POLITICAL CORRUPTION IN THE

NEW YORK STATE LEGISLATURE:

WILL IT EVER END?

BY SEYMOUR P. LACHMAN

Seymour P. Lachman

The Hon. Jerome and Helene Berg

Public Policy Papers on Government Reform

May 2015

Published by the

Hugh L. Carey Institute for Government Reform

at Wagner College

Staten Island, New York

Seymour P. Lachman, Dean Emeritus

Marc A. Rivlin, Interim Director

POLITICAL CORRUPTION IN THE

NEW YORK STATE LEGISLATURE:

WILL IT EVER END?

by Seymour P. Lachman

1

In the nineteenth century, the British historian Lord Acton wrote, “Power tends to

corrupt, and absolute power corrupts absolutely.” What Acton appeared to be saying is not

that leaders are innately corrupt—although some may fit that category. What he was

saying is that power can produce corruption and that absolute power invariably brings

about major corruption. The key question is, how do we limit this power that produces

corruption while working within the political systems in the United States. Winston

Churchill, the British prime minister and one of the greatest figures of World War II, put it

another way when he said that democracy is the worst form of government except for all of

the other alternatives. He is, therefore saying that democracy is not perfect but compared

to other systems of government, is better, and we have to realize this. In ancient and early

medieval times, when kings, emperors, pharaohs, and others had absolute power, they also

invariably abused that power. They could do whatever they wanted—politically,

economically, socially, and culturally—and they did.

At the end of the medieval period and the early modern period, these absolute

powers were somewhat but not as yet totally weakened through the creation of

constitutional monarchies, which began with the election of parliaments, initially only by

landowners and without the participation of women. Eventually this grew into monarchies

with limited parliamentary government. However, this was still not the parliamentary

democracy that developed in the late nineteenth, twentieth, and early twenty first

centuries.

The early immigrants to America usually came not only to make a better life for

themselves but also to be able to express their religious beliefs that were not accepted as

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yet by many of the nations of the world. This is why many of the Puritans and other

religious dissidents who emigrated to these shores and to a new land with all of its

difficulties had the opportunity to become, in their minds, similar to the ancient Israelites

and serve, in their opinions, as a light unto the nations. Some, unfortunately, did not accept

this in their relationships with some of the other religious dissidents.

Things were never easy in developing new democratic institutions and changing the

attitudes of people to accept them. There was an interesting case that illuminated this. In

1785, one of the outstanding founding fathers of America, Benjamin Franklin, was set to

leave France to return to the United States after serving there since 1776, first as one of

three commissioned envoys and later as minister plenipotentiary (ambassador). As was the

custom for departing diplomats, Franklin was given a gift by France’s King Louis XVI, just a

few years before his death during the French Revolution. What was the gift? It was a gold

snuff box, which contained a portrait of the king surrounded by 408 diamonds. Franklin’s

fellow envoys Silas Deane and Arthur Lee had received similar gifts upon their retirements

years earlier. The gift occurred before the Constitution had been adopted when the Third

Continental Congress presided over a weak central government under the Articles of

Confederation. There were concerns about the practice of diplomatic gifts, so much that the

Articles of Confederation prohibited the practice as a temptation to corruption (Articles of

Confederation, Article VI, Clause I). Still, Congress considered whether Franklin should be

allowed to keep the gift. Was this snuff box given to Franklin as a reward for his having

influenced the new American government to support France in issues of foreign affairs or

was it given because it was standard practice to give gifts to departing envoys? Should the

conflict of interest, an appearance of corruption that arises from diplomatic gifts mean that

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they should be banned outright as in the Articles of Confederation? Two years later, the

Constitutional Convention included in Article I a prohibition of any federal office holder

accepting a gift from a foreign government without the consent of Congress. Later, it was

discovered the snuff box amounted to more than half of Franklin’s personal estate. There

were also growing concerns in America about the growth of corruption in the late

eighteenth and early nineteenth centuries. Things worsened in the mid and late nineteenth

centuries. During the administrations of Andrew Jackson as military governor of Florida

and later president, corruption was rampant. Patronage grew as the means of filling

government positions and court orders were routinely defied. Corruption worsened later

in the nineteenth century. In New York State, William “Boss” Tweed controlled the

Democratic political machine of Manhattan known as Tammany Hall. He was eventually

sent to jail for multiple acts of public corruption. Between 1850 to 1870, he illegally

amassed $200 million, which would be worth approximately $7 billion today. He was one

of the richest people in the country. His power went so far that almost everyone who

received a job building the Brooklyn Bridge had to give a kickback to Tammany Hall, which

meant Boss Tweed.

In 1881, President James Garfield became the second American president to be

assassinated. He was assassinated by a disgruntled supporter who had expected an

appointment to high political office and money as a reward for his service to Garfield’s

1880 campaign for president. This led to a backlash against patronage, and the corrupt

spoils system very slowly began to change. But, even after the civil service laws were

passed by Congress, this was only the tip of the iceberg of growing corruption in

government.

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Things even became worse in the twentieth and early twenty first centuries to the

point that the Brennan Center for Justice at the New York University School of Law

observed that the New York State Legislature is one of the most corrupt in the nation. In my

opinion, it is today certainly the most dysfunctional and among the most corrupt. I saw this

firsthand when I served five terms in the New York State Senate during the late 1990s and

early 2000s before I returned to academic life. This corruption expanded into many other

areas in the last decade. Harvard University’s Edmond Safra Center for Ethics in 2015

issued a study of corruption for all of the fifty states. The Safra Center received their results

by breaking it down in terms of executive and legislative corruption. The New York State

Legislature, they said, is one of the six most corrupt in the country. A report on corruption

in Illinois issued by the University of Illinois at Chicago described New York as the most

corrupt state, followed by California and Illinois.

How and why is New York so corrupt? There is a complete lack of transparency: no

one knows except three men and their staffs what takes place in the development of the

budget for the entire state. The power of these three men — the governor, the speaker of

the Assembly, and the majority leader of the state Senate — is absolute. Their power

includes whether any and all bills are permitted to go through the two-house Legislature. I

do not recall during my five terms in the state Senate any bill that passed both houses of

the Legislature without the support of the speaker of the Assembly and the majority leader

of the Senate, who most of the time happened to be of opposite parties. The legislative

leaders also are in charge of all moneys going to members beyond their salaries of $79,500.

They appoint committee chairs as well as the numerous party conference leadership

positions (such as whip), controlling the additional salary that comes with those positions.

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They allocate office space and staff budgets, assign conference staff to assist in members’

offices, and determine what funds in the budget members may distribute to community

groups in their districts. They give them these perks and, in return, members of the

Legislature are required to listen to what their leaders tell them to do. Because the

members are so dependent upon the leaders for providing for their districts as well as

personal advancement, the relationship is inherently corrupt. The New York State budget

for Fiscal Year 2016 contained $2.9 billion—almost $3 billion—in “lump sum”

discretionary spending, much of it reallocations of member item funds from past years’

budgets, that was not itemized, all of which is controlled by the Assembly speaker, the

Senate majority leader, and the governor.

When I served in the state Legislature, we had considerable free time when the

three men in a room were coming up with a budget and deciding what bills would become

law. What did the members of the Legislature do? Most of them called their district offices

to work on local issues back home. This rarely took more than an hour each day. The

waiting could go on for many more hours. What would they do with the remaining time?

One state senator called people in his district for hours and hours to congratulate them for

milestones such as birthdays and anniversaries. That senator is now in jail for other

reasons mentioned later. Another senator, who was hoping to run someday for higher

office, spent his time calling potential donors to upcoming cultural programs that he hoped

would raise his public profile. He was successful with both the program and his goal of

achieving higher office.

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Many would take long hours for lunch and see the sights in Albany. Others would

work for hours in their offices on matters other than the budget because they did not know

what was happening in the budget process. Still others, including me some times, read the

various newspapers and articles in journals and magazines, some of which did pertain to

governmental issues but not the development of the New York State budget.

Every time members of the Legislature are in Albany, they receive a stipend — a per

diem — for food and lodging ($172 in 2015), which most members take in full, regardless

of whether they had spent that amount. Some members supplemented their salaries by

tens of thousands of dollars in per diem payments. This is just one of many questionable or

corrupt practices in the New York State Legislature.

We have to ask ourselves now: Why do corrupt and illegal practices continue?

Because of the concentration of power in leaders of each house and the fact that, since

many individual members benefited from the system in place, members of the Legislature

did not have the power or the will to change it. Today, because of the indictments of the

Senate and Assembly leaders and a new focus on ethics and corruption, individual

members may have power and the will to change at least part of it. However, thus far, there

have been very few changes.

Even though the United State Congress has been criticized for corruption, it does not

compare to the New York State Legislature, in part because the power is not concentrated

as much in the leaders. For example, Republican Speaker of the US House of

Representatives John Boehner faces frequent opposition to major parts to his legislative

agenda within his own Republican conference. He sometimes does not receive a majority

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vote of these colleagues to support important legislation he wants passed. Similarly, when

former Democratic House Speaker, Nancy Pelosi, almost a decade ago, wanted to have as

her deputy leader a congressman she supported, the Democratic conference selected

someone else. She remained speaker — it was not a vote of no confidence leading to her

replacement, and she remains the Democratic leader to this day— but she was taught a

lesson that the conference, not the speaker, has the power to select the leadership and the

committee chairs. That would never, ever happened in the New York State Legislature. The

majority party in Congress elects committee chairmen. Committee assignments are based

on seniority and what the members of the committee want. This does not exist in the New

York State Legislature where the leadership of each house controls everything.

In the New York State Legislature, the Senate majority leader and the Assembly

speaker do as they want. They use conference and committee leadership assignments as

perks since they come with significant stipends. If you do not follow the vote of the

leadership, then you will not rise in the party and have influence in state legislation. The

leaders of different committees receive different amounts of additional salary. The chair of

the finance committee gets as much as the deputy majority leader in the Senate. Some

would say it is unethical behavior to use leadership positions, and the stipends attached, in

this manner. Others would say that it is illegal behavior. Some would just call it politics. The

line between ethical and illegal behavior is blurred, and legislators sometimes go over the

line dividing the two, and some don’t realize when unethical behavior blurs into illegal

behavior.

8

Over a year ago, I received a call from Tom Kaplan who is a political reporter for The

New York Times. He asked me, “Do you still have that photo on the wall taken while you

were in the state Senate, the one with all 62 of you sitting there?” and I said, “Of course I

do.” And he said, “Can you go over to the photo and tell me what they are doing now.” I

went over to the picture, and looked at the people. I said that several are still in the

Legislature today. Others have left the state Legislature to resume their law practices full-

time. Others have become lobbyists for companies that might have business dealings with

the state. Some have been elected to local government positions. One has returned to

academic life. In a few minutes, I was surprised and shocked to discover that 15 percent of

the members of the Senate the year that the photo was taken have been indicted, face trial,

or are serving prison terms. Even former members of the Legislature don’t realize the

magnitude of the issue. What other business or profession has had 15 percent indicted and

found guilty in one decade. In the following decade it was much worse and the percentage

was over 20 percent of the state Senate.

When I was on the finance committee working to prepare a budget for New York

State — “working” means doing nothing for the majority of elected members. The majority

leader’s senior staff had much more power than I did. I will never forget the last day of one

session. All of a sudden, the members of the finance committee, Democrats and

Republicans, were called together. And, it was several months after the date the budget was

supposed to be voted on. We went in to the finance committee room, and the chair of the

finance committee said to us, “Okay guys, we have a budget. In a half hour we have to vote

on it.” And he was carrying a stack of papers as large as about 15 telephone directories,

which turned out to be the budget. And, he said, “Read the budget. You have the

9

opportunity to do that for one half hour before you vote. The other member of the Senate

and the Assembly do not have that opportunity at all. But, we all have to vote for it.” And I

said, “How can we possibly read a phone directory of over a thousand pages and vote on

it?” And he said, “Seymour, we are the lucky ones. The other members in the state Senate

won’t have a chance to even read it. It will plop on their desk when they come into the

Senate chambers for a vote.” And I said, “That’s crazy. How could you possibly do that?”

And he said, “One reason. You have to vote for this because it has the joint support of the

Senate majority leader, a Republican, and the Assembly speaker, a Democrat, and [then-]

Republican Governor George Pataki. And you know that whenever they agree on

something, it has to be voted on favorably and you have to vote yes.”

Those of us who called ourselves reformers were in a major dilemma. Many items in

the budget could be essential for our constituents and the people of the state of New York

as a whole — education issues, transportation issues, economic issues, social issues,

community issues. The problem was that individual budget items could not be voted on

independently after the leadership, the three men in the room, put this into what they felt

was the final form. Nothing could be removed and voted on independently because the

governor had issued a “message of necessity” for the agreed-upon budget bills. Each budget

bill was one total package, wrapped together with a ribbon, and you could only vote “yes”

or “no.” Anyone who dared vote “no” on this budget, approved by the governor, the

Assembly speaker, and the Senate majority leader, would become a pariah and persona non

grata in their Democratic or Republican conferences. If the legislators voted “yes,” they

would have the opportunity to move up in their party hierarchy and perhaps, in a few years

become a chair or a ranking minority member of an important committee.

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Henry Kissinger once said, “Corrupt politicians make the other ten percent of us

look bad.” I don’t think that corrupt politicians make up ninety percent. I think that there

are some people who are corrupt who run for office in order to make more money and gain

more power. But, I also think that most people who run for office many times want to do

the right thing but are prevented from doing so because of the dysfunctional environment

that they are in. Some of these who are not corrupt are drawn into the web and become

part of the system and advance politically and legislatively. It’s so dysfunctional that, for

the last decade, five majority leaders of the New York State Senate as well as the twenty-

year-veteran Speaker of the Assembly have all been indicted including some that are now

in prison or will be sentenced shortly. How is this possible?

In 2008, David Paterson, the Democratic minority leader in the Senate, was selected

to run for lieutenant governor by Eliot Spitzer, the then-gubernatorial candidate. Paterson

was succeeded by Democratic state Senator Malcolm Smith, who in 2014 was tried and

found guilty of bribery and corruption for his actions in a scheme with Republican New

York City Councilman Daniel Halloran (who was also convicted) to secure for Smith the

2009 Republican nomination for mayor. Smith was succeeded by Senator Pedro Espada Jr.,

who for years was criticized for enriching himself by directing state funds to a health care

nonprofit that he controlled and employed members of his family. In 2010, Senator Espada

and his son, an assemblyman, were indicted in federal court for embezzlement and tax

fraud for stealing funds from the nonprofit’s health clinics. Convicted in 2012, Senator

Espada was sentenced to five years in prison.

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Senator Carl Kruger, the chairman of the Senate Finance Committee, one of the most

powerful committees and the individual making birthday and anniversary telephone calls

to constituents, is now in prison serving a nine year sentence for illegally taking millions of

dollars from the state. Senator John Sampson, the Democratic conference leader in the state

Senate before the current one, who shared leadership with Senators Smith and Espada

when the Democrats controlled the state Senate in 2009 and 2010, was indicted in 2013 for

embezzlement, obstruction of justice, and making false statements to the Federal Bureau of

Investigation stemming from the alleged theft of $400,000 from the sale of foreclosed

homes and now faces a trial. It is unbelievable that these people and others together

represent close to 20 percent of the senators in the past 15 years. What other business,

union, or organization has 20 percent of its officials indicted over such a period?

In the Assembly, at least 18 members have been convicted of corruption or

otherwise left office in scandals related to their public offices in the past 15 years. Sheldon

Silver, who served as speaker from 1994 until forced to relinquish his position in January

2015, has been indicted for allegedly monetizing his power and position by illegally

earning attorney fees in return for conveying public benefits to a medical practice and a

real estate business.

The corruption extends to the Republican side of the aisle as well. Senator Joseph

Bruno, the predecessor to Senator Dean Skelos as majority leader, was convicted in 2009

on two federal counts of influence peddling related to $3.2 million in private consulting

fees earned from helping entities with business before the state. Bruno’s conviction was

overturned after a United States Supreme Court ruling narrowed the scope of the federal

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honest services statutes under which the charges were brought to require proof of bribes

or kickbacks and not just a showing that the public official used his or her influence to earn

outside income,1 and Bruno was acquitted at a retrial. Bruno’s senior assistant majority

leader, Senator Guy Velella, went to jail for bribery in 2004. And, now, in 2015 Dean Skelos,

his son, and his deputy majority leader, Tom Libous, both face federal trials on corruption.

This is the first time in at least 50 years that a majority leader and deputy majority leader

were both indicted.

What pattern do we have here of corruption in a dysfunctional state Legislature?

Every Senate majority leader in a decade and the only speaker of the Assembly in over a

generation have been indicted and many of them have already been sent to prison.

The above sounds quite frustrating, and it is. What possibly could be done to change

this dysfunctional system that exists today? What laws have to be adopted? How can these

recommendations for reform be adopted by the state Legislature as it exists in New York.

Governor Andrew Cuomo’s continual efforts to bring about reform have been frustrated by

opposition of the leadership in the Legislature. Recent prosecutions of public corruption by

federal prosecutors, including one of the most powerful in the nation, the United States

Attorney for the Southern District of New York, Preet Bharara, have brought to the surface

many corrupt practices taking place in the New York Legislature.

1 In Skilling v. United States, 561 U.S. 358 (2010), the United States Supreme Court held that the 1988 “honest

services” provisions to the federal mail and wire fraud statute (18 U.S.C. § 1346) was to be narrowly

interpreted as only covering “fraudulent schemes to deprive another of honest services through bribes or

kickbacks supplied by a third party who ha[s] not been deceived” and not solely the existence of a conflict of

interest.

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Perhaps as a result of the new indictments involving the speaker of the Assembly

and the Senate majority leader, there can be an opportunity for reform.

Some suggestions that can lead towards reforming the legislative system should

include:

1) Prohibit outside employment for all state legislators. Outside employment by

legislators leads to conflicts of interest or the appearance of conflicts of interest. Members

of the Legislature should be working in the best interest of their constituents and the

people of the State of New York, not outside interests.

In return for making the job of New York State legislator a full-time position, salaries

should be increased to a level that will attract people from all backgrounds and not give

any advantage to those who are independently wealthy.

2) Extend the legislative term from two to four years and set term limits of

three four-year terms. The constant pressure to campaign every two years and raise money

for reelection undermines members’ ability to act in the best interests of the people.

Unlimited terms lead to entrenched leadership with excessive power and increases the

possibility of corruption at the top as exemplified by the recent spate of arrests of

legislative leaders.

3) Put an end to unaccountable per diem payments that have been greatly

abused by legislators. Set a cap for reimbursements for food and lodging while on official

business in Albany. Require all legislators to prove that they are working in the capital and

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have them submit receipts for reimbursement rather than have the state automatically pay

the full per diem for any days that members claim to have been in the capital region.

4) Designated grants such as member items should be allocated fairly to

deserving organization. No organization should receive member items or equivalent

designated expenditures without it first being examined where the funding will go and how

the organization will use the funds to improve his or her district. Evaluations must be made

every year regarding the worthiness of these items. Where appropriate, organization

should be funded in the baseline budget and granted objectively by state agencies through

an application process based on the merits rather than at the discretion of members or the

three men in the room.

Designated expenditures should be allocated fairly to all members of the Legislature

on the basis of need within the district, not as a way to reward some members, especially

those in the majority party, and punish others.

5) Reform New York’s campaign finance system:

a) Eliminate the “LLC Loophole,” which treats limited liability companies

like individuals rather than partnerships or corporations for the purposes

of campaign contributions, allowing wealthy individuals to use multiple

LLCs to donate many times the amount of money allowed for one person.

b) Housekeeping accounts, separate non-campaign accounts used by

political parties to which unlimited political contributions can be made,

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leading to inevitable and undue influence by the major contributors, must

be eliminated.

c) Public campaign financing with matching funds for small individual

contributions, which the New York City Council has adopted, must be

improved and adopted by the state Legislature.

d) New York State has the highest individual contribution limits of any state

that limits campaign contributions. Contribution limits should be lowered

to levels closer to New York City and federal limits. Along with public

matching funds, this should reduce the influence of money on campaigns

and candidates.

e) Place additional restrictions on campaign contributions from those with

business before the state.

f) Further restrict the use of campaign funds for personal purposes and

spell out what is meant by “personal purposes” so that there is no

ambiguity or misunderstanding.

6) Limit the power of the leaders of each house. Individual members should

select committee chairs and leadership positions. Committees should be empowered to

hold hearings on pending legislation, allow bill markups and amendments, and decide

which bills are sent to the floor of each house of the Legislature for a vote, without

retribution at all by the leadership. In addition, all of the Senate and Assembly members,

regardless of party or seniority, should be given comparable staff allocations and Albany

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office space as well as funding for district offices sufficient to serve all constituent

regardless of geographic size or local rent costs.

The problem is that these laws have to be adopted by the state Legislature, but the

leaders and the members of the Legislature benefit from the current system and so much

that it would be difficult for them to go along with these democratic reform changes that

would make the state Legislature more functional. We all must increase the pressure on

them to change their behavior within the light of total transparency.

The dimensions of a dysfunctional Legislature have grown over the last generation

to the present when things are so bad that more and more people are demanding change.

At the same time, many of them do not know how to bring about these important and

necessary changes so that New York State in all aspects government will become a beacon

of light and not darkness unto the nation. In order to achieve this, we must organize

together as one group to really bring about a functional state Legislature that we can look

at with pride and satisfaction. It will not be an easy accomplishment, but, working together,

it can be done.