Blair Horner: New York’s Corruption-Palooza Nears Its End

Jul 16, 2018

Another week, another conviction.  The political establishment took another hit last week with the corruption conviction of former New York State economic development czar Alain Kaloyeros and key private developers of a major state-sponsored project.  Kaloyeros was Governor Cuomo’s right-hand man when it came to the state’s investments in hi-tech economic development projects, and in the case of the corruption conviction, the governor’s signature project was the so-called “Buffalo Billion.”

The “Buffalo Billion” is a commitment the governor made early in his tenure to generate investments of $1 billion in solar, medicine, and other hi-tech endeavors to jumpstart and anchor the economy in Buffalo, NY.  The plan was overseen by Kaloyeros who had been the state’s foremost advocate for putting public money in hi-tech public-private partnership investments across New York.

The U.S. Attorney’s case against Kaloyeros and a handful of private developers in Buffalo and Syracuse was that he rigged the state’s contracting process so state investments would go to benefit specific developers – all of whom had been large campaign donors to the governor.

The governor was not charged or directly implicated in this scheme.

The conviction follows one earlier this year when a top former aide to the governor, Joseph Percoco, was also convicted for violating the same federal law.  In the Percoco case, he was convicted of trying to rig government actions to benefit himself.  The proceedings also showed how he used his position to benefit campaign contributors as well. 

It is clear is that the Cuomo Administration’s emphasis on secrecy and quick results raised the risk of corruption, a risk that unfortunately played out in both of these cases. 

And while the courts have acted and the juries have done their work, both the governor and the Legislature have not.  Despite the staggering scandals that have rocked both branches of government, little meaningful changes have been approved to reduce the risk of corruption. 

There have been no hearings, no public debate; there’s been little other than the sound of policy “crickets” when it comes to ethics reforms.

Instead, the leaders have argued that the convictions themselves show the system is working.  An assertion that is absurd.

Yes, federal prosecutors – with the help of dogged reporting by investigating journalists – successfully brought cases against corrupt public officials, but what happened to the state’s system of ethics enforcement?  Clearly, the schemes were hatched because the officials involved assumed that no one was watching, that in fact the system would not catch them.

And if it weren’t for federal prosecutors, they would have been right.

Albany is broken.  Corruption risks remain.  There are solutions that would help:

  1. Enhance the authority of the independently-elected state Comptroller to monitor spending.  Early in the Cuomo term, the Comptroller’s powers were cut back, which may have sent a powerful signal that executive branch employees would be able to do as they please with little chance of getting caught. 
  2. Make state contracting public.  New York should approve creation of a “database of deals” that ensures better transparency and public oversight of the value of government spending.  In addition, all government-created corporations must be subject to the same openness requirements as state government.
  3. End “pay to play” campaign practices.  Governor Cuomo promised in 2010 that he would dramatically restrict the ability of those seeking government contracts to shower elected officials with campaign contributions.  The state’s “pay-to-play” atmosphere was central to the narrative in the recent corruption trials.  Yet the governor has done little to achieve his stated goal. 

These steps, and others – like closing the Limited Liability Company loophole, restricting the outside income of public officials and establishing an independent ethics watchdog agency – are critical to reducing corruption risk and restoring the public’s trust in its state government.

There is still time before the election this November to act.  Governor Cuomo should convene a special session of the Legislature to hammer out a deal to clean up Albany.  Unless actions are taken, voters should demand answers, answers as to why the state’s top elected officials presided over unprecedented corruption scandals and did nothing.  It’s time to take down the Corruption-Palooza sign down from the state Capitol.

Blair Horner is executive director of the New York Public Interest Research Group.

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