Money in Politics in New York, April 12 Edition

Financial Industry Heavyweights Join NY LEAD
The New York Leadership for Accountable Government (NY LEAD), a group of business, civic and philanthropic leaders organized to push for a citizen-funded elections in New York State, has added several prominent new members to its ranks. Delroy Warmington, managing partner of Delwar Capital Management, and Cynthia DiBarolo, CEO of Tigress Financial Partners and chairwoman of the Greater New York Chamber of Commerce, are two of the recent additions with impeccable business credentials. Dennis Mehiel, chairman and CEO of U.S. Corrugated and Battery Park City and former candidate for Lieutenant Governor in 2002, stated that “We must end the wasteful political arms race that forces so many businesses and business owners to siphon more and more money into election campaigns. A system of small-donor matching funds is a good answer. It will encourage business growth, help constituents hold candidates and officeholders accountable, and ensure fair legislation in Albany.” The complete list of new members is available here. Read more…

Putting a Better Team on the Field

Let’s say you just bought a pro football team that regularly has the worse record in the league. Your team’s woes are well documented. Team captains keep an iron grip on the locker room, and talented rookies rarely get to play. The team pays poorly, and many players have to work other jobs. Some players have even been caught trying to throw games in exchange for extra cash. Overall, the team has trouble attracting many talented new players, either rookies or stars from other teams.

The fans and sports writers are frustrated. They want wins, but they dislike many of the players and tired of the excuses. Thing is, the writers and fans don’t want to pay what it will take to attract new talent or established stars. They just want more team discipline — earlier curfews, fewer days off, shorter haircuts, etc. The fans, and most of the sports writers, are firmly convinced that the current — losing team — has to start winning a lot more before players get paid more. Though, how this punitive attitude will attract the players with the talent needed to win more games is a mystery. Other teams do everything they can to recruit new talent, including giving players better pay and working conditions.

Yes, you’ve got it. We are talking about Albany, and how we, the public, the taxpayers, the fans, need to do what it takes to recruit new talent into our state legislature. Bringing in new talent is by far the highest priority. Tougher ethics laws, much better enforcement and greater transparency will reduce corruption — but they will not give us a better legislature. Attracting new talent means hugely reducing the difficulty and unpleasantness of running for office, and giving the average legislator more say. We know how to do this. New York City Council has already done many of the most important things, and has had far fewer scandals than the state legislature over the last decade. Yeah, the fans hate it, the writers hate it, and they all want to punish the bad electeds. But what about future players? Where are they going to come from? Come on New York, ask yourself a question: do you want to win or what?

Putting a better elected team on the field

  • Four year terms for legislators. (Instead of two.)
  • Twelve year term limits for legislators.
  • NYC style small donor matching program for state elected office. (With much tougher restrictions on campaign spending and political committees.)
  • Legislative pay increase.



Money in Politics in NY: April 8th Edition

Six Arrested in Corruption Scandal Involving Senator Smith (IDC-Hollis) and NYC Republican Party Chairmen
Six individuals have been arrested for their role in a corruption scandal uncovered this week. At the center of the controversy,is Senator Malcolm Smith (IDC-Hollis). Smith, a Democrat, wanted to gain access to the Republican ballot in November for a shot at mayor of New York City. Getting on the ballot required signatures from a majority of New York City’s five Republican Party Chairmen. To persuade the Republican leaders in New York City, Smith promised to secure state funds for real estate developers, who in turn would funnel money to Joseph J. Savino, Bronx Republican Party Chairman, and Vincent Tabone, Queens Republican Party Chairman. New York City Councilman Dan Halloran III arranged meetings between the real estate developers and the Republican Party Chairmen and offered to divert City Council discretionary funds to the real estate company. In exchange, he received $18,300 in cash and $6,500 in campaign contributions from the real estate developers. The real estate developers were actually an undercover FBI agent and a cooperating witness. Over the past seven years, 29 state officeholders in Albany have been convicted of a crime, censured or accused of wrongdoing. The U.S. Attorney for the Southern District of New York, who unsealed federal corruption charges against Senator Smith and the parties involved, stated that “political corruption in New York is indeed rampant and that a show-me-the- money culture in Albany is alive and well.” Both the overhaul and enforcement of our state campaign finance laws is well overdue to change the culture of Albany and restore the public’s faith in our representatives. Read more…

Smith Scandal Flags $288M in Transportation “Member Items”

“I think I found another place for him to do it, too. Out of multi-modal money. . . Multi-modal money is outside the budget and it’s always around.”

State Senator Malcolm Smith explaining where a crooked real estate developer could get $500k in state road funding. Page 26 FBI Complaint

Before the Malcolm Smith scandal, few people had heard of NYSDOT’s $288 million Multi-Modal Program. That discretionary funding program mainly funds road and bridge projects “identified” by the governor and legislature outside of the regular budget.  It’s a bit murky how the Multi-Modal Program actually works.  There is no online list or description of Multi-Modal Program projects, or how much they cost, or which elected official asked for them.  The State DOT explains that Multi-Modal Program projects are “Identified in schedules agreed upon between the Governor and the Legislature in a Memorandum of Understanding” or via individual project requests.  But, these MOUs are not online.

“Member items” and other legislative discretionary spending — like the Multi-Modal Program — have been a feature of Albany and New York City corruption scandals for decades.  For this reason, Governor Cuomo has refused to fund new legislative member items and is carefully reviewing existing items.  Yet, the Multi-Modal Program, with $288 million in reappopriated funding is the largest potential source of discretionary  funds that legislators can directly steer to projects in their districts. 

According to a routine audit by the State Comptroller, as of 2011 there were 424 active projects which had been awarded Multi-Modal funds totaling $135.2m, an average of $320k per project. More recently, it appears from press accounts and government websites that Governor Cuomo has begun using Multi-Modal Program money as an important part of Regional Economic Development Council grants.  How much Multi-Modal Program funding is going to the Regional Councils  versus individual legislators favorite projects isn’t public. Historically, it appears that Multi-Modal Program Funds were used for routine, small dollar, road maintenance projects like the ones featured in this February 2008 press release on Assemblywoman Sandy Galef’s website.

Most likely, the vast bulk of Multi-Modal Program funds are used for innocuous things like fixing rough patches of pavement or old guardrails and drainage ditches. The problem is we don’t know. We don’t  know how all of these discretionary funds will be used, or have been  used and who asked for them.  The public should know how public funds are spent, especially discretionary funds that have often been subject to abuse.  As part of increasing transparency, the governor and the comptroller should put online a downloadable spreadsheet of all of the Multi-Modal Program projects, and the MOU’s authorizing them.




Empire State’s Corruption Hit Parade Revisited

“That’s politics, that’s politics, it’s all all about how much. Not about whether or will, it’s about how much, and that’s our politicians in New York, they’re all like that, all like that. And they get like that because of the drive that the money does for everything else. You can’t do anything without the f*ing money…Money is what what greases the wheels — good, bad, or indifferent.”
FBI transcript quoting Dan Halloran, indicted NYC Republican City Councilmember.

A state senator, NYC council member, suburban small-town mayor and Deputy Mayor,  and Queens and Bronx GOP leaders were arrested today by the FBI in a political bribery scandal that covers the spectrum of political corruption in New York. At the center of the scandal is a powerful state senator Malcolm Smith, a Democrat, who bribed Republican GOP county leaders to grant him a waiver to run as Republican in GOP mayoral primaries. (Why Smith, who is a prominent Queens Democrat, and African-American thought he had a chance in an overwhelmingly white GOP primary is a mystery.) Also prominent in the scandal is GOP City Councilmember Dan Halloran, who was contemplating a run for congress. The scandal is a hit parade of corruption issues involving money, politics and bribes in exchange for public spending.
Corruption Hit Parade Revisited
1. Member Items.  In exchange for bribes, Smith promised to get $500k in Senate transportation earmarks for a road project and Holloran promised hundreds of thousands in NYC City Council member items. Member items are responsible for a hugely disproportionate amount of corruption.
2. Small town real estate corruption —  Spring Valley in Rockland County is in the hot seat, but is the abuse of zoning and eminent domain ubiquitous?
3. Campaign Cash Crisis — Halloran faced huge pressure to raise cash for his congressional run.
4. Public road building for real estate profit — For decades, politically connected real estate developers have made huge profits by getting tax-payer funded roads and off-ramps built to their land. In this case, Malcolm Smith promised to find state transportation funds for a fake real developer for a project in Spring Valley.

Can improvements in transparency help reduce corruption and scandals like Smith/Halloran? Yes, and we’ll be exploring specifics in future blog posts.