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Government Ethics in NYS GRA Annual Conference 2007 Denver, Colorado Kent Gardner, PhD President & Chief Economist Center for Governmental Research Rochester.

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Presentation on theme: "Government Ethics in NYS GRA Annual Conference 2007 Denver, Colorado Kent Gardner, PhD President & Chief Economist Center for Governmental Research Rochester."— Presentation transcript:

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2 Government Ethics in NYS GRA Annual Conference 2007 Denver, Colorado Kent Gardner, PhD President & Chief Economist Center for Governmental Research Rochester & Albany, NY

3 Inform & Empower 2007 GRA Annual Conference Overview  Procurement Lobbying Law of 2005  Lawsuits secure more disclosure  Public Employee Ethics Reform Act of 2007  Campaign Finance Reform  The Sheriff of Wall Street meets Big Joe

4 Inform & Empower 2007 GRA Annual Conference 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

5 Inform & Empower 2007 GRA Annual Conference Progress on Pork  $200m per year in “member items”  $3.5b in borrowed funds allocated; add’l $800m appropriated  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  Lump sum in budget, secret MOU among leaders documents allocation

6 Inform & Empower 2007 GRA Annual Conference 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

7 Inform & Empower 2007 GRA Annual Conference 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”)

8 Inform & Empower 2007 GRA Annual Conference 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

9 Inform & Empower 2007 GRA Annual Conference 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

10 Inform & Empower 2007 GRA Annual Conference 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

11 Inform & Empower 2007 GRA Annual Conference 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

12 Inform & Empower 2007 GRA Annual Conference 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)

13 Inform & Empower 2007 GRA Annual Conference 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

14 Inform & Empower 2007 GRA Annual Conference Campaign Finance Reform (cont.)  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

15 Inform & Empower 2007 GRA Annual Conference 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?

16 Inform & Empower 2007 GRA Annual Conference 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?????

17 Inform & Empower 2007 GRA Annual Conference 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


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