Blair Horner: Albany's "Watergate" Moment

Feb 23, 2015


The recent indictment of former Assembly Speaker Sheldon Silver is simply the latest in a series of scandals involving the conflicts created by allowing sitting legislators to earn unlimited, unrestricted income from outside jobs.  But the controversy surrounding the former Speaker’s “moonlighting” is not the first time the issue has been raised.  The ability of sitting lawmakers to profit in any profession or business has been central to other recent scandals.  Here are some of the most high profile examples:

Former Senate Majority Leader Bruno was tried and convicted in federal court for violating the “honest services” law, but was subsequently acquitted in a second trial after the U.S. Supreme Court raised the standards for showing a violation of the law.  Undisputed was that Senator Bruno’s private consulting business created potential conflicts between his public responsibilities and his personal business dealings.

Former Senate Majority Leader and current Senator Sampson has been indicted and faces trial in Federal Court on charges that, while a sitting New York State Senator, he allegedly embezzled some $400,000 in funds he was entrusted to oversee in his private law practice and kept secret his ownership interest in a liquor store.

Former Assemblymember Seminerio died in Federal Prison in January 2011 while serving a six-year sentence for his conviction on influence-peddling charges related to his operation of a private consulting business that used his legislative position to generate income.

Former Senator and briefly Senate Majority Leader, Pedro Espada was convicted by a Federal jury of embezzling hundreds of thousands of dollars from the health care clinic network he had created and ran in the Bronx, despite having an annual salary of $235,000 with generous perks on top of his legislative pay.

Former Senator Nicholas Spano pleaded guilty to Federal charges of hiding outside consulting fees he received from an insurance brokerage firm doing business with the state from 1993 to 2008.

In 2004, former Senator Guy Velella pleaded guilty to bribery charges for taking monies to secure bridge painting contracts as part of his outside legal work.

It is obvious that allowing lawmakers to have outside jobs creates a conflict of interest.  And while New York is one of the 50 states that allow the practice, the Congress does not.

In the aftermath of the Watergate crisis, Congress adopted fundamental and lasting reforms.  Among other measures, the  Congress established strict limits on outside income.  In language that resonates in New York almost forty years later, the U.S. House of Representatives explained why it originally sought to limit outside earned income:

“… many citizens perceive outside earned income as providing Members with an opportunity to ‘cash in” on their positions of influence.  Even if there is no actual impropriety, such sources of income give the appearance of impropriety and, in so doing, further undermine public confidence and trust in government officials.”

Sound familiar?

In the last few years New Yorkers have seen scandals engulf a governor, a Comptroller, Senate leaders, and now the long-time leader of the Assembly.  Like that long-ago Congress, New York State has begun a debate over the propriety of lawmakers generating income from activities outside their legislative salaries.  The fundamental question that New Yorkers and their elected policymakers in Albany face is clear: Can lawmakers serve “two masters?”

The most effective way to raise ethical standards, boost New Yorkers’ trust in their state government, and ensure that lawmakers serve one, and only one “master:” The public.

The state Legislature should do what Congress did after Watergate, dramatically restrict outside income for lawmakers, and enact strong disclosure and conflict-of-interest rules for income earned by lawmakers and senior staff.

In a report released this week, it was found that an overwhelming majority of New York State lawmakers reported having earned no, or very little, outside income.  Over two-thirds of current state lawmakers who filed financial disclosure forms in 2014 as members of either the Senate or Assembly reported either no outside income or income that did not exceed $20,000.  (report available at www.nypirg.org)  So, the vast majority of lawmakers already “cap” their outside income, why not all of them?

New York State should dramatically restrict outside income for lawmakers and enact strong disclosure and conflict-of-interest rules for allowed income and for income earned by lawmakers’ family members.

 

Blair Horner is the Legislative Director of the New York Public Interest Research Group.

 

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