Ethics

Client Disclosure, But Only Moving Forward

The final ethics legislation to be voted on by state lawmakers includes disclosure requirements for those who work in the legal or consulting professions, but only for those with new business being taken on in 2016.

Client disclosure won’t be made public until June 2017, according to the law.

The bill language was released this afternoon and is expected to be voted on after lawmakers conference the massive education, labor and family assistance budget bill.

At the same time, there are allowances built into the legislation that would prevent client disclosure when it comes to the “invasion of privacy” for a client or “undue harm.”

Both the Joint Commission on Public Ethics and the Office of Court Administration will have the power to redact clients names based on that criteria and other exemptions, such as divorce proceedings, estate plannings and cases involving children.

When it comes to clients who are dealing with initial public offerings, where confidentiality is agreed to by federal law, names and other client information will be put into a “locked box” that is held by the Office of Court Administration to be opened at a later date.

JCOPE itself is due to receive a funding increase of $2.4 million, with half of that earmarked for the disclosure requirements being put into effect.

Moving forward, lawmakers with clients will need to detail what work they’ve done on their behalf and provide descriptions for a variety of sample services such as preparing “certified architectural or engineering renderings.”

Personal use of same campaign funds will be restricted, such as country club membership, rent and other dues.

But elected officials will still be allowed to use campaign money for attorney representation and other legal fees.

Under Budget, JCOPE To Receive $2.4M Boost

The ethics framework agreement is set to include a $2.4 million boost to the Joint Commission On Public Ethics, the lobbying and ethics regulator created in 2012.

The commission will receive $1.2 million in order to handle the new disclosure requirements for lawmakers with legal clients (Legislators who are lawyers with clients can also report to the Office of Court Administration and receive an exemption based on criteria such as the sensitivity of the case and whether the client has business before the state).

An additional $1.2 million will be earmarked JCOPE for information technology upgrades, according to an official briefed on the allocation.

Still, specific language on the ethics and disclosure package is yet to be formally released as lawmakers continue to discuss major budget bills such as the education, labor and family assistance package.

The ethics agreement, meanwhile, is being panned by a coalition of good government groups for not being released with hours to go before the deadline.

The groups — Common Cause of New York, Citizens Union, the Brennan Center, NYPIRG and Reinvent Albany — called on the bill to be released.

“It is unacceptable in a functioning democracy that an ethics bill about the disclosure of legislators’ outside income hasn’t even been disclosed to the public,” the groups said in a joint statement. “Yet it will be introduced in a moment’s notice, fast tracked with a message of necessity, and the legislature will vote on a major reform bill with no one having a chance to review it let alone read it.”

Good-Government Groups Huddle With Cuomo’s Office

As the negotiations over the state budget appear to be winding down, Gov. Andrew Cuomo’s counsel’s office met privately on Friday afternoon with several good-government advocates to discuss new outside income disclosure requirements under consideration.

The meeting was not with Cuomo himself, though the governor did make a brief appearance, said Blair Horner of the New York Public Interest Research Group.

Details were scarce on what a possible agreement between Cuomo and state lawmakers might look like at this point, though advocates said they were under the impression no formal deal had been made.

“I think the issue is still open,” Horner said.

Common Cause New York’s Susan Lerner agreed.

“The ethics bill is still in progress,” Lerner said. “I don’t think we learned anything that is surprising.”

The meeting was meant more to “trade ideas back and forth,” she said.

Both Lerner and Horner declined to go into the specifics of what was discussed or what proposals the governor’s office sought to float with them.

“I don’t think we’re in a position to go into any specifics,” Lerner said.

Republican Senate Majority Leader Dean Skelos earlier in the day said he expected an ethics bill to be introduced as early as this evening.

Assembly Democrats last week announce they were in support of an ethics package agreed to by Cuomo that would create new disclosure requirements for lawmakers with legal clients and campaign finance while also change the travel reimbursement structure.

Senate Republicans have balked at the disclosure requirements and Cuomo has spent the last several days trying to reach an agreement that meets their concerns.

Lerner insisted no bill language was put before them in the meeting.

“We won’t possible know until we see bill language,” she said. “Things can be described and what it comes down to is drafting. Sometimes the drafting can be more expansive and helpful than the description.”

Bonacic: Cuomo Put Himself In A Box On Ethics

Senate Republicans are expected to discuss the two-ethics agreement forged by Gov. Andrew Cuomo and Assembly Democrats this afternoon in closed-door conference.

Republican lawmakers have not been briefed yet on the details of the ethics bills backed Cuomo and Speaker Carl Heastie, but Sen. John Bonacic says the conference doesn’t want to “get jammed” on the issue.

Bonacic, an Orange County Republican, said he didn’t want to comment on Cuomo’s divide-and-conquer strategy with the two legislative houses on ethics.

But he added the governor painted himself into a corner on the issue by including ethics legislation in budget amendments that tied the policy to spending measures.

“I’m not going to talk about this game plan and his tactics,” Bonacic said. “He’s doing whatever he can to try to get the things he wants and get himself out of the box he put himself in by attaching a lot of what I thought were difficult public policy issues and attach it to the budget which I thought was a very bad strategy.”

Now, Cuomo is eager to get a deal, Bonacic said.

“He put himself in a small box and now he’s looking to get something done with the budget.”

Senate Majority Leader Dean Skelos is expected to discuss the issue in closed-door conference later today, Bonacic said.

Members were told to not be late for “an extremely important conference.”

Good Gov’t Groups to Legislature: Take After Congress

A coalition of good government groups are now out with their own proposed plan for ethics reform.

The group, which includes NYPIRG, Common Cause NY, and Reinvent Albany says the legislature should model their ethics package after what Congress currently has in place. Those reforms, which include outside income restrictions, were set in place following the Nixon adminstration’s Watergate scandal.

“We think New York is in its own Watergate moment right now,” said Blair Horner, Legislative Director of NYPIRG, “and this is the opportunity to actually seize that moment and enact meaningful, strict reforms on outside income and to make sure lawmakers represent only one master: The public they’re elected to serve.”

According to the report, about two-thirds of the Senate and three-fourths of the Assembly already have little to no outside income at all. With their proposal, outside income would be capped at 15 percent of the highest-paid legislator’s salary. Outside investments would be allowed, but would require disclosure.

This isn’t the first proposal that would limit or ban outside income. Senate Democrats and the Independent Democratic Conference have already put forth their own plans that would include heavy restrictions.

Those plans have been criticized as unconstitutional, illegal, or just unfair. But Horner says that critcism is unjustified.

“Most of the people that are here now live under a system that’s pretty much like what we’re describing and it’s not filled with millionaires now,” Horner said. “I think in fact the people who make the most money appear to be the people who don’t comply with this system.”

As far as the governor’s ethics plan, the coalition says it doesn’t go far enough.

“While [it] is certainly an improvement over what we have now, we’ve defined the problem differently,” Horner said. “What the governor’s proposing is you can serve two masters as long as you tell the public who they are, our argument is that you should only serve one master and that’s the public itself.”

Cuomo officially tied ethics reform to his spending plan in his 30-day budget amendments Friday. There’s been some concern that coming to an agreement on ethics reform could delay an on-time budget, but Horner says that shouldn’t be the case.

“They should get the budget done on time, they should do ethics reform. End of story. There’s no reason why one should have to hang up the other.”

The Disclosure Precedence

Amid the ongoing debate over whether disclosing private legal clients runs afoul of the law, it’s worth taking a look at a New York City Bar Association report that studied the issue.

In short, the study found that identifying clients does not constitute a breach of the attorney-client privilege.

It’s a key distinction as Gov. Andrew Cuomo has made disclosure of outside income and lawmakers’ business partners a major component of his ethics push in the wake of Sheldon Silver’s arrest on corruption charges.

While “information” may include the identity of a client courts have found that revealing client identities does not breach ethical obligations because attorneys may be obligated or permitted by law to provide this information,” the report, issued in January 2010, found.

Indeed, public knowledge of which clients have retained who is already a matter of public record through court documents, hearings and real-estate transactions and even through promotions on law firms’ websites.

“This reality lowers the client’s expectations that identity will be kept private,” the bar found.

States like California and Washington, meanwhile, have long required financial disclosure information that includes divulging legal clients, who can be kept private under certain circumstances.

Senate Republicans have said they would support “reasonable disclosure” of outside income and private activities.

Cuomo, to be sure, is not pushing for a full-time Legislature that would bar lawmakers from receiving any outside income.

20071850-ReformingNYSFinancialDisclosureRequirements by Nick Reisman

Silver Threatened With $120K JCOPE Fine

Former Speaker Sheldon Silver faces a fine of up to $120,000 for failing to properly disclose his outside income, according to a notice quietly filed on the Joint Commission on Public Ethics’ website.

The delinquency notice comes after Silver’s arrest last month on charges that he received millions of dollars in bribes — which federal prosecutors allege were masked as legal referrals — from two law firms over the last 10 years.

The notice alleges that Silver faces the fines after not listing that income on his disclosure forms over a three-year period, or $40,000 a year.

Silver resigned the speakership, a post he’s held since 1994, but retained his seat in the Democratic-led Assembly.

The notice was included on JCOPE’s web page with little fanfare on Tuesday evening.

JCOPE’s board includes three Silver appointees.

NOD Silver by Nick Reisman

Schumer Avoids Talking About Bharara

From the Morning Memo:

As some state lawmakers begin to question corruption-busting U.S. Attorney Preet Bharara’s tactics, his former boss is continuing to not weigh in.

U.S. Sen. Chuck Schumer on Monday declined to offer his assessment of Bharara or respond to the criticism from some lawmakers, who complained to The Daily News that the prosecutor has a tendency to grandstand and humiliate the Legislature by painting the whole body as rife with corruption.

At the same time, legislators have questioned whether it’s appropriate for Bharara to criticize how Albany does business through the three-men-in-a-room budget negotiations.

But Schumer, a former state assemblyman before being elected to the House, isn’t among those clamoring to criticize the federal prosecutor.

“He worked for me for five years,” Schumer said during a stop in Batavia, noting that he recommended Bharara for the job initially.

“The day he got into office we made a policy that I would not comment on him or his cases. I’ve kept it and I’m going to keep with it,” Schumer added.

Bharara in January made his most high-profile arrest, charging now former Assembly Speaker Sheldon Silver with accepting bribes and kickbacks.

Flanagan: Don’t Let Ethics Eclipse Education

From the Morning Memo:

Before the latest ethics reform craze swept the state Capitol in reaction to the Sheldon Silver corruption scandal, education was the top topic of debate among lawmakers and Gov. Andrew Cuomo.

Cuomo made it clear long before he unveiled his 2015-16 budget – and even before the November 2014 elections – that he had the teachers unions in his crosshairs, and intended to break the so-called “monopoly” he believed is to blame for most of the public education system’s woes.

As promised, Cuomo included a host of aggressive education reform proposals in his budget. And he told lawmakers that if they accepted his overhaul plan in total, districts would receive $1.1 billion in aid instead of just $377 million.

This set the stage for an epic education budget battle – perhaps the biggest Albany has seen for some time.

But it’s taking place alongside the ethics reform fight. Cuomo has said this is now his top priority – something for which he might even be willing to shut down the government if lawmakers don’t accept his five-point plan to clean up Albany.

Senate Education Committee Chairman John Flanagan said during a CapTon interview last night that while ethics reform is important, it shouldn’t distract lawmakers from the rest of the budget – and education in particular.

“I want to stay focused on what are our primary responsibilities,” Flanagan, a Long Island Republican, told me.

“Education is New York State’s number one obligation and responsibility, and I believe that’s dictated by virtue of our Constitution and a long historical perspective.”

“So, what we do on education – whether it’s funding or reform – has to be the focal point of the budget, and it has been for a long time.”

“Of course, there are great parallels to the health budget in large part because of federal funding. But New York State’s primary focus and obligation has to be on the proper and appropriate funding of education. The other issues…are real and they’re legitimate, and there’s going to be discussion on that.”

Flanagan is one of 16 state lawmakers who reported earning at least $100,000 from outside work in 2013. (Like a number of his Senate and Assembly colleagues, he’s an attorney).

The senator said yesterday that he does not support a full ban on outside income, which has been floated – though not formally proposed – by the governor, and endorsed by the IDC as part of a larger legislative reform package.

Flanagan said he believes Senate Majority Leader Dean Skelos, (also an attorney, whose outside income is reportedly the subject of a federal investigation), and the rest of the GOP conference will “support transparency and disclosure.”

But, Flanagan argued, a full ban on outside income would dramatically limit the Legislature’s talent pool, preventing anyone but career politicians and the very rich from entering public service.

“I believe there’s nothing wrong with people making money,” the senator said. “That’s one of the fundamental components of our democracy…I believe in government service…But I don’t think that should preclude me or anyone else from being able to earn money for our family.”

At the end of the day, Flanagan predicted that the Legislature and the governor will be able to come to a deal on an on-time budget that is “a good, solid product everyone can be proud of.”

But he allowed the process of getting there will likely be messy – to say the least.

Flanagan Questions Outside Income Ban

Republican Sen. John Flanagan questioned the push to ban outside income in the state Legislature, saying New York would be the only state government to have such a measure in place.

“I don’t think there’s any other state in the country that has a ban on outside income,” Flanagan, a Long Island Republican, said at a news conference. “Personally, no, I don’t believe in a ban on outside income.”

Flanagan instead said that new transparency measures should be put in place. Lawmakers are already required to release ranges on their outside income, but Gov. Andrew Cuomo is pushing them to detail the dollar amounts, plus reveal their legal clilents.

Flanagan, a lawyer who earns between $100,000 and $150,000 at a law firm, said the GOP conference would back “reasonable” disclosure.

“I think at the end of the day our conference will support transparency, disclosure that is reasonable that is in the best interest of the public,” he said.

The debate over legislative moonlighting is being reignited after the arrest of Manhattan Democrat Sheldon Silver on charges he used legal referrals to mask bribes and kickbacks. Silver was forced to resign from the Assembly speakership, a post he’s held since 1994.

Senate Democrats are backing legislation that would put a cap on outside income. The conference was quick to pounce today on Flanagan’s comments.

“How many times do we have hear the same old broken record when we know the Senate Republicans always water down the ethics reforms that are desperately needed right now,” said Deputy Minority Leader Mike Gianaris.

Senate Independent Democratic Conference Leader Jeff Klein, meanwhile, is stepping away from his law firm and forgoing outside income from now on.

In the Democratic-led Assembly, newly inducted Speaker Carl Heastie has raised the possibility of capping outside income in its rules.

As for outside income limitations or transparency measures, Heastie said the conference will decide how to move forward.

“That’s a decision we’ll make as a conference,” he said. “We’re starting to begin those discussions. I know the governor would like to see something done. We know as a conference that something has to be done.”