Silver Convicted: Now What?

The conviction of former Assembly speaker Sheldon Silver on seven federal corruption charges is as symbolic as it is substantive. Prosecutors working under U.S. Attorney Preet Bharara established that Silver had set up two elaborate schemes to use his public office and influence to enrich himself.

In one, he steered state money to a cancer researcher who referred mesothelioma patients to Silver’s law firm, which specializes in asbestos litigation. Silver collected millions in referral fees. In another, Silver convinced two real estate development firms to use a law firm that secretly shared referral fees with Silver for real estate tax challenges. Silver, in turn, was accessible to these firms and pushed legislation that they championed.

Although there was no explicit evidence of any bribery or quid pro quo, the prosecution established – and the jury found – that there was circumstantial evidence of at least an implied quid pro quo.

Mr. Silver’s lawyers argued that in charging him, Mr. Bharara’s office had sought to criminalize the kinds of activity in which state legislators routinely engaged.

That’s the problem.

Dean Skelos and his son are on trial right now. There are many more corrupt malefactors in Albany who engage in this sort of behavior, and many more indictments and convictions to be had.

Convicting Silver on this corrupt behavior is a great first step, but merely the tip of an iceberg. The question is whether his mandatory departure from the Assembly will embolden the Albany establishment to reform itself. I don’t think that’s at all bloody likely – it’s far more probable that they will try to placate a weary and disinterested electorate by enacting window-dressing pseudo-reforms but maintaining the status quo. They’ll try to get away with the bare minimum, and they will, because Albany politics is so remote and byzantine, and for most people they consider it only in the abstract. It’s a thing and a place that’s corrupt and we hate it, but most of us have no clue what, if anything, we can do about it.

Everyone can agree that reform is needed, but there’s little agreement on what needs to be done. As speaker, Silver wielded ridiculous power. He controlled the Assembly agenda. He demanded – and got – loyalty by threatening backbenchers. He was one of the three men in the room who ultimately control how the state budget is agreed-upon. When you get down to it, our entire state legislature is a farce – a show. It’s not a democratically elected deliberative representative body as much as it is a CGI projection of a crowd on a green screen behind the people who wield actual power.

It’s heartening that U.S. Attorney Bharara is taking public corruption seriously, and that Attorney General Schneiderman has, as well. But prosecutions can only catch illegalities after they happen. What we need to do is set up an Albany that acts like a legislature and a government is supposed to act in a civilized democracy. We need to make it much harder for this sort of graft and corruption to happen in the first place. Maybe we can downsize the legislature and ban outside income, making legislators full-time. Do we really need a state senate? Are there other structural reforms that we should be discussing and implementing in order to make Albany work for us, rather than vice-versa?

These are the challenges confronting this state, and symbolically, the conviction of Sheldon Silver shows us that change is possible.

However, the example of Joe Bruno shows us that change comes slowly and haltingly.

We can – and should – demand better from our state government, both elected officials and bureaucrats alike. Albany, however, is a morass of non-responsive automatons who mask their shrug-and-do-little reality behind ribbon cuttings and press releases. We pay a lot for the privilege of living in New York State. We deserve better.

NYS Announces Medical Marijuana Licenses

The New York State Department of Health today announced the five companies it will license to grow and produce medical marijuana. Here is the list:

medmar by Nick Reisman

None of the applicants from western New York were selected. This includes Lewiston Greenhouse, LLC, which had hired Steve Pigeon’s PAPI Consulting to lobby the state on its behalf. Lewiston Greenhouse fired Pigeon shortly after the May 28th state and federal raids of the homes of Pigeon, former Deputy Mayor Steve Casey, and Chris Collins’ Chief of Staff, Chris Grant.

Dan Humiston, the founder of the “Tanning Bed” chain also submitted a rejected application to grow marijuana in the former Tyson chicken plant in South Buffalo. It’s believed that Humiston is Pigeon’s landlord.

Out of 43 companies that submitted applications, three were from western New York.

$15 and Resentment

Facebook has become a sort of modern-day, digitized town square or water-cooler. It’s where we have epic debates and fights over the news of the day, and also share Instagrammed pictures of our dinners. In the last day or so, there’s been a lively debate on my Facebook timeline in response to this post of mine (my Facebook profile is locked down, and my general rule is I won’t friend you unless we’ve met in real life).

The $15 minimum wage for fast food workers is a catastrophe, unless you’re a fast food worker and rely on your pay to live and feed yourself.

It applies only to fast food franchisees with more than 30 locations in NYS. It will be phased in, and the $15 isn’t in effect until 2021; ($9.75 by Dec. 31, to $10.75 by December 2016, to $11.75 by 2017, to $12.75 by 2018, to $13.75 by 2019, to $14.50 by 2020 and to $15 by July 1, 2021.) This isn’t going to directly affect mom & pop businesses.

If you’re angry that it only applies to fast food franchisees and not to you, then you might consider doing what the fast food workers did and unite to fight for a raise. Maybe join a union. Maybe hold a demonstration.

Some people were angry that this particular segment of the working population will get this rate of pay. Others don’t like the idea of a minimum wage at all. Some think it’ll all backfire and that fast food joints will invest hundreds of thousands of dollars in automating the assembly and delivery of McNuggets. For the most part, the debate was lively and focused on issues rather than personalities, which is nice.

Listen to this Trending Buffalo podcast that Brad Riter and I recorded Thursday: (Direct link to audio)

The people who work these fast food jobs run the gamut in terms of age, social upbringing, socio-economic status, etc. I will say this, however: these workers, whoever they may be, might work a mindless job, but that’s true of practically any assembly line. You get trained, and you do the job. We’re not talking about some knowledge-based industry or something involving a terrific need for independent, logical thought.

I would bet that it’s hard to get people to work fast food in WNY because of transportation issues, the stigma associated with the nature of the work, etc. Indeed, it’s not been unknown to see signs in McDonalds already offering $10/hr because they’re hard-up for people to work there. It’s not a career path many people want. It is, however, sometimes a job of last resort for some, or a first job for others. It also might be a job that some take in order to break the cycle of dependence on welfare. In New York City especially, $15/hr is a pittance. Here, it’s a decent rate of pay. They still likely don’t get any vacation time, which is also, frankly, criminal. The US mandates 0 paid vacation days, just like Sri Lanka, Liberia, and Nauru.

The issue here is that this country has sacrificed so much at the altar of supply-side theory – a completely debunked and false theory that even Democrats have adopted in recent years. Don’t forget that a huge chunk of Obama’s stimulus involved tax cuts and tax breaks for people and businesses.

While productivity has soared, wages have not kept up over the last 40 years; they have stagnated. People work harder for less money. This, frankly, is some bullshit. It has also coincided with rising wage inequality, and a dramatic loss of influence and membership in unions. Some in DC talk about rolling back Social Security and Medicare – programs I’ve paid into since 1985, and you’re damn right they’re an entitlement, in the literal sense of that word. Cut medical for the aged and social security – for what? To fund more wars and occupations, or to give Paris Hilton another tax break?

When you give a tax break or a higher wage to someone who is the working poor or middle class, that will have a stimulative effect on the economy. When you help small businesses and entrepreneurs and ease the barriers to starting a business (or at least make them easy to find and follow), you’re helping to stimulate the economy. New York has big lessons to learn about that; query why no one has done anything about it. When a poor or middle-class person has more money in her pocket, she’s able to go out and buy a car, or a new house, or take a vacation, or replace her shitty dishwasher, or buy her kids some clothes.

On the other hand, when you give another tax break to the ultra-wealthy, you see no stimulative effect because it can’t affect them. If I’m a millionaire today and you give me a tax break, I’m a millionaire tomorrow, too. What is there that I can buy today to stimulate the economy that I couldn’t have bought yesterday? Whom could I hire tomorrow whom I couldn’t hire yesterday? What am I going to do, go out and buy another Ferrari even though I could have afforded to do so yesterday, too?

If there’s a transformative moment for this country, it’s in the notion that you have to give working people and the middle class a hand, and a break. If Warren Buffet or Donald Trump have to pay more in taxes (whether income or otherwise) to fund that, so be it.

So, as we talk about a big business – a fast-food franchise generally costs a shitload of bank, and owning 30 outlets means you’re not some mom & pop – we can ask that business to bump its workers’ pay to something they can live on. $30k (no vacation, likely no other benefits except, thanks to Obamacare, health insurance), is a decent rate of pay for someone assembling widgets or hamburgers. I don’t begrudge them their fight and their win, and what just happened serves as a lesson for people in other jobs with shitty pay that if they unite and speak with one voice to demand better pay, well hell, it just might work. This is a transformative moment in America – the first time in a long time that this sort of direct citizen action brought about a positve response with respect to pay. If they can do it, so can you.

Ranzenhofer and the LLC Loophole

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Last week, in my story about Attorney General Schneiderman’s push for an ethics reform bill in Albany, alluded to local state Senator Mike Ranzenhofer’s involvement, but it bears its own post.

One of Schneiderman’s proposed reforms would close what’s called the “LLC loophole”. This legal quirk enables politicians to raise massive sums of campaign cash that is difficult, if not impossible, to trace. For donors, it’s an easy way to (a) donate cash without leaving easily identifiable fingerprints; and/or (b) completely bypass and ignore the mandatory maximum donation. It costs just $200 to file and create an LLC, and each LLC can donate as a separate individual. One New York City developer has used the LLC loophole to pour over $13 million into campaign coffers since 2000.

Fixing this loophole is simple—in fact, Brooklyn Democrat Dan Squadron proposed a bill to do just that, but it was upstate Republicans in the Senate who effectively killed the effort, including the chair of the Corporations Committee Mike Ranzenhofer (R-East Amherst).

On Monday, the Buffalo News’ Denise Jewell Gee wrote that there are only 17 days to call your legislators to get the LLC loophole closed, but she omitted the local connection.

Not only did Ranzenhofer shut down Squadron’s bill to close the LLC loophole, but Ranzenhofer got $94,000 from Glenwood, the company whose various and sundry LLCs, led by Leonard Litwin, have contributed $1,000,000 to Governor Cuomo using 19 individual LLCs. Litwin and Glenwood are linked to the Sheldon Silver criminal probe, as well. It was reported yesterday that the Cuomo Administration cited an ongoing federal probe into the state’s housing finance agency relating to loans made to Litwin’s company. It is as if all of Albany is under investigation, or cooperating with an ongoing one.

Rural and suburban Democrats, naturally, have a difficult time recruiting candidates to run against Ranzenhofer to begin with, but who would want to bother when Ranzenhofer can pull in that much money from just one allegedly corrupt company, and shuts down any effort to close the LLC loophole as part of his official duties? Why is Ranzenhofer getting a pass from local media on his connection to Litwin and Glenwood, and his blatant blocking of Squadron’s effort to eliminate the corrupt/ing LLC loophole? Here it is:

It becomes more and more obvious that public financing of elections is the only way to clean up this state.

Albany corruption is a bipartisan problem with easy solutions that are being blocked in an equally bipartisan manner. Ranzenhofer has been moistening legislative seats for 20+ years, accumulating state benefits and pensions without accomplishing much of anything. The fact that he’s actively blocking even the most basic and uncontroversial Albany reforms should lead to his removal from elected office. Reform or get out of the way.

Schneiderman Tackles Corruption

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Earlier this week Attorney General Eric Schneiderman proposed a sweeping set of reforms to New York’s byzantine and minimally ethical election and campaign finance regulations. What you should pay attention to is this detail: every year, your candidates for state legislature promise to clean up that city’s political cesspool. They punctuate this all of this with caricatures of indicted former Assembly Speaker Sheldon Silver and indicted former Senate Majority Leader Dean Skelos. They call Skelos a “RINO”, or they promise to free the Assembly from Silver’s corrupt fingers.

When they actually get there, however, none of this happens. A couple of exceptions include current Buffalo Comptroller Mark Schroeder and Assemblyman Mickey Kearns, both of whom refused to back Silver as speaker. When Governor Andrew Cuomo proposed milquetoast pseudoreforms in 2014 and 2015, the few that mattered he negotiated away with the other men in the budget negotiation room. In fact, he went so far as to simply shut down the Moreland Commission he created to examine corruption and make recommendations to end it.

There exists no political will or serious push to undertake the sorts of reforms that Albany needs to become a little less like a dictatorial junta and a little more like a deliberative representative legislative entity.

When your state capital has to rely on the U.S. Attorney who handles a completely different geographical jurisdiction – the Southern District of New York – to prosecute corrupt politicians, you know your problem is more than just trivial.

Attorney General Schneiderman’s proposal, therefore, provides Albany with a way to fix itself before it’s too late. But there’s a weak link here – all of those Albany pols who promised you they’d clean up the state house if you elected them to – what, their 20th term of office – are the ones who would need to propose, debate, and pass any such legislation. It’s not a sexy law that results in any ribbon-cuttings back home, so don’t hold your breath.

Schneiderman outlined his proposal in an op-ed published on May 26th. Noting that 30 state officials and legislators have left office due to criminal or ethical breaches since 2000, he notes that the indictments of Silver and Skelos should serve as an acute wake-up call. Schneiderman notes that he and state Comptroller Tom DiNapoli have prosecuted 60 electeds and their “cronies” in just the past four years – an untenable and frankly outrageous figure. His proposed law, the…

End New York Corruption Now Act — dramatically lowers contribution limits, sharply restricts contributions by lobbyists, closes donation loopholes so big you can drive a Mack truck through them, and provides matching funds for small contributions to offset the power of mega-donors.

It expands the tools available to state prosecutors to investigate and prosecute public corruption.

It ends a system that allows outside employment income for legislators, who should have no “clients” other than the people of New York. In turn, they would be paid like the full-time professionals they are and get a salary increase. I have also proposed a constitutional amendment to change the period between legislative elections from two to four years, to create at least some time for members of the Assembly and Senate to focus on governing first, and politics second.

These are reforms worth considering. Why this, and why now?

“Every year, more or less, for the past five or six years there have been ethics reform packages introduced and passed in Albany,” he said. “And every year or so there’s a press conference and they say, ‘We have made fundamental reforms; we have cleaned this up.’ And then there are more scandals and there’s more outrage, and it’s clear that they didn’t work.”

“I’m done with advocating for incremental reforms — it’s time for us to be bold,” he said.

If you need any more proof, consider that the new Senate Majority Leader John Flanagan recently said that his conference wasn’t going to bother looking into ethics reforms. Shrug.

One of the Schneiderman’s proposed reforms would close what’s called the “LLC loophole”. This legal defect enables politicians to raise massive sums of campaign cash that is difficult, if not impossible, to trace. For donors, it’s an easy way to (a) donate cash without leaving easily identifiable fingerprints; and/or (b) completely bypass and ignore the mandatory maximum donation. It costs just $200 to file and create an LLC, and each LLC can donate as a separate individual. One New York City developer has used the LLC loophole to pour over $13 million into campaign coffers since 2000. Fixing this loophole is simple – in fact, Brooklyn Democrat Dan Squadron proposed a bill to do just that, but it was upstate Republicans in the Senate who effectively killed the effort, including the chair of the Corporations Committee Mike Ranzenhofer (R-East Amherst).

So much for the tired upstate memes about corrupt downstate legislators, right?

Squadron’s bill would

…treat LLCs like corporations or other joint-stock entities, which have $5,000 annual donation limits. Under a current state Board of Elections ruling, each of a developer’s LLCs can give up to $150,000 each annually, the same as a single individual.

The Assembly passed a bill similar to Squadron’s earlier this May, and you can watch Ranzenhofer’s committee stall the Senate version on YouTube.

Schneiderman’s proposal revives Squadron’s effort, and bans legislators from earning outside income, turning them into full-time professional legislators. The current salary approaches $90,000, plus per diems, and as much as we in New York hear from short-sighted tea partiers about how veteran teachers who earn similar amounts are dramatically overpaid, I’m sure we can dispense with any potential complaints about legislators’ earnings. Issues surrounding putside income helped put handcuffs on Sheldon Silver. The Attorney General’s proposed law would go further still, making it a felony to use one’s public power for personal gain. He would abolish “housekeeping accounts” that are ostensibly used for campaign overhead, but have no contribution limits and are ripe for abuse. It would also tighten rules on campaign consultants’ ability to then lobby the people they helped elect.

The glaring thing missing from Schneiderman’s proposals is something that New York needs to very carefully consider – abolition of our corrupt and needless system of “electoral fusion”. New York is one of only eight states that still allow multiple parties to cross-endorse the same candidate for office. It just shouldn’t be – whether we’re talking about the so-called “Independence” fusion Party, whose raison d’etre is patronage, and also to trick unawary voters who intended to register as what New York calls “unenrolled”; the “Conservative” fusion Party, whose platform planks are as set in stone as the party’s options for patronage and advancement, or the “Working Families” Party, which largely promotes the interests of organized labor.

While each fusion party claims that it serves some legitimate electoral purpose, the Independence fusion Party is almost laughably corrupt. It bears repeating that electoral fusion is awful. It is the root of very many evils. It allows candidates and other connected individuals to manipulate elections in order to maximize political power and monetary return through patronage for hangers-on. There are just over 13,000 Erie County voters registered in the Conservative Party – there is no rational way that party’s Erie County committee chairman Ralph Lorigo should wield the power he does. There was no way a barber from Springville – Tony Orsini – should have been a kingmaker. The statewide Independence Party was so angry about being manipulated by Democrats who were using it to trick low-information voters who thought they were voting for a small-i “independent” that they decided to become a wholly owned subsidiary of the state Republican Committee.

Electoral fusion is constantly being manipulated by bad people for bad reasons. It is used as a shield against some fantastical electoral rigor whereby a (R) will never color in the box for a (D) and vice-versa. It is used as a sword against people who don’t play ball with very petty people. Schneiderman’s proposed bill is worth advocating for and supporting. Even piecemeal reform is an improvement over our untenable status quo.

Because it doesn’t matter if you’re a Democrat or a Republican in Albany – that’s not remotely what matters. The only thing that matters is money, power, and control. Who owns or owes whom is the name of the game, whether it’s big donors with multiple LLCs or some microscopically small party line that lends the words “independent” or “conservative” to a candidate’s effort.

We know what the problems are, and we even know how to fix them. It’s time that our Albany pols become a bit more self-aware and actually – for once – think of the greater good.

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The Illusion of Albany

3menI’m expounding a bit here on conversations I had Wednesday with people in the know. Recent events in Albany, namely the indictments of former all-powerful Assembly Speaker Sheldon Silver and the indictment of former also-powerful Senate Majority Leader Dean Skelos, have given hope to some that U.S. Attorney Preet Bharara is power-washing Albany’s filth and corruption, and that things might actually change.

Others lament just how little clout western New York has in Albany, and that with the exception of fawning attention from a governor who wants to add “turned Buffalo around” to his resume, we get scant attention from our state government, save the odd ribbon-cutting.

As for the former, consider that new speaker Carl Heastie and new senate leader John Flanagan are widely rumored simply to be puppets of their respective predecessors. Consider why it was that, at a secret meeting, Senate Republicans chose a fellow Long Islander to replace Skelos, over a Central New Yorker. Even Cathy Young of Olean backed Flanagan in exchange for a vague guarantee about changing the totemic NY SAFE Act. The Bronx’s Heastie, too, shares a general geographical similarity to his predecessor, Manhattan’s Lower East Side’s Silver. Nothing has changed but the faces and names – it’s all just transparent artifice and fakery.

Indeed, Flanagan has already told people not to expect any more of what Albany desperately needs – ethics reforms. Whatever mild reforms Albany made in recent months are too little, too late as it is, and an effort to close the notorious LLC loophole, which allows individuals to bypass campaign giving maximums, has died in committee.

More to the point, the quashing of Senator Dan Squadron’s bill to close the LLC loophole is courtesy of WNY’s own Senator Mike Ranzenhofer, who killed it in his corporations committee.

As for WNY’s lost clout, consider that any outsider coming here to campaign or raise money must tiptoe through a field of dog crap in order to do so. There is quite literally no way to come into WNY outside the area and not offend one of our many “mean girls” factions. Like middle school, you have to have pre-selected a clique, and be especially aware of whom you meet with first, because presumably all of this minutae matters to someone. When the hopeful pol boards his JetBlue flight the hell out of here, his shoes are encrusted with dog excrement.

There is nothing new under the sun, and there is no reform or significant change coming. Albany will stay corrupt and corruptable until there is some underlying incentive to undertake serious and widespread reforms – structural reforms like abolishing electoral fusion and eliminating the LLC loophole. Western New York will continue to argue amongst itself and fight over scraps, because anything else would seem too effective for our collective taste.

Balancing the Upstate Billions

Governor Cuomo Presented with Buffalo Billion Investment Development Plan

Buffalo’s billion is being divvied up mostly as state investments in private enterprise – things like Elon Musk’s SolarCity. How the money is being spent is reportedly opaque, and controlled by very wealthy, well-connected people whose charge is to transform Buffalo’s economy into, according to the Buffalo News,

a hub for clean energy research and manufacturing, as well as a center for medical genomics research centered around the University at Buffalo’s supercomputing capabilities. Another center would have costly and sophisticated equipment that would help some types of advanced manufacturers develop new products and technologies that they couldn’t otherwise afford to do on their own.

That’s all very forward-thinking and laudable, but average western New Yorkers had no real input into how the state investment was made.

Some of the billion will be used for infrastructure changes, such as redesigning Niagara Falls’ sad downtown, and removing a portion of the Robert Moses Parkway, but that’s a small fraction of the billion.

More glaring is the fact that Cuomo hasn’t come up with a Buffalo or Syracuse or Binghamton billion.

During the 2014 campaign, Syracuse reporters were asking Cuomo why Syracuse didn’t have a billion, and Cuomo challenged the city to come up with a plan.

“I want to do the same with Syracuse,” Cuomo said today. “But don’t think I come and write a check and it happens. Because that’s not what happens. I don’t write the check until you have a vision and you have a plan”…

…To attract more state taxpayer help for the Syracuse area, the ideas and commitment from private companies have to be bigger, he said.

Winning communities, he said, have to be energized, coordinated and committed. “So I’m ready,” he said. “Are you ready, Syracuse?”

Syracuse is, evidently, ready, but its mayor, Stephanie Miner, has a radically different idea about how she’d use the money. More specifically, the state is staring at a $5.4 billion windfall from settlements with banks and other financial institutions, and trying to figure out how to spend it. School districts are clamoring for relief, at long last, from the Gap Elimination Adjustment, and Republicans in Albany want money for infrastructure improvement.

As set forth in this editorial, Miner would spend $851 million of a Syracuse billion to replace its crumbling water system. The balance would be spent on municipal broadband ($84 million), rebuilding roads ($48 million), develop newly created public space due to a reconfiguration of I-81 ($3.6 million), $10 million for schools, and a $3.34 million public market specifically targeted at Syracuse’s new refugee residents.

But the price tag for the new water mains has a modern addition:

At the same time, the city would create a natural chilled water system to cool buildings cheaply, efficiently and sustainably using the cold water at the bottom of Skaneateles Lake.

Miner’s ideas for this money directly benefit all Syracuse citizens by spending public money on public needs, like infrastructure and schools. It bucks Cuomo’s goals of public-private partnerships for industrial modernization. The Post-Standard likes Miner’s ideas, although its editorial board thinks it doesn’t go far enough,

It’s an “eat-your-peas” approach that aligns with Miner’s view of the role of government, versus the “shiny toys” approach favored by Cuomo and the Buffalo Billion.

adding,

Miner is right that investing in infrastructure gets government out of the business of picking winners and losers in its efforts to stimulate the economy. Infrastructure is a public good that enables and encourages economic activity. Government doesn’t create jobs; it creates the conditions for the private sector to create jobs.

The mayor is smart to capitalize on Syracuse’s distinct natural advantage — an abundance of potable water — and to piggyback on the existing paths that move it from Skaneateles to Syracuse. The question is whether “the best darn water infrastructure in the nation” is a boast worth making.

Whether by accident or design, the mayor’s plan leaves us wanting more. Think of it as an opening bid. Who’s willing to push her vision farther?

Frankly, wouldn’t it be prudent for a city to use a massive windfall to balance eat-your-peas with one or two big projects that could lead to a fundamental restructuring of its economy? This is without getting into how Cuomo’s handouts to upstate communities hardly puts a dent in the palpable damage that his hedge fund donors have done to those same communities.

But Miner makes a good argument – what’s the point, for instance, of building Syracuse’s version of Canalside if it’s going to be dependent on water mains from the 1890s?

Governor Cuomo has put up a $1 billion revitalization fund that upstate cities must compete for to receive. Business leaders have called on the governor to up the stakes to $2.5 billion.

There needs to be a good balance between direct state investment in capital projects, as well as public-private partnerships to jump-start anemic upstate economies. After all, it’s not like a complete rebuild of Syracuse’s water system isn’t going to directly benefit private contractors, as well.

But fundamental to remaking upstate, and a point that always gets overlooked because it’s far less sexy than Cuomo making it rain, is that Albany has yet to address things like making it easier and less onerous to start and maintain a business in New York State. It has yet properly to address the dysfunction of myriad stacked taxing districts and authorities that implement and make you pay for unfunded Albany mandates, over and over again.

The Banality of Albany Corruption

Courtesy Marquil at EmpireWire.com

Sheldon Silver lost his speakership because he’s been indicted on corruption and bribery charges. So far, it’s been a banner year for antidemocratic and corrupt practices to be shown the light of day. The common denominator is bad government, and why we elect horrible people to

1. ICYMI, the Buffalo School Board has abandoned all pretense of being responsible public servants.

2. Brooklyn Democrat, serial sexual harasser, and former Assemblyman Vito Lopez is settling lawsuits alleging that he was a creepy sex fiend misogynist groper. Well, that is to say that the state is settling these allegations to the tune of $545,000.  It’s taxpayer money – Lopez is only personally on the hook for about $35,000 of it. This isn’t just Lopez’s disgrace, but sheds light on how corrupt and shameful Sheldon Silver’s Assembly had become.

3. Former State Senator George Maziarz is accused of directing his staff to destroy campaign finance information soon after federal investigators began sniffing around. It might be ok to follow standard record-destruction timelines, but not so much if you’re simultaneously destroying evidence.

4. Former State Senate President, Democrat Malcolm Smith, was convicted of bribery charges last week.

Federal prosecutors had charged that Smith, with the help of $200,000, tried to bribe his way onto the GOP ballot by spreading money around to GOP power brokers. Smith was arrested in 2013, but continued to serve as a rank-and-file state senator, though his fellow Democrats did not allow him to conference with them. He was ousted by voters in Queens last fall in a Democratic primary election.

Also charged in the case was former Queens Republican boss Vincent Tabone. Smith, as a Democrat, needed to secure backing from GOP leaders in order to qualify for a place on the 2013 mayoral ballot on the GOP line. Tabone was convicted along with Smith Thursday. A former New York City councilman, Daniel J. Halloran III, had already pleaded guilty in the case.

Did you catch that? Smith was convicted of trying to bribe Republicans in Queens to give him a Wilson Pakula to run for Mayor on the Republican line. Electoral fusion is legalized corruption, and I have to imagine that this sort of quid pro quo is not at all unique to Mr. Smith.

5. Here’s another depressing story from the Albany Project. This one is about Cuomo mega-donor Leonard Litwin, a New York real estate tycoon. Litwin donated $1 million to Cuomo’s re-election campaign and $500,000 to the state Democratic committee, underscoring the toothless pointlessness of our campaign finance rules. Litwin also happened to be client of the small law firm Goldberg & Iryami, which is linked with the Sheldon Silver corruption prosecution and specializes in Article 7 real estate tax challenge suits. Litwin used the LLC loophole to get all that money (including $200,000 to Silver), to recipients.

Litwin recently booked a $260 million sweetheart loan through the NYS Housing Finance Agency to finance a luxury apartment project in Manhattan. The NYSHFA was run by a Cuomo appointee who was recently promoted, and is now Cuomo’s chief of staff.

Back when John McCain was a serious person, he’d talk of campaign finance reform to abolish what he called the “iron triangle” of special interests, money, and legislation. In New York, no one with any real authority has seriously taken up that cause, except for a federal prosecutor in Manhattan. In New York State politics, that triangle isn’t made of iron, it’s made from graphene, which is stronger and more expensive.

Furthermore, if anyone is to take up the cause of cleaning up state politics, they’ll have to lead by example and not cop out and be just as corrupt as everyone else.

I think we deserve better than this. Don’t you?

The Tragic Pointlessness of Sheldon Silver’s Fall

Read this. Then ask, when do they go after the rest of them?

SHELDON SILVER, the defendant, has engaged in and continues to engage in a secret and corrupt scheme to deprive the citizens of the State of New York (the “State”) of his honest services, and to extort individuals and entities under color of official right, as an elected legislator and as Speaker of the New York State Assembly (the “Assembly”). […] These representations were and are materially false and misleading. In truth and in fact, SILVER has obtained millions of dollars in outside income as a direct result of his corrupt use of his official position to obtain attorney referral fees for himself, including from clients with substantial business before the State, and not as a result of legitimate outside income SILVER earned as a private lawyer.

There’s no doubt that Assembly Speaker Sheldon Silver is widely reviled by people who pay even light attention to Albany politics, and likewise no doubt that Albany politicians fear or begrudgingly respect him. He rules the majority Assembly caucus with an iron fist, ruthlessly punishing dissidents and has survived a couple of pretty serious coup attempts. He has a long memory and doesn’t forget past insults or slights. He is, in short, a political survivor who wields extraordinary power within a dysfunctional, third-world style of governing that New York’s electorate has tolerated for years.

Netroots website “The Albany Project” was recently brought back from the dead, and it’s no zombie. The writers there have been relentless – just crushing the details and repercussions of the Sheldon Silver downfall. Here is the federal complaint:

US v Sheldon Silver Complaint

We can start with the obvious – the powerful Speaker of the Assembly was indicted on federal corruption charges last week, and the FBI took him into custody. There wasn’t a perp walk, but there’s a now-iconic picture of Silver – hands cuffed behind his back – seated in the back of an FBI agent’s car. He looks frail and elderly in the picture – nothing like the criminal monster, as his critics describe him. The outcry demanding his resignation – as speaker and from the Assembly – came quickly, but New York being New York, some people came to Silver’s defense. All of it is tone deaf. New York Mayor Bill deBlasio said Silver is a good man. The “Working Families” fusion Party praised Silver and reminded everyone of the presumption of innocence our system guarantees. Even Republican former Senate President Joe Bruno, who spent a decade fighting off corruption charges, came to Shelly’s defense.

After all, Silver was perceived as being a progressive check on what many on the left consider to be Governor Cuomo’s center-corporatist tendencies. Without Silver there as one of the all-powerful three men in the budget negotiations room, deBlasio and the WFP are somewhat adrift.

The charges against Silver share the same common denominator – that he misused his power, and used his official position to corrupt ends. Turn back to Joe Bruno – the problem isn’t necessarily that Bruno broke any laws, but that the things with which he got away were completely legal. But the federal prosecutors hone in on “honest services” fraud. 

SILVER agreed with others known and unknown, including a co-conspirator not named herein (“CC-1″), to use the power and influence of his official position to induce certain real estate developers with significant business before the State of New York to retain the law firm of CC-1 in exchange for hundreds of thousands of dollars in secret bribes and kickbacks paid to SILVER by the law firm, which were masked as legitimate income earned by SILVER as a private lawyer.

In addition, Silver failed to report other outside income including fees from unnamed law firms and referral fees from physicians. At least one physician who had side deals with Silver received state grants arising out of the 9/11 attacks. Silver’s law firm’s dominance as a plaintiff’s asbestos/mesothelioma firm is astonishing. The feds seized about $3.8 million from Silver around the time of his arrest.

Governor Cuomo’s Moreland Commission on public corruption was looking at outside income when it was disbanded, and Albany politicians spent $1 million quashing subpoenas seeking to uncover that income.

The arrest of Sheldon Silver, alas, is not the win New Yorkers need. Sheldon Silver isn’t the disease – he’s a symptom. The disease is a corrupt and corruptable system that puts too much power in too few hands. The disease is a state government that does not operate so much as a deliberative democratic representative body as much as a three-man junta. Everything bad about Albany flows from that fundamental structural, systemic dysfunction.

Sheldon Silver’s conviction – if it ever happens – won’t fix anything. On the contrary, it now serves as a handy distraction. Zephyr Teachout literally wrote the book on public corruption, and she calls on New Yorkers to seize the Silver arrest to fundamentally reform the way campaigns are funded in New York State. After all, corruption is the natural outgrowth of greed and power, and she calls our current system “legalized bribery”. Within that system, Silver is masterful. Literally millions of dollars flow to his campaign committee.

Silver’s arrest has, at long last, disgraced Assembly Democrats who called last night for his resignation as Speaker, as opposed to the temporary step-down he offered. It’s now safe for Assembly Democrats to fight back. That’s swell.

But Silver’s downfall only treats one of the symptoms, rather than curing the underlying disease.

Albany is broken, and the boffins at NYU Law School’s Brennan Center for Justice have spent over a decade laying out the ways in which New York’s government is undemocratic and dysfunctional, and has set forth specific reform proposals to help return the government to the people. Everything from Sheldon Silver to three men in a room to the NY SAFE Act – whatever your specific complaint might be – is a symptom of that underlying disease.

The people we elect to state government – regardless of party affiliation – have done little, if anything, to address the root causes of the symptomatic problems on which they run their campaigns. They have a vested interest in keeping things opaque because we’d probably be aghast at what really goes on. Full disclosure of campaign financing, limits and full disclosure on independent expenditures, public financing, and redistricting reform should be on the table. Furthermore, the Brennan Center went into great detail about the fundamental lack of any semblance of deliberative democracy taking place in Albany.

Arresting Shelly Silver is a start. As malefactors go, he’s a big fish. But until Albany politicians re-discover the fact that they are there to serve the people, rather than their own personal greed, power, and ambition, we will have more dysfunction, more graft, more theft of honest services, and more Sheldon Silvers time and time again.

As New Yorkers, it behooves us to recognize and differentiate between the symptoms of the disease, and the root cause, and direct our energy at the latter.

Parsing the Concern-Trolling Fracker

frac_truckIn late 2014, Governor Andrew Cuomo banned horizontal hydrofracking in New York State. While this will likely have some unknown, untested economic downside, it will eliminate the risk of environmental damage or catastrophe. This is a good thing, on balance.

Not everyone is pleased, however. Consider this “Another Voice” in the Buffalo News. To call it concern-trolling is kind; it is an appeal purely to emotion. Rush Limbaugh or the editorial board of the New York Post couldn’t have written anything better, and the only thing missing is an “Il Duce” reference to Cuomo’s Italian heritage, and some sort of irrelevant side-swipe at the NY SAFE Act.

We begin with ad hominem attacks on “Ithaca” and “Park Avenue”(?) liberals, who would be the caricature, I suppose, of the typical anti-fracking, pro-environment activist.

New York’s hardened anti-hydrofracking environmentalists are whooping it up! The hills of Ithaca and the lowlands of Park Avenue are alight with joy. Like-minded billionaires in California have joined the party, too. Their investments are finally paying off.

With the help of well-placed funds and attention-grabbing headlines, they have moved an entire political system into their self-serving camp. No wonder they are calling New York’s continued moratorium on fracking a huge victory. And it is. It is a huge pyrrhic victory.

I’m wondering what is “self-serving” about wanting to protect our shared environment? What is “self-serving” about wanting to avoid, e.g., the public cost of cleaning up some sort of environmental disaster? Isn’t that the opposite of self-serving? Is there some direct, pecuniary benefit that Ithaca or Park Avenue derive from a fracking ban?

There’s a lot of “pity the poor oil companies” going on.

Let’s break it down into winners and losers.

The progressive elites in New York’s well-heeled communities win. But why shouldn’t they? They have a long history of winning. Nuisances like the truth have no place at these heights.

Every time this author references “progressive elites,” I’m suspecting he’s too geographically ignorant to know that “Park Avenue” isn’t what he was looking for. He’s imagining this stereotype, as Woody Allen described in Annie Hall: “New York, Jewish, left-wing, liberal, intellectual, Central Park West, Brandeis University, the socialist summer camps and the, the father with the Ben Shahn drawings, right, and the really, y’know, strike-oriented kind of, red diaper…”

More and more, this game of shutting down oil and gas development is done at the pleasure of the rich. They are pulling the strings from the shadows. Some are, no doubt, good people with good intentions, but many are using their extreme wealth to blur the lines in a war they are waging on the prosperity and well-being of America and Americans.

Then there’s the Hollywood crowd, many of them unfamiliar with the ivy walls of higher education but fabulously wealthy nonetheless. They jet into events on private planes, dumping carbon onto the rooftops of the less privileged.

In brief, these are the winners. And that’s OK, because they are already winning at the game of life. They should win. But this time their victory has come at our cost.

So, the people who are opposed to hydrofracking are the wealthy “Park Avenue” crowd, and the wealthy “Hollywood” crowd. I suspect that the author is referring to Mark Ruffalo, who is a vocal fracking opponent who also happens to live in New York. In fact, his interest in fracking came in reference to land his family owns in upstate Sullivan County. So, you know, substitute “Callicoon” for “Hollywood”, and you’re on the right track.

Notice, however, the glaring omission of any evidence – even a mention – of the way in which these rich caricatures benefit in any way from a fracking ban. Instead, we have this appeal to what someone on the right would typically call “class warfare”, if the shoe was on the other foot:

Now for the losers. That’s you and me. That’s the farmers who saw their neighbors to the south in Pennsylvania collect fees of up to $5,000 an acre and royalties of close to 20 percent on $7 million wells. They won’t be sending their children to the same universities as the Cornell crowd. There is no moneyed legacy in these battered little towns and rural communities. They don’t have a voice. So in this case the well-heeled progressive crowd was able to do what the powerful always do – crush the less well off.

Well, no. It’s not “you and me”.

I’m not a fracking “loser” here, because I was never slated to collect any fees or royalties on my property. Chances are you weren’t, either. Furthermore, because fracking is allowed in states that have analyzed the relative costs and benefits of that extraction method and reached a different conclusion, I actually get the benefits of cheaper natural gas without the potential environmental difficulties. Sounds to me like a win/win for New Yorkers who are not directly affected by dint of location.

So, some hypothetical farmer in the Southern Tier won’t benefit from a huge petro-windfall of cash money, and we’re going to throw shade at Cornell – sorry the “Cornell crowd”? Furthermore, what’s absolutely astonishing about this editorial’s use of class warfare is the supposition that all of these super-wealthy pointy-headed nerds at Cornell, alongside the Hollywood and “Park Avenue” communists conspired to shut out the poor, lowly oil companies. If only these oil and gas companies could come close to competing with the juggernaut of Ruffalos and Finger Lake eco-nerds!

There are 62 hydrofracking operators in Pennsylvania, and that they have racked up 3,880 violations resulting in almost $6 million in fines. For instance, there have been 141 violations since 2009 for “discharge of pollutional material into waterways of the Commonwealth”. How dare these New York liberal elites fight for clean water!

Furthermore, Pennsylvania is unique in that it refuses to tax natural gas production in the state. It imposes some drilling fees,

But revenue generated by the fee has not kept pace with production. Gas pulled from the ground in Pennsylvania doubled from 2011 to 2012, soaring from a yield of roughly 1 trillion cubic feet the first year to more than 2 trillion the next. Yet the flow of money from the impact fee actually decreased in that same interval. The state brought in roughly $204 million from the fee in 2011. The following year, revenue dropped to $202.5 million.

Between 2012 and 2013, revenue from the fee increased by 11 percent, jumping to a record high of close to $225 million last year. But the leap was significantly smaller than the overall rise in production. Natural-gas output increased by more than 37 percent in the same period, when it rose to 3.1 trillion cubic feet, according to Pennsylvania state estimates.

It’s safe to assume that, had New York permitted this sort of fracking, it’d have taxed the crap out of it. But our Park-Avenue-and-Cornell-hating correspondent argues that the poor loser farmers in the Southern Tier were the out-spent victims of professors and rich Park Avenue Hollywood types. But if 2013 natural gas production in Pennsylvania reached 3.1 trillion cubic feet, presumably these companies – the implication being that they’d jump right into production in the Southern Tier of NYS – could have used a tiny bit of their revenue to advocate for people and policies that would have brought about fracking? Are the poor gas companies too impoverished to help out these downtrodden farmers who are losing out on millions in royalties and leases?

Natural gas is traded on the NY Mercantile Exchange in $x per million BTU. If you take that measure and multiply it by 1.025, you get the price per thousand cubic feet. Right now, about $3.10/mcf. So, 3.1 trillion cubic feet is worth about $3.17 billion right now. Surely, the poor, downtrodden farmers could have benefited from some of that money being thrown around to, say, elect Rob Astorino, right?

So now that Gov. Andrew M. Cuomo has talked the talk, will he walk the walk? In this case, he would personally stop using carbon-based fuels, since he is disallowing the production of them. He would ask his friends to park their planes and dock their yachts. He would not want to be seen as a taker. He would shut off the heat in his house. He would eat cold food. He would start walking foot trails only (after all, pavement is carbon-based, too).

This is some fundamentally stupid bullshit. It’s an argument by 14 year-old would be embarrassed to proffer. So, if someone who lives in Westchester County opposes nuclear energy, they should take themselves off the grid? Andrew Cuomo isn’t a hypocrite if he bans fracking and uses fossil fuels; he’d be a hypocrite if he banned fracking while owning land where fracking wells were present. All the Cornell professors need to “park their planes and dock their yachts”? Why the hatred against the wealthy, son? I mean, should an Obamacare opponent quit his health insurance and use cash for all doctor’s visits? My tax dollars go to pay for things I disagree with on a daily basis. Do I move to Monaco and renounce my citizenship, lest some dummy call me a hypocrite in the Buffalo News?

Anything less and Cuomo could paint himself as a phony. That would not bode well for his political ambitions, at least for those of us who believe that politicians are capable of the truth.

I get the distinct impression that this writer’s concern with Cuomo’s “political ambitions” is disingenuous, don’t you? What about that author, by the way?

Dan Doyle is president of Reliance Well Services, a hydraulic fracturing company based in Pennsylvania.

Because of course he is. Reliance Well Services is based in Erie, PA and counts Chautauqua, Alleghany, and Cattaraugus Counties as being within its territory. It operates “frac trucks” which are used to support drilling activities. Presumably, opening up the three NYS counties closest to Erie, PA to fracking would have resulted in a professional bonanza for Mr. Doyle and his company.

Mr. Doyle throws shade at Cornell professors and downstate activists for acting out of “self-interest” without defining or backing up that allegation in any way. He invokes the poor, downtrodden farmer as the real “loser” in this scenario, and demands that Governor Cuomo revert to a 18th century way of living for refusing to open up NYS land to hydrofracking. But in the end, the only one with “self-interest” is Mr. Doyle, who couldn’t be bothered to simply be honest about the fact that Governor Cuomo dealt a blow to his business plan and bottom line.

Pennsylvania may have a great need for the revenue that fracking delivers (despite the fact that its tax and regulation scheme leaves a lot to be desired). New York State coffers can rely on other, dependable, renewable sources of tax revenue to help keep it afloat. (See Wall Street, e.g.) The NYS unemployment rate stands at 5.9%. In Pennsylvania, it’s 5.1%. Seems to me like New York can do ok without fracking. Perhaps some future governor will disagree and open the state up to fracking. But for now, we’ll be ok.

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