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Thanks, Albany: NY Lawmakers Pass Weak Ethics Reform Bill

Jen Chung

Published Jun 18, 2016

Modified Jun 18, 2016

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Jen Chung

Published Jun 18, 2016

Modified Jun 18, 2016

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This year, former powerful longtime Assembly leader Sheldon Silver was sentenced to 12 years in prison for taking millions in bribes while in office. Less than two weeks later, former Senate Majority leader Dean Skelos was sentenced to five years in prison for taking bribes and extortion, including demanding a donor give his son a no-show job. Today we found out how Albany dealt with this unprecedented corruption catastrope: Lawmakers passed a toothless, sure-to-fix-nothing ethics reform bill.

Governor Andrew Cuomo's office sent out a press release, bragging that he, together with "Senate Majority Leader John Flanagan, Assembly Speaker Carl Heastie and Senate Independent Democratic Conference Leader Jeffrey Klein today announced an agreement on a 5 Point Ethics Reform Plan to toughen election, lobbying, and ethics enforcement laws, including first-in-the-nation legislation to curb the power of independent expenditure campaigns unleashed by the 2010 Supreme Court case Citizens United vs. Federal Election Commission, and require elected officials and policy makers convicted of corruption to forfeit their pension." Here are the five points:

1.) The nation’s strongest independent expenditure reforms to end coordination in political campaigns
2.) Pension Forfeiture
3.) First Time Disclosure Requirements for Political Consultants
4.) Lobbying Disclosure Reforms
5.) Issue Advocacy Reforms

You can read the details here, and one good if obvious inclusion is not allowing lawmakers convicted of corruption to collect their pensions. But what it doesn't include is a limit on how much outside income lawmakers can make (hello, Shelly) or closing LLC loophole.

The LLC loophole allows limited liability companies to donate unlimited amounts to lawmakers' campaigns. Last year, good government groups begged Cuomo to close the loophole, noting, " As the Moreland Commission discovered in 2013, one entity 'utilized 25 separate LLCs and subsidiary entities to make 147 separate political contributions totaling more than $3.1 million since 2008.' And the The New York Times has pointed to the LLC Loophole as one reason we have “some of the most porous campaign fund-raising laws in the nation.” Further, because it is often unclear who controls an LLC, the Loophole allows large contributors to conceal their identities."

In 2015, Gotham Gazette explained:

In New York, corporations are limited to giving $5,000 to a political candidate, while LLCs fall under limits of individuals and can therefore give $150,000.

Governor Cuomo has a complicated relationship with the LLC loophole. He has taken in millions of dollars from single donors who use multiple LLCs to maximize their giving. According to NYPIRG, 20 percent of Cuomo's $35 million campaign chest he utilized last election cycle came through the LLC loophole.

The most striking example of this loophole largesse is via Leonard Litwin. Using LLCs and corporations, Litwin, a real estate mogul, gave Cuomo over $1 million during the last election cycle. And Litwin is the largest single donor statewide—he blankets state elections in cash—giving to candidates and committees regardless of party.

Cuomo has spoken out against the loophole and his budget included a proposal that would ensure LLCs were restricted to the $5,000 corporate donation limit, which he also proposed reducing to $1,000. But advocates note the proposal did not call for stopping individuals from donating through multiple LLCs. Even Cuomo's "half loaf" proposal was rejected by the Legislature during budget negotiations. It is unclear how hard the governor fought for LLC reform.

Last week, Gotham Gazette pointed out how when Attorney General Eric Schneiderman proposed ethics reform ideas ten days before the 2015 legislative session closed, Cuomo said, "Let me make this as a blanket statement: It is late in the day for anything," but this year, four days before the session ended, Cuomo suddenly announced his proposal to go after PACs: "It is a late addition to a fairly long reform agenda the governor has done little to publicly support."

NYPIRG's Blair Horner says of the reforms that passed, "We think again, in this particular case, that the problem of Albany, what U.S. Attorney Preet Bharara calls the culture of corruption, is really not addressed by this package."

Tagged

Albany

corruption

dean skelos

ethics reform

governor cuomo

llc loophole

preet bharara

sheldon silver

Jen Chung

Jen Chung is a former WNYC and Gothamist editor.

Gothamist is funded by sponsors and member donations

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