New York lawmakers pass ethics legislation, but critics say the measure falls short

Introduction

After yet another public corruption scandal splashed across front pages in January, New York Gov. Andrew Cuomo insisted the state government would pass ethics reform, and said he would force lawmakers to deal with the issue by attaching ethics measures to the state budget. Cuomo got his wish in the wee hours of Wednesday morning, when the legislature passed a reform package just after a symbolic midnight deadline for an on-time budget.

In a statement, Cuomo claimed the bill “implements the nation’s strongest and most comprehensive disclosure laws for public officials.”

But many believe the changes likely won’t be sufficient to clean the state’s tarnished image. New York earned an overall grade of D from the State Integrity Investigation, a 2012 report by the Center for Public Integrity, Global Integrity and Public Radio International. Over the past few years, Empire State lawmakers have been convicted of bilking public funds by directing money to nonprofits, collecting per-diem payments for days when they weren’t actually in the capital and a variety of other offenses. In January, then-Speaker Sheldon Silver was charged with accepting millions of dollars in illegal kickbacks.

The ethics package looks to treat the state’s ills with greater transparency. Its signature measure is a requirement that lawmakers with private practices—lawyers, for instance— disclose the names of clients who pay them or their firms $5,000 or more. The bill makes several exceptions, however, including for clients involved in criminal cases or bankruptcy, and it applies only to new clients beginning December 31, 2015. Legislators can also avoid disclosing names by working on retainer for general advice, a clause that many advocates point to as a massive loophole that could render the new requirement largely meaningless.

Other provisions in the legislation will introduce more stringent prohibitions against the personal use of campaign funds, greater disclosure of independent campaign spending and a requirement that lawmakers use an electronic system to verify their attendance at official events in order to receive per diem payments.

Legislative leaders did not introduce the actual language of the bill until Tuesday afternoon, less than 12 hours before a deadline to pass all budget legislation, prompting a coalition of good-government groups to criticize the secrecy surrounding the effort. “It is unacceptable in a functioning democracy that an ethics bill about the disclosure of legislators’ outside income hasn’t even been disclosed to the public,” the groups said in a statement Tuesday morning.

Those groups and other advocates for reform, including New York Attorney General Eric Schneiderman, have generally criticized the legislation as inadequate to improve the state’s chronic corruption problems.

Indeed, there’s much that wasn’t included. Here’s a look at several issues — raised in the past by advocacy groups and even Cuomo himself — that are left essentially unaddressed:

• A ban or restriction on outside income – Reform groups and Schneiderman have called on the state to eliminate or restrict lawmakers’ ability to earn income from other sources, citing the practice as an inherent conflict of interest. Peggy Kerns, of the National Conference of State Legislatures, told the Center she is not aware of any state with such a prohibition.
• Campaign finance reform – In 2014, Cuomo called for broad campaign finance reform that would have included lower limits on campaign contributions — individuals can give up to $60,800 to statewide candidates per year in New York and up to $150,000 to all candidates and committees combined — and a system for public funding of campaigns. The effort drew little support from the Republican-led Senate, and a pilot program for public financing, enacted last year, was widely viewed as a failure. According to the New York Public Interest Research Group, an advocacy organization that has pushed for stronger ethics reforms, about half of the money Cuomo raised for his re-election last year came from donors who gave $40,000 or more.
• The “LLC loophole” – New York campaign finance law treats limited liability companies as individuals rather than corporations, which are subject to lower contribution limits. Wealthy New Yorkers have used the loophole to multiply their giving, registering various LLCs and donating the maximum allowed from each. This is how Leonard Litwin, reportedly one of two developers named in the complaint against Silver, gave $200,000 to the former speaker and a committee he controls and more than $10 million to politicians and parties in the state since 2005, according to the complaint. Litwin’s properties have benefited from numerous tax breaks and incentives controlled by the legislature.
• The “Housekeeping Account loophole” – Political parties are allowed to receive unlimited contributions to these accounts, which are supposed to fund only operating expenses, but which donors have used as an end-run around contribution limits. A 2013 report by Common Cause New York found that donors had given more than $133 million since 1999 to these accounts “in return for influence and access.”
• Pay-to-play laws – Schneiderman and several advocacy groups have called on the state to enact “pay-to-play” laws that would impose lower limits on the political contributions of entities that do business with the state.