Last Fall, top associates of Governor Cuomo were indicted for alleged corruption. In criminal complaints brought by former U.S. Attorney Preet Bharara, the Justice Department alleged that top ranking associates of the governor used their relationships to steer government contracts to the governor’s campaign donors, as well as enriching themselves personally. $800 million of contracts were affected. Much of the alleged illegal acts occurred in entities affiliated with the State University of New York. Nine individuals have been indicted for extortion and bribery, and one of those has pleaded guilty.
Of course, everyone is entitled to the presumption of innocence and the allegations have to be proven in court. However, the allegations took place at roughly the same time as the governor was successfully pushing proposals to limit the power of the state Comptroller to monitor the state’s procurement process.
Under New York’s constitution, a separately-elected Comptroller is charged with monitoring the state’s finances and managing the pension fund of public employees. The rationale for making this a separately-elected official is to give him or her independence from the Administration. Thus, the constitution creates political “distance” so that the Comptroller can audit the state’s books without fear or favor.
It doesn’t always work out that way. There has long been institutional tension between a governor and the Comptroller as the state’s fiscal watchdog.
When Governor Cuomo came to office during his first term in 2011 he successfully advanced legislation that cut back the powers of the Comptroller to do his job. At that time, the governor argued that the Comptroller’s office moved too slowly and that the governor wanted to get economic development projects moving quickly in his efforts to jump start the state’s economy.
The Comptroller offered evidence that the governor’s claims were incorrect, but the Legislature approved the governor’s proposals and in subsequent years, cut back the Comptroller’s powers even more.
Around that same time, the alleged schemes of the governor’s associates were being cooked up. Would the Comptroller have been able to identify these corrupt actions? We’ll never know, but the fact that an outside entity had the capacity to act might have short-circuited the efforts.
When the indictments came down, the governor promised to advance legislation to reduce the risk of corruption in the state’s system of awarding contracts. And in his budget, the governor proposed establishing new offices to monitor the contracting process – but those individuals would be appointed by the governor. Moreover, the governor did not propose restoring and strengthening the powers of the Comptroller, despite calls from reformers to do so.
The governor’s plan was rejected by the Legislature.
This past week, Deputy Majority Leader John DeFrancisco moved legislation to the Senate floor that strengthens the Comptroller’s powers to monitor state finances. Identical legislation has been introduced in the Assembly.
The legislation empowers the Comptroller to approve State University of New York contracts above certain dollar thresholds before they are bid, including contracts of the SUNY Research Foundation. SUNY contracts in the areas of construction, construction-related services like engineering and architecture, materials, and printing will be newly subject to prior approval. Contracting by third party vehicles affiliated with public authorities will be banned altogether.
The bill standardizes cost-effective and fair procurement practices, requiring public authorities, public corporations, and SUNY, to establish guidelines that mirror those of state agencies such as competitive bidding, awarding contracts to the lowest priced responsible bidder, and marketing practices that create the most competitive marketplace.
Additional measures in the legislation establish greater integrity in state procurement transactions between vendors and government officials, employees and board members at state agencies and public authorities. Both vendors and government representatives must follow a code of conduct prohibiting conflicts of interest or favoritism, requiring written recusals when conflicts do exist, reporting of any undue influence or fraud, and certifying a clean contracting process. Failure to do so can result in hefty fines, termination of a corrupted contract, and penalties including up to a lifetime ban on vendors contracting with the state.
Taken together, these many reforms will help to restore public confidence in the contracting process following recent scandals. It appears that the Senate is poised to act; the Assembly must follow suit and the governor should approve this important legislation.