STATEMENT

of the
NEW YORK PUBLIC INTEREST RESEARCH GROUP
before the
NEW YORK STATE SENATE PUBLIC FORUM ON ETHICS REFORM
regarding
LEGISLATIVE PROPOSALS TO REFORM STATE ETHICS LAWS
Albany, N.Y.
May 4, 2011

Good afternoon. My name is Russ Haven and I am Legislative Counsel the New York
Public Interest Research Group (NYPIRG). NYPIRG is a non-partisan, not-for-profit, research
and advocacy organization. NYPIRG’s areas of interest include policies to reform state
government. NYPIRG has been deeply involved in efforts to strengthened New York’s lobbying
and ethics laws for decades.

First, thank you for offering the public an opportunity to comment on proposals to
strengthen ethics and lobbying oversight in the state. It is important to get the public’s input into
the development of public policy. It is particularly important to get reactions in an area that is of
critical importance—namely public oversight of the lobbying industry and the public officials
entrusted with representing New Yorkers, setting state and local priorities and policies,
implementing the law and making our local and state governments run.

As you know, in Albany—as in other capitals—spending money on campaign

contributions and lobbying gives the wealthy and well organized an enormous influence over
governmental and legislative decisions.

While citizens and the media can play an important role in helping monitor ethics and
lobbying, the most critical roles are played by the state’s watchdog agencies. Additional
investigation and enforcement muscle is provided by local, state and federal prosecutors and law
enforcement officials. When it comes to oversight entities, far too frequently appointees to
agencies in those positions seek to hide from that key responsibility and instead seem more
interested in serving their “masters” —the so-called appointing authorities that placed them on
the various boards and commissions that oversee state ethics—ethics in the broadest sense.
Independence from the institutions they police and the sponsors who nominate and/or appoint
them is a paramount concern.

In just the past decade, New York has experienced a phenomenal run of scandals,
indictments and convictions that have shaken public trust in government. While some of this
misconduct has occurred at the local level, much of it has occurred in the state Capitol—with

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sitting Senators, Assemblymembers and even governors caught engaging in misfeasance,
malfeasance and just plain criminal, reprehensible conduct.

In order to repair the public’s trust in government, watchdog agencies must play a leading
role in improving the state’s ethical climate. Moreover, much of the worst behavior occurred
after the then-heralded reorganization of lobbying and ethics oversight in 2007.

With this backdrop in mind, NYPIRG offers this “Baker’s Dozen” list of
recommendations and urges the Senate to keep them in mind when considering ethics and
lobbying oversight reforms.

1. The key to effective oversight is to have an independent oversight board. The board
of the entity overseeing executive branch ethics, lobbying and potentially legislative ethics
should not be dominated by any one official or institutional interest. The board should not
contain a majority of gubernatorial appointees. One of the most glaring problems with the
structure of an entity that oversees advocacy is the balance and public perception of control of
the oversight commission. At the time of the original idea to merge the old Lobbying
Commission and the old State Ethics Commission, NYPIRG flagged this as a serious problem.
Unfortunately these fears were realized and were the subject of a blistering Inspector General
report on the conduct of the Commission on Public Integrity during the so-called Troopergate
episode.

We must be mindful that the laws will apply beyond the current incumbents so we should not let
our assessment of particular proposals to be based on our trust in those we know now, but rather
based on our concerns about those who will act in the future who we do not yet know.

2. The oversight commission should be “right sized” to make it more manageable.

Former Commission on Public Integrity Chairman Michael Cherkasky, in remarks upon his
departure, called for reducing the size of the Commission, stating that 13 members was too many
and suggesting five or seven members as “a more appropriate number.”

3. Executive directors must be insulated from political pressure. The executive director
of the ethics and lobbying and legislative oversight commissions should not serve at the pleasure
of the Commission. The executive directors should have a fixed term and only be removed for
cause.

4. Membership on the ethics and lobbying commission should be more restrictive.

Board members should not be involved in lobbying at any level, should not be receiving profits
as partners in firms that do lobbying or have state contracts, and should not be involved in
partisan affairs. Moreover, member of the commission should have a fiduciary responsibility to
the public, not their appointing authorities. The public should feel that the commission members
are there, first and foremost, to protect the interests of the public.

5. The meetings of the ethics and lobbying commission must follow the Open Meetings
Law. The Open Meetings Law allows for executive session when addressing issues such as
investigations. But the ethics and lobbying commission itself should follow the law and discuss
all other relevant matters in public.

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6. The ethics and lobbying oversight entity should enforce Article 14 of the Election
Law with respect to campaign finance violations. The State Board of Elections has proven
itself to be a gridlocked entity and it should focus its work on administering elections and voter
registration issues. The provisions in the Silver-Schneiderman bill that was vetoed by Governor
Paterson took steps in the right direction by including a provision to establish an independent
enforcement unit within SBOE. An even better approach would be to remove this function and
place it in an independent agency.

7. Effective ethics and lobby regulation requires that we capture the other side of the
“influence peddling” coin—campaign contributions by lobbyists and their clients. Getting
at this issue, however, can be tricky. However, it’s clear that many lobbyists play a significant
role in public officials’ campaign fundraising efforts—beyond simply making bundled donations
to a campaign committee at one of the hundreds of fundraisers held during session. These
activities and relationships often are viewed as being in tandem with lobbying as part of the
efforts to influence the outcome of governmental action. Therefore this area is properly part of
ethics and lobbying reform and should be addressed through disclosure and regulation.

8. Conflict of interest disclosures must be beefed up. Many of the scandals from the past
decade originated with elected officials’ outside business interests. NYPIRG believes that the
current system of disclosing outside employment needs to be strengthened. Key information
such as pay levels should be disclosed within narrow bands, it must not be redacted to prevent
public disclosure, clients with business before the state should be clearly identified, and
sufficient detail furnished to determine what work is performed. Merely labeling one’s
occupation as a “consultant” rarely provides useful information. Additionally, all disclosure
forms—including senior staff—should be posted online.

9. The definition of lobbying should be expanded to capture more lobbying activity.

NYPIRG believes that the lobbying definition should include paid efforts to influence any
governmental action, unless specifically exempted under the law. With respect to proposals over
the past few years to raise the reporting threshold to $10,000, we have looked at all of the clients
in New York and seen that this change would preserve the overwhelming majority of money
spent on lobbying efforts. However, any bill increasing the threshold should also make the new
total reflect all the money spent by a client or any entities with the same controlling interests.
Several businesses with dozens of subsidiaries evade various parts of the law regulating
campaign finance by have each of their subsidiaries donate to candidates, effectively letting an
individual give many times the legal limit. There is no reason to think that these entities would
not try to evade lobbying disclosure requirements through a similar strategy.

10. The lobby law penalties should be strengthened. The law should include penalties for
those who refuse to comply with random audits as well as adding civil penalties for violation of
the state’s contingency ban. We believe the contingency ban is worthy of support. Unlike in the
courtroom setting (where we believe a contingency fee system is appropriate), lobbying meetings
occur outside of public view, not monitored by an impartial judge and there is little or no record
of the events. Such secrecy, combined with a contingency system, could easily encourage
misconduct.

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11. The new regulatory approach should emphasize proactive investigation, training
and deterrence. Lawmakers, public officials and staff should regularly seek guidance on
complying with the laws. We need to create a culture that focuses on meeting the letter and
spirit of the law, not trying to figure out where the soft seams and loopholes are.

12. The watchdogs must have adequate resources to do their job. The public would
support substantial funding for a truly independent and effective watchdog. The agencies’
budgets must be objectively adequate to perform its important watchdog functions.

13. The lobbying database should be available on the Internet in the same fashion as the
state Board of Elections makes theirs. Allow the public easy access to the raw data collected
by oversight commissions. Periodically uploading their master database would incur no cost
beyond the two or three minutes of weekly staff time required. Additionally, commissions
should maintain all its records going forward for historical purposes.

Thank you for holding this important public forum and providing an opportunity for us to share
our perspectives on these issues.

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