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ALBANY’S ETHICAL BLINDSPOT
Just when you think you’ve seen it all, Albany offers something new. I thought I’d seen a lot in my twenty-plus years lobbying at the state Capitol, but last week lawmakers offered up a new example of brazen indifference toward ethics, kowtowing to special interests, and the misuse of your tax dollars. It started with a bill that was advancing in the legislature. The bill offered New York City workers early retirement with generous pensions. New York City Mayor Bloomberg objected to the proposal saying that it would cost the city treasury $200 million. Yet supporters argued that the legislation would have no effect on the city budget. The basis for supporters’ claim of no cost? An analysis contained in a fiscal note that had been conducted by a well-regarded actuary. “Fiscal notes” are a legally required estimate on a proposal’s cost. But what was not publicly known until last week, was that the actuary was not independent and that local unions, including District Council 37 – whose members would be the main beneficiaries of the proposed pension sweetener – bankrolled his work. The actuary was not paid for his work by the state; his clients were the unions who stood to gain from the legislation. This revelation came in a report by the New York Times. According to the Times, the actuary’s work had been cited in the fiscal analysis on hundreds of bills in recent years, with billions of dollars worth of potential costs. When pressed by the New York Times reporter, the actuary admitted that his job was “a step above voodoo” — and admitted that he had knowingly underestimated the costs of the pension bill. He told the Times, “I got a little bit carried away in my formulation.” A step above “voodoo”? He got “carried away” in his estimate that the costs would be zero? It is abundantly clear that it is a conflict of interest for state legislators to use a union-financed analyst for estimating the fiscal costs of bills that benefit unions. It is so obvious, and yet so incredible that this was the common practice for state legislators. But the conflict of allowing such a blatantly skewed analysis in favor of the unions on this bill does not stop here. The Assembly sponsor of the legislation also admitted to the Times that the legislation was drafted by the unions as well as having the estimate provided by the union-paid actuary. The Times reported that the Assemblyman who sponsored the bill stated, “It’s their bill. “They drew up the bill; they went to the actuary.” He added, “We assume he comes up with the real number. He was hired by them.” Sadly, this is hardly the first time conflicts have arisen. It is commonplace for lawmakers and interest groups to have too-cozy relationships. For example, each session there are campaign fundraisers held virtually every night lawmakers are in Albany. At these events lobbyists fork over campaign donations sometimes the very night before key votes are cast in the legislature. Moreover, legislators think nothing of conducting personal business with lobbyists and their clients – with only an occasional vague disclosure of that relationship to the public that lawmakers purport to serve. There are numerous other examples of conflicts, but what is clear is that something must be done. Legislators must get cracking on setting real limits on such conflicts and creating independent ethics watchdogs to enforce these rules. In the narrow case of the pension bill, it is just crazy for legislators to rely on fiscal analyses by actuaries with conflicts. Thankfully, the Assembly announced that they would review all of the legislation for which the union’s actuary had provided fiscal analyses. But that’s not enough. New York officials should rely on independent fiscal judgments, not hired guns. The federal government, 20 state governments and New York City all have independent fiscal watchdogs. New York State should have one too. An Independent Budget Office could provide just the type of analyses lawmakers should want – unbiased, non-partisan with only a concern for taxpayer dollars. There is a lot to do to fix Albany. New Yorkers must demand changes. That’s all for now. I’ll be keeping an eye on the Capitol and will talk to you again next week.
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