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New Ethics Law Has Loopholes, Reformers Say

Apr 1, 2015

The state Capitol Tuesday evening, as legislators voted on the budget inside
Credit Karen DeWitt

The New York legislature completed an almost on time budget, around 3 AM on the first day of the state’s fiscal year. One of the final pieces to come together was an ethics reform package, which will provide greater disclosure of lawmaker’s outside income. But critics say it does not go far enough.

The ethics changes would deny pensions for lawmakers convicted of serious crimes. The provision requires a constitutional amendment.  It would also require proof that legislators are actually in Albany before they can collect their daily expense payments, through a yet to be defined electronic system.

Governor Cuomo, in a brief statement after the budget was passed, called the package “the nation’s strongest and most comprehensive disclosure laws for public officials”.

There would be more disclosure of the law clients from Senators and Assemblymembers who work for private law firms. But the leading government reform groups in New York say the package is “inadequate”.

Dick Dadey with Citizens Union says there are some gaping loopholes in the disclosure law.

“There are so many ways in which the legislators can get around having to meet this reporting requirement,” Dadey said. “This package is so underwhelming and uninspiring.”

Whole categories of law would be exempted from disclosure, including family and estate law services. And lawmakers could refrain from disclosing some clients where, making the name public might cause embarrassment to the client. Instead, they will be allowed to appeal to a third party, either the state ethics commission, or the Office of Court Administration. It’s unclear how the two different agencies would develop standards for allowing clients’ names to remain secret.

Some legislators are what’s known as “of counsel” to a law firm, including Senate Leader Dean Skelos. They do not actually represent individual clients.  Under the new rules, they would have to disclose generally the kind of work they do for the firm, but would not have to list all of the firm’s clients.

The new rules stem from the arrest of the former Assembly Speaker, Sheldon Silver, who is accused of using his outside employment at two private law firms to illegally net millions of dollars. Under the old system, Silver and others had to merely list the law firms that paid them, and the approximate amount of money they received each year. But Blair Horner, with the New York Public Interest Research Group, even the new disclosure rules can still be exploited, if someone is bent on corruption.  

“If a lawmaker is looking to monetize their public office, they’ll still be able to do it,” Horner said.

There is also a grace period written into the new regulations. Lawmakers don’t have to report their clients for several months, so they could theoretically end relationships with clients where there might be appearances of a conflict of interest. And the public won’t know the names of the law clients that are disclosed until May of 2017, two years from now.

Dadey, with Citizen’s Union, says ultimately, what’s needed is a transition to a full time legislature, with strict limits on outside income, as is done in Congress.  

We’ve got to cap outside income and raise legislative salaries,” Dadey said.

Legislators will already begin working on getting more pay. The new law sets up a commission that will determine future pay scales for Senators and Assemblymembers, whose base pay is now nearly $80,000 a year. The commission would also consider raises for top employees of the Governor’s  office and commissioners at state agencies.

In the meantime, says Dadey, it’s likely that the US Attorney, Preet Bharara, who already arrested former Speaker Silver, will strike again, until the entire system is finally overhauled. He says Bharara has already said “stay tuned”.

“Sadly we’ll probably have to wait until the next set of corruption cases come forward,” said Dadey. “And we’ll be right back at work again.”

He says maybe, then, it will be time to enact bigger changes.