Subsidy Sheet: Reinvent Albany report calls for major governance and transparency reforms for Empire State Development


This week, we released “Open ESD,” a report that includes 35 specific actions to improve Empire State Development’s transparency, governance, oversight, and ethics. Reinvent Albany wrote the report to encourage the public authority’s Board of Directors and staff, the Governor, Legislature, State Comptroller, and Authorities Budget Office to take many big and small steps to increase public confidence that ESD puts the public first, not the Governor or powerful special interests and business clients. This report follows last week’s publication from Citizens Budget Commission showing that New York state and local governments are spending $11 billion a year on economic development, many of which involve ESD subsidies and projects.

“Open ESD” makes three key points:

  1. ESD is among the state authorities and agencies most vulnerable to corruption, pay-to-play, and political abuse. ESD has an amorphous mission that reduces its public accountability, and the Board and senior management are completely controlled by the Governor and show very few signs of acting independently. ESD by design engages in massive, secretive, sole-source deals totally at odds with basic principles of government spending and procurement that emphasize transparency and competitive bidding. 
  2. ESD is secretive and does not publicly disclose basic information about many subsidy deals, including the size of the subsidy, subsidy cost per job, and the financial assumptions underlying the subsidy. ESD does publish a huge amount of information, but much of it is more akin to a press release than usable data or honest evaluations of ESD activities that make it clear to taxpayers what their money is actually buying. 
  3. ESD officials must obey the New York State Public Authorities Law and Public Officers Law, which establish clear expectations for ethical and transparent behavior by the Board of Directors and staff. These laws are rooted in the principle that government is the public’s business, and the people’s right to know is basic to our society and democracy. Rather than embrace this responsibility, ESD officials and staff too often dodge reasonable questions from the public and journalists and game legal exceptions to delay and/or avoid disclosing records under the Freedom of Information Law. 

Read the full report on our website.

New York Corporate Giveaway News:

  • New York Corporate Giveaway News:  
  • A company hoping to cash in on subsidies from the Orange County IDA is under scrutiny and a possible criminal investigation after lying on its tax break application. 
  • State Senator Sean Ryan wrote an op-ed about the waste of corporate giveaways and IDA practices. 
  • The $1.1 billion taxpayer-funded Buffalo Bills stadium construction is underway and the Bills aren’t hiring many women- and minority-owned businesses to meet contractual goals. 
  • Spotify, which benefited from a highly touted $11 million subsidyfrom the Cuomo administration, will lay off more New York City employees.

Fun Fact: Empire State Development, the state’s economic development arm, is actually three organizations: The Urban Development Corporation (a public authority), the Job Development Authority (a public authority), and the state’s Department of Economic Development.

If you got this from a friend, sign up here. Subsidy Sheet is written by Elizabeth Marcello and edited by John Kaehny.