Governor Andrew Cuomo’s 2017 budget contains new rules of ethics which apply to legislators while navigating state funds to projects — but there are exclusions for him. The governor’s $152.3 billion spending plan obliges lawmakers to send a form to the state budget director affirming that they will not receive a “financial benefit”, have “no financial interest,” and have “no known conflict” in making any funding request they undertake. Within the 810-page budget, the ethics language is mentioned 18 times. It applies to funds which lawmakers distribute throughout their districts. There is, however, a caveat. The ethical rules do not apply to the state Dormitory Authority’s State and Municipal Facilities Program (SAM), a treasury of borrowed money.
As reported by the NY Post, in this quasi-governmental entity, Gov. Cuomo appoints five members from its 11-member board. Two of the other members, the budget director and the state health commissioner, report directly to him. The last four members include the State Education Commissioner and appointees of the State Comptroller, Assembly speaker and Senate President. Both the Governor and lawmakers may suggest projects for undertaking by SAM. The board reviews proposals and distributes money.
The fund, established in 1944, was originally formed to finance the construction of college dorms in New York. It has now grown into a $1.5 billion stash, and now disburses cash to a variety of “economic development projects”. In 2014, it provided $5 million to help CBS renovate the Ed Sullivan Theater in Midtown. In 2015, it provided a $25 million grant to build the Empire Outlets, a $350 million mall project near the proposed New York Wheel in Staten Island.
Regulators are concerned with the ethics exclusion. “If there is a big enough threat for bad behavior to put safeguards on all other programs, then why not on this one?” said Ken Girardin, Empire Center Analyst. “The state shouldn’t be running these slush funds in the first place. They benefit the political needs of elected officials more than they serve the public good.” Girardin calls the generous grant to Staten Island’s outlet developers “one of the most questionable subsidies in recent state history.”
Manhattan state Sen. Liz Krueger said, “As far as I’m concerned, everybody should sign in blood there’s no conflict of interest in using state money.” At a Manhattan conference last week, US Attorney Preet Bharara cautioned state municipal leaders to be “wary of slush funds.”
By Hadassa Kalatizadeh