What Moreland is ‘fishing’ for
ALBANY—On Friday, Republican and Democratic leaders of the Assembly and Senate, along with two major law firms that employ some of their members, legally challenged subpoenas by the Moreland Commission to Investigate Public Corruption.
The commission was convened by Governor Andrew Cuomo as a response to a number of indictments this spring, and a public shaming from federal prosecutor Preet Bharara, who spoke of Albany's "show-me-the-money" culture.
In a new crop of court papers—as well as an earlier motion to quash subpoenas targeting the Senate Republicans' political arm—legislators argue that the subpoenas are “oppressive,” “overbroad,” a “fishing expedition,” “coercion” to adopt the governor's legislative agenda and “a bald attempt to eviscerate the Legislature's law making responsibilities.”
The objections are in fact rooted partly in concerns about institutional prerogative. But the objectors are also fighting to protect two semi-official rackets that are as much a part of the Capitol's culture as the pledge of allegiance: outside compensation from firms who soak up their government stature and the ability to accept unlimited campaign money and spend it however they please.
“I guess they think that we can’t follow the money, but we are,” said Onondaga County District Attorney William Fitzpatrick, the Moreland Commission co-chair, during a recent radio interview.
The court filings offer a clear picture of what the Moreland Commission is preparing to say in its reports, the first of which is due early next month.
In many instances, the racket is plainly visible, like the arrangements of a number of Albany's lawyer-legislators.
Several elected lawmakers draw five or six-figure salaries from law firms without doing much in the way of visible work. It's widely suspected that there isn't much beneath the surface, and that the lawmakers are either acting as rainmakers who bring in business, or as a tacit lure for companies with interests before the state to sign up as clients. A 2011 law requires firms with such interests to declare if they have a business relationship with a legislator. The Moreland commissioners suspects that firms that employ lawmakers aren't complying.
A review of public records by Capital found several law firms that employ legislators have clients with interests before the state, including Hiscock & Barclay as well as Harris Beach.
Hiscock & Barclay employs two legislators—Sen. Neil Breslin, a Bethlehem Democrat, is of counsel in its Albany office and Republican Assemblyman Will Barclay, whose family founded the firm, is a partner in its Syracuse headquarters—and has recently counted Bank of America, BONY Mellon, Lutheran Social Services, Stone Street Capital and State Farm as clients. All are registered as lobbyists before the state.
Breslin has repeatedly said his work for the firm focuses on estate planning and the occasional mortgage, and offered to share his clients with commissioners provided the information never became public. It's unclear if he did so; he was not named in the subpoena the commission sent to Hiscock & Barclay.
A spokesman for Assemblyman Barclay did not comment.
Sen. Mike Nozzolio, a Rochester-area Republican, has been employed by Harris Beach for over a decade, and in 2012 reported between $100,000 and $150,000 in income. A review of state court records showed the firm has recently represented Waste Management, Railtech Composites, NOCO Energy, Unity Health System, Hofstra University, First Pioneer Farm Credit and Phillip Morris. All are registered before the state as lobbyists.
Nozzolio declined to comment, but Harris Beach partner Karl Sleight, in a statement accompanying the firm's motion to quash the Moreland Commission's subpoena, said, “It is ironic that a commission charged with purporting to examine ethics in government, blatantly disregards the sacrosanct relationship of clients and their attorneys.”
“Allowed to continue unfettered, this far-a-field inquiry would adversely impact every individual and business in New York,” continued Sleight, who was once a top state ethics enforcer. “The latest chapter of this wayward commission is another clumsy exchange that has only served to raise new ethics concerns about the government, and not solve them.”
There's also the case of Assembly Speaker Sheldon Silver, a Manhattan Democrat who reaped at least $350,000 from Weitz & Luxenberg, a large plaintiff's firm. Tort reform advocates have long argued that Silver, with evident self-interest, has sat on any measure that would make it harder for people to file lawsuits and collect.
Silver's spokesman said, “It's really rather simple - the Speaker, along with many of our members, believes that people have a fundamental right to seek compensation for harm that is done to them and we shouldn't victimize people further by undercutting their ability to hold accountable those who cause that harm.”
Some legislators argue these kinds of connections are completely justifiable if they're walled off from other firm clients with state business. This is perhaps plausible, at least, at larger firms.
But other legislators now say the appearance of impropriety by their lawyer-colleagues is impropriety, and call for an overhaul of the rules governing their outside work.
“It's an inherent conflict, when you legislate half the day and represent clients the rest,” said Senator Brad Hoylman, a freshman Democrat from Manhattan who until running for office was general counsel for the Partnership for New York City, a business lobbying group. “I strongly support a full-time Legislature, and I hope that's something that the Moreland Commission recommends. It would end so much of the problem.”
On the political side of the coin, several legislators have realized that under the Empire State's glorious campaign finance laws, basically everything is legal, and the laws that are on the books are essentially never enforced. For example, it's legal for office-seekers and officer-holders to use campaign funds to put covers on their pools, or dine out. If they die, their widows can spend the money.
While there are limits on direct donations, New York law has a loophole to allow for unlimited contributions to “housekeeping accounts,” which are supposed to be restricted to party-building and maintenance efforts. In the first half of this year, the Democratic State Committee used such soft money to fund a $5.3 million pro-Cuomo ad campaign, and the Senate Republican Campaign Committee's housekeeping account, interestingly, transferred $659,950 to other committees since the middle of 2011.
“The evidence we’ve uncovered so far indicates that this is a sham, the housekeeping accounts are used for partisan, political purposes which are not legal. The beauty of it is that there are no limits on donations,” Fitzpatrick said.
A recent Moreland Commission hearing revealed that the Board of Elections—whose two Republican and two Democratic commissioners must vote to pursue any alleged violation—has ignored most complaints. By taking advantage of the Board of Elections’ lax enforcement, the Senate Republicans have found a creative way to allow donors than the maximum amount to campaign efforts.
“In reality, the lines have completely disappeared and pretty much anything goes,” said Bill Mahoney, research coordinator for the New York Public Interest Research Group. The Senate G.O.P. “took money designed for building their own party, and transferred it to the Independence Party who ran attack ads.”
In addition, the SRCC money was frequently used for robocalls, polling and consulting. In the first six months of this year, the committee paid almost $20,000 to FLS Connect, which specializes in political robocalls, and paid $62,438 to companies specializing in strategic political media buys in the same time frame. It is unlawful for any of these expenses to benefit a specific campaign.
A spokesman for the Senate Republicans declined to comment.
Since it was formed, leaders of the Moreland Commission recognized that it might not find criminality, but could affect change by bringing to light non-criminal activity that is deeply unattractive.
On that score, even as the challenges to its subpoenas move forward in court, the commission seems to be getting somewhere.
--additional reporting for this article by Zach Bergson
Capital New York is launching a subscription news service in early 2014. For more information and to get complimentary access, please contact Lauren Englander at firstname.lastname@example.org.