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Politics

Congratulations, New York, You’re #1 in Corruption

How the Empire State created such a toxic (and criminal) political culture.

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Alan Greenblatt, a staff writer for Governing, is a former reporter for NPR and CQ.

Other states have plenty of corruption, but it’s hard to beat New York when it comes to sheer volume. The criminal complaint Monday against Dean Skelos, the state Senate majority leader, and his son Adam came just three months after charges were brought against Sheldon Silver, then the Assembly Speaker. Having the top leaders in both chambers face criminal charges in the same session is an unparalleled achievement, but Skelos is now the fifth straight Senate majority leader in Albany to face them.

New York doesn’t so much have a culture of corruption as an entire festival. So far, Senate Republicans are standing by Skelos, but if they decide to make a change, they probably won’t turn to Thomas Libous, the chamber’s Number Two leader. He faces trial this summer on charges of lying to the FBI, while his son faces sentencing later this month on similar charges. All told, more than two dozen members of the New York state legislature have been indicted or resigned in disgrace over the past five years. “Albany for a long time has had a culture of self-interest, where private gains are woven in with public policy,” says Susan Lerner, executive director of Common Cause in New York.

Clusters of corruption and even convictions are not unique to New York. Silver was one of four state House Speakers to face criminal charges over the past year (Alabama, Rhode Island and South Carolina are home to the others). In Massachusetts, three Speakers prior to current incumbent Robert DeLeo all resigned and pleaded guilty to criminal charges. When Dan Walker died last week, it was hard for obituary writers not to note that he was one of four Illinois governors over the past five decades who ended up in prison. “While I’m a proud New Yorker and want my state to be ahead in everything, I’m not sure we’re ahead on corruption,” says Daniel Richman, a former federal prosecutor who teaches law at Columbia University.

Richman is kidding, but he makes a serious point. Give any U.S. attorney a year and 10 FBI agents and he or she can probably come back from the state capital with a passel of indictments. Having said all that, however, the waters in Albany have long been heavily stocked with potentially big fish. Remember in the movie Lincoln, when the president decides he has to resort to low dealings to get the anti-slavery amendment through Congress? The characters he relies on to do the trick come from Albany.

Today, New York is rich in corruption scandals due to a confluence of circumstances. Albany is a highly insular place. Political scientists have found that capitals that are far from the main population centers and main media outlets tend to be more corrupt. Although the New York media covers the capital, there are too many members from New York City to warrant much individual scrutiny.

More importantly, power in New York State is closely held. The most enduring cliché about New York politics is the notion of “three men in a room.” Nearly every major decision, from setting the state budget on down, is made in private by the governor, the Assembly speaker and the Senate majority leader. Democratic Governor Andrew Cuomo occasionally calls for stricter ethics laws—after Silver’s indictment, Cuomo said he wouldn’t sign a budget until such rules were put in place—but, overall, it’s a self-perpetuating system that makes any prospect for real, structural change unlikely. “With that kind of absolute control, there’s no incentive for the people in control to reform the system, because it works for them,” Lerner says.

While tight control on power clearly benefits the top leaders, it also helps out rank-and-file members in certain ways. New York has a strong governor and legislators look to a single leader to stand for them in negotiations. They may not get to shape the final legislation, but they are typically rewarded with earmarks—known as member items in Albany parlance—and informal control over some state contracts. Meanwhile, top leaders act as a sort of shield, taking what media attention there is away from more minor members. When the cats are so clearly the stars of the show, the little mice are free to play. “Brazenly hitting up lobbyists for campaign contributions the night before they meet with them on policy doesn’t strike anyone as unreasonable or inappropriate,” says Blair Horner, legislative director for New York Public Interest Research Group.

In any legislature, the top leaders are essentially the campaign managers and chief fundraisers for their caucuses. In New York, that means big money. State officials oversee some of the most lucrative sectors of the entire economy—Wall Street, hedge funds, Manhattan real estate. It means nothing for an upstate or Long Island Republican to vote to continue tax breaks such as the 421-a property tax abatement, which cost New York City more than $1 billion in foregone revenue last year. That’s not their constituency. In fact, most legislators in New York, as elsewhere, are insulated from political pressures at home because their districts are small and lopsidedly favor one party or the other.

Good-government groups like to refer to New York as “Citizens United on steroids,” since corporations can give directly to candidates rather than having to go to the trouble of setting up super PACs. New York has what is known as an LLC loophole, meaning limited liability corporations are able to give far more in campaign contributions—$60,800 per election cycle—than corporations and partnerships, which are limited to $5,000 annually. Even the higher dollar amount is mostly a fiction, since it’s no trick to set up additional LLCs. Last year, an Albany Times-Union investigation found that four developers alone had set up at least 48 LLCs between them, doling out $600,000 over the past five years. Cuomo, who promised to end the LLC loophole, has taken in more than $6 million from such funds.

Legislation to bring LLC donations in line with other business entities has moved through committees in both chambers this year. There will doubtless be a big push, in light of the recent high-profile indictments, to push something through into law. There’s precedent. Political scandals in the New York City of the 1980s led to significant changes in local finance law. But it’s always tough to change a system that benefits its incumbent members. In New York, campaign finance regulations are violated routinely—thousands of times per year. The State Board of Commissioners is run by four commissioners—two each from the two parties. Since it takes three votes to recommend prosecution, guess what? It hardly ever happens, unless violations are egregious and the official is a pariah in both parties.

It’s common everywhere for public corruption cases to be brought by federal prosecutors. (New Jersey Governor Chris Christie first made his name by helping to convict more than 100 officials as a U.S. attorney.) State and local prosecutors are often too enmeshed in the political culture, or subject to party pressure, to tackle such cases. “What makes this different is two words: Preet Bharara,” Horner says, referring to the U.S. attorney who brought cases against both Skelos and Silver. “If he just kept going after terrorists and Wall Street, none of this would have happened, but his attention was drawn to Albany.”

Bharara seems to have had his eye on Albany even before Cuomo’s decision last year to disband the Moreland Commission, which had been charged with investigating state ethics. Moreland files may have given Bharara more haystacks to start hunting through. But it’s clear that Bharara is offended by the stink of corruption that has long hung over the capital.

It’s something longtime political types seem to have lost the scent of. Being enmeshed in a culture of entitlement, they barely even noticed it. Instead, they continued to make the rounds of lobbyist-shakedown fundraisers held by the hundreds during every legislative session. “Culture matters, and it’s a deeply transactional culture,” says Zephyr Teachout, a Fordham law professor who made corruption the centerpiece of her primary run against Cuomo last year. “It leads to easier-to-catch, old-fashioned cash for bribery scandals.”

Any smart legislator in any state should assume his conversations are being recorded or fodder for damaging tweets. That’s certainly the case in Albany, where legislators get indicted seemingly every other month. The Skelos criminal complaint suggests they were aware of this. “You can’t talk normally,” Adam Skelos said to Dean Skelos, according to the complaint, “because it’s like [expletive] Preet Bharara is listening to every [expletive] phone call.” And yet, they kept talking.

Bharara appears to have plenty of targets to choose from in Albany. It would be most unusual if he were able to collect the scalps of the two top legislative leaders in the state. Yet perhaps it’s no wonder he went after them. “If you want to follow the money,” Lerner says, “you look at the people who are collecting the most money.”

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