Albany officials propose ethics reforms under specter of scandals, investigations

By LOUIS FLORES

Several members of the New York State Senate Democratic Conference jointly announced a package of ethics reforms on Monday, even as news reports indicated that corruption investigations are spreading from The Bronx to Albany.

The conference of State Senators, affiliated with the Democratic Party, announced a 12-point plan of ethics reforms, which are outlined on a Web page published by Senate Minority Leader Andrea Stewart-Cousins (D-Yonkers).  The announcement on Monday of the legislative reform package came after former New York State Assembly Speaker Sheldon Silver (D-Lower East Side) was forced to resign from the speakership following his arrest on five counts of federal corruption charges and reports that federal authorities are investigating the political machine up in The Bronx.  

These latest reports follow a previous report, first broadcast by WNBC Channel 4 News, that Senate Majority Leader Dean Skelos (R-Rockville Centre) was under federal investigation, as well.

“These scandals have become too common and are something that we must deal with immediately.  We are facing a crisis of mistrust in Albany,” State Senator Stewart-Cousins said, according to a statement provided to Progress Queens, in which she added that, “The legislation offered by the Senate Democratic Conference will help rebuild the trust in our state government that has been rocked by repeated scandals.  I urge the Senate Republicans to end their opposition to cleaning up Albany and finally join with the Senate Democratic Conference to pass these good government reforms.”

The 12-point plan of ethics reforms includes proposals to restrict legislators' outside incomes, close the LLC loophole that allows limited liability companies to make campaign contributions of up to $150,000, strip pensions of convicted officials, prohibit the use of campaign contributions for criminal defense attorneys, end undisclosed self-dealing, and establish a partial-matching public campaign finance system.

With some portraying the problem of corruption as threatening the Democratic Party establishment, as did The Buffalo Chronicle in an article written by Matthew Ricchiazzi, Democratic Party officials are trying, in turn, to lay blame for expected delays or opposition to reforms at the feet of Republican Party officials, even as the Editorial Board of The New York Daily News has cast the "enemies of reform" to be from both major political parties.

Triangulating the looming showdown between Democrats and Republicans is Governor Andrew Cuomo (D-New York), who reportedly secretly worked behind the scenes in last year's election to ensure that the Republic Party remained in majority in the State Senate.  A campaign committee of the state Democratic Party dedicated to the election of Democrats to the State Senate, the Democratic Senate Campaign Committee, or the DSCC, is headed by one of the legislators at the announcement of Monday's 12-point plan, State Senator Michael Gianaris (D-Astoria).  As reported by Progress Queens, there are questions about the dedicated relationship State Senator Gianaris has with a lobbying firm, The Parkside Group, which is reportedly a mandatory campaign vendor for the reëlection campaigns of Democratic State Senators.

Governor Andrew Cuomo announced a five-point ethics reform plan during an address at New York University School of Law on February 2, 2015.  Some government reform activists believe that a Republican Party-controlled State Senate may block efforts to pass aggressive ethics reform legislation.  In 2014, Governor Cuomo reportedly entered into a secret pact to ensure that the Republican Party remained in the majority in the State Senate.  Source :  Official Photograph/Kevin P. Coughlin/Office of the Governor/Flickr

Governor Andrew Cuomo announced a five-point ethics reform plan during an address at New York University School of Law on February 2, 2015.  Some government reform activists believe that a Republican Party-controlled State Senate may block efforts to pass aggressive ethics reform legislation.  In 2014, Governor Cuomo reportedly entered into a secret pact to ensure that the Republican Party remained in the majority in the State Senate.  Source :  Official Photograph/Kevin P. Coughlin/Office of the Governor/Flickr

Governor Cuomo has announced his own five-point plan for ethics reforms, made public during an address at New York University School of Law, comprised of full disclosure of outside income, stripping of retirement pensions for convicted officials, regulation of per diem reïmbursements, ending the use of campaign funds for personal use, and closing campaign finance loopholes.

Governor Cuomo has taken a stand for enacting ethics reforms in the past, only to reportedly thwart ethics investigations or to accept watered-down reforms in exchange for reportedly ending ethics investigations.

In the last year, Governor Cuomo acted to violate one of his own proposed reforms when he separately announced that his campaign committee would pay for travel to and from Israel and indemnify the criminal legal defense expenses of state employees in connection with a federal probe of the Cuomo administration officials' reported actions to thwart the corruption-fighting work of the Moreland Commission, duplicity that has not been lost to some journalists.

At a speech delivered in January at the New York Law School, U.S. Attorney Preet Bharara, the man responsible for a wave of corruption-fighting investigations and prosecutions, noted the opportunity costs of corruption in government, saying, in part, "Separate and apart from all the things that legislators are supposed to do that are important to ordinary citizens, think of the things that they could do," adding that innovation in government typically took place in state governments, which he called "incubators for new ideas."  However, when corruption forces voters not to care about their own governments, then the opportunity for innovation "goes down the drain, also," Mr. Bharara said.

A sensibility similar to that perception of loss, as described by U.S. Attorney Bharara, motivated Mr. Ricchiazzi to write his article, attacking corruption that now threatens to "bring down the entire Democrat establishment," as the headline of his article blared.  Mr. Ricchiazzi singled out a major campaign contributor to political campaign committees, a billionaire real estate developer named Leonard Litwin, who is reportedly a central figure in the corruption case against former Assembly Speaker Silver.

"My hometown of Buffalo, NY, has endured 54 straight years of decline ; decades of hemorrhaging job losses ; rising rates of violent crime ; persistently underperforming schools ; and an endemic housing crisis.  Since the mid-1960s we've lost over half our population in an economic implosion that would make you cry," Mr. Ricchiazzi wrote in an e-mail interview with Progress Queens, adding that, "This is -- in no small part -- due to the pervasive culture of corruption that has consumed Albany, anchored by a downstate élite and personified by oligarchs like Leonard Litwin and others.  Their narrow interests pertaining to the particulars of the real estate development subsidy of the day consumes the attention and bandwidth of our less-than-impressive class of career politicians."

Mr. Ricchiazzi's concerns about big business interests exerting influence over government were demonstrated, in part, amongst some of the Democrats announcing the 12-point plan for ethics reforms.  State Senator Gianaris proposed lower campaign contribution limits, even though he chairs the DSCC, which provides extra campaign support to Senate candidates favored by the Democratic Party.  The DSCC is able to raise large contributions, since it is not a candidate's campaign committee.  This extra campaign support undermines the level playing field sought by government reform activists, and it serves to to only continue duplicitous opportunities for corruption.  For example, some government reform activists have been puzzled by where the DSCC stood vis-à-vis Governor Cuomo's secret pact to maintain Republican Party control of the State Senate.  As the state's highest elected Democratic Party official, Governor Cuomo is essentially the head of the state Democratic Party, and, although the DSCC serves to elect Democratic Party candidates to the State Senate, as a political party campaign committee of the Democratic Party, Governor Cuomo has a measure of influence over the DSCC's goals.  

Furthermore, State Senator Gianaris' relationship with The Parkside Group as a reported favoured campaign vendor is reminiscent of a past preferred campaign vendor relationships with the Democratic Party committee of Brooklyn, which was the source of a corruption trial.  However, no reports have indicated that State Senator Gianaris faces any such prosecutorial investigation, leading some government reform activists to ask :  How far can proposed ethics reforms go to end all shady backroom deals ?

State Senator Brad Hoylman at a February 4, 2015, joint hearing.  State Senator Hoylman has proposed ethics reforms that some government reform activists wish could have been in force and effect years ago, when State Senator Hoylman, before his election to the state legislature, oversaw the zone-busting application of the $1 billion luxury condo conversion of St. Vincent's Hospital.  Source :  New York State Senate/YouTube

State Senator Brad Hoylman at a February 4, 2015, joint hearing.  State Senator Hoylman has proposed ethics reforms that some government reform activists wish could have been in force and effect years ago, when State Senator Hoylman, before his election to the state legislature, oversaw the zone-busting application of the $1 billion luxury condo conversion of St. Vincent's Hospital.  Source :  New York State Senate/YouTube

Another Democrat, who proposed reforms on Monday, was State Senator Brad Hoylman (D-Chelsea).  He is proposing to restrict outside income earned by state legislators to mirror the 15 per cent. cap imposed on gross legislative pay earned by federal legislators.  (The 15 per cent. cap is a weaker proposal than one he made in 2013, which called for an outright ban on outside income.)  He is also proposing to end undisclosed self-dealing by creating two classes of felonies for public officials, who knowingly steer government contracts or grants to certain organizations in order to benefit themselves, their families, or a person with whom an official has a business or other financial relationship.  The second proposal appears hallow, since it only penalises undisclosed self-dealing.  Much of what is wrong with government is that public officials flagrantly engage in misconduct, even though voters, the media, and government reform activists denounce the misconduct.

State Senator Hoylman's second proposed reform also strikes some government reform activists as hypocritical, given the obvious conflict of interest he faced in deciding the fate of the now-shuttered St. Vincent's Hospital in the West Village of Manhattan.  At the time when residents in the West Village and Chelsea were fighting to preserve hospital zoning for the real estate of St. Vincent's, Mr. Hoylman was chair of the Manhattan community board tasked with reviewing a zone-busting real estate application filed by Rudin Management Company to convert the site into a $1 billion luxury condominium and townhouse complex.  As noted by the journalist Duncan Osborne of Gay City News, before State Senator Hoylman was elected to the State Senate, he was employed by the Partnership for New York City, a chamber of commerce-like organisation where the Rudin patriarch, William Rudin, served as a director.  Rudin Management Company was also a member of the Partnership for New York City.  The Partnership for New York City's president, Kathryn Wylde, and a lobbyist for Rudin Management Company, Travis Terry, later became campaign contributors to Senator Hoylman's campaign committee after Rudin Management Company's luxury condo conversion deal was approved by city officials.

(Allegations of conflicts of interest and appearances of self-dealing were also levied at former New York City Council Speaker Christine Quinn (D-West Village), who voted to approve Rudin Management Company's luxury condo conversion of St. Vincent's Hospital after she accepted approximately $30,000 in campaign contributions from members of the wealthy Rudin family.  But no prosecutorial investigation was ever publicly launched of former Speaker Quinn's alleged misconduct.)

The blatant example of self-dealing on behalf of Mr. Hoylman was denounced by healthcare and government reform activists, but no prosecutor -- not the local district attorney, not the attorney general, nor federal prosecutors -- would probe the transaction for how it appeared that Mr. Hoylman administered over the zone-busting application in spite of how he answered ultimately, amongst other directors at the Partnership for New York City, to Mr. Rudin.

Further irony can be found in the role of the Partnership for New York City's role in funding a controversial 401(c)(3) nonprofit group, the Committee to Save New York, which, in turn, funded tens of millions of dollars of political work to benefit Governor Cuomo before the Committee to Save New York was dissolved to avoid disclosure of its donors and, in the view of some government reform activists, to avoid scrutiny by the Moreland Commission.

The proposals comprising the 12-point plan for ethics reforms announced Monday did not address the controversy over the misuse of per diem reïmbursements nor the corrupting role of lobbyists, who double as campaign consultants, in upsetting the level playing field of elections.  

State Senator Stewart-Cousins declined to answer a request for an interview.

State Senator Gianaris declined to answer questions posed to him by e-mail by Progress Queens.  

For his part, State Senator Hoylman declined to answer a request for an interview.  Instead, State Senator Hoylman's communications director issued a statement to Progress Queens that included written remarks by State Senator Hoylman about today's 12-point plan for ethics reforms.

"New Yorkers have understandably lost faith in state government as a result of the shameful slew of corruption charges brought against Albany elected officials in recent weeks and months.  To truly reform the way business is done at the Capitol, it’s essential to limit the outside income of state legislators that contribute to conflicts of interest," State Senator Hoylman said, in his statement, adding, without a sense of irony, that, "My bill would apply the same restrictions to Albany legislators that already exist for members of Congress and help to ensure our state government works for the people, not special interests."

Just because State Senator Hoylman is creating new classes of felonies for undisclosed self-dealing, some government reform activists believe that it won't guarantee that district attorneys or state prosecutors will investigate official wrongdoing.  As reported by Progress Queens, local district attorneys and the state attorney general rarely prosecute cases of political or campaign corruption.  One glaring example of controversy, involving allegations of unaccounted taxpayer funds allocated to the Corona-Elmhurst Center for Economic Development, has faded to obscurity.  Another example, involving the convergence of government officials, lobbyists, and allegations of corporate corruption, namely, the troubled $2 billion upgrade to New York City's 911 emergency call system known as the Emergency Communications Transformation Program, has led to no charges of wrongdoing.  Still yet another example, involving corporate corruption, has appeared to have reached an impasse in the face of intense lobbying by the reported corporate target of the investigation, Herbalife Ltd.

A web of conflicts of interests have been woven around State Attorney General Eric Schneiderman (D-New York) as it relates to his reported investigation into the business practices of Herbalife, which has reportedly been described by investors and activists as a pyramid scheme.  At the same time while State Attorney General Schneiderman has been investigating Herbalife, the consulting firm of his ex-wife, Jennifer Cunningham, SKDKnickerbocker, was retained to represent Herbalife.  SKDKnickerbocker was also a principal campaign consulting firm for State Attorney General Schneiderman's campaign committees, having been paid over $4,7 million in 2010 and 2011 and over $5,8 million in 2014.  Ms. Cunningham and a law firm doing lobbying work on behalf of Herbalife, Dickstein Shapiro LLP, have been campaign contributors to State Attorney General Schneiderman's campaign committees.  Separately, Herbalife has contributed to another lobbying group, the Democratic Attorneys General Association, which has, in turn, contributed to one of State Attorney General Schneiderman's campaign committees, revealing that conflicts of interest and appearances of self-dealing exist even amongst state prosecutors.

In an unrelated coïncidence, Mr. Ricchiazzi, who is a registered member of the Republican Party but who told Progress Queens that he is "very liberal on social issues," concluded his article in The Buffalo Chronicle with the bombshell revelation that, "It is rumored that Attorney General Schneiderman’s office is currently under investigation by the US Attorney’s office."

When asked by Progress Queens to comment about those rumors, Mr. Ricchiazzi declined, asserting that his sources were confidential.

However, in an e-mail interview with Progress Queens, Mr. Ricchiazzi faulted State Attorney General Schneiderman for his reported failure to speak up as Cuomo administration officials were allegedly thwarting the work of the Moreland Commission, a complaint made by many, including by the Editorial Board of The New York Post.

"It is unconscionable that the Attorney General participated in the Moreland Commission as he did, and even more unconscionable that he would seemingly refuse to pursue corruption allegations against his political allies," Mr. Ricchiazzi said in his written statement to Progress Queens.

A press official with the U.S. Attorney's Office declined to comment to Progress Queens for this article.