August 9, 2022

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Business & Finance Blog

Ethics, Transparency, Spending Accountability, Campaign Finance, and Voting

Gov. Hochul signs orders (photo: Kevin P. Coughlin/Office of the Governor)


Good government groups and reform-minded officials have for years called for New York State’s Joint Commission on Public Ethics (JCOPE) to be scrapped and replaced with more independence from the elected officials it is meant to regulate. But since the details of a deal to replace the troubled commission began to emerge last month, reformers have raised alarms that the new body would hardly be better than the old.

A new state ethics commission is one of several measures related to government ethics and accountability, voting, and campaign finance reform included in the $220 billion state budget lawmakers adopted earlier this month.

They include funding to launch the statewide public-matching campaign finance system previously crafted by lawmakers, and steps to make voting more accessible. The budget also includes greater oversight of some state spending on infrastructure and business subsidies. But other long-sought measures, like restoring some of the comptroller’s contracting oversight, were left out, while questions remain about some of the details of the policies that were included.

​​The budget, negotiated by Governor Kathy Hochul, Senate Majority Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie — all Democrats — will undoubtedly be the biggest legislative action of the year. It will likely factor prominently in Hochul’s attempt to win her first full term later this year.

“We’ve had a good start, there’s always more to do,” Hochul said when asked about ethics reform in an interview scheduled to air Thursday on WAMC radio that her spokesperson point to in response for a request for comment for this article. “When I first became governor on August 24, I said my number one job is to restore people’s faith in government once again, and it won’t happen overnight. I’m supposed to change an entire culture that has been embedded in Albany for a long time.”

“The Senate Democratic Conference is once again proud to lead the way on ethics reforms from replacing the flawed JCOPE, to much needed voting reforms and increased government accountability and transparency,” wrote Mike Murphy, a Senate spokesperson, in an email. “Since winning the Majority, we have proven that we understand the importance of transparent and ethical government.”

Spokespeople for Heastie did not return requests for comment on this story.

Sunshine enthusiasts have said the budget agreement itself – with its closed-door negotiations and Messages of Necessity to force through a deal with little time for public or legislative review – is a sterling example of an opaque and unaccountable process ripe for change.

“In many ways, the process by which the budget agreement was cobbled together was an example of Albany at its worst,” said the New York Public Interest Research Group (NYPIRG) in a statement. But the outcome leaves reformers with some victories and an appetite for more advocacy.

JCOPE Replacement
Since it was created in 2014 by then Governor Andrew Cuomo and legislative leaders Dean Skelos and Sheldon Silver, all of whom have since left government due to scandal, the state’s primary ethics watchdog, the Joint Commission on Public Ethics, has itself been marred by scandal.

The body, with commissioners appointed by the governor and legislative leaders from both major parties, is responsible for investigating ethics law violations and issuing civil penalties, as well as overseeing lobbying and the financial disclosures of government employees. It has repeatedly failed to investigate or hold accountable state officials in a number of high-profile cases leading ethics advocates to call for its replacement.

Hochul embraced that spirit in her State of the State policy agenda earlier this year as a prelude to her executive budget proposal. “It is clear that JCOPE is irreparably broken and has failed to earn the public’s trust,” the governor said in January. “We must replace JCOPE with a new, truly independent watchdog with real teeth.”

But the appointment structure of the replacement body that was ultimately approved by lawmakers, the Commission on Ethics and Lobbying in Government (CELG), was watered-down to the point good government groups called for it to be rejected and some lawmakers voted against it. A proposal by Hochul to ban communications with outside parties about ongoing investigations was also dropped from the final agreement.

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Hochul proposed creating a rotating five-member body of the deans of the state’s accredited law school (or their appointees) rather than appointees of any elected official – a proposal lauded by good government groups and others. Instead, the new 11-member body will be appointed by the governor (3), Senate and Assembly majority leaders (2 each), minority leaders (1 each), the attorney general (1), and the comptroller (1). The appointments will be confirmed by a committee of accredited law school deans, who can reject nominees. The chair of CELG would be selected through a majority vote of CELG members.

“The Budget will improve ethics and restore New Yorkers’ trust in state government by creating a new entity…[that] will work differently and more transparently than before,” the Hochul administration said in a press release after the budget was adopted. The legislation would eliminate a voting mechanism that allowed one party to veto investigations, subject the body to the Open Meetings Law and Freedom of Information Law (FOIL), and improve staff training. It would also make “any breach of confidentiality referable to the Attorney General,” according to the governor’s office, a provision apparently spurred, at least in part, by a JCOPE leak scandal involving Cuomo and Assembly Speaker Carl Heastie.

“I first wanted to have the law school deans or their designee be able to be involved in being members, but I had to get this through the legislature,” Hochul said in the WAMC interview. “This had a lot of concerns raised about doing anything at all, which I said we have to deliver.”

“There’s at least another screening process,” the governor added.

But good government groups have said the new commission is still subject to domination by elected officials and it isn’t empowered enough to deal with sexual harassment and discrimination – a central issue in Cuomo’s resignation and the downfall of other state leaders in recent years.

“Just like in the former, broken system, elected officials will directly select and appoint their own ethics commissioners,” wrote a coalition of good government groups in a press release criticizing the deal. “It gives the deans the perilous option of rejecting a particular appointee made by a member of the state’s top political leadership.”

The groups include Citizens Union, Committee to Reform the State Constitution, Common Cause New York, New York State League of Women Voters, New York City Bar Association, NYPIRG, Reinvent Albany, and Sexual Harassment Working Group.

Voting Reforms
Beginning in November, local boards of elections will be required to open polling sites on college campuses, a measure long sought by good government groups and lauded by them upon its passage. “Undoubtedly, that will increase voter participation rates for young voters, among those who have the lowest rates now,” NYPIRG said.

Lawmakers delivered a win to voting rights advocates when they allocated $4 million for pre-paid return envelopes for absentee ballot applications and ballots. The state paid for postage in the June 2020 primaries, the first state election of the pandemic, using federal stimulus money, but has since left it to voters to cover the cost.

A proposal from Hochul to shorten the voter registration deadline from 25 days before Election Day to the constitutional minimum of 10 days was left out of the final budget agreements. Good government advocates also lamented a lack of action to close loopholes in the state’s campaign finance system, like its anemic enforcement and high contribution limits, and structural changes to election administration.

The budget includes no new funding to local elections boards to cover the costs of implementing and expanding early voting. Roughly $3 million was reappropriated from previous years, most of which has already been spent, according to a spokesperson for the State Board of Elections.

Public Campaign Financing
The enacted state budget contains $20.5 million for the new statewide public campaign finance program slated to go into effect this fall for future state-level elections. That includes $10.5 million for the day-to-day operations of the Public Campaign Finance Board, a new entity within the State Board of Elections responsible for administering the program. The remaining $10 million will go towards public matching funds for participating candidates.

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The program, passed by the Legislature and signed by then-Governor Andrew Cuomo in 2020, will create a voluntary public matching system for small-dollar donations (with public matching of up to $250 from qualifying donors) to participating candidates in exchange for certain raise and spend limitations.

The system, which applies to candidates for statewide and state legislative offices and will be overseen by the Public Campaign Finance Board, will apply to the 2024 state legislative elections for all 213 seats in the State Senate and Assembly, and the 2026 statewide races for Governor, Lieutenant Governor, Comptroller, and Attorney General, as well as any special elections that occur beginning after the 2022 general election this November.

It significantly lowers contributions limits for all candidates, whether or not they are receiving a public match. The measure is intended to boost the contributions of everyday New Yorkers and the attention paid to them by candidates, and dilute the power of major campaign donors, who especially since the 2010 Citizens United Supreme Court decision have dominated the political process.

“Small donor public financing will give all New Yorkers a greater say in the policies that can have the heaviest impact on historically marginalized and low-income communities, like criminal justice, education, housing, and healthcare,” said Joanna Zdanys, senior counsel in the Elections and Government Program at NYU Law School’s Brennan Center for Justice, in a statement. “It will make small-donor constituents a viable source of funding for candidates who would rather rely on community support than on a few big checks.”

Term Limits
Despite being included in Hochul’s State of the State agenda and executive budget, term limits for statewide elected officials did not make it into the adopted budget. Hochul had sought to limit statewide elected officials to two four-year terms to help “ensure New Yorkers are the focus of the State’s elected officials,” according to her executive budget briefing book.

That would require changes to the state constitution, which would have to be passed in two consecutive legislative sessions and approved by voters in a ballot referendum. There are currently no term limits for statewide officials or state legislators, who serve two-year terms. Hochul’s State of the State agenda also included a ban on outside income for statewide officials, another proposal that did not make the adopted budget..

Open Meetings Law
Lawmakers have also made changes to the state’s Open Meetings Law (OML), which governs the public’s right to participate in state and local government meetings. Since the onset of the pandemic, lawmakers and advocates have been looking for ways to adjust OML to allow for remote participation — a boon especially for some people with mobility impairments, as well as for parents and others with challenging schedules — without sacrificing the transparency benefits of an in-person attendance option.

The state budget requires an in-person quorum at public meetings, except in the case of a state of emergency, during which meetings may be entirely remote. Only one in-person location must be publicly available, eliminating a concern among officials that participating from home opens their living room to members of the public.

The law authorizes but only requires a public video conferencing option if an agency or board opts into it, rather than the universal remote option good government groups sought in a letter to Hochul earlier this year. It also sets standards for video conferencing but that does not include specific instructions on closed captioning and sign language interpretation.

Recordings of the meetings must be publicly posted online within five days and saved for five years.

Spending Oversight
As they do every year, lawmakers packed the budget with subsidies to businesses looking to move to, stay, or grow in New York State.

This year Governor Kathy Hochul pushed through more than $600 million in state subsidies for a new Buffalo Bills stadium she said will create jobs and keep the team in New York. There are numerous other subsidies, from the three-year, $1.3 billion Film and TV Tax Credit to $585 million gas tax holiday.

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But the budget also includes some measures to help publicly account for that spending, which often takes place with little oversight and scant reporting on the promised outcomes.

Database of Deals
The enacted budget calls for the creation of a database of state business subsidies, known as the “Database of Deals,” to allow lawmakers and the public to track taxpayer incentives to corporations. For close to a decade transparency advocates have said a public database that lists subsidies, commitments, and outcomes for job creation would help shed light on billions in largely unaccounted for economic development spending.

Both chambers included a version of the Database of Deals in their one-house budget resolutions. While good government groups lauded its inclusion in the enacted budget as a victory, they raised concerns that the final agreement left out critical components.

Key among them is the fact that the database requires the state to list subsidies received after October 2022, potentially obscuring previously awarded incentives that could amount to billions. It also fails to differentiate between full-time, part-time, and contract jobs created, according to the good government group Reinvent Albany. They and others have pointed out other loopholes for reporting and displaying information that could undermine its purpose.

The new database, which will be run by Empire State Development (ESD), the state’s economic development public benefit corporation, goes into effect 90 days from the April 9 bill-signing. ESD currently operates a more limited database with a narrower range of subsidies listed and fewer details about job creation and other aspects.

MTA Capital Dashboard
Hochul and legislators codified certain reporting practices on tens of billions of dollars in MTA capital projects and required data to be put in a single spreadsheet on the state’s Open Data Portal. The reporting will allow the public to more easily see information on the types of projects, amounts budgeted, changes to spending plans, and final outcome.

The dashboard builds on the MTA Open Data Law, passed last fall, which requires the MTA to establish a plan to release public datasets, among other measures. Advocates like Reinvent Albany say the dashboard is a positive step but want to see it eventually include more information like contract data and vendor names, and for it to be searchable by more project categories like accessibility or resiliency improvements.

Authorities Budget Office
The enacted budget includes $2.85 million for the Authorities Budget Office, a little known office with oversight over hundreds of public authorities and their subsidiaries. The funding was an increase over the $2.05 million allocated in previous years, but far below the $5 million good government groups said was the minimum needed to bring on enough staff to make it function as intended.

Economic Development Audit
The enacted budget requires the state Department of Taxation and Finance to hire a firm to analyze the return on investment of tax credits and other benefits meant to spur economic activity. While the firm must be contracted via a competitive bidding process, Reinvent Albany has raised concerns that having an executive branch agency auditing the projects of ESD, which is effectively controlled by the same branch, could defang the process. The group has proposed that power be given to a more independent entity like the state comptroller.

Comptroller’s Contract Oversight
In 2011 and 2012, then-Governor Andrew Cuomo used the budget to remove much of the state comptroller’s power to review state contracts for various SUNY and CUNY entities, and the Office of General Services, before they are signed. That allowed major portions of his economic development programming under the now-infamous Buffalo Billion initiative to take place through a SUNY research subsidiary and forgo comptroller sign-off. The subsidiary, the SUNY Research Foundation, was later found to have rigged the bidding for a $750 million contract for a solar panel factory in upstate New York — landing a close Cuomo ally in prison.

Both chambers’ one-house budget resolutions included restoring at least some of those “pre-audit” powers but neither plan made it into the enacted budget.

Note: this article has been corrected to accurately reflect the details of funding around early voting implementation.