Cuomo Gets Beaten Up Over Ethics, Hypocrisy

What a day for Governor Cuomo.

First the Independent Business Times reported this:

Cuomo has so far raked in more than $188,000 from HarperCollins, a News Corporation subsidiary. That is part of a book deal that could ultimately net him more than $700,000. With Albany’s transactional politics now the subject of a federal probe, the context of that April 2013 book deal is particularly significant: An International Business Times review of New York state documents reveals that News Corporation gave Cuomo a book contract after Cuomo’s administration backed a series of state initiatives that benefited the media giant.

One of the initiatives was a bill that created a special sales tax break for online-only publications that charge for subscriptions. News Corporation, which was one of the two companies that lobbied for the bill, was at the time investing tens of millions of dollars in such a publication. Another initiative was a special tax exemption that Cuomo’s administration created for electronic books, which are sold by, among others, HarperCollins. State records list News Corporation as lobbying Cuomo’s tax department in the months before the exemption was announced. And, while News Corporation lobbied the governor’s office in 2012, Cuomo championed an expansion of controversial film and television tax credits that have benefited News Corporation’s films, and that News Corporation had lobbied for in the past.

News Corporation did not respond to IBTimes’ request for comment. Cuomo’s office -- his calls for transparency notwithstanding -- declined IBTimes’ request to release the text of the contract for the book, which has reportedly sold just 3,000 copies. The governor’s office also declined to comment about the legislation he signed and the administrative tax change his officials enacted. The governor has previously rejected the notion that his book deal had anything to do with state business, saying book income is “an exception” because “I'm not allowed to represent anyone or any business matter." He has also scoffed at the idea of applying outside income restrictions on statewide elected officials like himself, challenging anyone to identify how those paying his book contract benefited from his policies.

Then, after a cabinet meeting, Cuomo had the following Q and A with the Albany press corps (transcript from Jimmy Vielkind at Capital NY):

Q: Governor, why didn't your ethics plan close the LLC loophole, which allows LLCs to be treated as individuals under the law? [Cuomo has raised $1 million from Leonard Litwin, a landlord, under this provision. Lawmakers from both parties are also regular beneficiaries.]

CUOMO: You know, there are a lot of things that you could include—this was about ethics, this was about responding to a particular point in time and focusing all our energy on making a difference on that issue. You make it too broad, then, first of all, you almost defy success, right? … I wanted to keep it sharp, tight, and frankly, indefensible that you could be opposed to these five points. How can you be opposed to disclosure? How can you be opposed to pension forfeiture? How can you be opposed to a fair per diem policy? I believe these items are almost inarguable, hence saying the budget should be conditioned on their acceptance.

If you inject an issue that you know is combative, like LLCs, well, I don't know that you're then arguing in good faith that this is an inarguable premise when you know LLCs have been argued for years and years and years.

What is the argument you've heard for not doing it?

It's the same argument you've heard. Why hasn't it happened?

The only argument I've heard is it allows rich people to multiply their political giving.

That's their argument. And that's why it hasn't happened for years and years.

Bharara says “stay tuned,” and the Capitol went for a loop when Silver was arrested. Should New Yorkers be concerned about you or senior members of your administration? Is there a legal risk that you feel regarding this ongoing probe, and what can you tell us to address those concerns?

I don't think there should be a concern. Has there been a series of 'scandals' in Albany? Yes. The shortness of memory surprises me. ... Paul Grondahl had a story that starts with an opening quote of these scandals in Albany and it's ongoing and every few months there's a scandal in Albany and every few months somebody gets arrested and on and on and on and it sounds like it was written contemporaneously. Then it says, 'So said Teddy Roosevelt.'

The scandals in government are not new. The question is, keep refining the system so that you do everything you can to prevent it, and if it happens then find it and punish it, and that is my point on the ethics disclosure. Five points, very strong, and by the way focusing on the issues arising from the case: pension forfeiture, outside income. …
I remember with my father, this was the constant drumbeat. You talk about the speaker: This was the third speaker who has been indicted. This is nothing new. I remember Mel Miller. And if you look at the genesis of most of the cases, it is because you have a part-time Legislature, and the part-time legislator can also have an outside business. … Many of them are lawyers, they can represent the private client, and you don't know who the private client is. … The case that keeps moving over and over is there was a conflict between a legislator who represented privately versus the public interest. That was the Joe Bruno case. That is inherent conflict.

[They say] 'Well, we want to have a part-time Legislature. We don't want to have a full-time Legislature. That's the constitutional framework.' Fine. So disclose the private clients. 'Well, that violates my right as a lawyer and my clients' rights.' No, it doesn't. That is just a red herring argument.The [New York City] Bar Association has said, unequivocally, you can release the client's name. 'Well, some clients will be embarrassed. Criminal case, divorce case.' Fine: exempt them. …
But clients that pose a potential conflict when they may be retaining you for your public capacity rather than your private capacity have to be disclosed. … Why does tort reform never get passed by the Legislature? There are little secrets that never sit right.

I understand that, but there is also concern about the executive branch.

There shouldn't be.

Could you elaborate a little on that, and can you describe if there's been any internal review that you've undertaken at the same time as the federal probe? You were elected in 2010, and again in 2014, talking about ethics, talking about changing the tenor of state government. I hear lots of concerns from people that there's going to be some kind of action that could involve the administration.

Yeah, I hear a lot of things from a lot of people. You should be more discriminating in who you're talking to, what you take to heart.

We have said … we worked very hard to clean up the culture of Albany, and we have. There is no doubt that there is more disclosure today than ever before—there is more disclosure in terms of clients, there is more disclosure in terms of income than ever before, there is more disclosure about who's going before state agencies, who has an interest in legislation. We have proceeded in leaps and bounds.

[They say] 'Well, it's not enough.' That may be true, it's not enough. But it's also true that we've made tremendous progress. That gets left out of the story, and, by the way, I don't know that it's ever going to be enough unless you make a structural change to who can represent outside clients, et cetera. ...
Do I feel we've done what we said we would do? Yes. Also, we've proposed a lot of ethics legislation that the Legislature has refused to pass. Right? It's a very difficult situation because the body that would be regulated is the body that needs to approve the regulations. …
What do you do? You say, I'm going to give you a very tight, narrow package and say, 'If you don't accomplish this, I'm not going to sign the budget.' You cannot say or do any more than I did.

Why don't your proposals capture the executive branch? Yourself?

Structurally, you don't have the conflicts with the executive because you don't have the opportunity for conflict. None of the people around the state, statewides, have outside income from clients. An elected official can do it.

Well, New Jersey bans all kind of speaking fees, book fees, all outside income. Other governors have taken speaking fees.

If there was a governor who you thought was abusive, then that would be fine.

But governor, the question isn't whether or not it's abusive, it goes to whether there's a potential conflict. You have not yet released the full details of your book deal with HarperCollins, which keeps everyone guessing as to just how much income you're going to derive from it.

I have released the income I've gotten from the book. [It's at least $700,000.]

On a year-to-year basis as required by law. But you haven't taken the extra step.

Hang around. Next year you'll see the other payment.

But does that go to the level of transparency that you're trying to create?

It's News Corp. You know that company. You know who owns it, and it is a book deal. You come up with some theory of how there's a conflict, writing a book, and we'll talk about it at that point. I understand the potential conflicts with speaker fees. I was here when we went through that—who engaged you, was there a conflict … I have not done speaking fees.

Well, there's an International Business Times report out today detailing how News Corp. had business before the state and it lobbied your administration, both as A.G. and as governor.

Who has?

News Corp., on issues that you ended up either signing or putting the budget. Tax breaks for online publications.

Tax breaks for online publications. I have no idea that they lobbied for it. I don't even know what it is, by the way. Also: The ethics laws that we proposed do apply to the executive, right … but the executive does not have many of the liberties that the Legislature does.

All of that came after Cuomo was aked if he or any member of his administration had been subpoenaed in a criminal investigation or talked to the feds:

Gov. Andrew Cuomo said he hasn’t had any conversations with federal prosecutors investigating his office’s role in the activities and disbandment of his Moreland Commission, but declined to say whether his staff has.

“Not myself. You’d have to ask people individually,” Cuomo said when asked by reporters following a Capitol cabinet meeting.

When asked how he would not know if his staff has talked to the U.S. Attorney’s Office or has been subpoenaed, he responded: “Not necessarily. I wouldn’t know if you were. It’s nobody else’s business besides the individual.”

He added, “You’d have to ask individuals. None to me.”

U.S. Attorney Preet Bharara has been investigating Cuomo’s decision to end the panel’s work last March and whether there was any meddling by Cuomo’s office into the Moreland Commission, which the governor vowed was independent.

Bharara hasn’t disclosed the status of his investigations into the Moreland Commission or state legislators, but last month offered the ominous message: “Stay tuned.”

Yesterday a usually Cuomo-friendly venue, NT2 blog, described the Cuomo administration as "teetering" in the frantic actions and fights Cuomo's been engaging in since the start of the second term.

Things got even worse for Sheriff Andy today.

Cuomo's trying to dictate to the Legislature in his "Sheriff Andy" style over ethics reform but it's hard to take him seriously when he's jiving over reforms that would affect him (like the LLC loophole) and refuses full transparency over the News Corp deal.

With the pounding he took over various issues today, I think we can officially say that Andrew Cuomo's lost control of the narrative in Albany.