Ethics

Gallivan Reacts To Maziarz Retirement; Downplays Questions Over Campaign Funds

Although he was surprised by it, State Senator Pat Gallivan said the public shouldn’t read into the timing of the retirement of fellow Western New York Republican George Maziarz.

“Senator Maziarz has expressed publically his reasons for retiring that he had been thinking of it for a while, that it was in the best interest of his family and his future and I think unless we see otherwise we have to take that at face value,” Gallivan said.

A report by an anti-corruption panel released in May that showed Maziarz had $140,000 in unspecified campaign expenditures, followed by the revelation his former chief of staff was issued a Federal subpoena has sparked a new conversation over how this money can and should be spent.

“It wasn’t talking about taxpayer dollars. It was talking about voluntary campaign contributions and of course the expenditures of campaign contributions are guided by the Executive Law,” said Gallivan.

Gallivan’s name also appeared on the now defunct Moreland Commission Report.  It showed he had $80,000 in unspecified campaign expenditures dating back more than five years.

“When that happened I directed my campaign staff to look at our filings. We’ve always tried to endeavor to comply with the law but I asked them to look at our filings to ensure that we are in full compliance with the law,” Gallivan said.

Democratic Erie County Board of Elections Commissioner Dennis Ward said there’s a lot of gray area when it comes to campaign finance law in New York State.  He said expenditures from private campaign donations, under $100 don’t have to be itemized.

“That doesn’t mean that you don’t have to keep the records so that if you are audited, at a point down the road, that you have to still have the records for such expenditures,” Ward said.

Ward said the Moreland Commission; even if it was still active, had no power to prosecute.  There are also questions as to whether or not a commission appointed by the executive branch even had the authority to investigate the legislative branch of state government.

“Is it sufficiently clear? No. Our law should be strengthened and it should be tightened up to define a lot more of these expenses that would appear to people to be personal expenditures,” Ward added.

Gallivan hopes the public will keep a few things in mind before passing judgment solely on the findings of the Moreland Commission.

“My understanding is that they looked at the campaign filings of every member of the the legislature so in some way shape or form everybody was looked at, some questions were raised and that’s ok that some questions were raised because that gives you a chance to make sure you’re doing things the right way and again I’m confident that our filing, after review, are fully up to snuff and are in full compliance with the law,” Gallivan added.

Bharara: Elected Officials Serve The Public, Not Their Families

The son of Sen. Tom Libous pleaded not guilty to six federal counts of filing false tax returns and obstruction and was arraigned on $50,000 bail.

Matthew Libous is accused of using the under reported income from a minority stake in Wireless Construction Solutions for a variety of personal uses, including iTunes downloads, casino trips, tanning, spa treatments, a gym membership and even an Internet data site, according to the indictment unsealed Monday.

Between 2008 and 2011, Matthe Libous is accused of failing to report more than $200,000 in income to the IRS.

Sen. Tom Libous faces one count of making a false statement to the FBI stemming from an investigation in whether he arranged for his son to receive a job at a prominent Westchester COunty law firm paid for by a lobbying organization.

“As alleged, Thomas Libous took advantage of his position as Senator and Chairman of the Transportation Committee by corruptly causing lobbyists, who wanted Libous’s influence to benefit their clients, to funnel money through a law firm to his son where Libous has gotten his son a position,” U.S. Attorney Preet Bharara said in a statement. “He then tried to cover up his corrupt conduct by lying to FBI Agents about his knowledge of his son’s arrangement with the firm, as the Indictment describes. Public servants should serve the public first, not themselves and their families. This Office will continue to pursue elected officials who attempt to take corrupt advantage of their positions.”

A Dubious Record Is Set

With the resignation last week of Assemblywoman Gabriela Rosa after it was revealed she was in a “sham” marriage, she became the sixth state lawmaker to leave office during the 2013-14 legislative term in office — a record high since the 1999-2000 class.

That’s according to a report compiled by Citizens Union, which found 26 lawmakers since the turn of the last century have left office under an ethical or legal cloud of misconduct, due to a range of wrongdoing including sexual harassment, bribery and misdirected member items.

Many of those lawmakers — such as Assemblyman William Boyland — were automatically forced out of office when they were convicted of felony charges.

Of course, the next class of state lawmakers haven’t been elected just yet, meaning those who face legal and ethical troubles could make that figure grow. Sens. Malcolm Smith and John Sampson are facing separate corruption charges (as well as primary challenges).

Assemblyman Micah Kellner, who was stripped of his Albany and district offices along with his staff budget after new allegations of harassment arose, is fighting the sanctions from Assembly Speaker Sheldon Silver. He plans to serve out the rest of his legislative term.

The record is set, too, after lawmakers in 2011 and then this past March approved various anti-corruption measures that created new ethics regulators, strengthened anti-bribery laws and an independent enforcement counsel at the state Board of Elections.

The most recent effort to bring corruption to light — the Moreland Commission on Public Corruption — was disbanded by Gov. Andrew Cuomo following the latest ethics agreement, which his critics have pounced on.

CU TurnoverResearch Ethical Criminal Issues June 27 2014 by Nick Reisman

Lawmakers Told To Save Their Moreland Records

U.S. Attorney Preet Bharara’s office is instructing the state Legislature to save documents relating to the now-defunct Moreland Commission on Public Corruption’s probe.

A member to Senate lawmakers from the chamber’s secretary, Frank Patience, suggests federal prosecutors are casting a wide net with its formal preservation request.

Patience in the memo writes the “All documents and records relating to the investigation” should be saved as well as records relating to its “funding, formation, operation, management and dissolution.”

“For purposes of this preservation request, the terms ‘documents and records’ should be construed broadly,” Patience writes in the memo.

The letter comes as the Moreland Commission has retained a lawyer to aid in its dealings with Bharara’s office, which assumed control of records generated by the anti-corruption panel.

Gov. Andrew Cuomo closed down the commission following an agreement on ethics reform in the state budget.

When it was in operation, the commission had been studying campaign finance records and how donations influenced policy. The commission was also trying to determine more information on lawmakers’ outside income and business interests.

A lawsuit to quash subpoenas from the commission was declared moot following the disbanding of the panel.

Senate Letter by Nick Reisman

Wills Used Charity To Conceal Matching Funds Theft (Updated)

New York City Councilman Ruben Willis, a former top aide to the now jailed former state Sen. Shirley Huntley, was arrested by the state attorney general’s office on a dozen different charges of misusing public funds and providing fraudulent records.

Updated: A letter from the state attorney general’s office reveals more information on why Wills, and his alleged accomplice, Jelani Mills, were arrested today.

The charges stem from an alleged scheme to use a charity organization to conceal the theft of public matching funds from the New York City Campaign Finance Board.

According to the letter from state prosecutors outlining bail recommendations for Wills and Mills, the councilman is accused of setting up a shell company to help funnel the money from the city campaign finance board.

The shell company, known as Micro Targeting, initially received funds to print campaign literature, though that never materialized, according to the AG’s office.

Mills, who is realted to Wills, was the sole owner of Micro Targeting.

After a $11,500 check cleared, Micro Targeting deposited the money into the charity’s bank account.

The AG’s office is recommending $50,000 bail.

The arrest follows an investigation by Attorney General Eric Schneiderman’s office that was looking into public funds directed to a charity Wills had once run that had subsequently gone missing.

According to the indictment, Wills is accused of filing false records through Micro Targeting with the New York City Campaign Finance Board through an undated invoice of $11,500.

Wills was one of several elected officials who was secretly recorded by Huntley, who was acting on behalf of law enforcement as she faced corruption charges of her own.

Indictment Wills & Mills by Nick Reisman

People v Ruben W Wills Et Al by Nick Reisman

Read The Cuomo Administration’s Contract With Cyber Search

The Cuomo administration last year entered into a contract with a New York City-based company tasked with helping the Moreland Commission on Public Corruption organize and process the reams of data being collected by the panel.

The contract between the Cuomo administration and Cyber Search Corp. was obtained by Capital Tonight from the state comptroller’s office through a Freedom of Information Law request.

Cyber Search Corp. received the $150,000 contract to help with the technical aspects of the Moreland investigation, including uploading documents to Concordance, software that is used by legal teams to help manage and coordinate large batches of files.

Last week, we reported on the K2 Intelligence contract with the Cuomo administration that showed the company was hired in part to help the Moreland Commission put together “dossiers on persons of interest” as well as organizations.

K2 Intelligence was hired to help comb through data that is available from a variety of sources, including campaign finance reports, lobbying disclosure data on the Joint Commission on Public Ethics website and the Project Sunlight database

The contracts from both K2 Intelligence and Cyber Search provide a window into the Moreland Commission’s work in investigating both the Legislature and, writ large, the intersection of money and politics in state government, however brief its life was.

The Moreland Commission on Public Corruption closed down last month following an agreement on ethics reform in the state budget, including the creation of a new independent oversight counsel at the state Board of Elections.

U.S. Attorney Preet Bharara’s office last month took possession of copies of documents generated by the commission.

2014-185 (2) by Nick Reisman

Read The Cuomo Administration’s Contract With K2 Intelligence

Gov. Andrew Cuomo’s office last year entered into a contract with K2 Intelligence in order to provide detailed data analytic services for the Moreland Commission on Public Corruption which includes a requirement for the creation of “dossiers on persons of interest.”

The $175,000 contract, which ran through December, lays out the requirements for the company to help the anti-corruption panel find “pertinent links and patterns” in a huge swath of data.

The contract shows K2 was charged with helping to “develop and execute a strategy for acquiring data” from the Joint Commission on Public Ethics including financial disclosure and lobbying records, Senate and Assembly legislation, campaign finance records and data made available on the Project Sunlight website.

The company’s contract stipulates the information would be used to help “create dossiers on persons of interest” along with organizations and companies as well. K2 was also required to create visual data maps and help analyze events over time.

The agreement was obtained by Capital Tonight from the state comptroller’s office through a Freedom of Information Law request.

Capital New York first reported on the initial request from the Cuomo administration to seek out K2′s services.

At the time, the administration noted K2′s data analysis software had been used by a variety of law enforcement agencies, including the Department of Justice, NYPD, FBI, and the NSA.

The commission closed down last month after state lawmakers and Gov. Andrew Cuomo reached an agreement on an ethics package in the state budget, which included the creation of an independent oversight counsel at the state Board of Elections.

U.S. Attorney Preet Bharara’s this month took possession of documents generated by the commission during its existence. On Thursday it was reported Bharara’s office had subpoenaed records from JCOPE.

A former commission member says the Moreland panel found as much as a dozen state lawmakers involved in criminality.

FOIL 2014-184 by Nick Reisman

Another Moreland Case Moves Toward Adjournment

While state lawmakers and their outside employers challenged the Moreland Commission’s authority to issue subpoenas in state court, a separate legal battle played out between the anti-corruption panel and a consultant that had done work for an independent expenditure group in the 2012 campaign cycle.

And like the larger lawsuit challenging the commission, the legal maneuvering between the Moreland panel and Strategic Advantage International appears to be winding down.

Court documents filed in recent days show state Supreme Court Justice Alice Schlesinger signing off on a motion to adjourn the case.

The Moreland Commission had subpoenaed the firm to gain more information on who contributed to Common Sense Principles, an independent expenditure group that had supported Senate Republicans in the previous election cycle.

When it came time for Common Sense Principles to disclose its political spending, the group filed that it had received funds from an apparent shell company.

Document by Nick Reisman

Moreland Commission Officially Withdraws Its Subpoenas

The Moreland Commission on Public Corruption has officially withdrawn its subpoenas seeking more information on lawmakers’ outside income and business interests, court documents filed this week show.

In a letter to state Supreme Court Justice Alice Schlesinger, the commission’s attorney writes that both Moreland co-chairs Milton Williams and Onondaga County District Attorney William Fitzpatrick have withdrawn the subpoenas as the panel’s work winds down.

In the same letter, Assistant Solicitor General Judith Vale requests that court declare the subsequent motions to quash the subpoenas moot.

“As a result, we respectfully request that the Court also dismiss the pending motions to quash, motions to intervene, and the declaratory-judgment complaint as moot, and close the above-referenced matters,” she wrote in the letter. “We will be reaching out to counsel for petitioners/plaintiffs regarding this request.”

The letter was filed with the court as part of an ongoing legal challenge to the Moreland Commission’s power to investigate and subpoena business the employ state lawmakers.

Gov. Andrew Cuomo created the commission last year after lawmakers failed to approve any ethics measures in the wake of a series of corruption arrests that hit the Capitol.

The commission, which produced a preliminary report in December following a series of public hearings, issued subpoenas to businesses that employ state lawmakers earlier year, mainly targeting law firms.

The firms, along with the Assembly and Senate, challenged the authority of the commission to issue the subpoenas, while the commission pointed to the extra powers granted by the state attorney general’s office.

But Cuomo and lawmakers last month struck an agreement on new ethics laws, including increased enforcement at the state Board of Elections. After lawmakers agreed to a state budget that contained the ethics reforms, the governor announced he was disbanding the commission.

The news that commission was disbanding was criticized by U.S. Attorney Preet Bharara, who assumed possession of records and other documents generated by the commission.

Cuomo defended the decision to end the commission’s work, noting that he had always planned to do so once an ethics deal was reached and that he didn’t want to create a “permanent bureaucracy.”

Subpoenas Letter by Nick Reisman

In Huff Post, Fitzpatrick Defends Moreland’s Record

Onondaga County District Attorney William Fitzpatrick defended the track record of the soon-to-be-defunct Moreland Commission on Public Corruption while at the same time blasting unauthorized leaks to the press and that the panel itself was “too big.”

But largely, the op/ed in The Huffington Post is a lengthy defense of the Moreland Commission’s pursuit of wrongdoing in the Legislature that ultimately resulted in a package of ethics law changes in the state budget.

Gov. Andrew Cuomo, who created the commission in 2013, announced the commission would end its work following the budget agreement, which included the creation of an independent enforcement counsel at the state Board of Elections.

But his decision to close the commission soon after the agreement is coming under criticism from U.S. Attorney Preet Bharara, whose office has taken possession of records generated by the panel.

Fitzpatrick in the op/ed denies there was any improper collusion from the governor’s office and decried commission members leaking to the press.

“In retrospect, the Commission was too big at 25 members. Some members were appointed by the Governor and some by the Attorney General and they had different perspectives,” Fitzpatrick wrote. “Leaks to the press were frequent, unauthorized, and largely inaccurate, and they were frustrating and undermining of the Commission. We experienced the staffing issues one would expect at a start-up organization. Whatever else, we asked each other for trust, and some members, for whatever reason, violated that trust.”

Meanwhile, Fitzpatrick takes aim at unnamed critics he says are engaging in “SCHADEN FREUDE” (sic) for focusing on perceived shortcomings of the commission:

“Of course, there are those who would prefer to practice the act of SCHADEN FREUDE and focus on what they perceive to be failures,” Fitzpatrick wrote. “I myself am still distressed that we as a Commission were unable to force legislators to disclose exactly what it is they do to earn lucrative outside income, not an unreasonable request of a person purportedly entrusted with serving the public good. The reality is, however, that that issue would still be in litigation long after the full term of Moreland had expired and it is left for another day. My focus is on the good that Moreland accomplished.”

The full op/ed — headline “My Moreland Mission” — can be found here.