Gotham Gazette http://www.gothamgazette.com/component/tags/tag/547 Tue, 12 Dec 2017 04:27:18 +0000 en-gb webmaster@gothamgazette.com (Webmaster) With Phase One Going on Trial, Cuomo’s Buffalo Investment Moves Ahead with Broken Reform Promises http://www.gothamgazette.com/?id=7353:with-phase-one-going-on-trial-cuomo-s-buffalo-investment-moves-ahead-with-changes-and-broken-reform-promises http://www.gothamgazette.com/?id=7353:with-phase-one-going-on-trial-cuomo-s-buffalo-investment-moves-ahead-with-changes-and-broken-reform-promises Cuomo jobs western new york

Gov. Cuomo (photo: Governor's Office)


As federal corruption trials loom for several associates of Governor Andrew Cuomo, the administration is forging ahead with Buffalo Billion II, the second phase in an ambitious plan to revitalize Buffalo’s beleaguered economy and help transform Upstate New York into a hub of technology innovation and jobs. The first phase saw the massive alleged bid-rigging and kickback scandal that rocked state politics when outlined in September 2016 by the Manhattan U.S. Attorney’s Office and will loom over Cuomo’s 2018 reelection campaign.

In April, the state Legislature approved $500 million in budgetary funds for the Buffalo Billion II, which marks a shift in the investment in Western New York. The initial Buffalo Billion program, touted by Cuomo as a major success in revitalizing that city despite the scandal, poured the bulk of the $1 billion in funds into a controversial solar panel factory, while Buffalo Billion II investments are diverse and largely infrastructural, including the development of waterfront and rail access, tourism, and job training initiatives.

Critics -- including lawmakers, financial analysts and good government groups -- acknowledge steps the Cuomo administration has since taken to improve the contracting process, but say they remain skeptical of the Buffalo Billion extension and how it is administered. Calling its approval “a blank check” to the governor with little oversight, they question why these small projects are not being funded through traditional means -- like via local governments -- and whether these investments are tax dollars well-spent. Meanwhile, other promises the governor made in the wake of the scandal were abandoned by Cuomo, who had promised unilateral action that did not materialize.

“There’s two problems here. One is the corruption problem, which is obviously paramount in the upcoming trials,” said David Friedfel, director of state affairs for Citizens Budget Commission, a nonpartisan watchdog. “But a second problem that we’ve voiced concern about, which is sort of getting lost in the conversation, is that a lot of these are a bad investment of state taxpayer dollars.”

The Buffalo solar panel factory, which received about $750 million in state subsidies, as well as a state-funded nanotechnology hub in Syracuse, are at the center of last year’s sweeping probe by then-U.S. Attorney Preet Bharara’s office, which ensnared nine men -- including two who had been powerful state officials -- whose trials may overshadow the 2018 legislative session in Albany, set to begin in January.

On January 8, jury selection is scheduled to start in the trial of Cuomo’s former close confidant and aide Joe Percoco, along with three construction and energy executives who had business before the state and are accused of arranging bribes for Percoco and his wife in exchange for Percoco’s government influence.

On May 15, jury selection for the trial of former SUNY Polytechnic Institute President and CEO Alain Kaloyeros, whom Cuomo empowered and praised over several years as a key architect of his upstate economic development efforts, and executives from LP Ciminelli, a construction company tied to the factory and Cuomo’ campaign coffers, will commence.

Two Syracuse developers, Steven Aiello and Joseph Gerardi, who run COR Development, will be defendants in both trials. Eight defendants in total have pleaded not guilty, while a ninth, lobbyist and former Cuomo ally Todd Howe, pleaded guilty to numerous felony charges and is cooperating with prosecutors. While Cuomo was not directly implicated in the federal complaint, prosecutors note that he received large campaign donations from the business people involved in the scheme, often at Howe’s behest. The governor also oversaw the economic development programs that were allegedly taken advantage of and dismissed calls for greater independent contracting oversight, both before and after the scandal broke, though he did make some relatively minor adjustments.

In November 2016, two months after the charges were outlined, Cuomo expressed dismay over the scandals that were threatening to undercut his signature economic development programs and vowed to quickly strengthen oversight and ethics, though all under his purview. Notably, Empire State Development, the state’s economic development authority, would immediately begin to oversee projects run by entities associated with SUNY Polytechnic, Fort Schuyler Management Corp. and Fuller Road Management Corp., state-affiliated nonprofits created to more quickly disburse economic development funding that Kaloyeros is accused of using to illegally direct contracts.

“I believe this public trust and integrity issue must be addressed – directly and forthrightly. I don’t believe in denial as a life strategy. I believe you must face your problems, no matter how unpleasant, and do your best to resolve them,” Cuomo said in a long statement outlining his response to the scandal and news of problems at CUNY. “It is time for action, not words.”

Cuomo promised a series of actions and proposals, some that would need legislative approval and others he categorized as “steps we can take immediately.” Most of those promised reforms did not materialize.

In the November 2016 statement, Cuomo vowed, “I will order my campaign and my party not to accept campaign contributions from companies once a Request for Proposals has been announced, and for six months following the conclusion for the winner,” adding, “I believe the other state offices and the legislature should do the same and will propose such a law.” According to Cuomo’s office, his pledge was not followed through on.

While his campaign did not follow through, in January of this year, Cuomo outlined his ethics platform and proposed creating such bans for all government leaders overseeing contracting processes. It did not pass.

In November 2016, under other ‘immediate’ actions he would be taking, Cuomo acknowledged that “[t]he contracting systems at CUNY and SUNY have become the focus of US Attorney and IG inquiries in the past several months. To insure more permanent supervision, I will create and appoint separate Inspector Generals for both SUNY and CUNY.” These IGs were not created.

Cuomo also said in November 2016, “I will also appoint a Chief Procurement Officer for the Executive branch. That person will be charged with reviewing all state contracts, with an eye towards eliminating any wrongdoing, conflicts of interest or collusion. And just so there is no confusion, I do mean all contracts.” The governor did not appoint such an officer.

Instead of immediate action on these promises, they were turned into proposals in Cuomo’s 2017 agenda that did not pass in the April budget or June legislative agreements that followed. Asked about the lack of follow-through on the promises from November 2016, Cuomo’s office pointed to the Legislature. In the November 2016 statement Cuomo had classified the proposals among “actions I can take under my own authority."

Enacted or not, critics say that these appointments would make no substitute for outside oversight.

Two months later, during the Buffalo leg of his six-stop 2017 State of the State tour, Cuomo made no mention of the scandals or his ethics platform, painting a rosy picture of his administration’s efforts to revitalize the city, and vowing to “double down” on the projects.

“Buffalo Billion squared because it takes Buffalo Billion I and it takes Buffalo Billion II, and there’s a synergy between the two of them that will be exponential,” Cuomo said. “The principles of it are going to be to build on Western New York’s renaissance, which you’ve all accomplished already, help more small businesses in downtown areas and strategically invest in regional industries.”

As the next phase of those efforts unfold with the backdrop of the corruption trials, the new Buffalo Billion does appear less vulnerable to bid-rigging, in part due to a series of voluntary fixes adopted by Cuomo’s administration, and also because of increased scrutiny from the press and government watchdogs.

The shift of economic development projects from under SUNY-affiliated nonprofits to Empire State Development, which can be audited by the comptroller’s office, is a key step, and ESD, a public authority, has modified its own contracting protocols based on recommendations by state-contracted consultants from Guidepost Solutions. (Cuomo announced he was hiring Guidepost to do a review soon after the scandal broke.)

Asked for comment about the steps the administration has taken to address the corruption scandal in the Buffalo Billion and which Cuomo promises has followed through on as Buffalo Billion II moves ahead, a spokesperson for Cuomo provided some background information but pointed Gotham Gazette to prior public statements by state officials.

“We share your goal of preventing fraud, waste and abuse. ESD has taken substantive steps to strengthen applicable processes to address the concerns you have raised and to implement your recommendations, including our support of strengthened governance provided to non-profits associated with SUNY,” Zemsky of ESD wrote in a letter sent to Guidepost Solutions’ head Bart Schwartz in April.

According to the governor's office, those Guidepost-suggested changes include reforms related to procurement, construction, property and equipment acquisition, and grant compliance. More specifically, there are new controls and procedures to improve payment processing and project management‎, with a focus on project timelines, billing, budgeting, documentation verification, payroll, and how RFPs and bids are evaluated.

There has been little contract or spending activity related to Buffalo Billion II in 2017, according to records provided by the governor’s office, but a handful of relatively smaller projects have made it past the planning stage. A new building for University at Buffalo Jacobs School of Medicine, is expected to be completed in December and will house an incoming class of students for the semester commencing January 2018. A welcome center on Grand Island, which is expected to become a vital component of New York's tourism industry, drawing in $100 billion and “supporting more than 900,000 jobs,” is expected to be fully constructed and in use by August 2018, according to Cuomo’s office.

Government watchdogs and reformers commend the government’s efforts to create more accountability for these projects but say they are no replacement for long-term, independent oversight.

The watchdogs call for a “database of deals,” which would digitally compile every entity receiving funds from the state along with where each dollar is going; dramatic overhaul of the campaign finance system to eliminate the appearance or reality of pay-to-play; and a bill to restore the powers of the state comptroller to review procurement contracts for SUNY, CUNY, and Office of General Services before they are approved. That power was stripped by Cuomo and the Legislature in 2011, in part to expedite the flow of economic development funds aimed at upstate revitalization, a move that was criticized intensely when the corruption revelations came to light.

"As with all of the economic development programs subject to our review, we are closely looking at payment requests,” said Jennifer Freeman, a spokesperson for DiNapoli's office in a statement to Gotham Gazette. “The problem is not all contracts and payments are subject to our review, which is why State Comptroller DiNapoli is pushing for major procurement reforms to improve oversight."

These long-sought reforms appeared to have some momentum in the 2017 legislative session, but wound up going nowhere due to pushback from Cuomo, even as more economic development money was approved.

There is less pushback against Buffalo Billion II, in part because the state projects involved are less controversial and more diverse than those announced in 2012. At that time, many questioned the state’s decision to spend $750 million on the SolarCity manufacturing plant that made a splash when it was purchased by Tesla’s Elon Musk, but has failed to the deliver the promised jobs. However, those watching Albany, and Buffalo, say questions remain about why the state is overseeing projects typically done by a local development authority or industrial development authority.

“In Buffalo, you have the state economic development corporation calling the shots on dinky expenditures on small real estate and street improvement projects,” said John Kaehny, executive director of ReInvent Albany, a watchdog group that has focused on economic development spending, especially upstate. “Is Buffalo Billion II a good investment compared to traditional government spending on clean water, road repair and public transit?”

Kaehny added that it is still preferable that the government make many small bets on small businesses, which is the emphasis of Buffalo Billion II, rather than “rolling the dice on giant, high risk, corporate handouts like Buffalo Billion I did with Tesla, Riverbend.”

Cuomo, a Democrat who has said he’s seeking a third term in 2018 and appears to be considering a run for president in 2020, may see Buffalo as an opportunity to shape his national image as a leader who successfully resuscitated one of America’s largest, long-suffering post-industrial cities -- succeeding where many others have failed. Though that narrative is likely to be complicated by the corruption scandal, with more to be determined by the trials set to begin in 2018.

The governor has called his work in Buffalo successful, pointing to a declining unemployment rate in the formerly industrial city, a rate that dropped from 7.9 percent in October 2010 to a 15-year-low of 4.9 by October 2016, and there is a chorus of voices backing him up. But Western New York’s job growth continues to lag behind the national average.

Part of the boom is related to an increase in construction jobs. For the five-year period ending in 2015, the number of construction jobs in the Buffalo-Niagara Falls Metro Area rose by 10.1 percent, an all-time record, according to Cuomo’s office, and by 9.3 percent in Erie County. The state investment has generated buzz and created an air of optimism and excitement for both Buffalonians and outsiders, including companies that have eyed the state’s second largest city. The city has recently seen investments from General Motors, Geico, Goldman Sachs, General Mills, Sumitomo Rubber, and Moog and Entrepreneur Magazine recently ranked Buffalo second in the nation for start-up communities, according to the governor’s office.

The governor and his aides also say young people are flocking back to Buffalo: the number of young adults ages 20 to 34 in the Buffalo-Niagara region has increased by 8.3 percent since 2010.

Still, lawmakers whose districts should benefit from the funds have critiques of both phases of the program. Assembly Member Raymond Walter, a Republican from Amherst, has been a vocal critic of the Legislature’s approval of the Buffalo Billion II and has joined calls for reforms in the wake of the the 2016 scandal. While acknowledging that Western New York has been infused with optimism and entrepreneurship, Walter says he attributes some of the economic prosperity to initiatives that predate Cuomo.

“My biggest concerns are, from what I've seen, is an inability to actually provide any data that shows that the programs are working,” he said of the initial Buffalo Billion program, noting that SolarCity was initially intended to house many types of industries before it became a solar panel factory. add

“The idea all along was we don't want a silver bullet, there's not a silver bullet solution to the economic woes of Western New York. We can't just have one big project, but that's exactly what this is turned into,” said Walter, who got in a heated back and forth with ESD head Howard Zemsky last month at an Assembly hearing on the progress of Buffalo Billion and other economic development programs.

The governor’s office says it is creating a “comprehensive and diverse portfolio of investments that collectively is driving the future of Buffalo’s continuing economic recovery.”

But while Buffalo Billion II may provide more tangible investments into the area, Walter questioned why the funds were not lined out by project in the 2017 budget, and criticized the opaque process through which it was passed.

“We're giving a blank check to the governor, to the Empire State Development, to whoever is going to be administering these funds,” he said. “So yeah, I still have great concern because we've given up all legislative authority over how this money is going to be spent.”

Others, like Democratic Assemblymember Crystal Peoples-Stokes, of Buffalo, says she and her constituents welcome the investment from the state. While she recognizes concerns, Peoples-Stokes said she has witnessed a dramatic change in the long-struggling city in terms of opportunity, entrepreneurship, and investment from major companies, as well as college students choosing to remain in Buffalo’s downtown after graduation.

“For me, at the end of the day, to see economic development dollars have a meaningful impact in the core of our city, I’m satisfied with that,” she said. “Because for years, literally years -- this is not my first go around, I’ve been here for 15 years -- I’ve never seen the type of resources put into Buffalo as we’ve seen under Governor Cuomo.”

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

Correction: An earlier version of this story mistated the trial date of the LP Ciminelli executives.

Note: this story has been updated with more information on the reforms adopted from the Guidepost recommendations.

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With Phase One Going on Trial, Cuomo’s Buffalo Investment Moves Ahead with Broken Reform Promises Thu, 07 Dec 2017 05:00:00 +0000
Vance Fallout Echoes Other Controversies that Led to Reforms http://www.gothamgazette.com/?id=7265:vance-fallout-echoes-other-controversies-that-led-to-reforms http://www.gothamgazette.com/?id=7265:vance-fallout-echoes-other-controversies-that-led-to-reforms comptroller dinapoli with check nyscomptroller

Comptroller Tom DiNapoli (@NYSComptroller)


As the office and campaign of Manhattan District Attorney Cy Vance reexamine internal policies regarding the acceptance of campaign contributions, they may want to reference the guidebook of the office of the State Comptroller or Attorney General, both of which have implemented their own donor-vetting systems and guidelines in the wake of controversies involving fundraising practices. These checks far exceed what is required by lax and porous state campaign finance laws.

District Attorney Vance, facing immense pressure over his handling of a sexual misconduct case against disgraced producer Harvey Weinstein and of a fraud investigation into Donald Trump, Jr. and Ivanka Trump, announced Sunday in a New York Daily News op-ed that he had enlisted the Center for the Advancement of Public Integrity (CAPI) at Columbia Law School to review and recommend restrictions on his campaign finance practices, especially with regard to contributions from defense lawyers with business before the district attorney’s office.

In the column, Vance said he hoped that CAPI would “recommend that we go well beyond what is currently required by laws that govern contributions to district attorneys in our state,” adding that “this is one of the first reviews of its kind ever undertaken in the realm of prosecutors’ offices, and the firestorm we have experienced over the past week presents an opportunity for real reform.”

The response to reports that Vance had accepted large campaign contributions from lawyers affiliated with the Trumps and Weinstein, before and after each case was closed, recalls another flare up involving Attorney General Eric Schneiderman, during his $40 million lawsuit against Trump University, which started in 2011 and spanned about six years, though the office does abide by internally enforced campaign finance guidelines.

Schneiderman’s office came under scrutiny for his campaign’s acceptance and alleged solicitation of funds from members of the Trump family while engaged in litigation against the university, which was widely seen as a scam. Trump has given $12,500 to help get Schneiderman elected as attorney general, and Ivanka Trump reportedly gave $500 to Schneiderman’s campaign in 2012. Trump aides claimed the mogul was told Schneiderman’s campaign solicited contributions from Ivanka offering to make the “very weak” ongoing investigation “go away,” and filed a complaint with the Joint Commission on Public Ethics (JCOPE), though the ethics advisory organization decided not pursue the case.

It would not be not the first time Trump was accused of attempting to buy his way out of the legal mess surrounding Trump University. In 2013, Florida Attorney General Pam Bondi, who was up for reelection, reportedly solicited Trump for donations while acknowledging that she was considering joining Schneiderman in his Trump University suit, but decided not to pursue the case after the mogul made a $25,000 donation to an organization, called And Justice for All, that was backing her campaign. Trump was fined by the Internal Revenue Service, not for the obvious pay-to-play element -- which is legal -- but for making the political contribution from his foundation rather than his personal bank account.

Trump settled the Trump University suit, including paying $25 million to individuals who had enrolled in the school, and Schneiderman has continued to pursue cases against Trump, a fact that his representatives cite as evidence that the attorney general is not influenced by donors to his campaign.

Even prior to his ongoing battles with Trump, Schneiderman adhered to the policies of his two most recent predecessors by refusing to accept contributions from individuals or entities who have a matter before the office or have had such within the prior 90 days, according to a spokesperson for his office.

Furthermore, “every contributor who is personally solicited is subject to an extensive vetting process, and the office has both returned and refused to accept contributions from individuals and attorneys who have had matters before this office,” said Amy Spitalnick, press secretary for the attorney general, in a statement.

The policy was tweaked after JCOPE put out an advisory opinion last year expanding this ban to one year for matters in which the attorney general was personally and substantially involved or for contributions that were personally solicited.

The ethics advisory commission, which has jurisdiction over state officials and lobbyists, also ruled that directly soliciting and knowingly accepting contributions from the active subject of investigations and enforcement proceedings violates Public Officers Law 74. Other conduct, such as directly soliciting from an attorney that is appearing before the office, would be evaluated on a case-by-case basis, according to JCOPE spokesperson Walter McClure.

County-level prosecutors like district attorneys, of which there are 62 across the state, are not under the purview of JCOPE. The city’s Conflict of Interest Board does not deal with conflicts related to campaign finance, and neither the city’s Campaign Finance Board nor the state’s Office of Court Administration, which supervises the conduct of judicial candidates, have power over district attorneys, leaving these law enforcement officials a rare level of latitude and impunity.

The massive pay-to-play scandal involving former State Comptroller Alan Hevesi similarly resulted in self-imposed reforms for that office. In 2011, Hevesi -- who had resigned four years earlier as part of a plea bargain for an unrelated scandal -- admitted to accepting $1 million in gifts for himself and friends in exchange for offering "preferential treatment" and $250 million in state pension investments to Markstone Capital, which was owned by Elliott Broidy. Broidy, in turn, gave $500,000 to Hevesi’s reelection campaign.

Following his election in 2007, Comptroller Tom DiNapoli enacted a series of reforms, including an executive order and interim policy that banned pay-to-play practices, which went into effect in 2009.

The order prohibited the state pension fund from doing business with any investment adviser who made a political contribution to the state comptroller or a candidate for state comptroller, and applied for two years from the date of the contribution. The regulations were put in place ahead of 2010 rules issued by the U.S. Securities and Exchange Commission, which they closely parallel.

“The point was to ban the practice without waiting for the SEC rule, which was then in the proposal stage. The SEC rule went into force in 2011, at which point it became the law of the land and superseded or obviated the Comptroller's executive order,” said DiNapoli spokesperson Matthew Sweeney.

Recommendations from the CAPI review of Vance’s practices are due in January. Meanwhile, at least two Democratic Assembly members have proposed bills that would significantly curb contributions to district attorneys.

One bill was sponsored by Assemblymember Tom Abinanti in February and calls for publicly-financed elections of district attorneys and State Supreme Court justices. It has a handful of co-sponsors, but it never went anywhere.

"As an attorney, I've always been troubled by a system where judges are elected on the basis of money of people who appear before them,” said Abinanti, who represents Greenburgh and Mount Pleasant. “It's just unseemly.”

More importantly, Abinanti said, for prosecutors, who are law enforcement officials, publicly-finance elections would enable them to more honestly express their views on issues like drug policy, immigration, and bail reform, at pre-election forums and debates.

The issue arose in the recent Democratic primary for Brooklyn District Attorney, when Acting District Attorney Eric Gonzalez was criticized for accepting money from the bail bond industry.

Another piece of legislation, expected to be introduced in January by Assemblymember Dan Quart of Manhattan, would compile a statewide database of criminal defense attorneys and firms and steeply reduces the amount these individuals and entities can contribute to a district attorney candidate's campaign (up to $320 per election cycle). It also would prevent the bundling of donations to district attorney candidates.

“It would create greater transparency and limit the influence of criminal defense attorneys,” said Quart, who noted that the system was based on the “NYC Doing Business” database. Entities listed on the database are greatly restricted by the city’s campaign finance system in what campaign donations they can give to candidates for city offices.

Though the New York State Assembly’s Democratic majority conference convened for several hours on Tuesday in Albany, a legislative response to questions raised by the Vance controversy was not discussed, according to Assembly Speaker Carl Heastie.

“I understand where people are coming from,” said Heastie of the public outrage. “We didn’t get a chance to talk about that, I don’t want to just make a decision without talking to members of our conference, but we are always open to election reforms that will give the confidence to our constituents that there are no inherent conflicts.”

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

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Vance Fallout Echoes Other Controversies that Led to Reforms Thu, 19 Oct 2017 04:00:00 +0000
Even Without Federal Cuts, Signs of Trouble for State Finances http://www.gothamgazette.com/?id=7102:even-without-federal-cuts-signs-of-trouble-for-state-finances http://www.gothamgazette.com/?id=7102:even-without-federal-cuts-signs-of-trouble-for-state-finances dinapoli phillips

State Comptroller Tom DiNapoli, right (photo: @NYSComptroller)


State Comptroller Tom DiNapoli is calmly ringing alarm bells about the New York economy and budget outlook. DiNapoli, the state’s chief fiscal officer, recently announced that overall tax collections for the first quarter of Fiscal Year 2018 -- April through July -- fell by $1.2 billion from the same period last year, a decrease of 6.1% in revenue.

Not only did tax revenues decrease by $1.2 billion from the prior year, but they were also $1.7 billion below a projection made by the Comptroller’s office in February, an indication that things are significantly worse than expected.

The findings were compiled in the comptroller’s monthly state cash report, issued in late July. In an accompanying statement, DiNapoli diagnosed a potential cause of the unanticipated shortfall in state revenues.

"We're three months into New York's fiscal year and personal income tax collections are falling short of what was expected," DiNapoli said. “Taxpayer anticipation of federal tax changes has contributed to the decline. Offsetting that, business tax collections are well over estimates.”

The comptroller, a few days after releasing the cash report, also released a larger fiscal analysis of the state’s enacted budget and other spending plans, including the capital program, which funds infrastructure projects. Already on unstable footing due to lower than expected revenues and questionable uses of budgetary windfalls, the situation is made worse by the looming cuts in federal aid by President Donald Trump and the Republican Congress, who have proposed deep cuts in areas integral to New York ranging from affordable housing to transportation and health care.

The comptroller’s fiscal report signals a potential crisis for the state in spite of what the DiNapoli refers to in his accompanying message as the nation’s “ninth year of economic expansion.” The larger analysis shows decreases in federal aid could have a large impact on the state’s ability to provide healthcare, for instance, with Medicaid funding at particular risk. Medicaid funding saw a significant increase in the new state budget, which was passed in early April after an agreement between Governor Andrew Cuomo and the two houses of the state Legislature.

The balance in the state’s General Fund, which is the state’s destination for non-earmarked revenue, is $7.7 billion, according to the report. According to DiNapoli, the figure “is substantially higher than the levels in the period during and immediately after the Great Recession, largely reflecting monetary settlements received in the past three years. But the State’s budgetary cushion is shrinking: the Enacted Budget Financial Plan projects that the General Fund balance will be one-third lower at the end of the current fiscal year than its recent peak two years previously.”

DiNapoli criticizes the apparent lack of credence paid to the very real threat of cuts in federal aid from the Republican-controlled Congress and White House in Washington D.C. The $153 billion state budget for Fiscal Year 2018 includes in its sources of revenue about $56 billion in federal aid, about a third of the $161 billion in revenue for FY18 according to the Citizens Budget Commission (CBC).

It is unclear just how much the federal budget could cut aid to New York, but the comptroller’s report suggests that the state’s Financial Plan doesn’t sufficiently account for the impact of the increasingly likely scenario of significant cuts in federal grants to New York. Cuomo and the Legislature did pass a new provision that allows the state greater flexibility to adjust the budget mid-year in the face of significant federal cuts, DiNapoli notes, but it is not completely clear how that process will play out and whether the state is truly prepared for such measures.

The comptroller also critiqued the use of funds acquired via financial settlements, which have amounted to about a $9 billion windfall over the past several years, as of January. The comptroller’s message states that the settlement money, which is “nonrecurring,” should be put towards financing capital projects rather than to balance budgets. According to the comptroller, through March 31, “the State had spent over $3.1 billion of its extraordinary windfall in settlement resources. Nearly half that amount had been used for various forms of budget relief, and another $461 million is planned for such use this year.”

In a statement to Gotham Gazette, David Friedfel, the director of state studies at Citizens Budget Commission, noted shared concerns between the comptroller and the nonpartisan, nonprofit budget watchdog.

“We echo many of the Comptroller’s concerns,” he said, “specifically the increasing use of settlement funds to close budgetary gaps. Likewise, it is concerning that personal income tax receipts continue to fall below projections, especially in light of potential cuts in Federal aid.”

Both CBC and the comptroller’s report also cast doubt on Cuomo’s claim that annual spending growth has stayed below 2 percent annually during his tenure. In May, CBC released a report explaining how Cuomo manipulated the numbers to tell his preferred story. The comptroller’s report says similarly, listing such budgetary tricks as “the use of prepayments; certain program restructurings which result in costs being reflected as reduced receipts rather than disbursements; shifting spending to capital projects funds; deferring expenditures to future years; and the use of off-budget resources to pay for certain program costs,” which, when accounted for, results in a 4 percent spending increase this year rather than Cuomo’s touted 2 percent.

“We are glad to see OSC voicing the same concern that state operating spending is really growing in excess of 2 percent,” Friedfel said. “The actual growth rate is still below historical norms, but by utilizing accounting adjustments and financial plan reclassifications, the State is undermining transparency to fit an artificial spending growth cap.”

Another nonprofit budget watchdog, Empire Center, had a similar reaction to the report.

"As usual, the Comptroller’s report was fairly thorough in identifying some of the most important budgetary trends obscured by the governor’s spin as well as the financial risks ahead,” said E.J. McMahon, research director at Empire Center, in a statement to Gotham Gazette. “However, one serious risk surprisingly overlooked by the report is the Trump administration’s proposal to eliminate the federal income tax deduction for state and local taxes, also known as the SALT deduction."

SALT refers to state and local taxes. The average SALT deduction claimed by New Yorker taxpayers is $21,038, the highest in the country and nearly double the national average, according to McMahon, in a July blog post.

"Given the state’s inordinate dependence on taxes paid by wealthy residents,” McMahon told Gotham Gazette, “the repeal of the SALT deduction could seriously undermine our tax base by increasing the net tax “price” of New York compared to states with low or no income tax, such as Florida.”

Other gloomy projections the report makes include $5.7 billion more in capital spending for the five-year plan than projected in the 2016-17 budget capital plan; a total lack of deposits to rainy day reserves in the previous fiscal year and the year that has begun; and an increase of $11.2 billion in out-year budget gaps from last year, to $17.4 billion. DiNapoli forecasts outstanding debt to increase by 4.1% to $63.9 billion this year and to $73.7 billion by the end of the current Capital Plan period in 2022.

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by Ben Brachfeld, Gotham Gazette

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Even Without Federal Cuts, Signs of Trouble for State Finances Tue, 01 Aug 2017 04:00:00 +0000
With Session Ending and Trial Looming, No Legislative Response to Bid-rigging Scandal http://www.gothamgazette.com/?id=7007:with-session-ending-and-trial-looming-no-legislative-response-to-bid-rigging-scandal http://www.gothamgazette.com/?id=7007:with-session-ending-and-trial-looming-no-legislative-response-to-bid-rigging-scandal Cuomo Flanagan Heastie

Flanagan, Cuomo, Heastie (photo: The Governor's Office)


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.

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.

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.

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.

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 first reported 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.

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.

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.

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.

“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.”

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.

“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.”

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.

“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.

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; the last time 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. 

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.

“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.”

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.”

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.

"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.

“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."

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.”

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.

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.

“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.”

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.

“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.”

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.

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.

“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.”

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.

Another bill, 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.

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

Read more by this writer.

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With Session Ending and Trial Looming, No Legislative Response to Bid-rigging Scandal Sun, 18 Jun 2017 04:00:00 +0000
Reviews Are In: What Watchdogs Say About The New State Budget http://www.gothamgazette.com/?id=7003:reviews-are-in-what-watchdogs-say-about-new-state-budget http://www.gothamgazette.com/?id=7003:reviews-are-in-what-watchdogs-say-about-new-state-budget Cuomo budget presentation

(photo: The Governor's Office)


A new state budget was passed in April in typical Albany fashion: with almost no time for public scrutiny of the bills or proper review by the legislators who quickly voted them through. Since the $153.1 billion budget was passed, watchdogs both in and out of government have released analyses, helping to better inform citizens and increase accountability.

The budget was adopted a little over a week into the new fiscal year, which begins April 1, after compromises were reached among legislative leaders and Governor Andrew Cuomo on contentious issues such as raising the age of adult criminal responsibility, education aid, a college tuition affordability program, the allocation of large sums of affordable housing monies, and more. The frantic and secretive nature of state budget adoption leaves a lot to digest afterward.

Now, about two months after the budget was passed, those analyses by watchdogs can bring to light a few common themes and several other key points.

Aside from general criticism of the process itself, there are the issues of the large lump sum appropriations, projects funded by mysterious sources, and the governor faulty marketing of his budgetary discipline.

Comptroller Tom DiNapoli
State Comptroller Tom DiNapoli released a report on the state budget that includes critiques of the budgeting process and the end result. The budget continues to rely heavily on appropriations from the federal government, at almost a third of state revenue, despite the unpredictability of state aid from Washington, D.C. under President Donald Trump and the Republican Congress.

“Although the budget came together more than a week into the fiscal year, the Legislature and Executive acted on critical budget issues that will help New York move forward,” DiNapoli said in a statement. “However, billions of dollars in spending lacks key details that would better inform the public about how their tax dollars are being spent.”

The Comptroller’s report included a lengthy chart showing the legislature’s inaction on ethics reform, criticizing the fact that, among other things, the budget “intentionally omits” measures such as requiring advisory opinions on legislators’ outside income, closing the LLC loophole in corporate political contributions, and extending the Freedom of Information Law (FOIL) to cover the Legislature. The Comptroller was equally pointed on the state’s procurement practices, which have come under fire due to rampant corruption in the state’s contracting process, stating that the changes were needed to “ensure spending accountability and transparency” in a statement. A measure to authorize the IG to investigate criminal wrongdoing in the state’s procurements was intentionally omitted.

The Comptroller was critical of the quickness of the process, essentially disallowing public review. Also criticized was the prevalence of lump sum appropriations, which can make state money harder to track.

“It should concern all New Yorkers that budget decisions in Washington may force tough fiscal choices for the state and raise new questions for local governments and nonprofits that rely on state funding,” DiNapoli said. “Federal actions that could adversely affect New York, as well as economic uncertainty, are key risks to this budget.”

Citizens Budget Commission
In a statement on the day the budget was adopted, CBC President Carol Kellermann said “achieving a fiscally sound budget is more important than an ‘on time’ budget,” referring to the emergency budget extender passed when negotiating parties couldn’t reach a deal on time. Still, CBC expressed dismay that the state budget was neither on-time nor fiscally sound.

In a later report, CBC also criticized Governor Cuomo for misleadingly saying that the adopted budget continued his “record of holding State Operating Funds spending annual growth to no more than 2 percent.” In reality, CBC explained, spending growth is closer to 3.7%, well above the 2% benchmark that Cuomo prides himself on. The budget is able to exploit this loophole by not “adjusting for payment timing differences and accounting changes,” such as through premature debt service payments or “shifting expenditures out of state operating funds spending.”

CBC has created a “budget navigator” to allow citizens to see how city and state money is being spent.

Empire Center for Public Policy
Empire Center, a conservative think tank based in Albany, has released a slew of criticisms of the budget. Condemnations expressed on the Empire Center blog cover health care spending, certain tax breaks, and the “free” college tuition program. Empire Center is also critical of the added tax deduction for union dues, “effectively a $35 million gratuity for an already privileged caste of (mostly government) workers.”

“The positives in New York’s FY 2018 budget make up a pretty short list—while the negatives are in some respects worse than usual,” wrote E.J. McMahon, Empire Center’s founder and research director, in a budget breakdown post on the Center’s blog.

McMahon argues for more transparency and accountability with the Water Infrastructure Improvement Act, which he says “used to be put before voters in New York.” Now that doing so is no longer a requirement, McMahon writes, “the governor and Legislature obviously figure, why bother?”

Citizens Union
Citizens Union identifies the budget’s large non-specific lump sum funding in its “Spending in the Shadows” report. The watchdog identified nearly $13 billion in the budget in nonspecific funding: around $3 billion “subject to decisions of one or more particular elected officials,” and nearly $10 billion “in approximately 40 different economic development and infrastructure pots listing no official with spending authority.” The group also found that there was “inadequate reporting as to how these funds are eventually spent.”

Citizens Union calls on the governor and Legislature to publicly identify all nonspecific funding and to publicly disclose information, such as purposes and the requester, regarding these funds, especially ahead of spending, not afterward as is often the case. Further, the organization calls for amending state finance law to introduce accountability and conflict-of-interest identification to public contracting, the disclosure of grants and contracts “awarded under nonspecific lump sum appropriations and reappropriations,” and for “aging the budget bills for three days.”

Reinvent Albany
Reinvent Albany has focused largely on procurement reform, which has become a major point of contention, particularly after the Buffalo Billion corruption scandal broke. Along with other watchdog groups, Reinvent Albany issued a release in May calling for “five clean contracting reforms,” all of which failed to make it into the budget:

1. Require competitive and transparent contracting for the award of state funds by all state agencies, authorities, and affiliates. Use existing agency procurement guidelines as a uniform minimum standard.

2. Transfer responsibility for awarding all economic development awards to Empire State Development Corporation (ESDC) and end awards by state non-profits and SUNY.

3. Empower the Comptroller to review and approve all state contracts over $250,000.

4. Prohibit state authorities, state corporations, and state non-profits from doing business with their board members.

5. Create a ‘Database of Deals’ that allows the public to see the total value of all forms of subsidies awarded to a business – as six states have done.

The groups have continued to call for such reforms, but legislative leaders have been hesitant to challenge Cuomo, who is opposed.

New York Public Interest Research Group
NYPIRG also criticized the opacity of the state budget process, which notorious for taking place largely behind closed doors, especially in terms of the final, major deals reached, with the infamous “Three Men in a Room” process determining what stays and what goes -- largely without public input. (There’s been a fourth man in the room of late given the addition of IDC Leader Jeff Klein along with the governor, Assembly speaker and Senate majority leader.)

“The process by which these decisions were made was awful and arguably worse than in the recent past,” said the organization in a statement shortly after the budget’s passage. “Virtually all the deliberations in developing the budget were conducted behind closed doors. There were no hearings, no open meetings, and with the three day legislative review period waived by the governor lawmakers were voting on bills that they had little time to comprehensively review.”

***
by Ben Brachfeld & Jynn Schubert
@GothamGazette

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. ]]>
Reviews Are In: What Watchdogs Say About The New State Budget Thu, 15 Jun 2017 04:00:00 +0000
Whose Job Is It To Investigate The Legislature’s Lulu System? http://www.gothamgazette.com/?id=6941:whose-job-is-it-to-investigate-the-legislature-s-lulu-system http://www.gothamgazette.com/?id=6941:whose-job-is-it-to-investigate-the-legislature-s-lulu-system klein

IDC Leader Jeff Klein (via nysenate.gov)


Reports that state senators have been receiving stipends for committee chair positions that they do not actually hold has drawn scrutiny to the Legislature’s stipend system and raised questions about the legality of the ways in which Senate leadership has arranged such payouts, often called lulus. Those questions have led to others, specifically whose job it is to investigate the potential wrongdoing involved and whether any legal or ethics enforcement entities will take action.

Four Republican senators and three members of the Independent Democratic Conference (IDC), an eight-person breakaway group of Democrats that aligns with the Senate GOP -- all seen as loyalists to Senate Majority Leader John Flanagan -- were recipients of bonus checks ranging from $12,500 to $18,000 a year, despite holding roles as vice chairs, a position that does not include a stipend. The New York Times first reported the potentially fraudulent filings last week, and reported Thursday evening that an unnamed law enforcement entity is now investigating the falsified paperwork. The Daily News then reported that Attorney General Eric Schneiderman's office and the office of the U.S. Attorney for the Eastern District of New York are investigating.

Flanagan, who signed off on payroll requests sent to the New York State Comptroller’s Office, which appear to misidentify the seven vice chairs as committee chairs, has defended the practice. “I believe everything we’ve done in the past and right now is in full accordance not only with the constitution but the legislative law,” Flanagan, a Republican from Long Island, told reporters Monday afternoon at the state Capitol.

Over the weekend, the conference’s attorney, David Lewis, released a memo arguing that there was no impropriety, and noting that the practice started with IDC Senator David Valesky, of Syracuse, was awarded a lulu for a vice chair by former Majority Leader Dean Skelos several years ago.

Critics of the IDC’s coalition with the GOP say that the stipend practice effectively rewards the rogue Democrats for empowering the majority conference. The Daily News reports that IDC Leader Senator Jeff Klein also received a significant pay hike through an increased stipend this year after Flanagan formally named him the chamber’s vice president pro tempore.

Whether the payments are legal is unclear. The distribution of lulus is codified in state law, but it is not specified that an unclaimed stipend can be diverted from a chair to someone who does not hold the position. Furthermore, deliberately submitting false payroll documents to the Comptroller could warrant criminal charges -- the Senate majority leader’s office listed vice chairs as chairs on payroll documents.

But as a blame game ensues at the Capitol, and GOP senators hide out in their chamber to avoid the press gaggle, questions abound over which entity would be authorized to investigate this practice of falsifying information on payroll forms.

Without specifying who might have jurisdiction, Senate Minority Leader Andrea Stewart-Cousins, a Westchester Democrat, has called for “someone in authority” to look into “the obvious violations of state law.

“It seems every day troubling new questions arise and new details are learned about the apparent abuse of the Senate stipend system,” she said. The counsel for the Senate Democratic Conference issued a memo countering the arguments laid out by the Senate GOP’s counsel and pointing to impropriety.

Governor Andrew Cuomo, a second-term Democrat, took reporters’ questions after an unrelated news conference in New York City Thursday, and pointed to the comptroller’s office, saying it must determine whether or not the practice is legal. “If it was not legal, the comptroller should call up and say ‘whoops I made a mistake, I need the money back,’” Cuomo said. “The call is the comptroller’s.”

In response, a spokesperson for DiNapoli’s office said in a statement, “The Comptroller’s office is not a court of law. This issue needs to be decided by the Senate itself or the legal system.”

Previously, DiNapoli’s office had issued a statement saying that the Senate is expected to comply with state law and house practices when filling stipend requests. "When our office receives a payroll request that has been certified by the Senate, or any state entity, we make the payment. At this time, we have no basis to take back this money," said Jennifer Freeman, a spokesperson for the Office of the State Comptroller.

While Cuomo has enjoyed a close working relationship with Flanagan and Klein, he has feuded with DiNapoli, including earlier this week over a new report from the comptroller scrutinizing missed reports from one of the governor’s controversial economic development programs.

Beyond the Comptroller’s Office, other oversight authorities that may have jurisdiction to pursue an investigation include the Attorney General’s Office, the Albany District Attorney‘s Office, and the U.S. Attorney for the Southern District of New York (USASD). All three offices declined to comment on the stipend situation when Gotham Gazette reached out. 

Attorney General Eric Schneiderman’s office is not authorized to pursue an investigation without a referral from the comptroller, the governor’s office, or a number of other government authorities. The situation also could also fall under the jurisdiction of the USASD, a position previously held by Preet Bharara, who became known for aggressively pursuing cases of public corruption, but was fired suddenly by President Donald Trump in March.

Finally, there is the Joint Committee of Public Ethics (JCOPE). While the independent ethics board cannot pursue criminal charges, it can investigate potential violations of the state's ethics law within the Legislature and issue a report, which is then referred to the Legislative Ethics Commission, a body comprised of four-legislative members and five non-legislative members. If the Legislative Ethics Commission accepts the findings of the report, it is authorized to mete out an appropriate penalty. The Senate and Assembly also have in-house ethics committees, which rarely meet. A spokesperson for JCOPE declined to comment on the stipend matter.

Which law enforcement entity is looking into the issue was not clear in the initial Thursday evening report by the New York Times.

Cuomo also pointed to the structure in which lawmakers are paid, which he says is inherently flawed. The governor has called for a pay increase for legislators and a strict cap on or elimination of what income they can earn in other jobs -- legislators are technically part-time, and they have not received a salary increase since 1999. Cuomo did not address eliminating stipends.

“The fundamental problem is the way we pay legislators and the conflicts of interest that are intrinsic in the system,” he said. “The stipend is pennies compared from the salary structure which is premised on the fact that they are part-time, which is premised on a fallacy -- because they are full-time.”

While lawmakers collect $79,500 annual base pay, legislative stipends for committee leadership roles ranging from $9,000 to $41,500 are fairly common in both houses. An Empire Center report from 2016 notes that all 63 senators are eligible for stipends -- though some decline the cash -- and more that half of Assembly members receive supplementary payments through their secondary roles in the Legislature. Lawmakers are also permitted to hold outside jobs in addition to their legislative roles.

Calling for a formal investigation is the government watchdog group Common Cause/NY. “Today’s New York Times report that the Senate filed fraudulent documents to secure ‘lulus’ for members of the Independent Democratic Conference represents an egregious misuse of public monies, and potentially a more serious legal violation, which must be investigated by law enforcement,” Common Cause/NY said in a statement last week. “This is not a clerical error to be blamed on staff, or punted to the comptroller.”

The organization also defended the comptroller’s office saying, “It is entirely appropriate for the Comptroller to trust and rely on the information as certified to him by the designating authority, in this case the Senate.”

Meanwhile, members of the IDC have continued to dismiss the lulu scandal as business as usual.

“Well, certainly it seems as if everyone is obsessed with the 'Lulu Land' here in Albany. But quite frankly, it is a story about nothing," said Senator Diane Savino, an IDC member from Staten Island and one of the seven getting the extra stipends, on NY1 Monday. "Legislative stipends have been in existence for decades here in Albany. It's certainly not something new."

In addition to Valesky and Savino, IDC Senator Jose Peralta, a Democrat from Queens; and Republican Senators Thomas O’Mara, of the Finger Lakes region; Patrick Gallivan, of Buffalo; and Patty Ritchie, of Elmira, have also received payments for their roles on committees they do not chair.

Senator Pamela Helming, a first-term Republican from Central New York, was also misidentified in the Senate payroll documents as a chair, but her office told reporters she has not cashed the checks and intends to return them.

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

Read more by this writer.

Note: this article has been updated to reflect that the New York Times reported Thursday evening that an unnamed law enforcement entity is investigating the Senate stipend matter.

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Whose Job Is It To Investigate The Legislature’s Lulu System? Thu, 18 May 2017 04:00:00 +0000
Government Watchdogs Push 'Clean Contracting' Reform in Albany http://www.gothamgazette.com/?id=6927:government-watchdogs-push-clean-contracting-reform-in-albany http://www.gothamgazette.com/?id=6927:government-watchdogs-push-clean-contracting-reform-in-albany Kaloyeros infrastructure

Alain Kaloyeros in 2016 (photo: The Governor's Office)


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.

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.

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.

“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.”

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.

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.

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.

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 has continued boosting the his signature economic development programs and infrastructure projects, to which the state is dedicating billions of dollars every year.

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.

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.

“I truly believe the comptroller plays an absolutely critical role in public policy in New York,” Flanagan said.

“You don’t always have to wait for something bad to happen to restore confidence to the public,” added Heastie.

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.

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.

“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.”

The legislation is currently facing opposition from SUNY. 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.

Flanagan has indicated 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.

Cuomo’s former aides, associates, and donors are set to go on trial late this year.

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.

“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.”

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. ]]>
Government Watchdogs Push 'Clean Contracting' Reform in Albany Wed, 10 May 2017 04:00:00 +0000
Public Health Week: Get the Lead Out http://www.gothamgazette.com/?id=6865:public-health-week-get-the-lead-out http://www.gothamgazette.com/?id=6865:public-health-week-get-the-lead-out water dineshraj goomany 2

(Photo by Dineshraj Goomany)


After nearly three years of grappling with contaminated drinking water, the citizens of Flint, Michigan finally obtained some relief as a federal court approved a settlement mandating replacement of lead pipes. 

As we mark Public Health Week in New York, we must confront the sobering need to “get the lead out” here as well.

Lead is a potent neurotoxin. It is particularly damaging to children, who absorb as much as 90 percent more lead into their bodies than adults. Once ingested, lead flows from the blood to the brain, kidneys, and bones. Children’s organs and bones are immature and more vulnerable than adults’; they also have an incomplete blood-brain barrier.

We have known for some time that high levels of lead can cause severe health impacts – including anemia, kidney disease, abnormal brain function and even death. Yet the medical science now confirms that even low levels of lead can cause permanent damage to our children.

Over the past two years, the tragedy of Flint has stunned the nation -- we watched the drinking water of an entire city become contaminated with lead. 

Now we know this toxic threat extends well beyond Flint - to communities right here in New York. In fact, test results show that lead is even contaminating drinking water in schools and pre-schools, flowing from thousands of fountains and faucets where our kids drink water every day. 

As more schools test their water in New York, they are finding lead. In the latest round of testing in New York City, reports show nine times as many water sources tested above the EPA’s “action level” of 15 parts per billion (ppb) compared to tests conducted just a year ago.

Such confirmed cases of lead-laced water are likely just the tip of the iceberg. Often, we only hear about “elevated” results – i.e., those showing more than 15 ppb of lead in the water. However, there is no safe level of lead.

Moreover, even properly done testing often fails to detect lead in water. Mark Edwards, the Virginia Tech expert who helped Flint residents uncover their tragedy, has even compared lead testing to Russian Roulette. 

The reason for this pervasive problem is simple: all too often, the water delivery systems in our homes and schools are lined with lead – from the pipes to the plumbing and fixtures. In some cases, the service line, which brings water from the main pipe in the street into a home or school – is entirely made of lead. 

So instead of waiting for more tests to confirm this toxin at the tap, we should take a more preventative approach, one that truly prioritizes children's health and safety.

The common-sense solution is to remove lead from pipes, plumbing, and fixtures. And until we’re sure that’s 100 percent done, we can protect our children with filters certified to remove lead, at every tap used for drinking or cooking.

To be sure, undoing this toxic legacy throughout all of our communities will take time. But the first place for us to start is with our schools and daycares, and the other places where our children go each day to learn and play.

Fortunately, Governor Andrew Cuomo and the New York State Legislature have finalized a $2.5 billion Clean Water Infrastructure Act as part of the budget for the new fiscal year. This is a huge boost to efforts to protect drinking water at its source.

However, in February, state Comptroller Tom DiNapoli released a report that places the state's drinking water infrastructure needs at $40 billion over the next 20 years. Such high estimates make it clear that steady and consistent future funding will be required as well.

As our nation rushed through more than a century of unprecedented economic growth, we allowed toxic health threats like lead to become embedded into the fabric our lives. We allowed manufacturers to put this potent neurotoxin in our paint, gasoline, and many other products.

For decades, public health officials have been working to undo the damage.  Banning lead in gasoline immediately removed a major source of toxic air pollution. Barring lead in paint stopped a major threat to children’s health from becoming even worse, but we are still cleaning up the damage from millions of homes with lead paint, as well as related lead in dust and soil. 

Yet until Flint, few of us were thinking about lead in the pipes and plumbing that bring drinking water right to our faucets. Now we know, and now we must act.  

For the sake of our children’s health, it’s time to get the lead out here in New York.

***
Heather Leibowitz, Esq. is the Director of Environment New York, a statewide advocacy organization. On Twitter @EnvNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Public Health Week: Get the Lead Out Mon, 10 Apr 2017 15:48:07 +0000
'External Risks Threaten NYC Budget,’ State Comptroller Says http://www.gothamgazette.com/?id=6786:major-risks-threaten-nyc-budget-state-comptroller-says http://www.gothamgazette.com/?id=6786:major-risks-threaten-nyc-budget-state-comptroller-says dinapoli speaking podium

State Comptroller Tom DiNapoli (photo: @NYSComptroller)


As City Council hearings on Mayor Bill de Blasio’s preliminary budget plan began Thursday morning at City Hall, state Comptroller Thomas DiNapoli released a new report on the city’s finances. “External risks threaten NYC budget,” the report blares, raising additional red flags to those already in the air courtesy of de Blasio’s own budget office, city Comptroller Scott Stringer, and others.

DiNapoli’s report, “Review of the Financial Plan of the City of New York,” is part of his job as comptroller -- he is the state's chief fiscal officer. Citing potential cuts to both federal and state funding to New York City, as well as slowing economic growth and tax collection, DiNapoli warns of uncertainty, even as de Blasio has outlined another increase to the city budget -- in late January, de Blasio presented an $84.67 billion spending plan.

Still, DiNapoli noted that the city’s reserves, savings program, and projected budget surplus for the current fiscal year are all helpful as it readies for potential storms ahead.

“While the city faces significant budget risks, it has record reserves to use if needed and Mayor de Blasio plans to expand the citywide savings program to help cut the size of the projected budget gaps,” DiNapoli said. “New York City’s economy is strong, but job growth and tax collections are slowing and risks beyond the city’s control, including possible changes in federal policy, are creating uncertainty.”

The City Council will evaluate de Blasio’s spending plan for the next few weeks, then release a preliminary budget response. Soon after, the mayor must release an updated executive budget plan, which will take into account the Council’s feedback; negotiations with the Council, service providers, and others; any developments on the federal level, where the Trump administration has threatened to strip billions of dollars in funding to cities like New York; and the adoption of a new state budget, which is due by April 1.

De Blasio and the City Council have until July 1 to agree on a spending plan for the next fiscal year. Once de Blasio releases his executive budget, another round of public hearings will commence as negotiations also continue behind closed doors.

DiNapoli’s analysis of the city’s financial picture discusses specific questions related to federal action, like potential repeal of the Affordable Care Act and Wall Street regulations, along with whether President Trump and a Republican Congress will attempt to significantly reduce federal funding to New York City -- in the current fiscal year, the city “anticipates the receipt of $8.8 billion in federal funding,” DiNapoli’s report says, which is about 10 percent of the city’s operating budget. About 1.5 million city residents could lose health insurance if the ACA is repealed, DiNapoli writes, mostly due to a possible loss of Medicaid coverage.

Looming threats from Washington, D.C. -- where de Blasio was himself on Thursday for a meeting of the U.S. Conference of Mayors -- was a major theme of the first City Council budget hearing, where the Council Speaker, Melissa Mark-Viverito; Council Finance Chair, Julissa Ferreras-Copeland; and other Council members asked questions of de Blasio budget director Dean Fuleihan. Ferreras-Copeland and others were disappointed with the lack of planning and detail presented by the de Blasio administration on Thursday.

“At a time when economic growth is slowing, uncertainty from Washington is reaching new heights,” City Comptroller Stringer said in a statement to Gotham Gazette when asked about DiNapoli’s new report. “We have to be prepared for any scenario with this White House, because President Trump is capable of not only shredding American values, but also local budgets.” Stringer released his analysis of de Blasio's preliminary budget on February 15.

In her opening statement at Thursday’s hearing, Mark-Viverito said, “we can anticipate that the President’s proposed budget will likely contain deep spending cuts on important domestic priorities.” She said funding and programs that are threatened “could include cuts to Medicaid, SNAP, and education services...[and] a number of federal initiatives that fund City programs may be targeted for elimination.” She cited job training and youth employment programs, funding for public housing repairs, and “social service block grants.”

As for Governor Andrew Cuomo’s executive budget, released in January, DiNapoli notes that it “would adversely impact the city by an estimated $561 million beginning in FY 2018,” which starts July 1 of this year. “For example, the budget would increase education aid to New York City by $295 million, $244 million less than the amount anticipated by the city for FY 2018.” Cuomo also outlined a variety of funding cuts to the city in a range of areas -- cuts that de Blasio and his allies in Albany, namely the Democrat-led Assembly, will be fighting before a state budget is agreed upon by Cuomo and legislative leaders.

“While the city’s economy remains strong, it is showing signs of slowing down,” DiNApoli’s report says. “Job growth has declined from an average of nearly 125,000 jobs during calendar years 2014 and 2015, to less than 90,000 in 2016. The city assumes job growth will slow further to 55,500 jobs in 2017.” It is in this light that de Blasio recently pledged the city would spur the creation of 100,000 new “good-paying jobs” over the next ten years. For de Blasio, that means at least $50,000 annually. The mayor’s plan was criticized by some as not being bold enough, but de Blasio has pointed to the city’s slowing job growth and the fact that many new jobs have been lower paying.

“Tax collections have also weakened,” DiNapoli’s report says. “Last year, collections grew by 3.2 percent, less than half the average gain during fiscal years 2011 through 2015. Tax collections are projected to slow further to 2.4 percent in FY 2017.”

But, the city does have solid reserves and an ongoing savings program, which de Blasio has vowed will yield even more savings before he presents his executive budget this spring. DiNapoli credits the city with $1 billion in its general reserve, and $250 million to be set aside annually in its Capital Stabilization Reserve, as well as $4 billion in its Retiree Health Benefits Trust.

Asked about DiNapoli’s report, Freddi Goldstein, a budget spokesperson for de Blasio, said, “As Comptroller DiNapoli points out, we have been cautious in our budgeting while we prepare for the unknown. We are maintaining historic levels of reserves, have been saving at each phase of the budget and are being strategic and targeted with our investments.”

***
by Ben Max, Gotham Gazette
     

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'External Risks Threaten NYC Budget,’ State Comptroller Says Thu, 02 Mar 2017 05:00:00 +0000
DiNapoli, Seeking Restored Power, Points Finger at Only the System http://www.gothamgazette.com/?id=6577:dinapoli-seeking-restored-power-points-finger-at-only-the-system http://www.gothamgazette.com/?id=6577:dinapoli-seeking-restored-power-points-finger-at-only-the-system DiNapoli speech charts

Comptroller DiNapoli (photo: @NYSComptroller)


Comptroller Tom Dinapoli is not interested in pointing fingers at any of his fellow elected officials when it comes to the massive scheme alleged to have corrupted major state economic development programs under the noses of Governor Andrew Cuomo and state legislators.

In the wake of corruption charges brought against nine individuals by U.S. Attorney Preet Bharara, DiNapoli was given multiple opportunities Friday during a radio interview, but he declined to criticize either Cuomo or the Legislature. Speaking with host Susan Arbetter on The Capitol Pressroom, DiNapoli instead called for greater oversight through his office of the large state contracts that had been awarded by SUNY Polytechnic and two affiliated nonprofits as part of Cuomo’s Buffalo Billion program and other state efforts to boost the economies of central and western New York.

Calling the bribery and bid-rigging allegations “very troubling,” DiNapoli said that the situation “seems to speak to a systemic failure, as to not having adequate checks and balances.” But asked by Arbetter if Cuomo helped create the system that was so ripe for abuse, DiNapoli demurred. After pausing and searching for his words, DiNapoli said, ”I don’t know that it’s productive to, you know, finger-point at the governor.”

The comptroller repeatedly said that the system lacked oversight and accountability, but excused the mindset behind its creation, saying that communities needed help and that he understood the desire for efficiency in moving money to projects meant to stimulate local economies that had not recovered from the Great Recession. His office, he said, is designed to approve contracts and is incorrectly known for slowing down the process -- when his office does slow something down, DiNapoli said, it is for good reason.

In September, Bharara brought charges against former Cuomo aides, prominent developers who were generous Cuomo campaign donors, and the now former head of SUNY Poly, Alain Kaloyeros, on whom Cuomo heaped praise and responsibility over years.

When Arbetter pressed DiNapoli on Cuomo and the Legislature enabling SUNY Poly and the system that appears to have been abused by what the comptroller called “a web” of stakeholders, DiNapoli again struggled to find his answer, then said, “From my perspective there was not adequate oversight in the way the process was set up, both with SUNY Poly and with the use of Fuller Road or Fort Schuyler, these nonprofits that were set up.” He pointed to the fact that the Comptroller’s oversight of construction contracts was diminished in 2011 and called for it to be restored.

Later in the interview, Arbetter asked DiNapoli why the Legislature, which he was once part of as an Assembly member, had been so quiet about the questionable system at play. DiNapoli began answering by saying officials were trying to help downtrodden communities, that there was consensus “we need to do more.”

“There is a hopeful expectation that it’s all going to be handled in the right way,” DiNapoli said of the mindset when a key priority is established by state government. Arbetter asked, “So lawmakers don’t want to get in the way?” To which DiNapoli said, “Well, unless there’s a reason to. In fairness, you did have the hearing that the economic development committee had in the Assembly and some fireworks came out of that.”

DiNapoli was referring to a recent hearing that came well after media reports of the federal investigation into the Buffalo Billion and years after flags were raised by watchdogs about the system at hand.

After Arbetter pushed back further, DiNapoli conceded, “Well, I think clearly that there’s more that could have been done, more questions asked...Clearly the lesson of this is that you can’t just trust that it’s all going to be handled in the right way.”

“I think the Legislature does have to play a more effective role in oversight,” DiNapoli said. DiNapoli's office did not provide further comment when asked on Sunday to clarify why the comptroller was hesitant to more directly hold anyone accountable.

When Cuomo and the Legislature stripped power from the Comptroller in 2011, they left the independent auditor’s office on the sidelines as hundreds of millions of tax dollars flowed to developers and other corporations through SUNY Poly. It was this cash flow, the opaque contracting process, and the state’s loose campaign finance laws that helped allow former Cuomo aides Joseph Percoco and Todd Howe to manipulate the system for their means, according to Bharara’s allegations.

While DiNapoli has called for restoration of all contract vetting powers before, he, like legislative leaders, has largely been quiet as Cuomo and others have revved up economic development programming through a system some watchdogs have long warned can too easily be taken advantage of by nefarious actors.

A careful, serious elected official who is well-regarded by many across the state, DiNapoli, a Democrat like Cuomo, is not one to throw verbal bombs or pursue headlines. Not necessarily media shy, DiNapoli is, however, inclined to let his audit and contract oversight work do the talking.

Recently, DiNapoli was on the receiving end of Cuomo vitriol when the comptroller released audits of other Cuomo economic stimulus programs, calling into question their efficacy. In turn, Cuomo called audits “opinion” and said that DiNapoli needed to “educate himself,” referring to him as “the Assemblymember” in an apparent effort to undermine him further.

DiNapoli responded in typical fashion -- by downplaying conflict and pointing to the content rather than escalating the back-and-forth. An astute headline from Politico New York read, “Cuomo thunders, and DiNapoli shrugs.” It is unsurprising that DiNapoli took the path he did on Arbetter’s show, pointing toward the future and needed changes, rather than laying direct blame with the governor or legislative leaders for past mistakes.

In May, DiNapoli did announce a series of proposed “reforms to state fiscal practices” that he led with a call for restrictions on “‘backdoor spending’ by public authorities” and requirements for “more comprehensive public authority disclosure.” In a press release, DiNapoli’s office said that “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.”

The proposals also came after news reports of the federal investigation into Cuomo’s economic development programming.

Earlier in May, DiNapoli had released his analysis of the recently-passed state budget for Fiscal Year 2017. His office wrote, “the budget expands on actions in recent years that have blurred both fiscal and operational distinctions among state agencies and public authorities.”

Cuomo paid DiNapoli's May suggestions and analysis little public mind, but did announce plans for procurement reform in the wake of the September charges brought by Bharara. The day after the U.S. attorney outlined the criminal complaint, Cuomo said in Buffalo that the revitalization of the city would not miss a beat, but that he was immediately moving power from SUNY Poly to the Empire State Development Corp. Cuomo also said that he had received recommendations from a private investigator he had hired and that he was accepting all of them -- but he declined to make them public.

On Thursday budget and government watchdog groups called on state legislative leaders to “hold emergency oversight hearings on the allegations by the U.S. Attorney of the largest bid-rigging scandals in state history.” A coalition including Reinvent Albany, Citizens Union, NYPIRG, Citizens Budget Commission, and others said that the public deserves more information about how “more than a billion dollars in state contracts were rigged and what reforms will be implemented to address this huge and systemic failure.”

Asked by Arbetter about the call for such hearings, DiNapoli said no one should rush to do anything, that it is important for all the best minds to get together and figure out the path ahead. Noting that state legislators are focused on their impending elections next month, he said that if they want to hold hearings toward the end of the year, that would be “their prerogative.”

The watchdog groups on Thursday also laid out “five clean contracting reforms” including that all state funds be awarded through “competitive and transparent contracting” and empowering “the comptroller to review and approve all state contracts over $250k.” Additionally, they called on the state to enact “pay to play” laws as are found in 19 states and New York City that would limit what entities with state business can donate to political campaigns.

DiNapoli appears to be largely on the same page. The comptroller has not been aggressive about publicly pushing his reforms, though -- while he gave a speech in May to outline his proposals, he has not, for example, called a press conference to put more public pressure on lawmakers to act.

When asked by Arbetter what he could have done differently to protect against the type of corruption alleged by Bharara, DiNapoli said he could have been more aggressive, but focused more on his “limited authority.”

“I would hope the Legislature would look at our role, restore what’s been taken away...perhaps some areas where our role can be strengthened,” he said. When Arbetter asked if he’s going to be more aggressive, DiNapoli paused and said, “We will certainly be more vigilant.”

***
by Ben Max, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

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DiNapoli, Seeking Restored Power, Points Finger at Only the System Sun, 16 Oct 2016 04:00:00 +0000