New York State collects and spends an enormous amount of money. Last year’s state budget, for example, exceeded $220 billion, second only to the state of California. The state is also home to some of the loosest campaign finance rules in the nation. Using the leverage of state spending powers to rake in campaign contributions has been a time-honored practice among New York’s elected officials.
In light of this reality, oversight of state spending is an important check on the obvious abuses that can – and too often do – occur. But governors resist having fiscal watchdogs. Most recently, former Governor Cuomo successfully championed a measure in 2011 to curtail the oversight functions of the state Comptroller – the state’s top fiscal watchdog. The former governor’s argument was that the Comptroller’s review of state contracting moved too slowly and that he needed quick actions on his plans for economic development. The Comptroller denied that claim, but the then-popular governor steamrolled opposition and the Legislature agreed to reduce the Comptroller’s oversight.
In hindsight, that move proved the old proverb “haste makes waste.”
New York State’s Comptroller is a separately elected official. The state Constitution established a separately elected Comptroller who is supposed to be free of interference from other governmental offices. It is the Comptroller who is charged with monitoring the state finances.
The 2011 move had its consequences. As a result of federal investigations into the Cuomo-era “Buffalo Billion” and other economic development actions, top aides to the former governor were sentenced to prison for shaking down campaign contributors who were interested in state government contracts – known as a “pay-to-play” scheme.
Had the Comptroller retained his oversight powers, would that – and other – schemes have occurred? Of course there is no way to know for sure, but people do behave differently when they are being watched. Experience shows that stronger oversight reduces corruption risks; more lax oversight leads to the opposite.
During the recent legislative session, lawmakers acted to restore the Comptroller’s powers. While the evidence of oversight omissions alone should have moved them to act, having a new governor likely played a role as well.
The governor has yet to say if she’ll approve the bill restoring Comptroller oversight. Approval of the legislation would send a powerful signal that Governor Hochul understands the need for stronger independent oversight of contracting. She has seen how the previous Administration’s preference for speed over accountability can lead to corruption.
She also knows that it’s not just members of the previous Administration or only the executive branch. Members of the Legislature have themselves been caught up in corruption investigations in which they were doing the bidding of campaign contributors as part of their “pay-to-play” arrangements. Most recently, the former Lt. Governor was charged by federal prosecutors in a scheme to pay back a campaign contributor by directing state monies to his organization. That matter is still pending.
Governor Hochul is currently building an enormous warchest in her effort to win the election this November. According to reporting in The New York Times – the governor set a target of raising a total of $50 to $70 million by Election Day. A mind-boggling amount of money in little over a year of being governor.
Also according to the Times, many of her campaign contributions came from those with business before the government. The Times reported Hochul raised over $200,000 from the gambling industry, which is waiting for three new licenses to be issued by the state for casinos in and around New York City.
It’s easy to understand why the governor wants a huge campaign warchest – it will pay for an expensive campaign and ensure that donors think twice about funding her opponents. But it does raise the policy question of what the state should do to ensure that the influence of campaign donors is not influencing the awarding of government contracts.
One way to ensure that such oversight exists hinges on how the governor chooses to act on the legislation restoring the powers of the state Comptroller. Stating her support for the legislation will help re-assure public confidence in state governmental decision-making; staying mum will raise concerns that the bad old days may be here to stay.