The July 25, 2011 Issue of The Capitol

www.nycapitolnews.comVOL. 4, NO. 13 JULY 25, 2011

Assemblyman William Boyland Jr. skips work to play Facebook games.

3

Steven Cohen looks back on his time as secretary to Cuomo.

Page 19

Where was the Catholic Church during the same-sex marriage debate?

Page 4

www.nycapitolnews.comVOL. 4, NO. 13 JULY 25, 2011

Andrew Schwartz/Joey Carolino

BALANCING ACTCan Inspector General

Ellen Biben make a difference in Albany?

pg. 10

www.nycapitolnews.comwww.nycapitolnews.com THE CAPITOL JULY 25, 2011 32 JULY 25, 2011 THE CAPITOL

BY CHERYL LEE TERRY

Gov. Andrew Cuomo is a Jupiter-ruled, freedom-loving Sagittarian. This year he fell into the perfect

astrological storm and joined the Uranus revolution for social change. Sagittarians are known for being outspoken and loyal, but in 2012 the governor may be surrounded by people who do not share his high ideals, and the numbers indicate that a mini-scandal may force him to cut a few old ties. He will not only survive, but go on to become one of the great governors of New York.

Aquarians like Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver may be peace-loving humanitarians, but their egos are a force to be reckoned with. And when the two Uranus-born, high-minded leaders meet, that becomes the elephant in the room. Fortunately Uranus is on a retrograde hiatus until

December – giving each a chance to compromise without losing face.

Numerologically this has been a hard year for the speaker, but by spoon-feeding the opposition, he will continue to move toward his ultimate goals and by October pull off a few coups of his own. The

majority leader is in line for an important career move, which is in the works but may not materialize until next year.

Cheryl Lee Terry is an astrologer and numerologist whose work has appeared in publications including Esquire, Elle, and the New York Post. Her past political predictions have included accurate outcomes for the 2000 and 2004 presidential races. Her work can be found at www.astrologyandbeyond.com

Political Astrology

UPFRONT

25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

M T W Th F S Su M T W Th F S Su M T W Th F S Su M T W Th F S Su

The Month Ahead (July 25–August 21)(July 25–August 21)

Redistricting task force hearing in Albany

Department of Environmental Conservation celebrates Smokey the Bear’s birthday in Staten Island

Redistricting task force hearing in White Plains

Consultant Evan Stavisky’s birthday

Redistricting task force hearing in Binghamton

Redistricting task force hearing in Buffalo

Capitol Tonight host Liz Benjamin’s birthday

Al D’Amato’s birthday

Assembly Minority Leader Brian Kolb’s birthday

DAMN! documentary on Jimmy McMillan’s run for governor is released

Binghamton Assemblywoman Donna Lupardo’s birthdayAccelerate Upstate

conference in Buffalo

$5,555,787.70

$3,316,083.92$3,692,033.66

$1,030,000

$6M

$5M

$4M

$3M

$2M

$1M

$0

$7,220

Mario Cuomo George Pataki Eliot Spitzer David Paterson Andrew CuomoSources: New York State Board of Elections, New York Public Interest Research Group

FRESHMAN FUND-RAISINGNew York governors rake in first-term cash

Joey Carolino

New beginnings, new ideas and new money: That’s what New York governors start their terms with. Gov. Andrew Cuomo’s fund-raising haul in his fi rst six months in offi ce dwarfs that of his recent predecessors, but they still pulled in millions.

Total fund-raising from Jan.–July in each governor’s fi rst year. Paterson took offi ce March 17; all others took offi ce Jan. 1.

By The Numbers

What’s in the stars for New York state’s leaders?

Kayla G

alway


In the fi nal, confusing days of Albany’s legislative session, the @NYSenate Twitter feed explained what

was happening when no one else in the Capitol seemed to know the answers. The man behind the curtain was 28-year-old Zach Hutchins, the Senate’s director of new media. What follows is an edited transcript.

The Capitol: The Senate ran on social media this session. How do you push the senators to get involved with applications like Facebook and Twitter?

Zach Hutchins: I wouldn’t charac-terize it as pushing. Actually, [Majority Leader Dean] Skelos and [spokeswoman] Kelly Cummings were very receptive to my proposals, and basically just told me to run with it. Myself and Tom Reale, who works in the offi ce with me, have been holding little miniseminars with the communica-tions staff of the individual senators. We started doing these when the Weinergate scandal broke. Obviously that put a crimp in a lot of people’s Twitter, simply because it raised some alarms like “Is the medium safe?” or “Can my account get hacked?”

TC: What’s some advice for someone new to the medium?

ZH: You have to have a clear voice. It doesn’t have to have a totally casual tone. I mean, you are a senator. There should be an air of senatoriality to it, I suppose. Certainly, let people know that it’s coming from you, whether it’s actually a staffer tweeting or the senator themselves, but don’t do third person; do fi rst person. Make sure you’re not just reposting press releases. One of the big things I’ve been a proponent of is weighing in on nonpolitical issues. Clearly not when you’re supposed to be doing senatorial things, but I think it’s totally appropriate for a senator if they’re home watching the Yankee game, or if they’re at Yankee Stadium, and it’s a Sunday after-noon and they’re there with their family, to tweet, “Hey, nice hit by Jeter!” You’ll probably get some extra followers out of that, and it can personalize you and humanize you.

TC: Is this a fundamental shift in how senators usually talk to their constitu-ents?

ZH: Well, no. It’s the same thing as if they go to parades in their district. They’re not

just talking about legislation—they’re talking about the pickup game around the corner or the traffi c light that’s out, and Twitter is just a digital means of constit-uent service.

TC: How are you able to be so fast on the handle, especially during the last days of the session, without making mistakes?

ZH: When Tom Reale and I get in, in the morning, we go over the active bills list and together we pre-write a lot of the tweets. We know that certain bills are

going to be on the active list, so they’re probably going to be acted on that day. We write the bill number, sponsor, get the link together to the open-legislation website, and then we fi ll in whether it was laid aside, failed, if it passed.

TC: During the last week of the session, did you fi nd yourself struggling to keep abreast of the momentary changes?

ZH: It wasn’t diffi cult, just more fast-paced. There was a greater volume of bills. The biggest thing that became slightly overwhelming was on Friday, when the same-sex marriage bill certainly looked like it was going to come to the

fl oor, just the volume of questions we were receiving on the account—it was too many to answer all of them. I was just answering questions about parliamentary procedure like “What does ‘laid aside’ mean?” and “We did the controversial calendar, but same-sex marriage didn’t come up; is it not going to come up?”

TC: Did you have a sense at the time that it was a momentous occasion?

ZH: I told my mother and my fi ancé last week that the last week of the session was the most rewarding work experience I’ve ever had in any of my jobs. All of it came from the interaction with people and the comments they made. No matter how you felt about the property tax cap or rent regu-lations or same-sex marriage or anything, people were just happy to see that their government was responding to them. People see @NYSenate and they think it’s this automated thing, that they would never actually get a real response from it.

TC: It’s a real person in there! It’s not a Twitter gnome. He’s a real man!

ZH: No, it’s not a gnome. Although I am short. —Laura Nahmias

[email protected]

EDITORIALEditor: Adam [email protected] Editor: Andrew J. [email protected]: Chris Bragg [email protected] Nahmias [email protected] Lentz [email protected] Editor: Andrew SchwartzIntern: Jeff Jacobson

ADVERTISINGAssociate Publishers: Jim Katocin, Seth MillerAdvertising Manager: Marty StronginSenior Account Executives:Ceil Ainsworth, Monica CondeDirector of Events and Marketing: Joanna VitelloMarketing Coordinator: Stephanie MussoExecutive Assistant of Sales: Jennie Valenti

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President/CEO: Tom AllonCFO/COO: Joanne HarrasDirector of InteractiveMarketing and Digital Strategy: Jay Gissen

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The Capitol is a division of Manhattan Media, LLC, publisher of City Hall, Our Town, The West Side Spirit, Chelsea Clinton News, The Westsider, New York Press, N.Y. Family, City Arts and AVENUE magazine.

The Capitol is published twice monthly.Copyright © 2011, Manhattan Media, LLC

Editorial (212) 894-5417 Advertising (212) 284-9715Fax (212) 268-2935 General (212) 268-8600

Publisher/Executive Director: Darren Bloch

SUMMER READINGA peek at the nightstands of New York’s leaders

Colossus: Hoover Dam and the Making of the American Century, by Michael Hiltzik

The Game From Where I Stand: A Ballplayer’s Inside View, by Doug Glanville

Manhattan Transfer, by John Dos Passos

Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon, by Gretchen Morgenson and Joshua Rosner

Attorney General Eric Schneiderman:

Comptroller Thomas DiNapoli:

As Husbands Go, by Susan Isaacs

The Alchemist, by Paulo Coelho

Senate Majority Dean Skelos:

And I Haven’t Had a Bad Day Since: From the Streets of Harlem to the Halls of Congress, by Rep. Charles Rangel and Leon Wynter

Gov. Andrew Cuomo:

Master Of The @NYSenate

Zach Hutchins

Assembly Speaker Sheldon Silver:

Truman, by David McCullough

As Husbands Go, by Susan Isaacs

The Alchemist

fl oor, just the volume of questions we


How Outsized Ambition,

The Alchemistby Paulo Coelho


The Alchemist

www.nycapitolnews.comwww.nycapitolnews.com THE CAPITOL JULY 25, 2011 PB4 JULY 25, 2011 THE CAPITOL

BY CHRIS BRAGG

As parishioners walked out of Sunday mass at St. Patrick’s Cathedral on July 24, the day

same-sex marriage offi cially became the law in New York, Archbishop Timothy Dolan was nowhere to be found. He was not at the lectern where he sermonizes most Sundays. He was not at the curb outside the church discussing the momentous occasion.

Blocks away, State Sen. Ruben Diaz Sr., a Pentecostal reverend, led a rally in front of Gov. Andrew Cuomo’s offi ce to protest the new law. But Dolan was not there either.

Where was the voice of the Catholic Church in New York City, the closest thing to a pope this side of the Atlantic Ocean?

“I have invited him to two rallies, and he hasn’t accepted invitations to any of them,” Diaz said. “It’s very important to have him here, and this is very hard to accomplish without him.”

It turned out Dolan was on vacation, according to a spokesman. The arch-bishop was set to return in late August or early September. He was unavailable for comment.

This was not the fi rst time in recent months Dolan has taken a noticeably low profi le. In mid-June, in the week before the gay-marriage bill’s passage, Dolan chose to attend a conference in Seattle where he would preside over the United States Conference of Catholic Bishops. He sent Bishop Nicholas DiMarzio of Brooklyn to Albany in his stead.

That action has provoked fi erce criti-cism from conservative elements of the church who believe a more muscular response could have prevented the bill’s two-vote passage, especially since two of the four Senate Republicans who voted for the bill are Catholic.

“Though greatly diminished in power from the glory days of Cardinal [Francis] Spellman, there is no bully pulpit like the one Dolan has,” conservative commen-tator Rod Dreher wrote in the wake of the bill’s passage. “Given the razor-thin margin of victory for the pro-gay side, it’s entirely possible, even likely, that a fully engaged Archbishop Dolan could have won this round for his side.”

Some critics believe the church must be more vocal on issues like gay marriage for it to continue to be relevant. In Phila-delphia, on Dolan’s southern fl ank, Arch-bishop Charles Chaput, who recently took the reins of the church, is known as a hard-liner who would never shy away from such a fi ght.

That kind of approach can alienate

people on the fence about the church, but energizes the more committed. During the gay-marriage fi ght, a Vatican adviser called for Cuomo to be denied commu-nion for supporting it. Dolan declined to make the same threat to lawmakers who were considering voting for the bill.

But Dolan is no shrinking violet. Years ago, Cardinal John O’Connor would hold court over a weekly curbside press scrum following Sunday mass at St. Patrick’s, generating headlines each Monday morning with his musings on the events of the day.

Dolan prefers to write on his blog, “The Gospel in the Digital Age,” on the Archdiocese of New York website. Still, Dolan is known as far more press-friendly than Cardinal Edward Egan, who Dolan succeeded in early 2009. He is a backslapper who drinks whiskey and smokes cigars, and many see similarities with Dolan’s media-savvy predecessor.

“His style is more outspoken than Cardinal Egan, and reminds me more of Cardinal O’Connor,” said former New York City mayor Ed Koch, who has known all three men. “He’s very direct and candid.”

This forthright nature makes Dolan’s low profi le on same-sex marriage more noticeable. He called in to an Albany radio show to complain about bill, and blogged that its passage was akin to an action of the North Korean dictatorship. But for the most part Dolan stayed quiet.

The money trail shows that gay marriage was not even the church’s top priority this session. Records show the New York State Catholic Conference spent far more lobbying against bills to

extend the statute of limitations for bringing civil lawsuits or criminal cases for sex crimes against children. The church has been hobbled for years by an ongoing controversy over sex-abuse cases among clergy members.

Many more moderate thinkers in the

church believe Dolan did the right thing by pulling punches in the gay-marriage fi ght, saying his involvement was unlikely to make a difference.

State Sen. Greg Ball, a Catholic who wavered on gay marriage and ultimately voted against it, said Dolan’s actions refl ected a pragmatic Catholicism needed in New York, a longtime stronghold that is now part of the religion’s rust belt.

The Vatican still cares greatly about same-sex marriage, but polls show many New York Catholics do not. From the church’s rapidly closing parishes to its diminishing ranks, Dolan has plenty else on his plate. And pushing too hard against same-sex marriage could have created unnecessary fi ssures and blown Dolan’s political capital.

Some lawmakers believe the more moderate approach gave church lobby-

ists entrée into Albany that other oppo-nents lacked. Hasidic Jewish lobbyists told lawmakers that passing gay marriage would pave their path to hell, according to Ball. Rev. Duane Motley, of New Yorkers for Constitutional Freedoms, paraded supposedly “converted” former gay people around the Capitol in a move that struck some lawmakers as too extreme.

But Dolan and the church played a quiet and constructive role behind the scenes helping carve out strong reli-gious exemptions, Ball said, arguing that everyone knew there were a handful of Republican votes in favor of the bill and that it was time to cut the best deal

possible.“The Catholic Church was pretty

darn smart politically,” Ball said. “In my opinion, they acted surgically, and carried the most water that they could.”

Dolan’s unwillingness to alienate anyone also played a role, observers say. He is far less confrontational than DiMarzio, who in the wake of the vote asked Catholic schools to reject honors bestowed this year by the governor or any member of the Legislature who voted to support the bill, and to rescind invitations for them to speak. Dolan has shied away

from such threats.Despite fi ercely opposing gay marriage

on his blog, Dolan repeatedly paused to reiterate that he was not antigay. (“If I have offended any of you in my strenuous defense of marriage, I apologize, and

assure you it was unintentional,” he wrote.) That approach may also be in part spawned simply by the nature of Dolan’s position, said David Gibson, a journalist who has written extensively on the Catholic Church.

“Bishop DiMarzio is out there a lot more, and the dynamic is sort of like the president and the vice president,” Gibson said.

“The president doesn’t want to get his hands dirty in every political fi ght.”

The church appears eager to move on from same-sex marriage. A spokesman for the New York State Catholic Conference declined to discuss what lessons could be taken from the same-sex marriage fi ght.

The questions of marriage and abor-tion are largely settled in New York, and what exactly Dolan’s role could and should be going forward remains unclear. He may have an opportunity to reframe the church in a new light, casting itself as a champion on issues from fi ghting the death penalty to promoting immigration reform.

“Those things were always secondary to gay marriage,” Gibson said. “Maybe we’ll now get the chance to see the more democratic, liberal Timothy Dolan.”

[email protected]

“The Catholic Church was pretty darn smart politically. In my opinion, they acted surgically, and carried the most water that they could.”

On gay marriage, Catholic Church was MIA

Turning The Other Cheek

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The Capitol: Why was Cuomo successful?

Ken Shapiro, counsel to former Assembly Speakers Stanley Steingut, Stanley Fink and Mel Miller: One thing Cuomo did bril-

liantly was creating the Medicaid Redesign task force. He took out GNYHA President Ken Raske, he took out HANYS President Dan Sisto and he took out the union. He took out three of the most vocal people or groups that generally oppose budgets.

I think that was the most brilliant move of all.

Charles O’Byrne, secretary to former Gov. David Paterson: That’s a key point. For the fi rst time we didn’t have a kind of media war, which really can enervate any administration.

Abe Lackman, adviser to former Senate Majority Leader Joe Bruno: I want to slightly disagree. The Medicaid issue is still one of those unanswered questions. There are cuts

to be announced, and if there’s one cloud I would focus on going forward, it’s whether the budget holds together for the remainder of the year. One unknown is you’ve got $2.5 billion worth of Medicaid cuts. A lot of those cuts have not been identifi ed yet. We’re also going to fi nd out soon for the fi rst time how the June tax revenues are. And we don’t know what’s going to come out of Washington with the debt cap, in terms of yet another round of cost shifting from the federal govern-ment to state government. With the recession, in the last three or four years revenues have been consistently below forecast. I think by November we’ll have a real sense of whether this budget deal, which I think was an extraordinary achievement, will hold.

TC: How does Cuomo compare with his predecessors?

David Nocenti, former counsel to Gov. Eliot Spitzer: It’s too early to assess what the governor’s done. He pushed very hard for a property tax cap, and it will probably take a few years to see how positive that was. Obvi-ously, same-sex marriage was a singular achievement, and he deserves great credit. I think Spitzer’s accomplishment

HISTORYVeteran advisors weigh in on 2011 legislative session

Ken ShapiroGov. Andrew Cuomo was remarkably effective in his fi rst six months in offi ce, which included an on-time budget, a historic property tax cap and a same-sex marriage law that could defi ne his legacy. But the path ahead may

soon get rockier.In a discussion hosted by The Capitol and the Real Estate Board of New York, in part-

nership with Baruch College’s School of Public Affairs, fi ve veteran political advisors evaluated the 2011 legislative session, including the precedents of Cuomo’s predecessors, his successful tactics and the looming redistricting battle that could slow his momentum.

What follows is an edited transcript.

Photos by Andrew Schwartz


levels are similar for the first term, including his passage of an ethics law, worker’s comp and civil commitment.

Lackman: I don’t agree. If you look at the first year of both of them—and, granted, Governor Cuomo hasn’t completed a year—but in Eliot’s first term we had two disasters: Troopergate,

and driver’s licenses for illegal immi-grants. This governor has been very strategic on what he has defined as his key issues, and he has achieved them all. I would say hands down Governor Cuomo has done a much better job than Governor Spitzer.

TC: What precedent did Paterson set?

O’Byrne: I would give him a lot of credit on gay marriage. As lieutenant governor he walked the floor of the Assembly soliciting votes, particularly from African-American members who didn’t feel secure enough to cast those votes. One of the first people Governor Cuomo gave props to was Governor Paterson, for what he did both in terms of the budget and in terms of gay marriage.

TC: Did Cuomo succeed by playing Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver against each other?

John Cahill, former secretary to Gov. George Pataki: Much of Albany is not Republican/Democrat politics. It’s institutional politics. Senator Bruno was very often very effective at being the fulcrum between Governor Pataki and Speaker Silver. For the first six months, Cuomo was the fulcrum. Power changes; interests change over time; and elec-tions come up. Shelly [Silver] and Dean Skelos are going to have one agenda next year, and that’s the protection of their members. I would not be surprised to see that change.

Lackman: I think the key dynamic has been the very deep relation-ship governmentally that has formed

between Senator Skelos and the governor. Just to give one example, having worked for the Senate Repub-licans, the fact that this governor was able to get the Senate majority to go along with prison closings without identifying them shows an extraordi-nary sense of trust. I think once Cuomo made that partnership with the Senate, it really removed the maneuverability on the Assembly side. They really had no place to go, because they then would have had to go to war with an incredibly popular Democratic governor. That rela-tionship between Senator Skelos and that conference and the governor—and some pieces are still not public—that, to me, was a driving force.

Shapiro: I think everyone’s overlooking one issue for next year, and that’s reap-portionment. In my mind, being there as many years as I was, that is the ugliest issue that you face. In the past, the governors who were there who had it—whether it was Carey, or Cuomo, Pataki—they really did not get involved in this on a day-to-day basis. When that issue surfaces, I think all the love between Governor Cuomo and the Senate Majority Leader may totally dissipate, because this reapportionment is a fight for survival. It’s never been that way before.

TC: Can Cuomo avoid controversy by leaving it to the courts?

Cahill: If Governor Cuomo takes this position to send it to a panel, or: “Hands off, because I’m taking the high road, and we’re no longer doing gerryman-dering”—it crushes the Republicans, more than likely. He basically gets to take the high road, and he achieves his political victory of basically disem-

boweling the Republican Party in New York, or certainly the New York State Senate. If Dean Skelos made the deal of gay-marriage-for-redistricting, that was a great deal, certainly, I think, for both sides, because I don’t think the govern-ment functions with single-party control in Albany. We’ve been through that once. We saw it wasn’t successful. The best is divided government. Sometimes you’ve got to face the cliff or you make a deal, and with all Democrats it’s much harder to achieve it. It’s clear that Governor

Cuomo wants to maintain a fiscal moderate or conservative agenda, and to achieve that agenda he’s got to have the Republicans in the Senate.

TC: Will Cuomo campaign aggres-sively for a Democratic Senate?

Lackman: I think a key test of that will be his stance on the four Republicans that voted for gay marriage. I’ve got a strong sense he’s going to campaign for them.

O’Byrne: I expect he will give them an enormous amount of credit for that vote. But Andrew Cuomo is the leader of the Democratic Party in New York. I fully expect him to support a Democratic majority in the Senate. There are advan-tages of having a Senate that functions, but I don’t think that’s a partisan ques-tion. I think a Democratic majority can effectively lead the Senate.

TC: Why did Silver give up so much?

Shapiro: I think Shelly was smart enough to understand and read the polls, and I think he understood that taking Cuomo on at that point in time was not going to get you anywhere. Shelly was able to get through things I never dreamed you could get through a Demo-cratic conference, such as the property tax cap. He had to throw in the towel on the millionaires’ tax, which his confer-ence wanted very, very badly. He knew when to fold his hand on that one.

TC: Can Cuomo maintain his momentum?

Cahill: Governor Pataki’s first six months in office were marked with a lot of accom-plishments: balancing a budget that was of the same magnitude percentage-wise as this year, cutting taxes and reinstating the death penalty. Governor Cuomo had his

accomplishments, but he also cemented his own personal legacy as governor with the same-sex marriage bill. These things ebb and flow over time. Next year is going to be different. The members of the Legislature are up for reelection. They’ll be a little more emboldened for their own agenda and not necessarily for the governor’s agenda. But same-sex marriage will give him an awful lot of ability to maneuver from financial issues, fiscal issues, with social policy issues. I can’t ever see the liberal left abandoning Governor Cuomo.

Shapiro: I think when you go back to 1975, when you look at Hugh Carey, and you look at what he had accomplished in his first four years, with New York City’s financial crisis—he did it all, and he was on top of the world. Then came that second term, and all at once the people couldn’t wait to get rid of him. You reach a peak and there’s nowhere to go but down.

Nocenti: Nobody remembers Hugh Carey’s terrible second term. Everybody remembers the fiscal crisis, and so he gets a lot of credit for that. I think it’s a legacy-building issue. But if unem-ployment goes to 12 percent, there will be Cuomo fatigue quickly. A lot of it’s economy-driven. If unemployment in New York goes to 14 percent, Governor Cuomo can still be doing great things but his popularity is going to go down. He has no control over that.

TC: What should Cuomo do differ-ently next year?

Cahill: He’s had a very successful six months, and you don’t want to change success. People don’t know him that well

at this point on a personal level. He does not have a propensity to be out there in public. For the public to see more of him would be a positive thing.

—Jon [email protected]

Charles O’Byrne

Abe LackmanJohn Cahill

David Nocenti


BY SUSAN ARBETTER

“Southern Tier” locals point south to Bradford, Pa. You can’t buy a case of Rolling

Rock there anymore without hearing tales of overnight “shale-ionaires.”

Yet while hydraulic frac-turing gas drilling in the Marcellus Shale—known as “hydrofracking”—has set off an economic gold rush in the Keystone State, its impact so far in the Empire State has been a political gold rush in Albany.

Lobbying data on fi le at the Commis-sion on Public Integrity shows a growing interest in New York by some fi rms that stand to benefi t, while others are still hanging back. Drilling advocates are newly optimistic about the industry’s future in the state, and that could morph into a mother lode for Albany’s corps of lobbyists.

In the last fi ve years, eight large compa-nies and two trade associations with a well-documented interest in hydrofracking saw their lobbying spending more than double, from $526,777 to $1,357,208.

Common Cause tallied $2,869,907 spent by the natural gas industry on lobbying last year, including $870,761 for several large media buys by Chesapeake Appalachia.

Chesapeake has dubbed itself “Amer-ica’s champion of natural gas,” and its ad buys may help burnish the company’s image. An explosion at the compa-ny’s Avella, Pa. operation in February made national head-lines, and a group of Virginia landowners won a $3.4 million settlement last month

after they said Chesapeake underpaid royalties.

At the other end of the spectrum, several large companies reported no lobbying spending at all, including Halliburton, Schlumberger and Range

Resources. That doesn’t mean they aren’t exercising infl uence in Albany, said

the New York Public Interest Research Group’s Bill Mahoney.

“It’s possible that they either use obscure subsidiaries for their lobbying, or they rely on various trade groups to lobby on their behalf,” Mahoney said.

The ethics bill taking effect next year would require more detailed disclosures.

Other drilling fi rms may be watching and waiting—and not only to lobby.

“We have had numerous companies indicate that they would have come to New York and spent hundreds of millions of dollars if our state were more recep-tive to business,” said Brad Gill, executive director of the Independent Oil and Gas Association of New York State. “Instead they went to Pennsylvania, Ohio—or in some cases, they were here and have moved out of New York for our neigh-boring states.”

Now, Gill says, companies encouraged by the Cuomo administration’s release of an environmental impact statement that could pave the way for drilling in New York are showing new interest in the state.

Companies can’t simply fl ip a switch and start hydrofracking. Supplying and supporting the state’s emerging natural-gas-drilling industry will be an enor-mous undertaking across many business sectors—construction, environmental services, water handling and disposal, avia-tion, heavy equipment, hotels and more. It’s a complex machine that few New Yorkers have seen operating at full speed.

Lobbyists for this spectrum of indus-tries could see a windfall.

The Public Policy Institute of New York State, an arm of the Business Council, released a report last week that claims drilling will add 500 natural gas wells per year in the state, and will result in at least 62,620 direct and indirect jobs.

If drilling gets the green light, New York will see “the creation of an industry,” said Heather Briccetti, the Business Council’s acting president.

At the same time the industry is growing, however, the Department of Environmental Conservation that regu-lates drilling is facing deep staffi ng cuts.

Activists will likely call for the industry to pay heavy fees for drilling permits. Former Acting Environmental Commis-sioner Peter Iwanowicz said New York has a long history of charging industry to pay for its own regulation.

If DEC levies higher fees to accommo-date a burst of drilling activity, activists will watch whether the agency uses the money to hire more regulators or more permitting staff—and what infl uence all that lobbying money is buying.

“Industry has an important role in this discussion,” said Common Cause’s Susan Lerner. “But they have resources to domi-nate the discussion. They pay for a big mega-phone and are able to drown out everyone else. They can turn it into a propaganda war rather than a balanced discussion.”

[email protected]

Susan Arbetter reports from the Capitol in Albany for Central New York’s PBS station, WCNY in Syracuse. She hosts a daily live radio show, “The Capitol Pressroom,” and produces The Capitol Report, broadcast daily on television across New York.

Hydrofracking Bonanza—For LobbyistsBEYOND THE CAPITOL

“Industry has an important role in this discussion. But they have resources to dominate the discussion.”

As drillers see progress, spending in Albany rises

Rock there anymore without hearing tales Chesapeake has dubbed itself “Amer-

Susan Arbetter

Drilling buys more infl uenceLobbying by gas companies has skyrocketed over fi ve years

COMPANY2005

lobbying spending

2010 lobbying spending

Spectra Energy Partners (formerly Duke Energy Corp.)

$76,000 $265,000

The Williams Company $41,000 $259,177

Chesapeake Appalachia (since 2007)

$7,750 $200,663

Exxon Mobil $85,527 $147,118

Independent Oil & Gas Association of NY

$36,000 $132,000

Hess Corp. $72,000 $120,000

Talisman/Fortuna $96,000 $78,440

El Paso/Tennessee Gas Pipeline (since 2006)

$54,000 $60,000

American Petroleum Institute $40,500 $58,810

Conoco Phillips $18,000 $36,000

Natural gas companies are spending more on lobbyists in hopes of bringing drilling rigs like this to New York.

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www.nycapitolnews.comwww.nycapitolnews.com THE CAPITOL JULY 25, 2011 9PB JULY 25, 2011 THE CAPITOL

BY JON LENTZ

The state’s proposed ban on controversial gas drilling in New York City’s watershed has won

praise from some environmental groups as smart policy, but others note the move is also smart politics by the Cuomo administration.

In recent years New York City has been one of the most infl uential foes of hydraulic fracturing (hydrofracking), a drilling process that uses massive amounts of water and chemicals to break up shale deposits and release natural gas.

By banning hydrofracking in and around the source of the city’s drinking water, the state is not only allaying the Bloomberg administration’s concerns but potentially quieting a key opponent to pave the way for drilling in other parts of the state.

“It’s a very crafty political move by the administration, to divide and conquer, and to take the huge political force of New York City and its constituents out of play, and leave these small, rural communities to fend for themselves,” said Ramsay Adams, executive director of Catskill Mountainkeeper, an environ-mental group opposed to hydrofracking. “It’s very hard to organize an opposition across the vast expanse of the Catskills and the Southern Tier.”

In contrast with New York City, many of the rural areas where drilling would be allowed are struggling to revive their

economies, which could make hydro-fracking and the investment it brings an attractive option.

“The reality is that the economics are a really tough element to this,” Adams said. “Make no mistake, these are poor

communities. These are struggling farms. There’s not a lot of jobs.”

John Holko, secretary of the Inde-pendent Oil and Gas Association, said hydrofracking is already safe enough to

go ahead anywhere, and the state has delayed allowing permits long enough.

But Adams and other environmental-ists said they would continue to push to ban risky hydrofracking chemicals and to add more staff at the state Department of Environmental Conservation to enforce new regulations—and even to bar the drilling practice statewide.

If their efforts fail, the next step will be to sue to block, or at least delay, permits

for hydrofracking in the hopes that more study will strengthen the case for greater safety precautions.

“We will continue to advocate for improvements, and hope that we can move the agency,” said Kate Hudson, watershed program director for River-keeper, an environmental group. “If we are unable to, we are prepared to litigate, and there are a handful of other groups that would be joining us.”

A DEC spokeswoman said the agency is taking other steps to make sure drilling is carried out safely, adding that New York City’s unfi ltered drinking water requires further restrictions.

“Development activity of all kinds, not just high-volume hydraulic fracturing, is limited in these watersheds,” said DEC’s Emily DeSantis. “It would cost New York

City more than $9 billion to fi lter its water supply originating west of the Hudson River.”

Concerns about hydrofracking blew up in 2008 under Gov. David Paterson’s

administration, which issued prelimi-nary guidelines that some panned as shoddy and inadequate. In response, New York City commissioned its own alternative study for $500,000 in 2009.

“I do think it caused the state to take a much closer look at this because that report did raise a lot of important ques-tions,” said Katherine Nadeau, a program director for Environmental Advocates of New York.

A spokesman for the city Department of Environmental Protection declined to comment on the state’s updated proposal to protect New York City’s water supply, but Mayor Michael Bloomberg applauded Gov. Andrew Cuomo for making “the right decision” while allowing drilling elsewhere in a “rigorously protective and environmentally responsible way.”

“My administration said from the beginning that decisions on drilling had to be based on detailed scientifi c reviews,” Bloomberg said in a state-ment. “After completing our own inde-pendent study, it became clear that hydrofracking in New York City’s water-sheds would compromise our ability to maintain an unfi ltered water supply, and we vigorously advocated for a complete ban on drilling in the city’s upstate

watersheds. These new recommen-dations appear to adopt the restric-tions we sought.”

Some observers said they expect New York City to continue to play an important role as it carefully moni-tors the state’s actions, especially since hydrofracking may be allowed in areas where aging and potentially vulnerable water pipelines transport water to the city.

“A lot of New York City sees this and gets this as a statewide fi ght,” Nadeau said. “This is an issue where there has been a lot of unity. This is more than NIMBY. This is a social-justice issue.”

Holko questioned whether the city’s initial support for the state’s updated plan would have much effect.

“It will make it smoother,” Holko said. “There’s an understanding that the process is going to move, rather than throwing up a roadblock and saying, ‘It’s not getting past this point.’ Let’s continue down this path, and let’s

see where this gets going. I think whether it’s in the political climate or a business climate, everything has to start some-where.”

[email protected]

Divide And DrillCritics eye litigation as New York City hails Cuomo’s hydrofracking plan

New York State Environmental Commissioner Joe Martens.

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“It’s a very crafty political move by the administration, to divide and conquer, and to take the huge political force of New York City and its constituents out of play, and leave these small, rural communities to fend for themselves.”

Approximate Depth (in feet below grade)

Marcellus Shale Formation

6,500

6,000

5,50

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5,000

4,500

4,000

3,50

0

3,000

2,50

0

2,000

1,000

500

CORE AREA

Syracuse and New York City watersheds protected from drilling.

Joey Carolino

“The Corvette guy,” Ellen Biben said.The New York inspector general ran

a hand through her long blond hair and started to tell a story. She relishes the tale of her fi rst big case in her last job, when she was an ambitious prosecutor plucked to head an offi ce nobody paid much attention to.

The Corvette guy. James Leggiero, auditor at the state’s Offi ce of Mental Health. State salary of $79,500 a year, owner of several cars above his pay grade: a Cadillac Escalade and three Corvettes, including a classic from 1958.

“It’s not the case of the century,” Biben said. “But he was an auditor at OMH, and he set up an outside phony company called ‘V.I.P.,’ and they didn’t have great internal controls, so he was the one who got the invoices.

“He had control over verifying payments, so he was essentially authorizing checks to his made-up company for years.

“For ten years. Over a million dollars. He had six Corvettes.”

That was 2007. Since then, Biben has caught, or helped catch, bigger fi sh. She was the lead prosecutor on the pay-to-play investigation that brought down former

state comptroller Alan Hevesi. Her work on that case so impressed Andrew Cuomo that he named her to head the offi ce of inspector general – one of his fi rst acts on taking offi ce.

Her offi ce on the 21st fl oor of a downtown Manhattan skyscraper is big, complete with a view of the Hudson River. When she started as the head of the Public Integ-rity Unit in the attorney general’s offi ce, she had three people working with her. Now she has a staff of 59.

It may be a higher-profi le gig, but it’s not without its shortcomings. Biben is heading an offi ce that has been bruised for years by allegations of bias and accusations

10 JULY 25, 2011 THE CAPITOLwww.nycapitolnews.com

BALANCING ACTCan Inspector General Ellen Biben make a difference in Albany?

By Laura NahmiasAn

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of toothlessness. The inspector general has a $6.5 million budget and broad inves-tigatory authority over 50 separate agen-cies with more than 190,000 employees—but the offi ce has little enforcement power.

And the list of things she can’t do is long: She can’t bring an action against someone. She doesn’t have the power to bring an accusatory instrument like a complaint or an indictment. She can’t go into a grand jury and ask them to use an accusatory instrument. She can’t bring charges, she can’t sanction and she can’t ask a court to issue a fi ne.

As Cuomo positions himself as the savior of Albany and restorer of ethics and good government, where does that leave Biben?

“I’m still trying to wrap my arms around this,” Biben said. “When people ask me, ‘What do you do?’ I don’t even know what the answer is.”

Above all, Biben, 44, is regarded as a capable prosecutor. She has been able to advance in Cuomo’s

offi ce partly through her ability to command respect from the people she’s paid to argue for—and against.

Cuomo had never met Biben when he offered her a position as chief of the Public Integrity Unit, the arm of the attorney general’s offi ce that investigates govern-ment corruption. Instead she’d caught the attention of his chief of staff, Steve Cohen, when the two argued on opposite sides of a labor racketeering case. At the time, she was the deputy bureau chief of rackets under former Manhattan District Attorney Robert Morgenthau.

“She was as open-minded and fair a prosecutor as I had ever met,” Cohen said of their initial meeting. “I told the governor, ‘You’ve got to meet this woman. She’s absolutely the kind of lawyer you want.’ ”

What they wanted, Cohen said, was someone who could handle cases that “by their very nature attract attention, just because of the positions held by the individuals involved.” Cuomo’s offi ce wanted to pursue high-ranking offi cials, but needed a prosecutor who would tread carefully.

“Ellen has a rare ability to be both aggressive in the way she looked at cases, but very deft and subtle in her approach to the individuals involved,” Cohen said. “She was powerfully effective without wielding a sledgehammer.”

Former New York State Chief Judge Judith Kaye worked with Biben when the two investigated ex-Gov. David Paterson’s involvement in a former aide’s domestic violence case.

Biben knew there were some very important names that would be attached to the fi nal report issued in July of 2010, including those of Kaye and Cuomo, who was then preparing for his gubernatorial campaign.

“She had my complete trust,” Kaye said, “but I watched very carefully.”

She added, “This was an extremely,

extremely sensitive matter.”Biben’s supporters and her opponents

all end up emphasizing one trait.“Tough,” said Karl Sleight, former head

of the state Ethics Commission, who as a private lawyer now represents the subject of a Biben investigation, former SUNY Research Foundation chairman John O’Connor. “Tough but good.”

Biben does not look or sound particularly tough. She talks with her hands, has an easy laugh. She’s

self-deprecating.On this particular day she is wearing

multiple bracelets—a thick red cloi-

sonné bangle and a huge silver watch that sparkles in the sun. Around her neck she wears a long strand of Lucite baubles, and on her lower lids a trace of purple eyeliner. She commiserates about the stairs in the Capitol building in Albany, making travel up and down something of a challenge for those of the heels-wearing persuasion. On a particular day in July she has on a pair of three-inch black wedges, à la mode and yet functional.

Biben grew up on the Upper West Side, but her path to law and order was indirect. She graduated from Wesleyan University in 1987 with a degree in English literature, at a time when the school was a hotbed of fringe political activism. She did community theater, and the traces of liberal-arts education fl avor her speech. (She immediately recognizes a reference to Rashomon, a foundational fi lm of Japanese cinema.) She narrates cases with dramatic pauses.

A year ahead of her in college were Transformers director Michael Bay and Buffy the Vampire Slayer creator Joss Whedon, whose mom taught Biben high school English at Riverdale Country School. She doubles over at the sugges-tion she might bear some resemblance to the petite blond vampire slayer, knocking out the bad guys in Albany.

Biben attended law school at the University of Southern California, and clerked for a judge in Connecticut. She spent a short time as a litigator at Sullivan & Cromwell before deciding she wanted a job with more tangible results. She inter-viewed with Morgenthau’s offi ce, taking a job as an assistant district attorney in the rackets bureau.

She learned to spot patterns in corrup-tion, how to reconcile lies and bad memo-ries with paperwork that corroborated or disproved a story. She was named deputy chief of the rackets bureau in 2001, four years after she started.

When Biben accepted the Public Integrity Unit post with Cuomo in 2007,

she took over an offi ce that had been gutted by prior administrations but was suddenly facing its most high-profi le case in years.

State Comptroller Alan Hevesi had won reelection the previous fall, despite a charge by the State Ethics Commis-sion that he had used state resources to chauffeur his ailing wife to doctors’ appointments. Biben caught the case a few months into the job.

“I get there, I’m brand-new, don’t know what to expect,” Biben said. “The offi ce was certainly not about criminal public integrity. It was looking at ethical viola-tions, confl icts of interest. If anything had

a criminal element, they didn’t do it.”Biben approached the Hevesi case

with a dual method. The lawyers in every branch of Cuomo’s offi ce were instructed to fi nd creative ways to pros-ecute cases, because attorneys general have limited authority in criminal cases. They were told to use the Tweed Act and the Martin Act—decades-old laws that were primarily used combating securities frauds—to help prosecute public corrup-tion.

Biben and fellow prosecutor Linda Lacewell approached the Hevesi investi-gation the same way one would attack an organized-crime web. Only in hindsight, noted Biben, does the case appear to have fi t the bill; at the time, “we weren’t even sure what it was,” she said. When the case was given to her, she was asked to look into Hank Morris, the placement agent whose activities provided her an investigative entry point into the pay-to-play racket.

“You say ‘Hank Morris’ to some people and they’re like, ‘Oh, Hank Morris!’ ” she said. Biben, who describes herself as nonpolitical, said she didn’t even know who Morris was at the time. Now, however, she has become so familiar with the case that Attorney General Eric Schneiderman’s offi ce has retained her as a special attorney general to handle ongoing sentencing hearings.

What she learned from the Hevesi case she plans to apply to the IG’s offi ce—an

approach that combs through individual cases looking for evidence for a systemic problem, what Biben calls “teachable moments.” The Hevesi case eventually led to changes in the way the state manages its pension system, and she hopes investigations in her new post can do the same. Her probes so far, into parking-placard abuse, into various frauds by state workers, have been lauded.

But chasing after Albany’s bad guys

without enforcement power has been a challenge for every inspector general who ever dug into a case, only to fi nd that recommendations for an employee’s dismissal or for further investigation were summarily ignored—by law enforcement, by the press, by other state agencies.

Friendly relations between the state’s investigative agencies help cut down on procedural errors. And experts say Biben has to know the other state agencies well enough to know when an investigation should be referred elsewhere.

“You don’t want to bungle an investiga-tion by having people who aren’t trained do something that violates someone’s constitutional rights,” Sleight said. “Then you’ve lost your whole case.”

Biben should be able to combat this diffi culty in part because of her closeness with some of the agency

heads who moved with her from the prior Cuomo administration, like Commission on Public Integrity Chairwoman Mitra Hormozi and State Police Superintendent Joe D’Amico. Familiarity can make it easier to press her cause.

Good-government groups say it is also her greatest liability. To be an effective IG, they say, Biben must show total inde-pendence from Cuomo.

“Everybody that gets into a position in government where they are in an inves-tigative capacity is appointed by some-body,” said David Grandeau, former head of the state’s Temporary Commission on Lobbying. “There’s no original sin here.”

What is original about Cuomo’s administration is the degree to which he has relied on close lieutenants from his attorney general days and former aides to his father to fi ll top posts in his new administration. The staff is close-knit, giving rise to an undercurrent of concern: Is the Cuomo team too tight to maintain agency independence? Can they police themselves?

Cuomo’s infl uence over the inspector general’s offi ce seems particularly strong. He has made a point of publicly announcing his desire for the IG to inves-tigate state problems like rate setting at the Long Island Power Authority. Last week, a New York Post editorial described the governor’s request for Biben to look into the state racing authority with this headline: “Cuomo Sics Inspector General on NYRA.” Cuomo, the headline implied, calls the shots.

At a news conference this spring, he directed Biben to look into allegations of corruption at the SUNY Research Foun-dation, even as the agency had already come under investigation by the Commis-sion on Public Integrity and the state comptroller’s division of investigation.

Biben wouldn’t comment on the number of investigations she’d under-taken at the specifi c behest of the governor, but said inter-agency closeness helped more than hindered.

“To be independent and be able to do your job with integrity does not mean you need to be strangers,” Biben said. “We all

www.nycapitolnews.comTHE CAPITOL JULY 25, 2011 11

just because of the positions held by the

“There’s hope that there will be some return to normalcy. I think at the same time there’s been a bar that’s been set, in terms of a willingness to investigate. The expectations for ethical conduct are now very high.”


know each other—not because we were hanging out and all decided to get these jobs. We know each other because we were brought together in a professional environment.”

The office has to maintain the appearance of being completely nonpartisan, even if that means proactively auditing the executive chamber. Cuomo himself pressed that point in a 2001 New York Times article when Gov. George Pataki’s former inspector general, Roslynn Mauskopf, was being considered for U.S. Attorney for the Eastern District. At the time, Cuomo was leaving the Clinton administration and preparing his ill-fated first run for governor.

“As inspector general,” Cuomo told the Times, “Mauskopf has been noticed only for her conspicuous silence. She has failed to press a single investigation of any major offi-cial in the Pataki administration.”

“The office should never be political,” said Joseph Spinelli, who served as inspector general and under former Gov. Mario Cuomo and ethics commissioner under Paterson. “I’m not going to opine on Pataki’s administration, but I will say that after I left office, senators said, ‘This isn’t a patronage office.’ I’m not sure that was duplicated under Pataki.”

Biben is currently working on 250 active investigations, out of more than 2,500 complaints

it receives each year. This is partly the result of her own indefatigability—Spinelli said she drew comparisons to the Energizer bunny—and partly the result of a changed investigatory climate in Albany.

The state has multiple ethics-enforcement agencies, but even these have been plagued by allegations of abuse in recent years. The IG’s office suffered under the Spitzer adminis-tration, when Kristine Hamann was forced to resign following revela-tions she had treaded softly around a Troopergate scandal that directly implicated the governor’s secretary, Richard Baum.

One of the outgrowths of Troo-pergate was a series of reports that recommended changes to New York’s ethics-enforcement system. One, by the New York State Commis-sion of Investigation, concluded that “several agencies with competing interests, each of whom lacked suffi-cient jurisdiction to conduct a thor-ough investigation into all of the issues, created a situation whereby investigations were conducted in a piecemeal fashion.”

The verdict was harsh: The agen-cies caused lengthy delays and burdened taxpayers. New Yorkers had lost “confidence in the state’s ability to police itself,” the report concluded.

This has resulted in conflicting

suggestions. One report sent to Cuomo’s efficiency task force suggested consolidating more power underneath the IG—giving the office the ability to investigate state agen-cies that already have their own IGs by statute. Other reports suggested rolling the IG’s functions into the attorney general’s office. Some reports suggested investigations had taken on the flavor of politics; that they overlapped and were redundant.

Cuomo, Schneiderman and other officials elected last year came to Albany promising to sweep the capital clean. But that has led to suggestions of conflict as the agen-cies try to out-police one another, a charge they all deny if asked.

“No one’s out to try to get their name in the paper; they’re just trying to save taxpayer dollars,” says Nelson Sheingold, who heads up the division of investigations in the comptroller’s office, one of the agencies auditing the SUNY Research Foundation.

Still, Cuomo likes to consolidate power under his own handpicked deputies, Biben among them. He also is not immune from politicking under the banner of ethics. Critics note that when the governor was attorney general, his Troopergate report devoted more pages to raking Spitzer across the coals than it did looking into allegations former Senate Majority Leader Joe Bruno had broken the law.

Cuomo also has been attacked for conducting the state’s business under a veil of secrecy—concerned more with results than with getting them in a transparent fashion.

“I think Cuomo is one of the best political operators I’ve ever seen,” said David Grandeau. “But there’s a big difference between operating politically, and redoing ethics in New York. You can’t do it behind closed doors; you have to do it way out in the middle of State Street, so everyone can see what you’re doing.”

Politics can be the enemy of a good inspector general, and it’s an area in which Ellen Biben,

by her own admission, has little expertise.

In the Troopergate shuffle, when then Inspector General Joseph Fisch recommended the dismissal of CPI commissioners for their ethics viola-tions, Paterson followed up and asked for their resignation.

The CPI declined, and subse-quently opened an investigation into Paterson’s receipt of free Yankees tickets. They fined him $60,000, and eventually Paterson dropped his reelection bid. The Yankees Enter-tainment Group wasn’t investigated.

Good-government groups still have high hopes for Cuomo’s admin-istration—and for Biben.

“I think we just went through a dark decade,” Sleight said. “There’s hope that there will be some return to normalcy. I think at the same time there’s been a bar that’s been set, in terms of a willingness to investigate. The expectations for ethical conduct are now very high.”

Cuomo will stake some of his legacy and future political aspira-tions on how well he can clean up Albany’s notorious standards for doing business. He negotiated a tough but flawed ethics bill, though he has yet to sign it. And he has Biben.

She is no shrinking violet. She was on the varsity swim team in college; she does push-ups every day. She turned down personal gain as a litigator for the thrills of sniffing out corruption. And if she gets a complaint about the governor who appointed her, or anyone on his staff, she insists she’ll treat it as seriously as any other.

“The office reviews every complaint that comes in,” she said. “I swore an oath to this job and I fully intend to uphold that oath.”

[email protected]

Corruption BustersThe inspector general is just one of several authorities with power to probe wrongdoing in New York state, but each has limits:

INSPECTOR GENERAL: Ellen Biben

Investigates 190,000 employees of the 50 state agencies with heads appointed by the governorPowers: Can issue subpoenas, compel witness testimony and investigate any complaint within its jurisdiction without a referralLimits: Lacks prosecutorial power, reports to governor’s secretary

ATTORNEY GENERAL: Eric Schneiderman

Investigates anyone thought to have broken New York lawPowers: Can file civil lawsuits or bring criminal chargesLimits: Needs referral from a state agency to pursue some criminal matters within it

COMMISSION ON PUBLIC INTEGRITY: Chairwoman Mitra Hormozi

Audits elected officials, executive branch officers and employees, as well as lobbyists, their clients and public benefit corporationsPowers: Can audit, investigate and levy finesLimits: Can’t make findings public until investigation ends, subject to political pressure

JOINT COMMISSION ON PUBLIC ETHICS: Chair to be determined

Audits elected officials, executive branch officers and employees, as well as lobbyists, their clients and public benefit corporationsPowers: Can audit, investigate and levy finesLimits: Three members of 14-member commission can decide to quash an investigation

LEGISLATIVE ETHICS COMMISSION: Chaired by Sen. Andrew Lanza and Assemblyman Daniel O’Donnell

Investigates ethics complaints against legislatorsPowers: Can censure sitting lawmakersLimits: Has history of ineffective oversight; investigations are confidential until findings are issued

PUBLIC AUTHORITIES BUDGET OFFICE: Director David Kidera

Audits New York’s myriad public authoritiesPowers: Can issue reportsLimits: Has limited staff and resources —Laura Nahmias

[email protected]

Ellen Biben (right) with former Manhattan District Attorney Robert Morgenthau (center) and colleagues as they announce an indictment in 2002.

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BY LAURA NAHMIAS

In the real world, Assemblyman William Boyland Jr. represents a tough corner of Brooklyn and is under

indictment on corruption and bribery charges. But most days this year, Boyland goes to another place, a virtual place, where he’s the mayor of his own thriving city—William’s Town.

The place is CityVille, a Facebook game where users create their own city. And Boyland doesn’t just play the game on his personal time.

A comparison of Boyland’s Face-book activity with a record of Assembly sessions shows the scandal-scarred pol logging on when he is supposed to be doing the people’s business. Boyland sponsored zero bills and missed one-third of the Assembly’s sessions—ranking dead last in the chamber on both measures—for his $79,500 state salary. But he wasbusy—on Facebook.

On June 21, when the Assembly debated and voted on bills—including an extension of rent regulations—from 10:34 a.m. to 8:21 p.m., Boyland was tending to William’s Town.

At 5:44 p.m., William’s Town’s virtual police needed a feeding. On his Face-book wall, Boyland wrote he needed “donuts to fuel hungry cops.” The fuel was necessary, the post noted, “to apprehend the bandits.”

An hour earlier, he posted a request to Facebook friends to help upgrade the William’s Town Mall. He logged on to CityVille at least seven times that day, while the Assembly was still in session.

He missed the Assembly’s sessions on March 23 and 24, but appears to have spent the entire night between them playing CityVille, posting game updates seven times between midnight and 8 a.m.

On May 9, Boyland skipped the Assem-bly’s three-hour session but spent the better part of the day playing CityVille, posting updates at least 12 times that day.

He was absent with an excuse for the Assembly’s June 6 session, but he managed to do some work in CityVille and post a video about prisons during the four hours the chamber was in session.

While a spokesman for Boyland did not return a request for comment, his social-networking habits did not go unnoticed.

“He was rarely there, and when he was, he often seemed distracted by his phone, and the leadership and their staff often had to remind him to press

the button and vote,” said one Assembly Democrat. “He seemed often distracted by whatever was going on on his smart-phone.”

Boyland missed 20 of 60 Assembly session days this year. Perhaps he over-slept: His Facebook logs reveal that on the nights before sessions he skipped, he frequently stayed up taking care of William’s Town or uploading links to music videos between midnight and 6 a.m.

When news broke of the indictment on March 11, he stayed away from the Assembly for weeks. But late on March 20, Boyland clicked the Facebook button to “like” the New York State Assembly.

CityVille is one of a suite of games for Facebook that encourage social inter-action. Boyland also dabbled in other popular Facebook games like FarmVille, FrontierVille and Mafi a Wars.

His preferred game appears to be CityVille, which he plays almost every day. On days when the Assembly is adjourned, he updates the feed as often as 12

times a day.CityVille can be addictive, as the Wall

Street Journal noted earlier this year.“CityVille is the perfect hospital-

waiting-room activity,” wrote Liz Gannes. “Unlike in a real city, everything you can possibly accomplish in the game is good. You receive money, goods, reputation points, energy and random bonus prizes constantly.”

In William’s Town, Boyland spends time catching thieves, planting fl owers, getting endorsements and engaging in other expressions of civic pride. And it’s not necessarily against Assembly rules to play games on your phone while you’re supposed to be working, said Ron Canestrari, the Assembly’s majority leader.

“It’s done; it’s hard to stop them; I hate it. But as long as someone’s not loud or disrupting things,�people do use them—go to the rear of the chamber, the front of chamber; they walk out,” Canestrari said.

He described Boyland as a “very quiet and private individual” with a “great sense of humor.”

Other Assembly members who sit near Boyland say he was virtually invisible, even when he was present.

“He didn’t spend much time in the seat,” groused Assemblyman William Magee, an upstate Democrat who sits directly behind Boyland.

“Other than that, he was kind of a low-profi le guy, didn’t speak out much in the session,” Magee observed. “I didn’t have

much to do with him.”Boyland joined the

Assembly after a 2003 special election that put him in the family business. Both his father and his uncle are former Assembly members, and his sister, Tracy Boyland, is a former New York City councilwoman.

Experts on social media say his habits may seem familiar to some political observers.

“Obviously, it all sounds a bit like Rep. Weiner’s circumstances—without the sex, of course,” wrote Stuart Fischoff, senior editor of the Journal of

Media Psychology. “Both poli-ticians hung out in alternate realities and utilized social media like Facebook and Twitter.”

The game would make sense in the context of problems in Boyland’s daily life, Fischoff suggested.

“It would seem as though, increas-ingly, cyberspace and virtual reality are risky or questionable environments to inhabit for politicians who go there for some gratifi cations they can’t satisfy in the real world, be it sex, power, political success, or other drive or fantasy urges,” Fischoff said.

[email protected]

Mayor Of William’s TownAssemblyman William Boyland Jr. plays Facebook games on his phone during legislative sessions

Facebook that encourage social inter-action. Boyland also dabbled in other popular Facebook games like FarmVille,

the Assembly is adjourned, he updates the feed as often as 12

CityVille can be addictive, as the Wall noted earlier this year.

“CityVille is the perfect hospital-waiting-room activity,” wrote Liz Gannes. “Unlike in a real city, everything you can possibly accomplish in the game is good. You receive money, goods, reputation points, energy and random bonus prizes

In William’s Town, Boyland spends time catching thieves, planting fl owers,

much to do with him.”Boyland joined the

Assembly after a 2003 special election that put him in the family business. Both his father and his uncle are former Assembly members, and his sister, Tracy Boyland, is a former New York City councilwoman.

Experts on social media say his habits may seem familiar to some political observers.

sounds a bit like Rep. Weiner’s circumstances—without the sex, of

Media Psychology. ticians hung out in alternate realities and utilized social media like Facebook and

“He was rarely there, and when he was, he often seemed distracted by his phone, and the leadership and their staff often had to remind him to press the button and vote.”

Photo illustration


BY RICHARD BRODSKY

The Battle of Indian Point is heating up, and the stakes are huge.

The Fukushima Daiichi disaster in Japan was real and scary, reinvigo-rating the long-standing debate about the dangers of nuclear power and the failures of the Nuclear Regulatory Commission. In New York, Gov. Andrew Cuomo wants to close Indian Point as too dangerous, and a supportive coalition is emerging. Mayor Bloomberg and the nuclear industry are arguing we need the electricity.

For the political class, it’s a new fi ght to watch—but framing it as a political battle masks real dangers. There’s too much at stake to let that happen. So what are the realities, and how will they impact New Yorkers?

Is Indian Point dangerous? The chances of a catastrophic accident and radiation release at Indian Point are small. But the consequences of that small chance are so overwhelmingly disastrous, so economically destructive, so capable of causing untold death and suffering, that

we can’t just shrug our shoulders and hope. We need the truth, and that’s been withheld from us.

Location, location, location. The dangers are intensifi ed because of Indian Point’s location. No other nuke plant is located within 50 miles of 23,000,000 people. What may be acceptable risk for a plant on the Great Plains is not acceptable 30 miles from the capital of the world. Even the NRC admits that siting the plant so close to the city couldn’t happen under today’s rules. And Indian Point is just a few miles from the city’s water supply, so even a moderate release of radiation could close down the city.

What are the safety issues? Indian Point has long been plagued by concerns over fi re safety, spent fuel storage, earthquakes, terrorism, evac-uation plans and operational failures.

The NRC has secretly let the plant use defective fi re insulation on electric cables that shut down the reactor in an emergency. There’s an unprotected underground gas pipeline a few feet from the plant. There are dozens of design defects that make a fi re more likely and harder to extinguish.

Thousands of tons of highly toxic spent fuel (radioactive strontium, iodine, pluto-nium, etc.) have no physical protection,

unlike the reactor itself, which is under a concrete dome. The Ramapo earth-quake fault runs right under the plant. The chances of a major earthquake are small, but not crazy-remote. The 9/11 terrorists fl ew over Indian Point on their way to the World Trade Center. The spent fuel pool is an especially inviting target, God forbid.

For years the NRC admitted Indian Point was the most danger-ously operated plant in America. The evacuation plans are an elaborate, unworkable joke, covering only those within 10 miles of the plant. The NRC said the Japanese should have a plan for those within 50 miles of Fukushima.

Is it cheaper than other power? Nope. Because of the way electricity is sold, New Yorkers pay Indian Point the highest price paid to any energy generator, not its true cost of producing the power plus profi t. Indian Point produces power for around 2 cents a kilowatt-hour and is paid about 10 cents. It is an incredibly lucrative consumer rip-off.

What about the NRC? The NRC is the real problem. It is to Indian Point what the Securities and Exchange Commission was to Wall Street three years ago. It’s in the pocket of the industry, and its malfea-sance is ghastly and dangerous. It’s granted

thousands of secret “exemptions” to safety rules. It lets plant operators ignore safety rules if they cost money. It’s trying to extend the operating life of old, dangerous plants without analyzing their safety dangers. The same kind of stuff happened in Japan.

Folks who raised these issues used to be marginalized by the press and the nuclear industry as kooks. Fukushima changed all that. There’s a genuine hunger for a rational exploration of all these issues, and for a hard look at the NRC’s awful record. Credit goes to Cuomo for mainstreaming these concerns: He took this position years before Fukushima, and he’s not backing down so far. But the big boys are lining up.

Will Cuomo stick to his guns? Why is Bloomberg protecting Entergy, Indian Point’s owner? Can Obama fi nd a way to pay genuine attention to safety issues while continuing to favor new nuke plants? Can the pro-nukes get away with painting the opposition as left-wing outsiders?

There’s nothing wrong with a political fi ght between insiders over Indian Point’s future. But we need to focus on the facts that have so far been kept from us. We need a grassroots coalition to raise ques-tions, a skeptical press, an end to the polit-ical power of the nuclear industry and a trustworthy, independent look at all these things. Now. Before we all glow in the dark.

Richard Brodsky is a senior fellow at Demos, a NYC-based think tank, and at NYU’s Wagner School of Public Administration.

BY JOHN FASO

The late columnist William Safi re used to refer to dense topics as “MEGO”—“my eyes glaze over.”

Most New Yorkers would rather discuss scandals, trials and emotional issues like same-sex marriage than a MEGO topic like state mandates on local governments and school districts.

But mandates matter—because, to paraphrase Willie Sutton, mandates are where the money is.

Let’s agree at the outset that not every mandate is bad. Who would argue with New York requiring schools to offer a free K–12 education for every child, or ordering hospitals to treat everyone seeking emergency care?

Some mandates, however, no longer make sense—and their price tags quietly add up.

Albany’s biggest mandate may be the requirement that county governments and

the city of New York bear a large share of the non-federal cost of Medicaid, which pays for health care and nursing homes for the poor. With about 8 percent of the nation’s Medicaid recipients, New York bears about 16 percent of the nation’s Medicaid cost.

This is in part traceable to a decision known as “Rocky’s mistake.” Mandating a local share of Medicaid back in 1965 was perhaps Nelson Rockefeller’s worst decision as governor, because it sepa-rated state government, which confers the benefi t, from the county governments that have to foot a large share of the bill.

Other mandates govern how contracts with public employee unions are negoti-ated. It is an open secret in Albany that public unions have until recently run rough-shod over taxpayers. They use their elec-toral power to pressure the Legislature to enact favorable rules governing contracts, pensions and health benefi ts. What they don’t get in collective bargaining, they try to get the Legislature to enact in laws —like mandated time off for cancer screenings.

Which brings us to Gov. Andrew Cuomo’s property tax cap. New York’s

property tax burden is 70 percent above the national average, and the public is over-whelmingly in favor of the cap. But unless Cuomo and the Legislature get serious about reforming mandates, local govern-

ments and school districts will soon face dire fi nancial conse-quences. Raising local taxes is no longer an easy option; reducing expenses—espe-cially public employee bene-fi ts—will become a necessity.

New York’s “Triborough” law requires that all terms of expired contracts be continued until a

new agreement is reached, which protects employees but takes away bargaining power from their governmental employers.

Health insurance is an enormous and growing cost for taxpayers, thanks in part to the Triborough law. State employees pay 10 percent of the cost of single coverage and 25 percent of family coverage, levels which will rise under new state union agreements in Albany.

But for local and school employees, paying nothing is the norm. Arbitrators recently ordered the Rockland County town of Clarkstown to pay 3.5 percent retroactive raises for a police force with

a $142,000 average salary. Adding insult to injury, arbitrators ruled offi cers shouldn’t pay anything for health insurance because no other local police are required to pay anything for health insurance.

These rulings have their basis in state laws, which also dictate numerous other rules about how union contracts are nego-tiated, public works contracts are bid and benefi ts are paid to retirees. If a local government or school district wanted to set up alternative pension arrangements, like 401(k)-type plans for new employees, forget it—pension policies are dictated by state law.

Cuomo says public pension reform is a high priority for next year, but this won’t be nearly enough. Reforming state mandates is essential to making the prop-erty-tax cap a success—and more impor-tant, bringing back economic growth and opportunity for New Yorkers.

These mandates are unquestionably MEGO—but they are so costly and so deeply embedded in the New York status quo that Albany needs to bring a clear-eyed determi-nation to the task of reforming them.

John Faso is a former minority leader of the state Assembly and was the Republican candidate for governor in 2006. He is a partner in the Albany offi ce of the national law fi rm Manatt, Phelps & Phillips, LLP.

New York’s Mandates Are Eye-Opening

John Faso

Costly requirements push New Yorkers’ taxes ever higher

PERSPECTIVES

Richard Brodsky

Ready To Glow In The Dark?The battle of Indian Point should be waged on substance, not politics


BY BRUCE GYORY

One root of Albany’s past dysfunction has been the Legislature’s propensity to

ignore public opinion. After a session rightly hailed for actually working, the Legislature faces a new test: drawing new district lines in a way New Yorkers can accept as valid.

Which party wins control of the New York State Senate in 2012 is very much in doubt, but I believe partisan gerryman-dering to maximize Republican strength will fail. Senate Republicans can hold their majority at the polls by gaining the support of voters outside their base, but they cannot hold it by trying to create a predetermined majority of Republican seats through reapportionment.

New York Republicans’ traditional practice to increase strength is to divide their upstate areas of strength among many underpopulated districts, while culling Democratic-leaning minority neighborhoods from friendly downstate districts.

That is unlikely to work any more in an increasingly Democratic New York.

The Republican registration defi cit is so profound that partisan gerrymandering is probably not enough to create a safe Republican majority, and in a reform-friendly political climate, any attempt to do so will likely spur a potent polit-ical backlash.

For the fi rst time, reform groups are organized under former Mayor Ed Koch’s media-savvy banner to stop partisan redistricting, bolstered by near unanimity among editorial boards. Most importantly, Gov. Andrew Cuomo supports an inde-pendent redistricting commission and has vowed to veto any map drawn with partisan lines.

Let’s take a step back to examine the context of this controversy. The stale-mate we see in Congress over the debt-limit extension is a case in point. There is a clear consensus in public opinion for a debt-limit extension accompanied by signifi cant defi cit reduction, made up mostly of cuts but also increased reve-nues.

But the dominant wings in both congressional parties appear primed to ignore this consensus. If there were 200 truly competitive House races instead of only 70, perhaps the consent of the

governed would not be so cavalierly dismissed.

Moreover, Cuomo’s legislative achieve-ments this past session were predicated upon his transforming the Senate’s polit-ical instability into a sturdy governing tool. The governor was able to work

with all factions in the Senate to craft different coalitions, enacting an on-time budget, a property tax cap and same-sex marriage.

The greater the number of competitive districts, the more likely Cuomo’s creative template can be replicated, precisely because the Legisla-

ture will then see the same electorate the governor sees.

Will the Legislature fi ght back? Lawmakers could band together against the governor to preserve what they consider their redistricting prerogatives. They could block Cuomo’s program next year as leverage, returning Albany to dysfunction.

Yet if the governor vetoes a traditional reapportionment plan, the votes will not be there to override it, especially in the Senate. That path ultimately leads to a court-appointed special master drawing the lines, a nightmare of unpredictability for incumbent legislators.

Is there a principled compromise to avoid a pitched battle between Cuomo and the Legislature? They could set up a redistricting commission with signifi -cant legislative input but not legislative

control. And if that commission acted responsibly—with a tight population balance in all districts, and commu-nity contiguity—public opinion would support that plan.

Quinnipiac University’s late-June poll showed 42 percent of New York voters support an independent commission, 34 percent want a commission with legisla-tive input and only a paltry 14 percent support traditional legislative control. Koch and the editorial boards might support this compromise, if the statutory standards had teeth.

Without such a compromise, I can see no political reason for the governor to rescind his veto promise and break faith with his reform pledge.

Bruce Gyory is a political consultant at Corning Place Consulting in Albany, and an adjunct professor of political science at SUNY Albany.

The Lines Are Clearis probably not enough to create a safe tool. The governor was able to work

Bruce Gyory

Partisan district lines could spur a backlash The Republican

registration deficit is so profound that partisan gerrymandering is probably not enough to create a safe Republican majority.


By Andrew J. HAwkins

August 1 may be just another Monday for most New Yorkers, but in Nassau County, it’s

Election Day.That day, the county government will

open the polls and ask residents to vote on whether to go forward with a multimillion- dollar development project to build a stadium for the New York Islanders hockey team and a surrounding busi-ness hub. If approved, Islanders owner Charles Wang has promised to bank-roll the project, which will include $400 million in county subsidies.

But while County Executive Ed Mangano is confident Nassau residents will approve the project, others are raising questions about the legality of the vote, how it is being promoted and the elec-tion’s $2.2 million price tag. And though those questions probably won’t derail the vote itself, the project could run into problems when it eventually goes before the county legislature for final approval.

Some county officials are looking to state and local authorities for help. Nassau District Attorney Kathleen Rice is reportedly looking into the question of whether Mangano’s administration improperly used public resources to promote the referendum.

Meanwhile, William Biamonte, Demo-cratic commissioner at the Nassau County Board of Elections, asked Attorney General Eric Schneiderman on June 23 to weigh in on the legality of the referendum. There is some disagreement as to whether or not the vote is legally binding: Mangano’s office argues it is; the Board of Elections insists it’s not.

Schneiderman’s office declined to look into the matter, a spokeswoman said, saying the request must come from the county attorney’s office, not the Board of Elections, to be considered.

“Should the county attorney request an opinion, our office will review the matter,” said the spokeswoman, Lauren Passalacqua.

But Biamonte says the county attorney is unlikely to request an opinion, seeing as

how the referendum is Mangano’s brain-child, and County Attorney John Ciam-poli is a Mangano appointee. The vote will require opening 385 polling locations and tapping some 5,000 election workers, which Biamonte and other Democrats consider a waste of taxpayer dollars.

“This is just bad policy,” he said. “Spending $2.2 million to hold a referendum on August 1st, which I think will be a suppressed-turnout election, makes no sense.”

Paul Sabatino, former counsel to the Suffolk County Legislature, who oversaw dozens of referenda, agrees with Biamon-te’s assessment. He said legislation autho-rizing the vote contains obvious legal loopholes that could throw the entire process into question.

“I challenge anybody to go read the bill that was adopted at the end of May and find the language that talks about doing all the things they’re talking about doing,” he said.

Sabatino also questioned Wang’s offer to pay the referendum’s $2.2 million price tag if the vote turns out in his favor. If the stadium project is rejected, however, the county will have to cover the bill.

“You can’t buy and sell referenda to private citizens,” he said. “Either it’s a binding referendum or it’s not.”

Nassau County Clerk Bonnie Gerone says the vote is not binding. Several county legislators have indicated they may vote against the stadium project if the majority of residents in their respec-tive districts reject the ballot measure. And the chairman of the Nassau County Interim Finance Authority, which has not taken an official position on the stadium, warned that if approved, the project could result in a small property tax increase.

A spokeswoman for Mangano dismissed claims the referendum was illegitimate or legally questionable, arguing it was neces-sary to give residents the final say over an expensive development project.

“We’ve had so many plans in the past fail,” said Katie Grilli-Robles, press secre-tary for Mangano. “Now this is an oppor-tunity for people to say ‘Yes, this is what we’re doing.’ ”

[email protected]

Islanders In The StormPlan for a new hockey stadium in Nassau is up for a vote, but legality and price tag are questioned

If the vote passes, Islander owner Charles Wang, left, will pay for the cost of the referendum. If it fails, Ed Mangano, right, and the county government will foot the bill.

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Banks and Financial Services

Q: How will the creation of the state Department of Financial Services affect the balance between safeguarding consumers and promoting the banking industry?

Joseph Griffo: A lot of that has yet to be determined, because this is going to be a new construct. I do believe that [Ben] Lawsky is a capable man. It was a good ap-pointment by the governor. And through my interaction with him, I found him to be capable of modernizing the

department, streamlining the department, and as a result fi nding the balance nec-essary for the department to deal with a number of issues. I still believe that the primary focus of that department will be the banking industry and the insurance industry. Many of the proposals initially [were] to put the consumer affairs in that department, and the consensus agreed that it would not be the case.

Malcolm Smith: The merger will actually become effective around October 3, 2011. What’s most important is being able to regulate the banks while still making sure the insurers will still have their protections; and I think the Department of Financial Services, while still cutting costs and being more effi cient, clearly minimized their focus on oversight of the banks and insurers. I know that for the governor as well as myself, the consumer protection is the number one thing for us, while still making sure that the banks in the state and the city can thrive, because obviously New York City is the fi nancial capital of the world.

Q: How will the U.S. Consumer Financial Protection Bureau in-teract with DFS? Are there any foreseeable problems? Overlap?

Griffo: We’re going to have to wait [to see] how this all unfolds. If we end up encountering a problem, we’re going to have to review it and determine how we deal with it.

Smith: The banking and insurance industry are very much intimately related, which is a pretty complicated system. The bureau of consumer fi nancial protection, clearly, was birthed in July 2010, the result of the Dodd–Frank Financial Reform Act that, obviously, the president pushed, very much so. That consumer fi nancial protection board does have some broad-based authority. They’re doing more for federal banks instead of state banks, but I believe that the bureau of consumer fi nancial protection, as well as our Department of Financial Services, are going to morph to what their respective roles are. I do believe they will be complementary.

Q: Access to credit for small businesses is tight all across the country, a problem New York entrepreneurs are acutely aware of. What can govern-ment do to ease credit restrictions on small businesses?

Griffo: Right now about 30 percent of the banking industry is regulated in New York State, and 99 percent of the insurance industry is regulated. We need to see if there are areas [in which] we need to review regulations that could be problematic, and we need to look at regulatory review, to put it in a position where more people are reliant on state charters than on federal charters, because we want to see state charters grow.

Smith: The governor and I are partners in an effort to increase minority-owned and women-owned business involvement in state government. There are some 1.9 million small businesses in the state of New York, of which 50 percent of them are minority-owned, women-owned businesses. In this last round of budgeting, we’ve put in about $50 million toward small businesses, Main Street business that can access that capi-tal. That’s a little bit where I fault the Obama administration. When they put the capital into the banks, they didn’t put the restrictions on how they’re supposed to lend that money. But you’ve also got the Economic Development Council that [Bob] Duffy and Ken Adams are going to be overseeing. While their $130 million is not going directly to small businesses, when they infuse that capital as a stimulus to economic develop-ment projects, then the small minority-, women-owned businesses will be ancillary benefi ciaries of it.

Q: Given the spate of fore-closure fraud exposed over the past year, what needs to

be done to protect mortgage holders?

Griffo: The agency has been digging into the banking industry and trying to stir up lawsuits as a result of the housing crisis. We want to make sure this doesn’t become something that is just a posture. We want to do it respon-sibly. The federal government, in my opinion, with Fan-nie Mae and Freddie Mac, were culpable as any of the banking companies for some of the mortgage crisis, some of the quick foreclosure schemes that were recurring throughout the nation. Some of the banks may still be reluctant to forgive debt because the market is reducing the prices of homes. Where balance comes into the equation here—we have to take a look at: What were the causes? What is worthy of further investigation or review, if indeed there is a practice that is contributing to the problem?

Smith: Two things that I did that passed the Senate before we left: One is [the] mortgage-fraud issue on licensing. It puts the onus on the banks, as well as

mortgage bankers, to report their licenses. And the second piece I did allows the Department of Financial Services and the attorney general

to work more closely together. So I think the attorney general is going to be the one who’s really focusing on that, and they’ve got three or four divisions. They’ve got the Criminal Prosecutions Bu-

reau that investigates and prosecutes criminal mortgage fraud. [The attorney general] has his Civil Rights Bureau that dealt with predato-

ry lending. And obviously he had his Investor Protection Bureau that dealt with the whole mortgage-backed security issue when we had the

fi nancial crisis. I’ve been talking to Attorney General Eric Schneiderman, and we’ve talked about ground zero being Southeast Queens, that I represent. He’s going to be looking to have some cases he will investigate on our end, with some of the bigger mortgage-backed security fraud issues.

Q: What other topics need to be addressed?

Griffo: Our priority should be to try to reposition Wall Street to assure that the city and the state continue to be the world fi nancial capital. We need to regain that prominence, so we’ve got to make sure that the climate is friendly in that regard. There’s going to be a lot of things that have to be done. Some of it has to be refl ec-tive of the economic condition. We see improvement in the economy; do we learn from some of the mistakes and errors of the past? And as a result of that, do we put together policies that do that again, [in] that we are trying to see the industry grow, we’re trying to protect the needs of the consumer and the people that deal with institutions? I think there’s a lot on the plate, but I do believe that this should be the vision and the practice of the administration and the Legislature, to ultimately reestablish that prominence. I think it’s still there, but we want to ensure that we re-instill that, nationally and globally, where people look to New York, both to the city and the state, as a world leader. And so there’ll be a lot of things that we’ll have to assess, evaluate and foster in order to ensure we are repositioned in that posture.

Smith: I’m now focusing on what the attorney general is doing. I think we’ve got to go back to Bank of America; we’ve got to JPMorgan Chase, Citibank. What they were doing—Goldman Sachs, AIG, that whole industry—was just unbelievable, how they were able to defraud the investors. Moody’s, the ratings companies ran wild. Remember, no one of those individuals ever have been prosecuted. Basically what they’ve done was pay a fi ne. Bank of America, they want to pay $8 billion in fi nes, and that’s just supposed to let everybody off the hook. Meanwhile, you can have Mrs. Jones down the block who by accident spent a few extra dollars or did something wrong to retire with $8,000: She goes to jail. There’s got to be some deeper investigation into what the banks have been doing, and dealing exactly with the mortgage fraud a little bit more. I think what the attorney general is doing is right, but we have to go a little bit deeper into that. When you have cooperation with the investors, with the ratings companies, with the bankers, there’s really a big fraudulent activity that I don’t think we’ve got to the root of this yet.

ISSUESPOTLIGHT

Point/Counterpoint


While most of the fi nancial sector is watching Washington for the latest regulatory updates, Albany is engaged in its own effort to redefi ne the state’s relationship with Wall Street. The Capitol asked Joseph Griffo and Malcolm Smith, chairman and ranking member of the state Senate Committee on Banks respectively, to discuss these issues and more facing New York. What follows is an edited transcript.

Joseph Griffo Malcolm Smith


BY JEFF JACOBSON

A year after President Barack Obama signed into law sweeping reforms overhauling the nation’s

fi nancial system, one key component of the act remains unfulfi lled.

Hailed as a victory by consumer advocates nation-wide, the Consumer Finan-cial Protection Bureau was formally established last week. Absent an offi cial director, however, supporters argue the new agency will be hamstrung in its efforts to protect consumers.

Signed into law in July 2010, the Dodd–Frank reform, named for Senate and House fi nance committee chairmen Christo-pher Dodd and Barney Frank, was intended to prevent another crisis on Wall Street from causing widespread economic collapse. But many of the law’s provisions are yet to be implemented, and a partisan stalemate in Washington could further hinder the rollout.

Earlier this month, Obama nominated former Ohio Attorney General Richard

Cordray to run the CFPB, though Repub-licans in the U.S. Senate have vowed to block his confi rmation without signifi -cant changes to the legislation.

Even consumer advocates are upset with Obama’s choice. But Harvard law professor

Elizabeth Warren, the bureau’s original proponent and interim director,

who is highly respected among those who back reform, is

urging her supporters to get behind Cordray’s nomination.“Rich is smart, he is

tough, and he will make a stellar Director,” Warren

wrote on a July 18 blog post for the Huffi ngton Post.

In May, all 44 Republican senators vowed to block any CFPB nominee unless critical changes were made to reduce its independent powers and increase congressional oversight—alterations the bureau’s supporters reject.

“You have the Republicans thwarting it at every step along the way,” said Dean Baker of the nonpartisan Center for Economic and Policy Research. “We might not see much

advances in terms of consumer protection over where we were before the bill passed.”

Treasury Secretary Timothy Geithner has demanded the president veto any legislation that may harm the reform. In a Wall Street Journal op-ed last week, Geithner argued Republicans are “trying to slow down and weaken rules, starve regulatory agencies of resources, and block nominations so that they can ultimately kill reform.”

But the fi ght over the CFPB is just one piece in a larger, protracted fi ght over fi nancial reform.

While the partisan fi ght over the law’s passage ended long ago, most of the regula-tions to implement it have yet to be written. Dodd–Frank requires regulators to write 243 rules, conduct 67 studies of fi nancial markets and perform 22 periodic reports.

“There’s a lot of details that have to be fi lled in,” said NYU economics professor Mark Gertler. “All of this has

to be worked out. Everything is still being negotiated.”

Since Dodd–Frank’s passage, Demo-crats have charged Republicans with ignoring the faulty Wall Street practices that led to the crisis and have criticized any efforts to weaken reform. Republi-cans, in turn, argue that centralizing too much power in the consumer protection agency could lead to abuse or misuse.

“Dodd-Frank is already creating enormous uncertainty in our markets,” said Rep. Michael Grimm, a Republican representing Staten Island and Brooklyn. “Rather than do its job and legislate, the previous Congress that passed Dodd-Frank abdicated its responsibility and passed it off to the regulators.”

He added, “Uncertainty like this makes people less willing to allocate capital, and in the end, hurts job growth.”

[email protected]

Fight For Reform

President Barack Obama meets with heads of fi nancial regulatory agencies for an update on implementing the Dodd–Frank reforms.

A year after being signed into law, Dodd–Frank fi nancial reforms hang in the balance

fi nancial system, one key component of the act remains unfulfi lled.

Hailed as a victory by consumer advocates nation-wide, the Consumer Finan-cial Protection Bureau was formally established last week. Absent an offi cial director, however, supporters argue the new agency will be hamstrung in its efforts to protect consumers.

Signed into law in July 2010, the Dodd–Frank reform, named for Senate and

Obama’s choice. But Harvard law professor Elizabeth Warren, the bureau’s original

proponent and interim director, who is highly respected among

those who back reform, is urging her supporters to get behind Cordray’s nomination.“Rich is smart, he is



In May, all 44 Republican senators

Hailed as a victory by consumer advocates nation-wide, the Consumer Finan-

offi cial director, however, supporters argue the new agency will be hamstrung in its efforts to protect consumers.

Signed into law in July 2010, the

proponent and interim director, who is highly respected among

those who back reform, is




Whi

te H

ouse

former Ohio Attorney General Richard

S UNDBITES

Mary Griffi n, vice president and director of government affairs for Citigroup

Improving the gen-eral business climate in New York is the

most important issue to us. Keeping taxes low and creating an effi cient reg-ulatory climate will keep businesses in New York and could be the catalyst for job growth. It also will make New York more competitive in relation to neigh-boring states, especially Connecticut and New Jersey. Gov. Andrew Cuomo has made signifi cant progress on this front with the 2 percent property tax cap. The fi nancial community in New York doesn’t just include Wall Street―it also includes community banks around the state, all of which contribute to our economy.

We need to get the housing mar-ket on a sound footing. The recov-ery of the housing market is a key component for the state’s economic growth. Although New York has not experienced the large number of foreclosures other states have had, the number of foreclosures in the state is still at a high-water mark. Citi has long supported laws to protect homeowners and keep families in

their homes, and we are proud of our efforts to help homeowners avoid foreclosure. However, on average it takes more than 365 days to com-plete a foreclosure, and these exten-sive delays in returning a property to the market delay the recovery of the housing market. Public-policy makers must evaluate any additional legisla-tion intended to prevent foreclosures and what impact these measures could have on New York’s housing market and economic growth.

Adam Weinstein, chief fi nancial offi cer of the New York Hedge Fund Roundtable

The current defi cit and national debt are among the big-

gest challenges today to the fi nancial services sector, as is the overhang of regulation. The bank and fi nan-cial services community wants to understand what is going to happen with taxes and spending, and from a regulatory perspective what will or will not apply. Until solutions and answers are reached, there will be a bit of a deadlock on how to move forward for the business community. Specifi -cally, budgetary issues (taxing and spending policies) and what comes

out of the Securities and Exchange Commission and Commodity Futures Trading Commission are going to be critical to understand how Wall Street will truly be reshaped.

Kathy Wylde, president and CEO of the Partnership for New York City

Uncertainty associated with the implementation of regulatory reform,

nationally and globally, and the reso-lution of the housing fi nance crisis are the foremost concerns of the fi nancial sector. For Wall Street, the primary concern is how government will manage structural budget defi cits and growing public obligations, both immediately and over the long term. U.S. competitiveness, employment and the strength of capital markets will all depend on reforms that ensure the state and federal governments

achieve the right balance in spending and tax policies.

Ronald Filler, director of the Center on Finan-cial Services Law at New York Law School

The U.S. fi nan-cial sector faces

global competition. Uncertainty about what laws and regulations will evolve over the next few months, and even years, both here and overseas, could signifi cantly impact the ability of U.S. fi nancial fi rms to compete with their global counterparts. A global regula-tory level playing fi eld is needed. With the passage of the Dodd –Frank Act in July 2010, Congress overhauled how fi nancial fi rms should operate and be regulated. Some 200-plus regula-tions are still pending to be written as required by this new law. What these new regulations will say—in particular Title VII of Dodd–Frank relating to the regulation of over-the-counter deriva-tives—how they will compare to laws and regulations being adopted in other countries, the impact of the extraterrito-riality of these new regulations, all taken together, will impact the profi tability of many Wall Street fi rms, as each have large affi liates operating overseas.

professor Mark Gertler. “All of this has

out of the Securities and Exchange



THE CAPITOL: We are only seven months into the governor’s administration. Why are you leaving now?

STEVEN COHEN: When I originally came to work for the then-attorney general, it was January of 2007; and my plan had been, and the understanding was, that I would stay for two years. He was doing some really amazing work, so I agreed to stay for a third year, and then a fourth year—and ultimately, when he was elected governor I realized, just from the standpoint of the realities of my family life and the age of my kids, that I really couldn’t be a responsible parent and continue doing what I was doing. So I had decided not to go to the governor’s office at all. I then spoke to the governor and he was…quite persuasive in convincing me to come and really help with that transition, so I agreed to stay six months.

TC: How much of his convincing had to do with you wanting to pass a same-sex marriage law? Was that a draw for you?

SC: I’d say the real draw was I had a fundamental belief that Andrew Cuomo was really going to make a tremen-dous difference. Those first few weeks I probably couldn’t have told you what specifically he would accomplish. I am tremendously gratified that he did as much as he did, but I also believed in this person, and I wanted to be part of it.

TC: What made you essential to his transition?

SC: I don’t want to speak for the governor, [but] I think on the one hand I offered a kind of continuity. You know, I had been there not just with him but with many members of his executive staff. I knew them all; some I knew from the attorney general’s office; some I knew from years ago when I worked for his father. There was a high-level of comfort people had in me. When you [get] to the gover-nor’s office on January 1, you’re confronted with so much to do that you don’t have time necessarily to put those relationships together before you start working.

TC: Do you think that we might see him talk more with the press, or give more interviews?

SC: I think he has been incredibly accessible. He has held a large number of press events, formal ones in the Red Room. He routinely would be available for impromptu meetings with the press on the second floor. So if somebody thinks he is not sufficiently accessible, I’m not quite sure what they’re referring to, short of moving in with him.

TC: Will we see the governor use the same coalition strategy he used to pass same-sex marriage or Medicaid reform in other policy initiatives?

SC: It really was a unique situation. So I think it was, in a way, sort of a natural coalition that existed. It is just

smart politics and smart policy to build coalitions. There are a lot of people who support policies who come from disparate places who, if they simply are able to work in a collegial way, are much more effective. I suspect you’ll be seeing more and more of this because, frankly, it works.

TC: Was there ever a time when you didn’t think the same-sex marriage bill would pass?

SC: I never allowed myself to believe that it actually would happen until the 32nd vote was cast. Because you learn in Albany nothing is done until it’s done. I thought it was a very big day when the remaining members of the Democratic conference, with the exception of Sen. [Ruben] Diaz [Sr.], came out publicly and said they were supporting it. Later that day Sen. [James] Alesi became the first member of the Republican conference to say he would vote for it. And then Sen. [Roy] McDonald came out and said he would support it as well. That was the day it really seemed like it was actually going to happen.

TC: When Republican donors started coming out to pledge support and cash, that seemed to seal the deal. Do you agree?

SC: I don’t think any one thing sealed the deal. That was a very important moment, because it showed this was not an issue that was about party affiliation. This was an issue that went broader and deeper. This showed that some individuals that were very supportive of Repub-lican causes in terms of financial support, that they were willing to put this issue at the top of their agenda. And that sent a message to the Republican conference.

TC: How does Cuomo attract talent to the administra-tion, when people can earn six figures working in the private sector?

SC: I think most people want to do something that makes a difference, that’s rewarding. Most people want to feel a part of something that has a lasting effect. They can always go out and make money. Under this administration, people now know this is an extraordinary opportunity. I suspect it will become easier for the governor to attract high level talent, easier than it was when we were first in the AG’s office, easier than it was in the transition to the governor’s office.

TC: What advice did you give to Cuomo or your successor, Larry Schwartz, on ensuring continued successes?

SC: This governor does not need advice from me. The only advice I would give to him is what I learned from him, which is: It’s about focus. It’s about setting goals. It’s about understanding what you want to accomplish. It’s about taking the issues on and being committed to accomplish them. He knows how to do that.

TC: What do you have to say to Schwartz on the way out?

SC: Larry Schwartz is a man who the entire state owes gratitude to. The work Larry did under Gov. [David] Paterson’s administration hasn’t gotten nearly the atten-tion and praise that it deserves. Those were difficult times, and Larry kept the second floor running. He kept the executive running. He did it with a kind of skill and a kind of dignity that I don’t think that many people could have mustered under difficult circumstances.

TC: Do you anticipate any liberal backlash to the gover-nor’s fiscally conservative policies?

SC: No. It’s easier to hang labels on people and on initia-tives. He looked at the fiscal realities of the state and he said, “We’re going to do what we can afford, and if we can’t afford to do something right now, we’re going to face the reality.” The governor has shown through the marriage-equality effort that he’s a true progressive leader, that he believes in a lot of the same principles and goals of people who consider themselves or are happy with the label “liberal.”

TC: What about progressive economic policies?

SC: I would say: What was the biggest issue that he has been criticized for? I really don’t think there is any specific issue. People have said, “We didn’t like cuts; we wanted more taxes.” He just couldn’t do it. Part of the reality of having a state that is healthy is that you have to draw businesses.

TC: Today is your first day off the staff, first time in a long time. What will you do now?

SC: I’m going to take a couple of weeks off, spend some time with my family, catch up on some reading I’ve been meaning to do—

TC: What reading? SC: I’m going to read obscure works of Canadian fiction, mostly related to hockey.

TC: Will you go back into private practice?

SC: I’ve got to figure out what I am going to do for a living and where I will be working, but I will at least take a couple of days or a week or two and decompress.

TC: One last question. You’re so close to the governor, can you tell us: Would he rather be feared than loved?

SC: I suspect that what this governor would like to be is respected and appreciated for doing the best job possible in the position he holds.

—Laura [email protected]

Right-Hand Man

Steven Cohen was one of Gov. Andrew Cuomo’s closest aides, and seven months into the new administration, he is the first high-profile member to step down. Cohen spoke with The Capitol about why he left the office, his role in the same-sex marriage vote,

the governor’s relationship with the media and whether Cuomo will build on the successes from his first legislative session. What follows is an edited transcript.

BACK & FORTH

Top Cuomo advisor says he is leaving Albany in capable hands

Andr

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artz

Recent events in Japan refocused attention in New York on nuclear energy and our energy infrastructure. But those who monitor the state’s various energy systems – from power generators and distributors, to regulators and policy makers, and energy and environmental advocates – understand that looking at nuclear

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City Hall, in partnership with the New York Building Congress and the New York League of Conservation Voters, has organized a panel of experts, advocates, and government offi cials for a conversation on the policy and politics surrounding New York’s energy outlook, including system stability and reliability, economic develop-ment impacts, environmental issues, public safety and long-term planning and sustainability.

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Introduction by Richard T. Anderson, President of the New York

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Defense CouncilJERRY KREMER, Former Chairman, Assembly Ways & Means Committee,

Chairman of Empire Government Strategies

KEVIN LANAHAN, Government Relations Director, Con Edison

RAY LONG, Vice President, Government Affairs, NRG Energy, Inc.

PANELISTS (group in formation):

SERGEJ MAHNOVSKI, Senior Advisor and Director, NYC DEP Offi ce of Energy Policy and Infrastructure

The July 25, 2011 Issue of The Capitol

Documents

Transcript of The July 25, 2011 Issue of The Capitol