Government Ethics in NYS GRA Annual Conference 2007 Denver, Colorado

Kent Gardner, PhD President & Chief Economist Center for Governmental Research Rochester & Albany, NY

Overview

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Procurement Lobbying Law of 2005



Lawsuits secure more disclosure

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Public Employee Ethics Reform Act of 2007

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Campaign Finance Reform



The Sheriff of Wall Street meets Big Joe

2007 GRA Annual Conference Inform &

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Alan Hevesi, fmr Comptroller

 Chauffeurgate  Used state funds to support a full time driver & other personal assistance for his wife —after having been caught previously  Republicans hadn’t fielded a strong candidate; Hevesi wins anyway; resigns in plea bargain with Albany County DA  Ongoing  Daniel Hevesi under investigation for job at Third Point Capital NYS pension fund invests; Andrew Hevesi gets campaign contribution from CA fund after investment  Jack Chartier, Hevesi aide, under investigation for providing state car & other favors to Peggy Lipton 2007 GRA Annual Conference Inform &

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Progress on Pork

   Related: $400m in annual debt service on economic development borrowing  Worthy recipients:     National Museum of Catholic History and Art in Harlem ($4m) Irish Reparatory Theater in Chelsea ($200k) St. Edward the Confessor RC in Albany ($100k) Christian Airmen in Buffalo  $200m per year in “member items” $3.5b in borrowed funds allocated; add’l $800m appropriated Lump sum in budget, secret MOU among leaders documents allocation 2007 GRA Annual Conference Inform &

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Progress on Pork (cont.)

 Consortium of media organizations (led by Albany Times-Union) secured ruling that member items must be disclosed and lined-out in budget  Close associations revealed between legislators & recipients (I’m

shocked!

)  Capital pork, despite claims by Spitzer, still not subject to same level of scrutiny 2007 GRA Annual Conference Inform &

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Progress on Empire Zones

 VERY generous benefits for economic development projects meeting specific criteria  Key provision: % tax credit driven by % increase in employment  Reporting? What reporting??

 Syracuse Post-Standard sues NYS & wins  Reveals millions to established firms —including several very prominent law firms —who claimed “new company” status then increased employment 100% (“shirt changers”) 2007 GRA Annual Conference Inform &

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Procurement Lobbying Law of 2005

 Lobbying law previously applied only to lobbying of NYS legislature —not state agencies  Established reporting requirements both for covered entities and private firms seeking contracts  Affected entities include both state agencies and state/local authorities  Purpose  To limit undue influence on procurement process  To improve ability of small & MWBE firms to compete for state contracts 2007 GRA Annual Conference Inform &

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Procurement Lobbying Law of 2005



(cont.)

Advisory Council on Procurement Lobbying established to assess effectiveness of law  CGR engaged to conduct a survey of affected public entities and businesses  Firms receiving contracts with state agencies since enactment  Certified MWBE firms  Firms receiving

NYS Contract Reporter

 Findings  1/3 public entities thought it did not apply to them   50% of business firms hadn’t heard of the law Businesses doing regular business with the state reported that cost of compliance was not insubstantial  Conclusion: Did reduce ability of large firms to improperly influence disposition of state contracts; Cost & complexity of compliance probably reduced competition Inform & 2007 GRA Annual Conference

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Public Employee Ethics Reform Act of 2007

 Strongly supported by new governor, Eliot Spitzer  Expanded definition of what is reportable as lobbying activity   Establishes $15,000 threshold: Any determinations by public official or entity working in cooperation with public official for disbursement of more than $15,000 of public money (loan or grant) must be reported as lobbying Definition now includes pork (“member items”) and disbursements under “economic assistance” rubric 2007 GRA Annual Conference Inform &

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Public Employee Ethics Reform Act of 2007 (cont.)

 Re-defines allowable gift   Formerly “anything of value” with $75 threshold Now defined specifically as 

"anything of more than nominal value given to a Public Official in any form including, but not limited to money, service, loan, travel, lodging, meals, refreshment, entertainment, discount, forbearance or promise, having a monetary value“

No threshold —no gift

"unless under the circumstances it is not reasonable to infer that the gift was intended to influence“

recipient 2007 GRA Annual Conference Inform &

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Public Employee Ethics Reform Act of 2007 (cont.)

 Commission on Public Integrity  Replaces Temporary State Commission on Lobbying and State Ethics Commission  Not yet implemented  Penalties increased  Class A misdemeanor for first offense  Can be barred from lobbying for one year for repeated violation  Four year debarment available under provisions of procurement lobbying law  Adds monetary penalty up to 3x amount not reported (adds to existing fines of $25k/$50k) Inform & 2007 GRA Annual Conference

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Campaign Finance Reform

 Spitzer holds congestion pricing grant, property tax “rebates,” $1B in pork, pay raise for legislators, etc hostage to reform agenda  Majority Leader Bruno weakened after July 1 revelations that he used state helicopter to attend political events  Agreement reached July 19 after 96 hour negotiation 2007 GRA Annual Conference Inform &

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Campaign Finance Reform (cont.)

Statewide Office Now Proposed Now Senate Proposed Assembly Now Proposed Individual Contributions $55.9

$25.0 $15.5

$11.5

$7.6

$4.6

 Soft money to be limited to $300k initially, falling to $150k by 2013  “Sham” LLCs, corporate subsidiaries, registered lobbyists barred  More disclosure, enforcement, fines  Bundling must be disclosed  No limits on PACs, LLCs  Effective date: January 2009 2007 GRA Annual Conference Inform &

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Oops . . .

 Troopergate July 23: Atty General Andrew Cuomo releases report on use of state aircraft by Majority Leader Bruno  Implicates top Spitzer aides  Misuse of state police to monitor Bruno  Gather data from state police through sham FOIL  Phone call to reporter suggesting he request data  What did he know? When did he know it?

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Troopergate continues

 Aides (top flack, chief of staff, Homeland Security advisor) refused to speak to Cuomo under oath  Albany County DA begins criminal probe  Ex-flack hires prominent criminal defense attorney 

What deal on campaign finance reform?????

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Still troubling

 Campaign contributions for personal use  Public Integrity Commission appointed by Gov  Weak financial disclosure for elected officials (the Shelly Silver issue)  Weak conflict of interest rules for legislators  Door still revolves smartly for legislative aides  Legislators can receive generous honoraria  Board of Elections —still 2 and 2  etc 2007 GRA Annual Conference Inform &

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