney. In the meantime, and as the [Buffalo Billion] program operates on a daily basis, the Governor has ordered an immediate full review of the program. Any grants made by this program will be thoroughly scrutinized – past, current or future.”</p> <p>David went on to say: “Ensuring the integrity of the contracting process for this program is paramount, so that the Buffalo Billion and Nano program can continue creating new jobs and revitalizing Upstate’s economy.”</p> <p>The statement wasn’t reassuring for many watchdogs, especially those who have long-criticized the Buffalo Billion program.</p> <p>“The governor is looking at it in terms of the mistakes, or poor behavior of a couple aides that he seems to be disassociating himself with,” said John Kaehny, executive director of Reinvent Albany. “But what the subpoenas are targeting seems to be the corruption risk and bid-rigging favoring the governor’s campaign contributors. No one cares Todd Howe did something dumb. This is not what this is about - the governor sidestepped the larger issues.”</p> <p>At least six current or former members of the Cuomo administration have been targeted by subpoenas. The administration has defended<a href="http://nypost.com/2016/05/10/cuomo-wont-defend-all-of-his-probed-aides/" target="_blank"> some of them</a>.</p> <p>A review of a number of businesses targeted by Bharara’s subpoenas shows that most of them are regular contributors to Cuomo’s campaigns. That leads some observers, including Kaehny, to believe that Bharara is interested in the state’s economic development subsidy programs as a whole.</p> <p>“The Buffalo Billion is just a microcosm of the pay-to-play racket that has engulfed economic development under Governor Cuomo,” said Kaehny. “It is just a giant machine that takes in donations and doles out grants to donors. It is remarkable in its scope, consistency, and is dramatic in how it all leads back to the same people. What caught Bharara's interest in this is a system - not a rogue agent, not a bad apple, it's a system.”</p> <p>Jennifer Rodgers, formerly of the U.S. Attorney’s office and current executive director of Columbia’s Center for the Advancement of Public Integrity, said she does not believe that is the case.</p> <p>“I wouldn't say the fact that the U.S. Attorney is involved means it is systemic,” said Rodgers. “This is important enough even if it is just two guys who took bribes for grants with their position, and importance makes it a very worthy case to pursue. If I learned two guys were taking all this money and were involved in these subsidies, I would think they were good targets,” said Rodgers.</p> <p>However, Rodgers said she understands why there is suspicion about the overall system. “I think it is a disaster of a system that everyone in good government sees as asking for trouble - there is no oversight. At the same time, it is not the U.S. Attorney's job to change the system. Their job is to charge guys with criminality. I could see issuing a grand jury report that says ‘by the way this system is asking for trouble,’ but it is not the crux of what he does.”</p> <p>Blair Horner, executive director of the New York Public Interest Research Group, said without knowing what Bharara knows, it is impossible to judge what he is really after. “But I would say opacity in government increases the risk for corruption. What is so notable about how the Cuomo administration operates is they keep their decision-making process behind closed doors and he only shows the public what he wants them to see. This is the governor who ordered agencies to delete their emails and who still hasn’t told us how the Tappan Zee Bridge will be funded and it’s half completed.”</p> <p>Gerald Benjamin, a professor of political science at SUNY New Paltz noted that the fact SUNY Polytechnic President Alain Kaloyeros has been subpoenaed and appears to have been a target of the probe since the fall, “makes it a much bigger matter that could be focused on systemic practices.”</p> <p>Kaloyeros has overseen much of the Buffalo Billion contracting and <a href="http://www.gothamgazette.com/index.php/government/5912-alain-kaloyeros-powerful-centerpiece-of-buffalo-billion-could-become-household-name" target="_blank">has become a major figure</a> in the Cuomo administration as the governor has ramped up his economic development programs.</p> <p>“The issue we have is confidentiality,” Kaloyeros told Gotham Gazette by Facebook messenger <a href="http://www.gothamgazette.com/index.php/government/5925-buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail" target="_blank">last fall when being asked</a> about the Buffalo Billion investigation. “We were instructed in no uncertain terms not to comment on the inquiry from down South with the threat of jail which is being interpreted as we are the target of an investigation. So that part we cannot comment on beyond what we were authorized to say publicly."</p> <p>Gov. Cuomo has distanced himself from Percoco and Howe. Percoco, who has been characterized as a third son to Mario Cuomo, worked at Andrew Cuomo’s side since his days at HUD. Percoco left the administration for part of 2014 to run the governor’s reelection campaign. He later filed income disclosure forms with the Joint Commission on Public Ethics (JCOPE) revealing he received income from two developers with business before the state while managing the governor’s campaign.</p> <p>Todd Howe, the Washington lobbyist who had a relationship with Mario Cuomo and worked for Andrew Cuomo’s 2014 campaign under Percoco, has been involved in <a href="http://www.capitalnewyork.com/article/albany/2016/05/8598650/lobbyist-steered-subpoenaed-companies-cuomo-campaign" target="_blank">steering donations</a> from contractors to Cuomo and attended a fundraiser with Cuomo as recently as December, <a href="http://www.capitalnewyork.com/article/albany/2016/05/8598974/cuomo-attended-december-fundraiser-embattled-lobbyist-aide-and-develo" target="_blank">according to Politico New York</a>, which reported that Howe steered donations from “several development and energy companies” to Cuomo’s reelection campaign.</p> <p>Cuomo has said he allowed Percoco to take on outside work because he was strapped for cash. The governor has denied he had much of a relationship with Howe. Cuomo rejected the idea that he should have questioned Percoco on whether his outside clients had business with the state, telling reporters on Tuesday, “No. The state has tens of thousands of employees; they’re not supposed to be cross-examined to make sure they’re following the rules, right?”</p> <p>Horner rejected Cuomo’s assertion that he shouldn’t have kept himself apprised of Percoco’s outside work. “It is the governor’s responsibility. He allowed Percoco to take outside work in the first place. This guy is not a hands-off administrator. That being said, he can’t know everything.”</p> <p>Aside from the red flags sent up by donations and dealings with the air of conflict of interest, watchdog groups say they believe Bharara may be examining the Buffalo Billion because it is clear that up until now on one on the state level has been.</p> <p>Cuomo and the Legislature crippled the Comptroller’s ability to audit deals made regarding the Buffalo Billion in 2011, <a href="http://www.timesunion.com/local/article/DiNapoli-We-used-to-have-more-oversight-over-6554885.php" target="_blank">DiNapoli and others say</a>, by passing legislation that prevented auditing of SUNY, CUNY, hospital or construction funds. That is important to the Buffalo Billion because the state funnels cash for Buffalo Billion contracts through two non-profits controlled by SUNY.</p> <p>On Wednesday, DiNapoli <a href="http://www.gothamgazette.com/index.php/state/6328-comptroller-calls-for-state-budget-transparency-fiscal-reform" target="_blank">unveiled a series of proposals</a> to bring more transparency to state spending - a few which would likely impact how the state funds the Buffalo Billion. His plan would ban lump sum appropriations, create a council to plan capital spending, and require economic development program proposals to be scored and ranked in a public database.</p> <p>“Public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight,” reads the release from DiNapoli’s office. “DiNapoli’s proposal would require state-funded public authority projects to be scored and ranked using measurable and objective criteria. His proposal also requires more disclosure of public authorities’ spending and financing activities.”</p> <p>Deutsch has been advocating for such a database for years. “My entire career I've been calling the efficacy of these programs into question,” said Deutsch. “We saw Empire Zones move to cater to where businesses wanted to be rather than have them come to economically disadvantaged areas,” Deutsch said of an economic development program that was a hallmark of Republican Governor George Pataki. “Every once in awhile there's a bad deal, or someone breaks the law and people pay attention for a little while.”</p> <p>While calling for his own investigation of the Buffalo Billion, Cuomo has simultaneously downplayed the role of the state’s existing ethics body in preventing possible conflicts of interest. Asked whether JCOPE should have flagged Percoco’s filing that showed him taking income from groups with business before the state, Cuomo told reporters on Tuesday: “JCOPE has proven effective. Can an agency always be more effective? But I don’t think this is about JCOPE. We’re looking at two individuals to see if they’ve done anything improper. The first responsibility lies with that individual.” Cuomo also told reporters that you have to engage in criminality to be a target of JCOPE.</p> <p>JCOPE is able to give administration officials guidance in taking outside work. It is unclear if JCOPE issued such an opinion in the case of Percoco. The commission has been headed by a succession of three Cuomo aides since its inception. Seth Agata, the new and third head of the commission, once served as Cuomo’s counsel, where he wrote to JCOPE to ask for clearance for Cuomo to earn hundreds of thousands of dollars to write a memoir for a company that has business before the state. Permission was granted.</p> <p>The Legislature has shown little interest in reforming how the state doles out subsidies. Senate Majority Leader John Flanagan, a Republican from Long Island, <a href="http://www.nystateofpolitics.com/2016/05/flanagan-dont-pull-back-from-economic-development/" target="_blank">told State of Politics</a> on Wednesday that the state should be “forging ahead” with current economic development programs. “The executive has an inherent responsibility to be overseeing these projects from start to finish,” Flanagan said. “I don’t think we should be scaling back anything. Can we take a closer look, put it under a microscope, fine. But people need jobs. This is a great way to create economic development.”</p> <p>Cuomo’s creation of an independent investigation is worrying to some because of the governor’s history with independent commissions.</p> <p>“Bart Schwartz is not independent, Alphonso David is not independent, Seth Agata is not independent,” said Kaehny. “The public will not get the truth unless the facts are independently accessed and the governor is incapable of investigating himself. We’ve seen what happens when the governor says ‘Follow the money wherever it may lead’ - as soon as the money brought [the] Moreland [Commission to Investigate Public Corruption] back to the governor and his real estate contributors at REBNY, Cuomo pulled the plug...No one is good at investigating themselves,” said Kaehny.</p> <p>Rodgers, of CAPI, said that she has faith in Cuomo’s independent investigation. “The U.S. Attorney's Office will proceed with their work regardless of what internal investigation is going on,” said Rodgers. “And Bart Schwartz being chosen to head the internal investigation is a good sign for the credibility and independence of whatever findings he makes. If the governor's office had chosen someone with less credibility, you could see that there might be suggestions about tampering with witnesses and other evidence (i.e. that the governor's investigation might try to taint the government investigation during their own evidence collection), but I don't think you'll see any of that here with Bart in charge.”</p> <p>Asked if voters should have faith in Schwartz’s investigation, Horner replied, “They should have faith in Preet Bharara.”</p> <p>On Thursday, following the sentencing of former Republican Senate Majority Leader Dean Skelos, Bharara issued a statement trumpeting the conviction and sentencing of Skelos and former Democratic Assembly Speaker Sheldon Silver. The statement included a reference to Cuomo-controlled investigations. “These cases show--and history teaches--that the most effective corruption investigations are those that are truly independent and not in danger of either interference of premature shutdown.”</p> <p>

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/25963023556_3de267387f_z.jpg" width="600" height="399" alt="cuomo buffalo billion" /></p> <p>Gov. Cuomo in Buffalo (photo via The Governor's Office)</p> <hr /> <p>As U.S. Attorney Preet Bharara’s office issues a storm of subpoenas to the administration of Governor Andrew Cuomo and his close associates in relation to the state’s Buffalo Billion economic development program, the governor and his aides have delivered a consistent message: the investigation targets the dealings of a few bad apples, the governor wasn’t aware of any wrongdoing and he wants to get to the bottom of the situation as quickly as possible.</p> <p>“I’ve said to all my people, and I’ve said to the U.S. attorney, any way we can find out and be helpful and be cooperative, we will be,” Cuomo told reporters during a press conference in the Adirondacks on Tuesday. “Nobody wants the facts more than us. That’s why we started our own private investigation. We know the questions: did two people act improperly? Did they represent companies they shouldn’t have? Was there undue influence for those companies? Those are the questions, we now need the answers and we don’t have the answers.”</p> <p>The message rings as spin to a number of expert observers who insist Cuomo has long overseen a system that allows, at the very least, for the appearance of pay-to-play to flourish as mini-economies have popped up around the state where connected consultants work with both state government entities and those looking to win state contracts, and where the state funnels money through non-profits, allowing them to avoid scrutiny and standard state contracting procedures.</p> <p>Bharara’s probe appears to have also spurred inquiries into surrounding issues by Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli - all of whom, like Cuomo, are Democrats.</p> <p>It is unclear whether the two men who have been reported to be at the center of the probe - longtime Cuomo aide Joe Percoco and Cuomo family associate and lobbyist Todd Howe - violated the law or how Bharara’s many subpoenas that have targeted the executive chamber, former Cuomo aides, consultants, and businesses involved in the Buffalo Billion all fit together. However, the scope of the investigation and the deep layers of connections between and among some of the players involved makes it fairly clear that the target of Bharara’s investigation is not simply two Cuomo associates.</p> <p>Unlike New York City, New York State has no restrictions on what is referred to as “pay-to-play.” Donors with business before the state are allowed to contribute the same amount as anyone else to a candidate campaign.</p> <p>Meanwhile, the checks that exist on how the state awards contracts have been subverted by the use of non-profit entities that aren’t subject to the same regulations. State Comptroller Tom DiNapoli and other government and budget watchdogs have criticized the proliferation of these entities and called for reform.</p> <p>When acknowledging that investigators are looking into actions by individual actors and decisions that were made by state entities, Cuomo also announced “our own investigation with a private investigator who was from the U.S. attorney’s office originally, Mr. Bart Schwartz.” Though it is being explained differently, the move is seen by some watchdogs as designed only to target specific contracts and not intended to address what they say is a flawed system plagued by the appearance and risk of corruption, if not worse.</p> <p>“The governor is trying to get in front of this issue and is saying a couple of people did something wrong, but the reality is that the entire system is ripe for corruption,” said Ron Deutsch, executive director of The Fiscal Policy Institute, an independent group that analyzes New York fiscal issues.</p> <p>Cuomo spokesperson Dani Lever declined comment, but pointed Gotham Gazette to a statement issued by Cuomo counsel Alphonso David. (Another Cuomo aide emailed a sarcastic comment to Gotham Gazette.)</p> <p>Alphonso David issued a statement just as <a href="http://www.nydailynews.com/news/politics/cuomo-aides-probed-shady-lobbying-conflicts-interest-article-1.2619360" target="_blank">the New York Daily News broke a story</a> April 29 revealing that Percoco is a target of Bharara’s probe, acknowledging allegations and announcing the independent investigation.</p> <p>“This [federal] investigation has 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,” David wrote. “We take violations of the public trust seriously and we believe these issues must be resolved by further investigation by the U.S. Attorney. In the meantime, and as the [Buffalo Billion] program operates on a daily basis, the Governor has ordered an immediate full review of the program. Any grants made by this program will be thoroughly scrutinized – past, current or future.”</p> <p>David went on to say: “Ensuring the integrity of the contracting process for this program is paramount, so that the Buffalo Billion and Nano program can continue creating new jobs and revitalizing Upstate’s economy.”</p> <p>The statement wasn’t reassuring for many watchdogs, especially those who have long-criticized the Buffalo Billion program.</p> <p>“The governor is looking at it in terms of the mistakes, or poor behavior of a couple aides that he seems to be disassociating himself with,” said John Kaehny, executive director of Reinvent Albany. “But what the subpoenas are targeting seems to be the corruption risk and bid-rigging favoring the governor’s campaign contributors. No one cares Todd Howe did something dumb. This is not what this is about - the governor sidestepped the larger issues.”</p> <p>At least six current or former members of the Cuomo administration have been targeted by subpoenas. The administration has defended<a href="http://nypost.com/2016/05/10/cuomo-wont-defend-all-of-his-probed-aides/" target="_blank"> some of them</a>.</p> <p>A review of a number of businesses targeted by Bharara’s subpoenas shows that most of them are regular contributors to Cuomo’s campaigns. That leads some observers, including Kaehny, to believe that Bharara is interested in the state’s economic development subsidy programs as a whole.</p> <p>“The Buffalo Billion is just a microcosm of the pay-to-play racket that has engulfed economic development under Governor Cuomo,” said Kaehny. “It is just a giant machine that takes in donations and doles out grants to donors. It is remarkable in its scope, consistency, and is dramatic in how it all leads back to the same people. What caught Bharara's interest in this is a system - not a rogue agent, not a bad apple, it's a system.”</p> <p>Jennifer Rodgers, formerly of the U.S. Attorney’s office and current executive director of Columbia’s Center for the Advancement of Public Integrity, said she does not believe that is the case.</p> <p>“I wouldn't say the fact that the U.S. Attorney is involved means it is systemic,” said Rodgers. “This is important enough even if it is just two guys who took bribes for grants with their position, and importance makes it a very worthy case to pursue. If I learned two guys were taking all this money and were involved in these subsidies, I would think they were good targets,” said Rodgers.</p> <p>However, Rodgers said she understands why there is suspicion about the overall system. “I think it is a disaster of a system that everyone in good government sees as asking for trouble - there is no oversight. At the same time, it is not the U.S. Attorney's job to change the system. Their job is to charge guys with criminality. I could see issuing a grand jury report that says ‘by the way this system is asking for trouble,’ but it is not the crux of what he does.”</p> <p>Blair Horner, executive director of the New York Public Interest Research Group, said without knowing what Bharara knows, it is impossible to judge what he is really after. “But I would say opacity in government increases the risk for corruption. What is so notable about how the Cuomo administration operates is they keep their decision-making process behind closed doors and he only shows the public what he wants them to see. This is the governor who ordered agencies to delete their emails and who still hasn’t told us how the Tappan Zee Bridge will be funded and it’s half completed.”</p> <p>Gerald Benjamin, a professor of political science at SUNY New Paltz noted that the fact SUNY Polytechnic President Alain Kaloyeros has been subpoenaed and appears to have been a target of the probe since the fall, “makes it a much bigger matter that could be focused on systemic practices.”</p> <p>Kaloyeros has overseen much of the Buffalo Billion contracting and <a href="http://www.gothamgazette.com/index.php/government/5912-alain-kaloyeros-powerful-centerpiece-of-buffalo-billion-could-become-household-name" target="_blank">has become a major figure</a> in the Cuomo administration as the governor has ramped up his economic development programs.</p> <p>“The issue we have is confidentiality,” Kaloyeros told Gotham Gazette by Facebook messenger <a href="http://www.gothamgazette.com/index.php/government/5925-buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail" target="_blank">last fall when being asked</a> about the Buffalo Billion investigation. “We were instructed in no uncertain terms not to comment on the inquiry from down South with the threat of jail which is being interpreted as we are the target of an investigation. So that part we cannot comment on beyond what we were authorized to say publicly."</p> <p>Gov. Cuomo has distanced himself from Percoco and Howe. Percoco, who has been characterized as a third son to Mario Cuomo, worked at Andrew Cuomo’s side since his days at HUD. Percoco left the administration for part of 2014 to run the governor’s reelection campaign. He later filed income disclosure forms with the Joint Commission on Public Ethics (JCOPE) revealing he received income from two developers with business before the state while managing the governor’s campaign.</p> <p>Todd Howe, the Washington lobbyist who had a relationship with Mario Cuomo and worked for Andrew Cuomo’s 2014 campaign under Percoco, has been involved in <a href="http://www.capitalnewyork.com/article/albany/2016/05/8598650/lobbyist-steered-subpoenaed-companies-cuomo-campaign" target="_blank">steering donations</a> from contractors to Cuomo and attended a fundraiser with Cuomo as recently as December, <a href="http://www.capitalnewyork.com/article/albany/2016/05/8598974/cuomo-attended-december-fundraiser-embattled-lobbyist-aide-and-develo" target="_blank">according to Politico New York</a>, which reported that Howe steered donations from “several development and energy companies” to Cuomo’s reelection campaign.</p> <p>Cuomo has said he allowed Percoco to take on outside work because he was strapped for cash. The governor has denied he had much of a relationship with Howe. Cuomo rejected the idea that he should have questioned Percoco on whether his outside clients had business with the state, telling reporters on Tuesday, “No. The state has tens of thousands of employees; they’re not supposed to be cross-examined to make sure they’re following the rules, right?”</p> <p>Horner rejected Cuomo’s assertion that he shouldn’t have kept himself apprised of Percoco’s outside work. “It is the governor’s responsibility. He allowed Percoco to take outside work in the first place. This guy is not a hands-off administrator. That being said, he can’t know everything.”</p> <p>Aside from the red flags sent up by donations and dealings with the air of conflict of interest, watchdog groups say they believe Bharara may be examining the Buffalo Billion because it is clear that up until now on one on the state level has been.</p> <p>Cuomo and the Legislature crippled the Comptroller’s ability to audit deals made regarding the Buffalo Billion in 2011, <a href="http://www.timesunion.com/local/article/DiNapoli-We-used-to-have-more-oversight-over-6554885.php" target="_blank">DiNapoli and others say</a>, by passing legislation that prevented auditing of SUNY, CUNY, hospital or construction funds. That is important to the Buffalo Billion because the state funnels cash for Buffalo Billion contracts through two non-profits controlled by SUNY.</p> <p>On Wednesday, DiNapoli <a href="http://www.gothamgazette.com/index.php/state/6328-comptroller-calls-for-state-budget-transparency-fiscal-reform" target="_blank">unveiled a series of proposals</a> to bring more transparency to state spending - a few which would likely impact how the state funds the Buffalo Billion. His plan would ban lump sum appropriations, create a council to plan capital spending, and require economic development program proposals to be scored and ranked in a public database.</p> <p>“Public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight,” reads the release from DiNapoli’s office. “DiNapoli’s proposal would require state-funded public authority projects to be scored and ranked using measurable and objective criteria. His proposal also requires more disclosure of public authorities’ spending and financing activities.”</p> <p>Deutsch has been advocating for such a database for years. “My entire career I've been calling the efficacy of these programs into question,” said Deutsch. “We saw Empire Zones move to cater to where businesses wanted to be rather than have them come to economically disadvantaged areas,” Deutsch said of an economic development program that was a hallmark of Republican Governor George Pataki. “Every once in awhile there's a bad deal, or someone breaks the law and people pay attention for a little while.”</p> <p>While calling for his own investigation of the Buffalo Billion, Cuomo has simultaneously downplayed the role of the state’s existing ethics body in preventing possible conflicts of interest. Asked whether JCOPE should have flagged Percoco’s filing that showed him taking income from groups with business before the state, Cuomo told reporters on Tuesday: “JCOPE has proven effective. Can an agency always be more effective? But I don’t think this is about JCOPE. We’re looking at two individuals to see if they’ve done anything improper. The first responsibility lies with that individual.” Cuomo also told reporters that you have to engage in criminality to be a target of JCOPE.</p> <p>JCOPE is able to give administration officials guidance in taking outside work. It is unclear if JCOPE issued such an opinion in the case of Percoco. The commission has been headed by a succession of three Cuomo aides since its inception. Seth Agata, the new and third head of the commission, once served as Cuomo’s counsel, where he wrote to JCOPE to ask for clearance for Cuomo to earn hundreds of thousands of dollars to write a memoir for a company that has business before the state. Permission was granted.</p> <p>The Legislature has shown little interest in reforming how the state doles out subsidies. Senate Majority Leader John Flanagan, a Republican from Long Island, <a href="http://www.nystateofpolitics.com/2016/05/flanagan-dont-pull-back-from-economic-development/" target="_blank">told State of Politics</a> on Wednesday that the state should be “forging ahead” with current economic development programs. “The executive has an inherent responsibility to be overseeing these projects from start to finish,” Flanagan said. “I don’t think we should be scaling back anything. Can we take a closer look, put it under a microscope, fine. But people need jobs. This is a great way to create economic development.”</p> <p>Cuomo’s creation of an independent investigation is worrying to some because of the governor’s history with independent commissions.</p> <p>“Bart Schwartz is not independent, Alphonso David is not independent, Seth Agata is not independent,” said Kaehny. “The public will not get the truth unless the facts are independently accessed and the governor is incapable of investigating himself. We’ve seen what happens when the governor says ‘Follow the money wherever it may lead’ - as soon as the money brought [the] Moreland [Commission to Investigate Public Corruption] back to the governor and his real estate contributors at REBNY, Cuomo pulled the plug...No one is good at investigating themselves,” said Kaehny.</p> <p>Rodgers, of CAPI, said that she has faith in Cuomo’s independent investigation. “The U.S. Attorney's Office will proceed with their work regardless of what internal investigation is going on,” said Rodgers. “And Bart Schwartz being chosen to head the internal investigation is a good sign for the credibility and independence of whatever findings he makes. If the governor's office had chosen someone with less credibility, you could see that there might be suggestions about tampering with witnesses and other evidence (i.e. that the governor's investigation might try to taint the government investigation during their own evidence collection), but I don't think you'll see any of that here with Bart in charge.”</p> <p>Asked if voters should have faith in Schwartz’s investigation, Horner replied, “They should have faith in Preet Bharara.”</p> <p>On Thursday, following the sentencing of former Republican Senate Majority Leader Dean Skelos, Bharara issued a statement trumpeting the conviction and sentencing of Skelos and former Democratic Assembly Speaker Sheldon Silver. The statement included a reference to Cuomo-controlled investigations. “These cases show--and history teaches--that the most effective corruption investigations are those that are truly independent and not in danger of either interference of premature shutdown.”</p> <p>

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by David King, Albany editor, Gotham Gazette
     

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