Archive for October 2021

Bringing Accountability to New York State Government

Posted by NYPIRG on October 18, 2021 at 11:13 am

Ever since former Governor Cuomo resigned in the wake of bombshell investigations that found that his Administration had misled the public about nursing home deaths and that he had harassed his staff, the calls for reform have been growing.

Governor Hochul has said that she wishes to completely overhaul the state’s ethics oversight, reportedly saying that she wants “blow up” the state’s ethics watchdog.

Bravo!  But the problems of Albany are not solely the result of a failed ethics enforcement system.  The problems go much deeper.

For a decade New York State has plowed billions of dollars into programs that were designed to be “transformational” and to recharge economic development.  But the decisions were largely made behind closed doors and no systems were put in place to monitor whether those programs succeeded or failed.  In fact, when it came to the efforts to revitalize Buffalo and Syracuse, all that resulted was scandal.  The then-U.S. Attorney Preet Bharara’s investigation led to the conviction of top Cuomo aides and allies for widespread “pay-to-play” schemes.

The Legislature never followed up to investigate these failures or to comprehensively review the track record of the Cuomo Administration’s multi-billion-dollar initiatives.

They should and they must.  There is still time to learn from those scandals.

But it is also the case that new systems need to be put in place so that the public can better monitor state programmatic initiatives without having to hope that lawmakers will take their oversight responsibilities seriously.

Last week, the state Comptroller took one step in that direction.  Comptroller DiNapoli unveiled a new program to track where federal pandemic relief money is going.  As part of the federal efforts to bolster states’ finances in the wake of the COVID pandemic, New York State has received $21 billion in federal pandemic relief money and has spent $6.1 billion – or one-third –since the end of September.

Having a system in place to monitor what the state is doing with federal aid is, of course, important.  The federal aid was designed to bolster programs that were impacted by the pandemic.  Taxpayers need to be sure that their federal dollars are being spent appropriately and not diverted to spending in other areas.

And the public needs to know if the money is being spent, and how quickly it’s “going out the door.”  Sitting on federal aid only exacerbates the financial pain caused by the pandemic.

The Comptroller’s “tracker” can be expanded to cover all state spending, not just federal pandemic aid.  It’s very hard for the public – and rank-and-file lawmakers – to monitor state agencies’ spending.  It’s impossible to know how to hold government officials accountable if you don’t have the basic facts.

Even better monitoring of state government spending is only half of the picture – New Yorkers need to know how well funded services perform.

Public monitoring of government service delivery is not some pie-in-the-sky notion.  The City of New York has a program, known as the Mayor’s Management Report (MMR), that annually publishes city agencies’ performance.

The report was first produced by the Mayor’s Office in 1977 as a part of the City’s response to the fiscal crisis, to highlight the impacts on performance in that challenging budget environment. The MMR includes both quantitative metrics and qualitative explanations that show how each city agency and related projects are doing and allows for year-over-year comparisons, to show where progress has been made, where more attention is needed, and where there are opportunities for improvement.

There can be no doubt that Governor Hochul’s Administration has its hands full – it needs to hire new staff, deal with the ongoing pandemic, get government up and running, and prepare a budget for next year – all while preparing to run for election.

Yet there also can be no doubt that an overhaul of the state’s ethics oversight is desperately needed.  New Yorkers need to have tools to hold all of government accountable for the work that taxpayers fund.  Unlike ethics reform – which requires the cooperation of the Legislature – developing a program to hold state government spending accountable is something that the governor can do on her own.

Through her executive powers, the governor can mandate a system that tracks the program used in New York City.  She can mandate that and have her agency heads publicly testify to the Administration’s successes or failures in delivering services.  If Governor Hochul builds on the work of the Comptroller and the New York City model, she will have made her mark in the short time that she has left in her term.  A mark that could make a huge difference in holding government accountable and, hopefully, make it harder for political insiders to game the system to enrich themselves.

After all, a more accountable government is a more ethical one.

The Former Governor’s $5 Million Book Deal

Posted by NYPIRG on October 11, 2021 at 11:04 am

New York’s much maligned state ethics watchdog, the Joint Commission on Public Ethics (JCOPE), agreed last week to launch an investigation – of itself.  The reason?  The Commissioners want an independent review of the agency’s decision to bless former Governor Cuomo’s $5 million book deal.

Some background.  As the COVID pandemic first swept the nation, the former governor was widely applauded for his public educational efforts on the disease and how government and the public should respond.  His presentations – which ran daily for months – were seen as a constructive alternative to the grossly incompetent response by former President Trump.  Trump’s misleading, misinformed, and often malignant COVID briefings contributed to the nation’s failure to adequately address the pandemic.  Former Governor Cuomo’s presentations, on the other hand, were widely viewed as competently presented, reassuring, and helpful to the public’s understanding of the pandemic.

The national acclaim prompted the governor to write a book on his experiences.  At the time, the idea that a sitting governor would write a book to essentially “cash in” on his public service should have raised flags within the ethics oversight board.  The governor and other members of New York’s executive staff are considered full-time employees and are not allowed to have outside income unless it is approved by ethics monitors. 

New York’s governor is the highest paid in the nation and has significant public benefits in terms of travel, security, housing, and other perks all paid for by taxpayers.  Allowing outside income to the governor should have triggered an independent review.

And so, the governor requested an ethics approval.  That request was written by public servants during (apparently) their public time on the job and was presented on gubernatorial letterhead.  Essentially the public was paying for the governor’s attorney to make his personal request for outside income.

That alone should have been a no-no.  But the ethics watchdog agreed to the request for review.  The staff of the ethics watchdog decided to conduct an internal, staff-only review without taking the request to the full Commission.  The staff approved the former governor’s request, apparently without a review of the multi-million-dollar contract offered by the book publisher.

The request was approved with the caveat that no public resources could be used in writing the book.

As it turns out, the governor did use public resources in writing the book and that decision is currently under investigation by the Attorney General.  Former Governor Cuomo argues that the staff who worked on the book did so voluntarily and that public resources were only incidental.  We’ll see whether the investigation agrees with him.

The agency action that led to approval of the agreement in the first place is what the JCOPE Commissioners appear to be investigating.  The members of the JCOPE Commission are appointees of the governor and the legislative leaders (itself a fundamental flaw) and with new members being appointed by the governor, it is far more likely that the episode will get a fresh examination.

The new chairman of the Joint Commission on Public Ethics (a Governor Hochul appointee) announced that JCOPE would hire an outside attorney to examine the operations of the Commission.  This vague announcement has been supplemented by reporting that the investigation would look at the decision-making into the approval by JCOPE of former Governor Cuomo’s book deal.

They would be right to look closely.  This isn’t the first book deal that led to a big payday for the former governor.  It is obvious that he should not have been allowed to use public resources to request approval for either one of the book contracts; he should have been told to use his own resources.  That needs to be made clear by the Commission.

It should also be made clear that no public resources should be used for a public official’s private enrichment.  None.  Having subordinates allowed to voluntarily work on projects that personally enrich elected officials should be verboten.

And it should be made clear that plans to allow for significant outside income for full-time public employees must be made by a full Commission review. 

This entire episode underscores a fundamental problem with ethics oversight in New York: The public can’t trust an ethics oversight system that relies on appointees of those whose behavior is being monitored.  Governor Hochul and the legislative leaders need to replace the current flawed ethics oversight system. 

There is no need for an investigation to make that decision.  New York ethics needs an independent watchdog. 

Will the Congress Tackle Drug Costs for Seniors?

Posted by NYPIRG on October 4, 2021 at 7:32 am

We all know that when we buy things in bulk, we can save money.  Economic theory and our own shopping experiences are that sellers are much more likely to give the consumer a break on the per-item cost if the consumer buys more of them. 

Over the long haul, buying in bulk can save real money.

And that’s what government can do.  Governments are the biggest purchasers of health care – both through public programs like Medicare (health insurance for seniors), Medicaid (health insurance for lower income individuals) and through health coverage for public employees.

At the federal level, the government currently negotiates drug costs for veterans (through the Veterans Administration) and Medicaid beneficiaries.  Yet, because of a federal law passed in 2003, the government is specifically prohibited from negotiating for Medicare drug prices.

That prohibition was part of a deal that expanded drug coverage to seniors.  The 2003 Medicare Prescription Drug, Improvement, and Modernization Act expanded the Medicare program by creating a voluntary prescription drug benefit known as Part D.  The benefit took effect in 2006 and provided prescription drugs through private stand-alone drug plans and Medicare Advantage plans.  

However, as part of the deal and to sweeten the benefits for pharmaceutical companies, that law prohibited the Secretary of Health and Human Services (HHS) from negotiating Medicare drug costs. 

Instead, Medicare prescription drug prices are negotiated between prescription drug manufacturers and hundreds of insurance companies that administer Part D plans.  Of course, insurance companies have some clout, but it is nothing compared to the negotiating power of the federal government.  As a result, Medicare drug costs are higher – and seniors must pay more.

Generally, those who support allowing the federal government to negotiate for lower Medicare prescription drug costs argue that Medicare beneficiaries should receive the same lower prescription drug prices that veterans and Medicaid beneficiaries receive.  Specifically, establishing the government as the single negotiating entity, instead of thousands of individual private plans, would result in significantly lower prices for beneficiaries and reduce program costs.

Opponents argue that doing so would be a form of price control that would interfere with market competition.  They also cite concerns that a reduction in prescription drug manufacturers’ profits may result in less money for researching and developing new drugs.  Opponents ignore the facts that drug therapy research is often conducted using taxpayers’ dollars and that allowing the Veterans Administration and Medicaid to negotiate drug costs has not impacted the pipelines for new medicines.

Since passage of the 2003 law, there have been numerous unsuccessful attempts to allow the federal government to negotiate Medicare drug prices, in the same way it does now for veterans.  That fight has reached a new peak as part of the Congressional debate over the Biden Administration’s Build Back Better Act, the proposed $3.5 trillion stimulus program.

The President’s plan is central to the Congressional budget reconciliation debate.  Under Congressional rules, budget reconciliation proposals merely require majority approval in the U.S. Senate – circumventing the filibuster obstacle that requires 60 votes to end debate on policy-focused bills.  Measures considered under budget reconciliation must be narrowly tailored to the implementation of the federal budget.  A plan to change the nation’s immigration policy, for example, has been barred from budget reconciliation since that plan was more policy than budget.

However, when it comes to Medicare drug costs, the plan to allow the government to negotiate for lower costs is far more compelling.  The nonpartisan Congressional Budget Office has estimated that allowing Medicare to negotiate prices would save government health plans more than $450 billion over 10 years.  And those savings clearly make sense as part of a multi-trillion-dollar budget plan.

Of course, the benefits would not be to the government alone.  Lower drug prices would result in lower costs for Medicare beneficiaries.  Under drug price negotiation, Medicare beneficiaries would see a savings from an estimated 9% of the Part D base premium in 2023 to 15% in 2029.  The lower prices would benefit the more than 45 million Americans who participate in Medicare prescription coverage.

As the Congressional debate over budget reconciliation and the Biden plan unfolds, making sure that seniors benefit from lower drug costs and the government saves hundreds of billions of dollars must be a top priority.  The financial health of the nation – and the health of seniors – hang in the balance.