Thursday, November 11, 2010

Andrew Cuomo, Albany, And Lobbyists - Village Voice

I have a question: can an investigation into criminal fraud start before a newly-elected governor takes his seat?
Full disclosure: I worked with Hank Sheinkopf from January 3 - August 13, 2007, answering his telephone, writing press releases, and arranging meetings. I was researching the court corruption that I write about on this blog, because Hank ran the election campaigns for the judges - Surrogate Renee Roth, Nora Anderson, and Supreme Court Judge Karla Moskowitz, among others - who stole my mother's property from me after she died. Hank also met with Andrew Cuomo in order to help Karl O'Farrell get his company Capital Play the Aqueduct Casino deal.

Betsy Combier

Andrew Cuomo Goes to Albany, Where Lobbyists Are Waiting

By Wayne Barrett Wednesday, Nov 10 2010
LINK

As often as we hear how imperative it is “to change the culture of Albany,” the language of reform camouflages the enemy. A mercenary class of elite lobbyists is at the heart of every state scandal, and nothing will change in New York until their death grip is broken.

Amorphous critiques of the “way things are done” in Albany do not describe what’s killing the state. It’s real people, an encrusted caste of 6584 registered lobbyists now awaiting the Albany arrival of Andrew Cuomo. He will either find a way to isolate and disarm them, or he will succumb to their charms, favoring one lobbyist or another until his government, too, is perceived as theirs.

This gang, especially the top hundred heavy hitters, lives by a code of cult-like indifference to the common good—selling relationships with seduced decisionmakers for four-five-and even six-figure monthly fees. They put a pricetag on every hello. They cobble contributions. They push interests as if they are beliefs. They are as likely to be retained to make something go away as they are to make it happen. They engage, ingratiate, invest and convert, carrying the state, one compromising deal at a time, towards fiscal oblivion.

The shadows are their office. They recruit by whisper. As covert as they prefer to be, filing disclosure forms that conceal, they rationalize themselves as necessary intermediaries, the glue of a disjointed government. It’s a proselytizing mantra that covers the capital in alibis and allegories.

Albany’s lobbyists are, of course, no different than lobbyists elsewhere. That doesn’t make them any more compatible with the public good. And with twice as many lobbyists per legislator as the second highest state, they have become the permanent government of New York, like black crows circling the iconic green Capitol dome. The scandals they spark routinely change all the players but them. We are watching that cycle again, as almost every tarnished power center other than the Assembly Democrats, that ultimate bastion of lobbyist collusion, switches hands.

In this season of chilling revelation and electoral tumult, the primetime lobbyists appear set to remain as Albany’s most enduring fixture, with a change in revenue rankings but a roster nonetheless largely intact--altered only by the winks and nods among fresh insiders.

This is a memo to Cuomo. If he doesn’t take dramatic executive order action in his early days as governor to blunt the sway of lobbyists, they will chip away at his credibility, and voters will come to believe over time that all that has changed are the names of the ins and the outs. He can finance his next campaign without them. He can’t restore public faith in state government with them.

A pecking order of the caste closest to Cuomo has already emerged.

Members of governor hopeful Andrew Cuomo's inner circle include Jennifer Cunningham (top left), father Mario Cuomo (top right), Benjamin Lawsky (bottom left) and Steven Cohen (bottom right).
John Marino, who chaired the state party for five years under Mario Cuomo and ran three of his campaigns, launched a government affairs unit at his public relations firm, Dan Klores Communications (DKC), last September. It’s run by Allison Lee, the wife of Congressman Maurice Hinchey and a former aide to Andrew in his days at HUD under President Clinton. When Cuomo was nominated for governor at the state party convention this May, it was Marino who introduced him .

The founder of the firm, Dan Klores, is so close to Andrew that they used to throw joint birthday parties. Klores, who says he’s sold his interest in the firm to Marino and other employees as part of a long-term “arrangement,” spends most of his time now producing plays and movies, but he was on the phone often in 2003, talking to reporters about Andrew’s breakup with Kerry Kennedy. He put $101,700 into Cuomo’s 2006 campaign for attorney general and supplied his campaign press secretary and first communications director in the AG’s office. Marino, Klores, Klores’ wife, and Lee have given $42,500 to Cuomo since January 2008, and their government affairs attracted 10 clients the day they opened, and a total of 27 clients since.

Marino tells the Voice that he “ain’t ever going to lobby the governor or anyone on the executive side,” promising to restructure the firm in such a way “as to not share in the profits” of the government affairs unit. Klores said much the same, indicating that under the terms of his sale, “I don’t have anything to gain” from the firm’s future lobbying income. That still leaves Lee and others at the firm with their own ties to Cuomo, as well as the allure of the big names at the top of the letterhead.

The interlocking history of DKC and Cuomo put it only half a step ahead of the woman who ran the 2006 campaign, Jennifer Cunningham, who is a partner with John Cordo, a former Republican senate staffer, in Cordo & Co. Cuomo and Cunningham differed over Eric Schneiderman during the primary, when Cunningham was running the campaign of her former husband and Cuomo wanted anyone but Schneiderman to win. But they ended up on the same page (and what a novel it is). Schneiderman’s stunning win, aided by Andrew, may cement the ties between these three over the coming years. Cunningham’s penultimate client is 1199 SEIU United Healthcare Workers, a union Cuomo is at loggerheads with regarding Medicaid costs.

The Cordo firm’s most recent filing with the state’s Public Integrity Commission lists Cunningham and Cordo as the new lobbyists for Genting, the Asian gaming company that won the scandal-ridden and extraordinarily lucrative Aqueduct casino contract. SKDKnickerbocker , a public relations firm where Cunningham also works, is now also handling press inquiries for Genting, an indication, perhaps, that the big spenders can smell the perfume.

Chris Del Giudice, the son of Mario Cuomo’s former secretary and Andrew’s current top policy adviser, Mike Del Giudice, recently joined Wilson Elser, the firm that always takes first place in the New York Public Interest Group’s annual revenue and campaign contribution rankings. So did Jerry Jennings, the son of Albany’s mayor, another reliable Cuomo ally. Wilson Elser, which hosted two receptions for Cuomo since 2008 and gave $68,856 to him, did an intimate fundraiser for him last fall in the ninth-floor conference room at its Albany office. Then Cuomo went to the Fort Orange Club, the gothic, wood-paneled, male-and-pale deal mausoleum, where he was introduced by the senior Jennings to an overflowing crowd of handlers and wirepullers.

In fact, it’s stunning how many leftovers from the Mario days are lobbyists and major Andrew donors now—Tonio Burgos, Jerry Weiss, Rick Ostroff, Pat Brown and his partner, David Weinraub. James Featherstonhaugh, the legendary 66-year-old dean of Albany lobbyists who represented Mario Cuomo personally in civil litigation, and was subsequently represented by Mario’s law firm, has taken on an Andrew aide, Frank Hoare, as a new partner. Burgos was Mario’s appointments secretary, and Weiss created the law firm Andrew ended up joining. Brown was a highly respected senior counsel to Mario Cuomo for many years. Weinraub and Ostroff, now at competing lobbying firms, ran intergovernmental affairs for Mario. This pack from the past combined to donate $213,080 to Andrew’s coffers since 2008.

Charlie King, the former top aide to Andrew at HUD who took a leave from his own two small lobbying outfits to serve as Cuomo’s executive director of the state party during this campaign, may return to his companies or to Bolton St. John’s, one of the state’s premier firms where he once worked. King was Andrew’s running mate in his failed 2002 bid for governor, and partnered for years with Al Sharpton, who has functioned as a lobbyist in David Paterson’s Albany without registering as one, collecting hundreds of thousands in state-connected donations to the National Action Network that he and King ran. King is a Cuomo and Sharpton loyalist, well positioned to become one of Albany’s most significant minority lobbyists.

The other “Al,” former Republican senator Al D’Amato, has tried to position himself as a key Cuomo ally, denouncing Carl Paladino as “not fit” to serve at the outset of the general election campaign. D’Amato sees himself as the kingmaker in picking the next GOP state chair after the election, and as an intermediary between Cuomo and the new Senate Republican majority. He hung on to his Republican credentials by loudly championing Dan Donovan, the party’s losing candidate for attorney general, even as he embraced Cuomo and Kirsten Gillibrand, the Democratic senator whose father, Doug Rutnik, is an Albany lobbyist himself and a longtime D’Amato and Featherstonhaugh sidekick.

D’Amato recruited former Staten Island Congressman Vito Fossella as a new partner in his Park Strategies lobbying firm at the same time that Fossella was featuring Paladino, rather than Rick Lazio, at a pre-primary rally in Staten Island against the so-called Ground Zero mosque. That September 11 appearance, combined with the timing of D’Amato’s post-primary denunciations of Paladino, may be the best indicators that Cuomo wanted to face Paladino, a deck D’Amato helped stack.

When D’Amato was in the senate and was the state’s official top Republican, and Mario Cuomo was the state’s top Democrat, the two had what Senator Patrick Moynihan called “a nonaggression pact,” with D’Amato serving up weak Republican challengers for governor in 1986 and 1990. As the unofficial leader of the party now, whose connections help bankroll it, D’Amato may hope to use that leverage to establish a similar tie to the son.

The D’Amato firm’s stable of prominent Republicans includes the son of Congressman Peter King (a potential formidable Cuomo opponent), the ex- Erie County executive Joel Giambra, and Fossella, whose career was undercut by the DUI-related revelations of a second, Washington-area, family. While D’Amato, who was once famously paid $500,000 for a single call to a state official, is not listed as a Cuomo donor. But his partners gave $9000, and D’Amato hosted a Cuomo fundraiser. D’Amato has also long been closely tied to another lobbying firm, Mercury Public Affairs, and one of its principals, Michael McKeon, ran Cuomo’s outreach effort to Republicans.

Mel Miller, the former Democratic Assembly speaker, recently joined D’Amato’s firm as special counsel. Miller sold his firm, Bolton St. John’s, to the staff a couple of years ago. He’d already established a strong D’Amato relationship by recruiting Armand D’Amato, the senator’s brother, as Bolton’s general counsel years earlier. Armand left Bolton to join Park Strategies in 2004, and now the D’Amatos have returned the favor.

Who cares that the Senate Ethics Committee found in 1991 that Al D’Amato had allowed his lobbyist brother to use his office stationery to solicit multimillion- dollar Navy contracts for a client? Who cares that Miller and Armand were convicted in unrelated federal trials in the 1990s, only to have their convictions overturned on appeal? In Albany, overturned convictions can be selling points.

In the days immediately following Miller’s 1991 conviction and automatic expulsion from the assembly, he told reporters that he was moving on to a new phase in his life and didn’t expect to do jail time for stealing $300,000 from his law clients. “Maybe I’ll make some real money now,” the then 52-year-old Miller said. Having spent a lifetime watching other lobbyists at the Albany trough, Miller’s on-the-mark prediction hardly made him a prophet.

Cuomo will be inaugurated on the darkest of Albany days, and it’s not just the budget that’s broken.

Three scandals as large as any in my lifetime haunt the capital, and each is a tale of lobbyists at their venal labor.

Republicans may have just retaken the state senate, even though their longtime majority leader, Joe Bruno, was convicted of federal felonies less than a year ago. If the GOP won, they did so, in part, by hanging a new, lobbyist-laden, scandal--the award of the $3 billion, 30-year racino franchise at Aqueduct--around the necks of Bruno’s Democratic successors, Malcolm Smith and John Sampson.

Bruno was caught mimicking the lobbyists that owned him, taking $3.2 million in “consultant” fees to steer union pension and state funds to his clients, though the media subordinated his proven criminal enterprise this fall to fresher Aqueduct headlines about still-unproven Democratic offenses. As tawdry as Smith and Sampson appear in the Aqueduct saga, they are boy scouts compared to Bruno, whose trial record depicted a breathtaking criminal enterprise.

One former counsel to Bruno, Kenneth Riddett, testified that he instructed GOP senators to have their financial disclosure forms hand-delivered to the ethics commission as a way of avoiding federal mail fraud statutes. By the time he testified, Riddett had his own lobbying shop, starting off with the Trial Lawyers Association, a Democratic stronghold in search of a Republican ally. It has long been legend that the GOP senate, much like Tom Delay’s House, pointed petitioners at their door to designated lobbyists, like a setter aiming its muzzle at game.

Lobbyists like Featherstonhaugh also made appearances on the witness stand. “Feathers,” as he is called, never bothers to dust a story up. He sees nothing wrong with being in a real estate partnership with the Senate leader he lobbies, Joe Bruno, or his brother Peter, or representing the Bruno family business, or doing a land deal with Bruno’s son, Kenny, or hiring Kenny as a lobbyist in his firm. (Kenny Bruno went on to Wilson Elser and then to his own lobbying firm, where he was clearing $50,000 a month.)

Feathers testified that he introduced the senator to a partner in a local investment firm because the businessman “wanted to see if he could enter into some kind of relationship” with Bruno, which he did, retaining the senator as a “consultant.” Then Feathers’s friend introduced Bruno to another businessman, who also retained him, giving birth to the business that ultimately convicted Bruno. Lobbyist John Cordo, who once worked for Feathers and was treated “like a son” by Bruno, also testified, confirming that a pivotal bill he handled granting correction officers some of the same pension benefits as police officers and firefighters was only passed after the correction union invested in a Bruno-tied investment firm, though he claimed he didn’t know Bruno was a consultant to the firm.

“I would see Joe socially,” Feathers recalled, unconsciously defining the art of the Albany schmooze. “He would talk primarily about his back swing and what trail he was going to ski. Those were our two big conversations.” Feathers wasn’t shy about saying what bored Bruno, either, simultaneously debunking the “three-in-a-room” decision-making legend, insisting that it was more like six-to-seven in a room, counting counsels.

Bruno didn’t testify, saving his long-winded declaration of innocence for the sentencing judge in May. “How dare anyone say I’m not worth $20,000 a month?” the lobbyist senator wailed, incensed by the testimony of one client who said Bruno did no work. “I know consultants that get paid $50,000 a month for doing what I was doing.”

It is a bipartisan whine, with Bruno echoing a Democratic assemblyman, Anthony Seminerio, who was convicted, like Bruno, of lobbyist envy. “I was doing favors for these sons of bitches there,” Seminerio told another convicted assemblyman in a secretly taped conversation. “They were making thousands.” So, said Seminerio, he decided, “Screw you—from now on, I’m the consultant.” Bruno explained, without a clause of contrition at his sentencing hearing: “I watched people on the outside who had been in leadership positions earning millions of dollars a year.”

So he tried it from the inside. A month after he stepped down from the senate in 2008, and shortly before he was indicted, Joe Bruno, 80, registered as a lobbyist for CMA Consulting, a company run by the widow of a former state senator with tens of millions in state contracts. It was not a late second career.

“I looked at what’s going on up on that hill,” said U.S. District Court Judge Gary Sharpe as he sentenced Bruno to two years in prison, “and I just shook my head.”

Inspector General Joseph Fisch’s 308-page report, released a week before election day, focused on “the locusts of lobbyists” that “descended on” Senate Democratic leaders to win the Aqueduct contract, the largest in state history. The report only briefly notes that it was Bruno who insisted that the franchise be awarded like none other, empowering the two legislative leaders to exercise executive power and pick the winner, together with the governor.

Leave it to Feathers to attest to what the IG report said was a “common sentiment.” He testified that the unusual arrangement “came from my friend Joe Bruno’s insistence,” tied no doubt to the fact that Bruno’s son Kenny was representing Capital Play, an early bidder that evolved into Aqueduct Entertainment Group (AEG). Feathers himself was a principal in another bidder that won the contract in late 2008, shortly after Bruno resigned as leader, only to forfeit it when Feathers’s partners couldn’t come up with the upfront multimillion-dollar fee it agreed to pay. The majority leader was acting again as a lobbyist, this time for the horseracing interests he was so identified with, starting with his own son and Feathers.

Fisch told the Voice that the awarding of this contract to AEG was “a tribute to the unbridled power of lobbyists.” While AEG competitors, said Fisch, “had the financial resources, experience and the support of the licensing and financial professionals, AEG had the right lobbyists.” That, he concludes, “proved to be all they needed.”

Hank Sheinkopf
Two of the lobbyists accused in the IG report of fixing the Democratic senate - Carl Andrews and Hank Sheinkopf - flouted the probe, with Andrews unsuccessfully suing to block subpoenas and appealing right up to the report’s release, and Sheinkopf taking the fifth amendment. Incredibly, their refusal to cooperate with a state probe of the award of one state contract has no effect on their ability to seek another. There are no qualifications or standards for this job, and you can keep it even if the state’s Public Integrity Commission (PIC) finds that you violated the lobbying laws. All you have to do is find a client willing to pay you.

Andrews hosted a victory dinner in his Brooklyn house right after AEG won the bid, and Smith and Sampson and five other legislators, including Manhattan county leader Keith Wright, joined company brass at an event Andrews invoiced for $1,562. The night before Governor Paterson announced the award, Andrews and AEG executives lit a victory cigar at the Havana Club with Al Sharpton, whose NAN had just collected $100,000 in AEG contributions, ostensibly tied to their belief that the Rev was whispering to Paterson on their behalf. A former state senator himself, Andrews held a top executive title in the Spitzer and Paterson administrations until a scandal about his apparent efforts to influence a decision of the State Liquor Authority forced him from office (the IG eventually concluded that Andrews’ top aide had to be fired).

But, like Mel Miller and others in Albany, Andrews has found that scandal can be a stepping stone, prospering even after his mentor, Brooklyn Democratic boss and assemblyman Clarence Norman, was convicted in three separate felony cases. Andrews attracted clients like AEG from the moment he threw up a shingle in 2009, also recruiting A.L. Eastmond & Sons, the Bronx boiler firm that allegedly paid City Councilman Larry Seabrook $50,000 to rig a Yankee Stadium subcontract. He also represents the Marcus Garvey Nursing Home, a much-probed, state-supported, Brooklyn residence that remained the biggest giver to Norman’s re-election committee in 2009, four years after he surrendered his assembly post.

Charged by the IG with getting a confidential senate memo from Sampson and playing a key role in tilting Sampson in AEG’s direction, Andrews’ relationship with Sampson is described by the IG as “a wellspring of ethical issues.” E-mails from AEG executives revealed that a day after Andrews got the secret memo comparing bids, they decided to boost his monthly stipend by $2,500 to $10,000, calling him “our most important” of seven lobbyists. But they also decided to pay him only half of the amount he was due right away. “By delaying payment #2,” one executive wrote, referring to a second $10,000 stipend, “he can’t release the senate.” It is such a statement of perceived power that Andrews, who has survived so many grand juries he may think they’re grand, is apparently trying again to wait out this storm as well and perhaps turn the findings into a flyer for his services.

Sheinkopf copped a memo, too, obtaining it from an aide to the top Senate staffer, Angelo Aponte, who Sheinkopf personally installed in the key spot. He had the power to do that because the skillful Sheinkopf doubles as a lobbyist and as a political consultant, and had advised Senate Democrats in the elections that led to the 2008 majority, helping to make Malcolm Smith majority leader. Sheinkopf collected $356,741 in consulting fees from the Senate Democratic Campaign Committee at the same time that he was representing AEG and its precursor with Senate Democrats. Having worked for Bill Thompson and Mike Bloomberg most recently, Sheinkopf makes kings so he can then make deals with the kings he’s made. He became a regular on CNN over recent years, appearing as an expert so often he started to believe he was one.

More than 20 years ago, Sheinkopf handled the first successful campaign for Rob Johnson, who is still the Bronx District Attorney. Johnson beat Phil Foglia, the author of the IG report, after a top Foglia associate reportedly tried, unsuccessfully, to get Sheinkopf to do Foglia’s campaign. That may make this report the first time Sheinkopf’s two hats have, over time, become too many to wear, especially when caught in a headwind like AEG. Fisch, oddly, recused himself on this investigation because of his ties to Paterson, who participated in the AEG selection, but took center stage at the press conference unveiling it-an unusual combination.

Foglia, who is so Republican he was picked in 2007 to be the Bronx party’s commissioner on the NYC Board of Elections, has failed in a couple of electoral runs, but his well-timed report may have delivered the GOP its biggest 2010 win. Foglia told the Voice that his BOE nomination was “stalled by politics” and that he “became a Republican in the late 90s,” running as one for City Council in 2005. The Foglia ties suggest that even a report that gets the Democratic Senate side of a scandal right can, by going light on Senate Republicans and Assembly Democrats, still be a well-timed partisan contract in Albany.

The report quotes another AEG lobbyist, the ubiquitous Cordo, as defending the illicit receipt of the two memos: “All I care about is the information, not where it came from.” His reasoning? “This is lobbying,” he explained, which the IG concluded was a clear statement of why lobbyists were “antithetical to an objective procurement” process, unconcerned about rigging it.

Also prominent in orchestrating the award were Bolton St. John’s and two other lobbyists closely associated with Sheinkopf--Norman Levy, who was Sheinkopf’s best man AT his wedding, and Stanley Schlein, a fixer tied to the one-man Senate crime wave, Pedro Espada, who was fined $15,000 in 2008 by the city’s Conflict of Interests Board. Schlein told the AEG he didn’t register as an AEG lobbyist because he was functioning as their counsel, though, said the report, “others testified that he played a role as a lobbyist.”

Manhattan U.S. Attorney Preet Bharara has been investigating the aqueduct deal all year, as he has the simultaneous $50 million voting machine contract awarded by the city election board to a company, Election Systems & Software (ES&S), also represented by Sheinkopf and Levy. NYPIRG listings showed that Sheinkopf had the third largest increase in compensation between 2008 and 2009, while Levy was ninth.

Schlein was on the opposite side of the voting machine competition, representing the losing company that’s now suing. One source said Schlein was working with John Haggerty, the Republican consultant under indictment for stealing a million in campaign funds from Mayor Bloomberg and a recent top aide to Carl Paladino. Haggerty, who was said to have periodically appeared at the board, did not file as a lobbyist on the deal.

A lobbyist working with Sheinkopf and Levy for ES&S, Anthony Mangone, was arrested by the feds on unrelated bribery charges the day after the January board decision. Jay Savino, the Bronx Republican county leader who nominated Foglia to be the party’s commissioner on the Board of Elections, shares an office suite with Mangone and has already been subpoenaed in the case, just one more way these incestuous circles swirl. Foglia says his relationship with Savino is “cordial.”

Cuomo learned firsthand how pernicious the Albany lobbying game is with his investigation of the other great scandal of the past four years—the looting of the state’s pension fund. Some of the same lobbyists that are tied to AEG made appearances in this clammy chronicle as well.

Norman Levy “received a half-million dollars” in 2006 payments from Bill Howell, a major pension fund placement agent, and “appeared sometimes to be Howell’s partner” in controversial deals with the fund, according to a source familiar with the transactions. Investigators concluded that they were splitting fees, and not disclosing it. The payments to Levy - whose conviction for running a parking-ticket-fixing-scam decades ago was also overturned on appeal - were allegedly tied to his introduction of Howell to a principal of Global Strategies, a consulting firm whose client, Intermedia, was seeking millions in city and state pension fund investments. Howell made the placements and shared the fees with Levy, who appeared to be listed as an employee of one Howell entity. Sheinkopf received payments from Levy shortly after Levy was paid by Howell.

Howell also paid former Liberal Party boss and notoriously influential lobbyist Ray Harding another half-million. Unlike Howell and Levy, Harding was indicted on charges associated with these and other payments. In his guilty plea, Harding refers to the payments Howell made to him and concedes he did nothing to earn them.

The comptroller at the time, Alan Hevesi, just pled guilty to taking a million in bribes from Markstone Capital Partners, one of the companies that looted the fund, and $380,000 of that total took the form of a fee paid to Frank Sanzillo, a lobbyist whose brother was Hevesi’s top deputy. The fee was funneled through Hank Morris, the lynchpin of the pension racket. Hevesi’s only attempt at an explanation for steering the payments to Sanzillo is that he was “a political supporter of mine.” Sanzillo, who has not been charged, is another of the AEG lobbyists named in the IG report, though he got out quickly after a two-month retainer. He and Carl Andrews share several clients and are listed as pitching in together when the Senate Democrats buy golf balls for their outing.

Other lobbyists like onetime Bronx assemblyman Roberto Ramirez and former Republican assembly leader John Faso have also been implicated in the pension scandal. The only reason more haven’t been is because Hevesi - and his successor, Tom DiNapoli - decided to continue a policy that exempted lobbyists dealing with the fund from registering or filing as lobbyists. A memo that DiNapoli’s lawyers sent to the Public Integrity Commission in July 2009 distinguished the pension fund from other “governmental entities,” contending it was not “a state asset” and thus not subject to state procurement policies, including those regulating lobbyists. Hevesi took a similar position in 2002, shortly after he was elected.

More disclosure and tighter reins won’t begin to break the cult. Andrew Cuomo has to move in a wholly new direction, creating an office of lobbying relations that will become the only passageway onto his second floor for lobbying information, which is sometimes informed and helpful. This filter will be staffed by technocrats who think of birds when they hear someone mention feathers. The unit will be staffed not on the basis of who they know, but who they don’t know. Once this ban on direct contacts with decisionmakers is extended to all state agencies, Cuomo may have set an example that the senate and assembly will have to emulate.

I ran this remedy past Blair Horner, the New York Public Interest Group lobbyist who is the ethics watchdog of Albany and once worked for Cuomo. Horner sees all kinds of practical difficulties, fearing “bottlenecks” and other “logistical questions,” but says “it could work.” He thinks it should be “tested out” in a pilot project.

Of course, the danger of anything piecemeal is that the Big Boys could set in motion a new pattern of Cuomo seduction before the wholesale innovation gets off the ground, and, thus, radical change would never occur. Feathers blasted the idea as “na├»ve,” and said “the generalists” Cuomo put in the unit “would know us all in two weeks.”

It’s not just the state that would be protected by erecting these walls. It’s Cuomo himself. If he falls into the get-along ways of the lobbying caste, just changing the seating arrangement at the head table, he will become the main course. And New York, the love of his family’s life, will sink deeper into its swamp of cynicism.

Saturday, November 6, 2010

The Corruption of Andrew Cuomo Part 2: The Hevesi-Morris-DiNapoli Pension Scandal

Alan Hevesi


Alan Hevesi, former New York State Comptroller, and his colleague Hank Morris have been indicted for plundering the State pension fund for their own financial gain. One of the questions the public needs answered now is, who knew about this, and what did they do/not do to stop it? Why did newly elected Comptroller Tom DiNapoli suspend his agency's sole audit of the attorney general's office soon after launching it a year ago? DiNapoli spokesman Dennis Tompkins explained as follows: "We had a temporary shift in priorities."
From Betsy Combier:
Editor, parentadvocates.org
LINK

I pay taxes like anyone else, and yet have no expectation that public officials whom I am paying with my tax dollars are working to protect my best interests or that of my fellow taxpayers. I am baffled as to why New York State voters seem to enjoy putting corruption into the closet by buying papers such as The Daily News. (See The Corruption of Andrew Cuomo Part 1:The Aqueduct Racino Bidding Process)

Would someone please find out what Andrew Cuomo and Eliot Spitzer, New York State's former Attorney General, were doing while Alan Hevesi (also see the article below) and his people were stealing our pension funds? Tom DiNapoli was appointed to take Hevesi's place, and now has won election as the New York State Comptroller. He needs to answer this question as sole trustee for the $129 billion State pension fund, one of the largest institutional investors in the world.
Audit of Cuomo quickly put off
By CASEY SEILER State Editor, Times Union, Saturday, November 6, 2010
LINK

ALBANY -- Comptroller Tom DiNapoli's office suspended its sole audit of the attorney general's office almost immediately after launching it almost a year ago.

The audit of the attorney general's Civil Recoveries Bureau was, and remains, DiNapoli's only examination of Andrew Cuomo's office since the former assemblyman was appointed to the post in January 2007.

The audit was first reported by the Times Union a week after the customary "engagement letter" was sent to the attorney general's office in December 2009. The Civil Recoveries Bureau is assigned to recover money owed to state agencies through litigation.

"We issued the engagement letter, and shortly after that we suspended the field work," said DiNapoli spokesman Dennis Tompkins.

Asked to explain the reason behind the suspension, Tompkins said, "We had a temporary shift in priorities."

Tompkins would not respond when asked if the attorney general's office had requested the postponement of the audit, which would have been conducted during Cuomo's investigation of the pension fund scandal involving DiNapoli's predecessor, Alan Hevesi. The probe, which at the time was also examining DiNapoli's conduct in office, is ongoing.

"I can't comment on the investigation into the pension fund," Tompkins said.

The attorney general's office failed to answer a request for comment.

The initiation of the audit followed months of often cool relations between DiNapoli, who on Tuesday was elected to a full term, and Cuomo, now the governor-elect. As the pension fund investigation progressed through 2009, Cuomo became vocal about what he saw as the need to curtail the comptroller's "sole trustee" status over the $125 billion Common Retirement Fund. Cuomo has proposed the creation of a 13-member board of trustees including the comptroller as well as appointees of the governor, the attorney general and legislative leaders.

DiNapoli has remained resistant to what he sees as a reduction in the comptroller's constitutional powers that, he argues, could expose the fund to political moves.

Just after the letter announcing the audit was delivered, Tompkins dismissed the notion that the timing of the audit was due to anything other than the comptroller's obligation to conduct examinations across state government. "There is no ulterior motive," Tompkins said in December. " ... This is what we do."

Hevesi resigned in disgrace just weeks after winning re-election in 2006, and pleaded guilty last month to felony corruption after admitting that he had received more than $1 million in campaign cash and luxury trips in exchange for granting investment firms access to the pension fund. His longtime adviser Hank Morris decided to take a plea earlier this week.

Following Hevesi's guilty plea, Cuomo's spokesman took the unexpected step of issuing a statement saying that while matters involving DiNapoli had been examined, he was "not involved in any investigation or matter in this office."

That assurance was seen as a major boost to DiNapoli, whose Republican opponent Harry Wilson had attempted to tie the incumbent to Hevesi's misdeeds.

Tompkins insisted that despite the suspension of DiNapoli's only audit of the attorney general's office, the pension fund scandal doesn't limit the comptroller's fiscal oversight. He said the exam of the Civil Recoveries Bureau is still on the audit plan, although he couldn't say when it would resume. "I don't know the timing of it," Tompkins said.

Reach Seiler at 454-5619 or cseiler@timesunion.com.

Ex-Comptroller Alan Hevesi pleads guilty to felony, drops dime on former advisor
By FREDRIC U. DICKER in Albany and LAURA ITALIANO in New York
New York Post, October 7, 2010
LINK

Disgraced former state Comptroller Alan Hevesi pleaded guilty to a felony corruption charge today in connection with the huge pay-to-play state pension story -- even ratting out his former longtime political advisor Hank Morris for the first time -- that has rocked the office he once held.

Hevesi, a Democrat, was charged with the felony for receiving a reward for official misconduct in the second-degree.

READ HEVESI'S ALLOCUTION

READ THE CHARGES AGAINST HEVESI

"I deeply regret my conduct and sincerely and deeply apologize to the people of the state of New York." he told Manhattan Supreme Court Justice Lewis Stone, who will sentence him to as much as four years behind bars to as little as no jail time on Dec 16.

The plea deal includes his cooperating against remaining co-defendants, including Morris.

"Beginning in June 2003 through September 2005, I approved a series of Common Retirement Fund investments totaling $250 million in Markstone Capital Partners, a private equity fund managed by Elliott Broidy. In exercising my discretion as Comptroller to approve these deals, I gave preferential treatment to Markstone and Broidy, who was a friend of mine and political fundraiser for my campaign.

"I also sought to help Broidy in his efforts to market Markstone by encouraging other public pension funds to invest in Markstone," said Hevesi, who wore a black suit and looked somber throughout the proceeding.

Hevesi also surrendered his passport before the hearing, where the former city and state comptroller told the judge about his misdeeds in great detail.

"Broidy and I agreed that Broidy would pay for certain travel expenses on my behalf, and I was aware that Broidy concealed his payment of some of these expenses through the use of charitable organizations and false invoices submitted to the Office of the New York State Comptroller.

"On at least five occasions, between in or about April 2003 and in or about June 2006, I traveled to Israel, and on one occasion to Italy, with Broidy and certain high-ranking officials of the Office of the New York State Comptroller. Pursuant to our agreement, Broidy paid at least $75,000 in travel expenses incurred by myself, other Office of the New York State comptroller officials, and my adult children, in connection with these trips," Hevesi told the judge.

Attorney General Andrew Cuomo has been investigating Hevesi and several of his former top aides including Morris in connection with kickbacks that were paid by investment companies to gain access to the massive state pension retirement fund.

“Alan Hevesi presided over a culture of corruption and violated his oath as a public servant,” Cuomo said in a statement. “He was solely charged with protecting our pension fund, but he exploited it for his personal benefit instead. With his guilty plea, we can now focus on the process of restoring public trust in government."

Morris has been indicted on multiple felonies and several guilty pleas have already been entered including one by former state Liberal Party boss Raymond Harding, a longtime Hevesi friend and advisor.

"During my tenure, as I knew, my paid political adviser and campaign manager Henry 'Hank' Morris arranged for Broidy to enter into a sham consulting agreement with a lobbyist friend of Morris who was also a political supporter of mine pursuant to which Broidy paid or caused to be paid in excess of $380,000 to the lobbyist over a period of more than two years. Markstone, with my knowledge, failed to comply with its obligation to disclose to New York State Common Retirement Fund staff that these payments had been made in connection with the New York State Common Retirement Fund’s investment in Markstone," said Hevesi.

Hevesi resigned in December 2006 after pleading guilty to an unrelated felony charge.

Hevesi controlled the multibillion-dollar pension fund until his resignation when he admitted to using state workers to chauffeur around his wife.

Hevesi ended his remarks by saying that Morris "solicited contributions to my re-election campaign from those doing business with" the retirement fund.

I understood that during my tenure as comptroller, Morris was also a paid placement agent in connection with Common Retirement Fund investments, and that he steered Common Retirement Fund investments to friends and political associates," he said.

David Loglisci, chief investment officer of the state fund under Hevesi, pleaded guilty this past March to a violation of the state’s general business law.

Prosecutors said Loglisci, who has also agreed to cooperate with authorities, had allowed Morris to choose which money managers received alternative investments from the fund.

COMMENTS
Off Duty
10/08/2010 8:10 AM
When the F will New Yorkers wake up?

bobp1940
10/07/2010 7:54 PM
Another member of the main crime family in NYS "The DemocRAT Party" pleads guilty to crimes committed while in office. And yet the 'Soldiers" of the crime family will march into the voting booths and vote to put more "Capo's" into office.

Debbi64
10/07/2010 6:49 PM
Just wondering? If he's admitted to all these "kick backs" per se...where is the IRS looking for their fair share + interest and then returning everything except the interest????

Don't we all pay taxes?

Archie
10/07/2010 6:17 PM
Vote Republican !

Ex New Yorker
10/07/2010 4:30 PM
Andrew Cuomo stated "With his guilty plea, we can now focus on the process of restoring public trust in government." LMAO! These very same words have been uttered countless times since the days of Tammany Hall and NOTHING has changed! While both political parties are no angels, the Democrats really take the cake when it comes to corruption; witness NY, Chicago, Bell California etc. They wrote the freakin book on corruption, and NY'ers will continue voting for them because Democrats exist by rewarding mediocrity and placating unskilled workers with high paying jobs and benefits.

Bellona
10/07/2010 3:50 PM
What about his tennure as City comptroller? What went on there?

BillNYC
10/07/2010 1:48 PM
Put the bum in JAIL for the full FOUR YEARS, No Parole, No Early Release!

MaryLongIsland
10/07/2010 1:48 PM
RISE UP my fellow NY'ers...these are CORRUPT POLITICIANS FOR DECADES IN NY STATE...VOTE THESE BUMS OUT!!

THROW OUT PRINCE CUOMO on 11/2...NO MO CUOMO!!

These CLOWNS...Schumer, Silver, Gillibrand, Bloomberg,CUOMO, accidental Governor Patterson,Hevesi,Former disgraceful Gov Spitzer..Senate majority, Assembly majority, etc all are DEMOCRATS my friends! ...Robbing us BLIND for decades and they are PROUD of it!

Prince Cuomo total Fraud & Failure running HUD...$59 BILLION unaccounted for when an AUDIT was performed...

DON'T send CORRUPT CUOMO to Albany folks as he is the leader of DIRTY Politicians!!

MHRAorg
10/07/2010 1:41 PM
This is guy, Hevesi, is a slug. But he wasn't by himself. You mean to tell me his deputy didn't KNOW or SUSPECT what was going on. How does he get a pass on this?!!!

No More Mr Nice Guy!
10/07/2010 1:37 PM
HughMcs.........You are correct ! There is no mention of any mandatory jail time in his plea deal . They do however mention that he could do no time at all . There is also no mention of fines or the return of any of the loot . It does mention the name of one particular guy he is going to rat on . Morris will get the real punishment . Hevesi will be rewarded for his invaluable help to the prosecution , His good buddy , Cuomo

HughMcs
10/07/2010 1:07 PM
I think there is a "sweetheart deal" in the making. This prosecution is all about portraying "Prince Andrew" as a shining knight in armor. Everyone knows that he got a job with Clinton due to his father's political influence. Why weren't Hevesi's son's included in the indictment? Where is the investigation going? Have deals been made that if Cuomo gets elected will he give "pardons" to these political fat cats.

Queenskid
10/07/2010 12:45 PM
I sincerely hope this guy gets the kind of hard time he would were he not a white politician. Stick his old behind in Rikers and let those who enjoy older men have some fun.

kingtigertank
10/07/2010 12:44 PM
Jail is the appropriate sentence for this corrupt moneysucking parasite. As a previous poster stated, he only regrets getting caught. I seriously doubt he is is even shamed by his criminal behavior. Corrupt politicians of his ilk have done enormous damage to NYS. "Pay to play" is alive and well in New York and there are more Hevesis still out there that need to be caught.

Mimi
10/07/2010 12:30 PM
So what about Hevesi's two sons (Daniel, a former politician, and Andrew, a current politician)? Are they exempt from prosecution now? Why is Andrew allowed to remain in office?

LedZep
10/07/2010 12:27 PM
OK friends - what are the odds he gets no jail time?

I say there is a 80% chance he gets no jail time

LedZep
10/07/2010 12:25 PM
He states: "I deeply regret my conduct and sincerely and deeply apologize to the people of the state of New York."

He meant to say: "I deeply regret getting caught and I wish I was still in the position to screw the find the people of the state of New York."

WNYer
10/07/2010 12:12 PM
When is Cuomo going to be investigated?

Al Einstein
10/07/2010 11:48 AM
Thanks God we have mini-me mario to get tough on crooked politicians. He's goona be such a good governor...the timing couldn't be better for the little sfacim.

fred klein nassau cty ADA
10/07/2010 11:40 AM
karma every thing was good with all the shake downs until i got caught.while pretending to be a good law enforcement officer i was fired for being a gigantic liar and thief.while all along it was me and i put many innocent people in prison for my own greed and ego.i got caught up in my own judge and jury and hang man attitude.

stopcorruption
10/07/2010 11:38 AM
This state is amazing. Here you have this thief that has a history of corruption still working in public office. NYS socks the big one. We must leave this skithole.

outraged
10/07/2010 11:08 AM
more schemes more corruption it's everywhere just look at the nonprofits stealing like crazy..millions and they are perverts also. I read about the ceo of the leukemia and lymphoma society another child molestor

ne3pete
10/07/2010 11:02 AM
I wonder if he can play a race card like Rangel? oh..wait, he can play the "politician" card!

LiesLiesLiesLiesLies
10/07/2010 10:55 AM
A scrificial lamb for Cuomo's election year altar.

Try all the blood letting you want Andrew. Carl is gonna whoop your azz.

mingdurga
10/07/2010 10:51 AM
Messing around with state workers pension plans is a big NO NO Alan. Anything else is just par for the course of doing political business in NY or any other state. As long as nobody pulls a Michael Vick, you guys should just be fined and "leave" office. Exceptions are the Vito Lopez's and Pedro Espada's. They're just plain thieves and deserve jail time.

iheartdogs
10/07/2010 10:41 AM
I'm sure the government employees in charge of billions of taxpayer money used to run Obamacare will be just as honest, lol.

Toni
10/07/2010 10:16 AM
Another sad story of the state of our Governments Leaders. Are any of them honest?

newsreader
10/07/2010 10:03 AM
Hi Alan - remember when you came to Erie County in 2006 and pointed your finger at us and said "we needed adult supervision"?

Interesting how you insinuated that we should just shut up and raise taxes all the while you were padding your pockets and using state resources for your own personal use.

Ah... those must have been to good ol' days when your arrogance ran rampant. So... who needs "adult supervision now" ?

bonkers
10/07/2010 10:03 AM
xoxoxo

throwemallout
10/07/2010 9:55 AM
Another Democratic politician busted for corruption. Shocker!

dth2libbies returns
10/07/2010 9:49 AM
Liberals stealing from Liberals so what? NY will continue to vote for Demonrats anyway so what?

No More Mr Nice Guy!
10/07/2010 9:44 AM
If he is ready to cop-out already he must have plenty to hide , Including a very large stash of money . He must have cut a real nice deal for himself . The kind of deal where he wont do much time and returns very little . Im sure Cuomo took it easy on him . Jimmy Hoffa was convicted of committing the same crimes with the Teamsters pension fund . He lost everything and did 8 years in federal prison . Lets see what happens to this guy .

maggiev77
10/07/2010 9:40 AM
What's amazing is that there has not been any monitoring of State pension funds at all. Don't they get it. Here's the equation:

Any Politician+Power+Unmonitored Funds=Corruption

skiparoo
10/07/2010 9:33 AM
self serving thief. lock 'em all up, asap.

SuzannahTroy
10/07/2010 9:28 AM
Please explain to me why Hevesi and not Steve Rattner, Mike Bloomberg's money manager who pleaded the 5th to the SEC more times than Mike Bloomberg has been mayor? Why did someone finally get out the handcuffs but nothing is happening with the slush fund investigation at City Hall except tax payers' bills for top defense attorneys for Christine Quinn and staff are just getting bigger. In Ari Ronston's article in NYO he lays it out clearly that Bloomberg broke the law not declaring the money he wired to the Independence party and no one has the guts to apply the laws to Bloomberg the way I understand it. It sickens me that the rich and politically connected are above the law. Re: pensions - I have heard they have been grossly mishandled as well as exploited.

DMZ
10/07/2010 9:24 AM
SuperDopeFreakObama,
In case you haven't noticed, corruption runs rampant on BOTH sides of the aisle. The size and scope of the crimes supposedly committed by this politician are miniscule compared to what Obama's predecessor and HIS puppeteer Darth Vader pulled, AND GOT AWAY WITH!

Lou (bx67)
10/07/2010 9:14 AM
Yet another corrupt Democrat.

NYS is a real political sewer filled with Democrat sewer rats.

hojo
10/07/2010 9:11 AM
When this creep is being held on Rikers in General Population, then alert the public.Why isn't he going thru the same procedures as all others who are arrested. The double standard has become more blatant and brazen. What a shame.

SuperDopeFreakObama
10/07/2010 9:04 AM
Bookem Danno!

THE DEMS ARE CORRUPT, THEY HAVE BEEN STEALING FROM NY FOR DECADES.

NOV,2...MAKE IT STOP!!!

Joey in LI
10/07/2010 9:04 AM
@Magma, @Shy Dawn, how crooked a politician is simply depends on who's is in power. In 5, 10, maybe 15 years, when there's a different AG, I'm sure we'll see Cuomo in handcuffs. You can't be good at being a politician without being corrupt!

eatingdogfood
10/07/2010 9:01 AM
Another Corrupt Liberal DemoRat !!! Does anybody really believe that he will serve any Prison Time ??? Yes, he will be made to walk the "Perp Walk " !!! That's it !!! Then he goes home and continues to collect his hard earned NYS pension !!!

Magma
10/07/2010 9:00 AM
Please lock him up. Please.

Shy Dawn
10/07/2010 8:58 AM
Gee what a surprise, another crooked politician.

WNYer
10/07/2010 8:56 AM
The man needs to go to jail,Too many politicians getting caught with their hand in the cookie jar but, not going to jail. If you do the crime, do the time, period.

Barack_Mugabe
10/07/2010 8:51 AM
Ho hum. The Culture of Corruption rambles on.

DON'T GET FOOLED AGAIN!
10/07/2010 8:50 AM

From Betsy Combier:
oh yes, you might say, Andrew Cuomo is ripping apart the pay-to-play in Albany. Really? Giving the rooster the job of picking the hens in the hen house is ridiculous, dont you think? Who is investigating Andrew Cuomo?

Wait until you see how Andrew Cuomo fights his constituents in order to steal their property in his own pay-the-judges-to-play scheme. That's my next article in this very sad series on New York State's new Governor.

Everywhere a ripoff
Editorials
Saturday, April 17th 2010, 4:00 AM
LINK

Attorney General Andrew Cuomo's probe of corruption in the state pension fund makes it clearer than ever that Albany is a cesspool of pay-to-play politics.

Two investment firms and three lobbyists agreed to cough up a total of $17 million to the state, the pension fund and federal securities regulators to settle charges that they improperly wangled money from the $129 billion pension fund. Among the key players was President Obama's former car czar Steven Rattner.

The settlements were the flip side of criminal charges that Cuomo has pursued among the inner circle of former Controller Alan Hevesi.

One Hevesi top aide has pleaded guilty, and Hevesi's long-time political consultant Hank Morris stands indicted.

Foremost among the schemers, Morris pocketed tens of millions of dollars as a middleman in pension fund deals overseen by his pal.

It didn't matter whether you were a small startup firm or a seasoned money manager. If you wanted a piece of the pension fund, cutting Morris in on the action was the way to go.

Morris' lawyer brazenly admitted as much in a stunning response to Cuomo's indictment:

"It should come as a shock to no one that 'knowing people' matters, and that individuals with political connections frequently enjoy readier access to government decision-makers than do others."

Ain't that the truth?

When Los Angeles-based money manager GKM hired Morris in 2003, for example, it was a young company with $14 million in assets and "virtually no track record," Cuomo's office says. Morris worked his magic and - presto! - GKM was handling $800 million within two years.

Then there was Rattner, a top Wall Streeter who founded the Quadrangle Group.

When Rattner was angling to win Quadrangle a pension fund contract, he not only paid Morris a cool million but also helped finance "Chooch," a cheesy movie produced by the brother of a top pension fund official.

Cuomo's settlement further reveals that Morris leaned on Rattner to donate to Hevesi's campaign fund, and Rattner responded by hitting up a couple of friends to contribute $25,000 each.

His reward? A $150 million investment from the pension fund.

Quadrangle rebuked Rattner, saying his actions were "inappropriate, wrong and unethical."

Meanwhile, Hevesi's successor as controller, Tom DiNapoli says he has diligently cleaned up the mess he inherited. But at least one smelly deal transpired on DiNapoli's watch.

As the Daily News' Ken Lovett reported last year, DiNapoli more than tripled an investment with a firm called InterMedia after a meeting in his office brokered by lobbyist and former Bronx Democratic boss Roberto Ramirez.

Also apparently in the room was a partner with Global Strategies Group - a lobbying and political consulting firm well known for its high-profile clients, including Eliot Spitzer and Cuomo.

DiNapoli mewls that the confab took place before he changed the rules to ban middlemen and other pay-to-play practices.

So what? As Cuomo's investigation proves beyond a doubt, allowing lobbyists and fixers to come within 100 miles of the pension fund is a recipe for disaster.

DiNapoli shouldn't have needed rules to tell him that.

Mayor Bloomberg defends friend, car czar Steven Ratner, amid pension scandal probe

By Kathleen Lucadamo, DAILY NEWS CITY HALL BUREAU
Thursday, April 23rd 2009, 1:33 PM
LINK

Mayor Bloomberg defended his buddy Steven Rattner Thursday, saying he shouldn't give up his federal car czar post while investigators probe his firm's involvement in an exploding pension scandal.

"I can tell you going back a long ways with this guy, he is scrupulously honest and a great public servant," Bloomberg told reporters.

City ethics lawyers last year cleared the way for Rattner's Quadrangle group to manage the mayor's personal fortune and philanthropy assets year after Bloomberg asked for more flexibility in his investments.

The private-equity firm is being probed by State Attorney General Andrew Cuomo for paying fees to secure investments by the city pension funds without disclosing the fees.

Rattner has not been charged with any wrongdoing in the expanding probe, which also includes Quadrangle's role in pay-for-play involving the state pension fund.

Placement fees are legal unless companies are forced to pay a particular firm in exchange for business.

A top associate of Alan Hevesi, who served both as city and then state controller, has been indicted in the scandal.

That associate, Hank Morris, was employed by a firm that collected millions in placment fees.

Critics have called on Rattner to step down from his position as President Obama's pointperson to bailout the auto industry until the investigation is complete.

"From what I can tell and what the authorities have said...he and his company did nothing wrong," said Bloomberg.

"If that's the case, there would be no reason to deprive the country of a very smart guy who is willing to devote himself to public service," he added.

Bloomberg said the decision is ultimately up to the president, adding "I really shouldn't weigh in, he is a friend of mine."

The Obama team has so far backed Rattner, saying he hasn't been accused of wrongdoing and that he alerted them about the investigation.

Friday, November 5, 2010

Judicial Independence Question: 3 Judges In Iowa Voted Out Of Office

Appointed vs. Elected Justices: States' High Courts Take a Hit

Katherine A. Helm, Special to Law.com, November 08, 2010
LINK

The nation often believes that the Supreme Court is divided in its voting strictly based on the political parties of the presidents who appointed the justices. The Court's decision earlier this year in Citizens United v. FEC provided a blunt exemplar of the divided ideologies.

Of course, divisions based on ideological orientation have animated judicial rulings since forever. It was perhaps at its worst, though, and the views expressed most strident, as 2000 drew to a close. The Supreme Court had just awarded the presidential election to George W. on party lines, in an episode truly sui generis. The most important decision in American constitutional history was seen as having been decided not by the justices who signed the majority opinion but by the party politics of their appointers. If the majority of voters had their way on Dec. 12, 2000, when Bush II was decided, they might well have tried a rapid-fire "recall" of the majority justices.

Why, then, in the face of such a calamity where the man-on-the-street Democratic voters believed that election was stolen through the medium of Republican-appointed justices, and now, on the still-hot heels of Citizens United, would anyone think the public better served by an appointment system than an electoral system? How could it be worse, one might wonder, irrespective of whether the justices on both sides decided these cases purely on the merits? In fact, could there be better examples of why the voters themselves, not presidents or governors, should make the decision as to who decides? Up goes the straw man. Now let's have some fun deconstructing it.

In the John Grisham novel "The Appeal," a Wall Street predator tries to buy the election for the next Supreme Court justice in the state of Mississippi. The underbelly of the electoral system is exposed as a bad-guy billionaire goes about rigging a judicial election and taking control of a seat on the high court, just in time to overturn a huge plaintiffs verdict in a mass tort lawsuit against his chemical company. The novel's tag line is "Politics has always been a dirty game. Now justice is, too."

It makes for good page-turning. But our judicial system's electoral process is not so dirty, surely. Justice is not for sale like in a Grisham novel. Elected justices are not stooges for corporate interests ... right? Things like that don't really happen in the majority of states (39) that elect their judges. Even after the Citizens United Court threw out a law restricting corporations and unions from funding ads for or against political candidates, corporate money won't sully judicial campaigns ... will it?

John Grisham's personal view that campaign contributions snuff out small-town justice is no secret. Grisham's take on it, per a pre-Citizens United interview on PBS' "Bill Moyers Journal," is that states with elected high court justices are biased in favor of the powerful and are unsympathetic to the rights of victims, consumers and criminal defendants: "Corporate America sells it ... as a way to protect business, economic development, economic growth [saying] -- Look at our state. We frown on lawsuits. We frown on unions. This is a good place to do business."

Post-Citizens United, the mood surrounding the issue of electing high state court justices shifted for many from increasing concern to full-blown dread. Many judicial authorities have stood up and denounced state judicial elections flat out. Retired U.S. Supreme Court Justice Sandra Day O'Connor is against having elected judges and has devoted much personal time to her quest for maintaining judicial independence through the appointment process. In addition, several of the sitting U.S. Supreme Court justices (including the majority opinion author of Citizens United) have voiced equally strong concerns that campaign contributions to judicial races can create the perception, or the reality, that judicial independence is undermined.

If the highest ranks of the judiciary are concerned that money in elections threatens the very institution and the fair administration of justice, people should listen. How can judicial elections be what Jeffrey Toobin called "the national scandal that few people really know about" if such stalwart public figures are speaking out so strongly? Like the bumper sticker goes: If you're not outraged, you're not paying attention.

So how far off are we from a Grisham novel? No doubt, elected judges are potentially susceptible to influence by political or ideological constituencies. But are deep pockets and political connections truly dominating a system corrupted by greed and big business? Well, consider the midterm campaigns to oust Supreme Court justices in various states, most notably Ohio, Illinois, Colorado, Alaska, Michigan and Iowa. Three Iowa Supreme Court justices were removed on Tuesday, through non-competitive retention elections (where a yes/no vote either approves an appointed judge or votes him out). This unprecedented rejection of three Iowa justices was supported by various conservative groups who effectively campaigned for a referendum against last year's Iowa Supreme Court decision that held unconstitutional the state's statutory ban on same-sex marriage.

This is a big deal. Not only do corporations now have the ability to fund campaigns to elect pro-business state Supreme Court justices to generally rule in Corporate America's favor, but special interest groups have shown they can finance ouster campaigns to take out justices (running unopposed, no less) whose opinions are disliked on the social issue-du-jour, like same-sex marriage or the constitutionality of "Obamacare." In this way, popular opinion can be used to dictate the outcomes of individual cases.

Do we label such efforts by the electorate as highly objectionable attempts to corral favorable ideological judgments or do we deem them part of an acceptable practice of voting one's personal philosophies? To even ask the question collapses all distinctions between political and judicial elections. It is disturbing indeed to think that many voters do not even purport to select judges based on their professional competence, i.e., their temperament for the job and their commitment to judicial neutrality and the rule of law. Court rulings are not legislation and justices should not be labeled activists if they do not follow popular opinion on all hot-button issues that come before the court. If citizens do not realize this, or do not care about securing a truly independent judiciary, we are in serious crisis mode.

We don't want our judges acting like some lawyers who hesitate to stand up to their clients for fear of losing the clients. If judges start to treat their profession as a business and hesitate to rule against their electorate for fear of losing their jobs, the administration of justice is compromised. And yet, more and more, elected high court justices are both being viewed and perhaps inevitably viewing themselves as service providers for their electorate. If we endorse this skewed vision, we risk seeing a decline in the exercise of fair and impartial judging due to a commercialization, creeping towards privatization, of the court system.

Given the inevitability of judicial candidates feeling beholden to various constituencies, no matter your politics, it should be clear that our long-term interests are not well served by elected high court justices. Until things change, however, we are going to have to live with the fact that political structures and challenging societal conditions influence the judicial arena. Nothing is foreordained, though, and we need not accept the argument for judicial deference to the principle of majority rule. Elected judges themselves say they don't want judicial positions to become political positions. Those of us in the system need to construct a response to the challenging conditions that face the increasingly commercialized legal world. Justice is not up for a vote. We cannot have judges running on party line platforms concerning active issues because the majority should not rule issue-by-issue or case-by-case. While this is hardly a controversial notion, it is outside the mainstream for some voters, ebbing into what Jon Stewart mockingly derogated as the agenda of those "unelected, lame-stream, activist judges."

This brings us back to our beginning straw man proposal: Don't we have the same problem with high-ranking appointed justices, viz., Bush v. Gore and Citizens United? While it has been argued by presidents (though not always believed by the citizenry) that there exist no litmus tests for Supreme Court appointments, it is expected that presidents will appoint those jurists who fit neatly with their own philosophies and political platforms. As Sen. Lindsey Graham shrewdly stated during Elena Kagan's confirmation hearing, she would not have been his choice, but the person who did choose, President Barack Obama, chose wisely. Elections always have consequences, even in judicial appointment systems. Of course, there have been some upsets, like George H.W. Bush's appointment of Justice David Souter, but this should comfort us with the reminder that the appointment-for-life system is always a bit of a crapshoot that can't ever be rigged.

While the vote splits in Bush v. Gore and Citizens United are troubling to some extent, the presidents who made the appointments of the majority justices in those cases didn't appoint them to garner favorable decisions in those individual cases. The presidents were popularly elected and were thus given a mandate, one can surely agree, to bring the Court around to their way of thinking on critical issues. That's what elective politics is all about. That's not what's at stake in Grisham novels or in those state judicial midterm ouster campaigns. What's at stake in those are fat cats or lobbyists bankrolling "their guys" and their campaigns to get them on the bench to serve their economic interests and loaded social agendas. That is intolerable and a judicial form of pay-for-play at its worst. Whether one actually supports or opposes the agenda or decision in question, we must recognize the ends are not justified when the means bestow an appearance of bias on, and undermine our confidence in, the very judicial system by whose decisions society must abide. Because if we lose that, we're all losers.

Katherine A. Helm, Ph.D., is a former law clerk to a U.S. Court of Appeals judge and a U.S. District Court judge. She is a current Law.com columnist and will soon be returning to private practice in New York City.

Most disturbing results of election 2010

LINK

In one of Tuesday's most disturbing election results, the losing candidates didn't even have opponents.

Three justices of the Iowa Supreme Court lost what is ordinarily a pro forma election to retain their seats. Not coincidentally, these justices were part of last year's unanimous ruling to strike down a state law defining marriage as between a man and a woman. Outside groups opposed to same-sex marriage, including the National Organization for Marriage and the American Family Association, poured hundreds of thousands of dollars into television ads and other efforts to deny them a new term.

"Activist judges on Iowa's Supreme Court have become political, ignoring the will of voters and imposing same-sex marriage on Iowa," said one commercial. "Liberal, out-of-control judges ignoring our traditional values and legislating from the bench.... Send them a message. Vote no on retention of Supreme Court justices."

Well, message sent -- and that is the problem. The Iowa vote is part of a larger phenomenon of the increasing politicization of judicial elections: more money, more attack ads, more intervention by outside groups, from trial lawyers to business interests.

This is an unavoidable result of states' decisions to give voters a say in judicial selection, whether through direct election of judges or retention votes. In 22 states, judges on the highest state court are chosen through elections and then either stand for re-election or face retention votes.

In another 16 states, high court judges are chosen in some other way, but voters weigh in on keeping them. Some of the most prominent champions of judicial independence, including retired Supreme Court Justice Sandra Day O'Connor, have pointed to this approach -- merit selection coupled with retention election -- as a model for insulating the judiciary for undue political influence.

But the 2010 campaign illustrates the downside of judicial accountability and the threat of growing politicization of retention elections. In Illinois, where Supreme Court justices are chosen through elections and then subject to a retention vote, the decision about whether to keep incumbent Chief Justice Thomas Kilbride turned into a multimillion-dollar battle in the wake of Kilbride's vote to overturn a state law limiting damages in medical malpractice suits. Kilbride won.

You might look at the Iowa results as a reasonable illustration of accountability in action. After all, what's the point of building in accountability unless you're willing to let voters hold judges accountable? But there is also a difference between giving voters the opportunity to remove judges who behave in inappropriate or unethical ways and letting retention elections turn into referendums on unpopular rulings. The courts may follow the election returns, but I don't want judges making rulings with an eye on their own electoral fortunes.

I happen to agree with the Iowa court's same-sex marriage decision, but I hope I'd feel the same way if the court had ruled in the opposite direction and gay rights groups fought to remove them. I vehemently disagree with the U.S. Supreme Court's campaign finance ruling in the Citizens United case, but those who suggest the impeachment of Chief Justice John Roberts for that decision are even more off-base than the critics of the Iowa justices. Oregon Democratic Rep. Peter DeFazio told The Huffington Post that he was "investigating articles of impeachment against Justice Roberts for perjuring during his Senate hearings, where he said he wouldn't be a judicial activist." DeFazio can't be serious.

There is an inherent tension between independence and accountability. When it comes to the judges -- and when judicial activism is in the eye of the beholder -- the system needs to be rigged, as the founders wisely did, in favor of independence.

November 3, 2010

Ouster of Iowa Judges Sends Signal to Bench
By A. G. SULZBERGER, NY TIMES
LINK

Correction Appended

DES MOINES — An unprecedented vote to remove three Iowa Supreme Court justices who were part of the unanimous decision that legalized same-sex marriage in the state was celebrated by conservatives as a popular rebuke of judicial overreach, even as it alarmed proponents of an independent judiciary.

The outcome of the election was heralded both as a statewide repudiation of same-sex marriage and as a national demonstration that conservatives who have long complained about “legislators in robes” are able to effectively target and remove judges who issue unpopular decisions.

Leaders of the recall campaign said the results should be a warning to judges elsewhere.

“I think it will send a message across the country that the power resides with the people,” said Bob Vander Plaats, an unsuccessful Republican candidate for governor who led the campaign. “It’s we the people, not we the courts.”

But critics of the campaign, including those who see the courts as a protector of minority rights, said the politicization of uncontested judicial elections represented a danger.

“What is so disturbing about this is that it really might cause judges in the future to be less willing to protect minorities out of fear that they might be voted out of office,” said Erwin Chemerinsky, the dean of the University of California, Irvine, School of Law. “Something like this really does chill other judges.”

Replacements for the three ousted justices will be appointed by the governor from a slate of candidates nominated by the State Judicial Nominating Commission and will have to stand for periodic retention votes, a system known as merit selection.

From its first decision in 1839, the Iowa Supreme Court demonstrated a willingness to push ahead of public opinion on matters of minority rights, ruling against slavery, school segregation and discrimination decades before the national mood shifted toward racial equality.

That legacy was cited in liberal corners here last year when the seven-member court voted unanimously to strike down a law defining marriage as between a man and a woman, making the state the first in the Midwest to permit same-sex marriage.

But the risk of leapfrogging — or ignoring — public opinion on controversial issues was brought into sharp relief Tuesday when voters chose to remove all three justices who were on the ballot seeking new terms.

Conservative groups this year launched similar campaigns in a number of the 16 states that use merit selection, targeting supreme court justices for rulings on abortion, taxes, tort reform and health care. Unlike the three in Iowa, however, those judges — in Alaska, Colorado, Kansas, Illinois and Florida — were all re-elected.

The number of challenges and the success of the effort in Iowa has caused some concern that retention elections designed to be as apolitical as possible are becoming as bitterly contested as other races. This year far more was spent on campaigns in retention elections than was spent in the entire previous decade, according to the Brennan Center for Justice at New York University Law School.

The ouster was reminiscent of a retention election in California in 1986 that led to the removal of three Supreme Court justices who were portrayed as opposing the death penalty.

“Obviously it has an impact on the independence of judges and how they think of their role — I think that’s demonstrable,” said Joseph R. Grodin, a law professor who was one of the three California judges who lost a re-election bid. “But more than that,” he continued, “I think the damage is not on judges, but that courts will come to be seen and judges will come to be seen as simply legislators with robes.”

The most sustained effort to oust judges in this election cycle was in Iowa, where out-of-state organizations opposed to gay marriage, including the National Organization for Marriage and the American Family Association, poured money into the removal campaign. Judges face no opponents in retention elections and simply need to win more yes votes than no votes to go on to another eight-year term. In Iowa, the three ousted justices did not raise campaign money, and they only made public appearances defending themselves toward the end of the election.

Each of the three justices — Marsha K. Ternus, the chief justice; Michael J. Streit; and David L. Baker — received about 45 percent of the vote, making this the first time members of the state’s high court had been rejected by voters. The 71 lower court judges on the ballot all easily won re-election.

The justices’ removal will have no effect on same-sex marriage, which will remain the law.

The judges declined requests for interviews but released a statement that decried what they called “an unprecedented attack by out-of-state special interest groups.” The statement defended the system for selecting judges but offered what a veiled warning about populist impulses to remake the judiciary: “Ultimately, however, the preservation of our state’s fair and impartial courts will require more than the integrity and fortitude of individual judges, it will require the steadfast support of the people.”

The defeat was a bitter disappointment to much of the legal community here, which rallied behind the justices, and it was viewed with particular concern in the gay community, which has found state courts more sympathetic than state legislatures.

“A lot of time we start in the courts because they’re there to protect the minority against the tyranny of the majority,” said Carolyn Jenisen, executive director of One Iowa, an organization supporting gay rights, “Because they’re there to make tough decisions without regard to popular opinion.”

Correction: November 5, 2010

An article on Thursday about a decision by Iowa voters on Tuesday to remove three of the state’s Supreme Court justices referred incorrectly to the composition of the State Judicial Nominating Commission, which will nominate replacements. The group includes seven nonlawyer commissioners appointed by the governor; it is not composed entirely of lawyers.


Conservatives love "results oriented judges" they agree with.
November 6, 2010


Judges Were Independent. Then They Were Defeated.

To the Editor:

We were pleased to see your front-page coverage of Tuesday’s electoral removal of three Iowa Supreme Court justices because they had ruled in 2009 that the State Constitution protected same-sex marriage (“Ouster of Iowa Judges Sends Signal to Bench,” Nov. 4).

When a judge suffers an electoral defeat because he or she exercised judicial independence, we all suffer. Despite that, in a post-election statement, the three justices — Marsha K. Ternus, the chief justice; David L. Baker; and Michael J. Streit — wisely reminded us that we must continue to create and support an independent, merit-selected judiciary.

While it is regrettable that the justices were defeated in a retention election not for judicial incompetence but for ruling in a way they believed was required under the State Constitution, we should not be deterred in our efforts to achieve a truly independent judiciary in New York. This means replacing the current election of judges with the adoption of a commission-based, merit-selected appointment system.

We are confident that this is the best way to select New York’s judiciary. Apparently, three departing judges from Iowa agree with us.

Samuel W. Seymour
President
New York City Bar Association
New York, Nov. 4, 2010

Tuesday, October 26, 2010

OIG Audit Targets Andrew Cuomo's HUD Overhaul

Audit Faulted Cuomo's HUD Overhaul

By JACOB GERSHMAN, WSJ
LINK
Andrew Cuomo points to his time as Housing and Urban Development secretary as a prime example of how he's made government more efficient and effective. But federal auditors say Mr. Cuomo oversaw a "poorly planned" overhaul of personnel that bulked up HUD's public outreach but undermined the agency's enforcement efforts.

President Clinton nominated Andrew Cuomo to head HUD in 1996.

During the gubernatorial debate on Monday, Mr. Cuomo touted his four-year record at HUD, saying he "shrunk government" and promising to do the same in Albany if elected governor. "The question in this race is who can actually do it. Who can get it done," he said.

While the number of full-time employees at HUD declined under his watch, Mr. Cuomo also added hundreds of high-paid positions as part of his "Community Builders" program, which came under withering criticism from HUD's veteran field staffs, federal auditors, and Republican lawmakers in Washington.

"The concept was not unreasonable. But it was very poorly implemented and the consequences were pretty near disastrous," said Robert Paquin, a former regional director of Community Planning and Development in HUD's Boston office.

The idea behind the program was to split enforcement and customer relations into separate ranks of employees. Between 1997 and 1999, Mr. Cuomo recruited nearly 800 Community Builders, including hundreds of high-paid "fellows" who underwent training sessions at Harvard.

The Community Builders acted as liaisons to city officials and community groups and reported directly to HUD's headquarters in Washington.

"What the Peace Corps is to global development, what Americorps is to local empowerment, we hope Community Builders will be to urban renewal," Mr. Cuomo said when he announced the initiative.

Andrew Cuomo's Political Path

Over three decades, New York Attorney General and Democratic gubernatorial hopeful Andrew Cuomo has charted a careful course through local, state and national politics. Here's a look at his life and career.

In 1999, the program was the subject of a scathing audit report by the HUD Inspector General's office, which recommended that it be terminated.

Congress eliminated its funding that year, over the objections of several Democratic lawmakers, including Sen. John Kerry and now-Vice President Joe Biden.

The audit report said the hiring of the Community Builders skirted federal protocols, siphoned funds away from grant-monitoring activities and caused "significant morale problems" among some career civil servants, who bristled at the higher pay grades awarded to the new employees.

"HUD chose an overly expensive and controversial solution that exacerbated any existing problem," the audit said.

Mr. Cuomo and former aides at HUD said the allegations were unfounded, and fiercely defended the program. "The attacks on the Community Builders program were partisan in nature and wholly without merit," Howard Glaser, deputy general counsel under Mr. Cuomo at HUD, said Friday.

Mr. Glaser pointed to positive reviews of the program by consulting firms hired by HUD. Officials at the Inspector General's office said the other reviews did not contradict the office's claims, and noted that they relied on case studies pre-selected by HUD's senior management.

The Inspector General's audit report also claimed that senior officials under Mr. Cuomo sought to impede investigators examining the program and took the unusual step of asking the Inspector General's office for the names of HUD employees who spoke with auditors.

Several HUD employees "feared reprisal" and urged investigators to keep their communications confidential, according to the audit report.

Mr. Paquin, who was transferred to a lower-level position in 1999, returned to his old job years later after filing a complaint with the U.S. Office of Special Counsel alleging that his transfer was prompted by testimony he gave to the U.S. Government Accountability Office, which conducted a separate review of HUD's overall monitoring activities.

The Inspector General's report said HUD could not adequately justify the number of Community Builders hired nor their salaries, which in many cases were tens of thousands of dollars higher than the pay given to veteran civil servants who monitored HUD's grantees.

"HUD allocated a large amount of its resources to outreach and customer relations in the form of higher grades, travel and training funding, and personnel," the report stated.

More than half of the Community Builders interviewed by the auditors said they spent most of their time on public-relations activities.

"Considering that 228 Community Builders came from HUD's monitoring side, there is an appearance HUD favors the outreach and public relations over the monitoring and compliance function," the report said.

The Community Builders interviewed by the auditors lacked knowledge of HUD's grant programs, the report said, and in some cases improperly interfered with housing transactions between local officials and nonprofit groups, resulting in the loss of millions of taxpayer dollars.

HUD, in its response to the 1999 audit, said the report was "misleading" and denied that the agency had violated hiring protocol.

It noted that the program was widely praised by local officials and others interviewed by Ernst & Young, which was under contract with HUD to conduct an interim review.

The audit report faulted HUD for using the Community Builders to carry out a public-relations campaign on behalf of HUD when Congress threatened to slash the agency's budget. Senior officials directed the employees to reach out to local media and "arrange press conferences, conference calls, and telephone interviews," the audit said.

The Inspector General's report also said Mr. Cuomo's staff took unusual steps to hinder its review, stating that HUD senior management "told employees not to talk to us during our planning stage" and "circulated 'questions and answers' for employees to use when we interviewed them."

Investigators said senior HUD officials also asked the Inspector General's office to identify the HUD employees interviewed by auditors.

"When the request came in, everyone wondered why the department needed it. Why do they need to know who spoke with the auditors?" said a person who was with the Inspector General's office at the time.

Saul Ramirez, a deputy secretary under Mr. Cuomo, said the request for the names was "standard procedure" and intended to help headquarters organize the schedules of field staffers involved in the auditing process.

Write to Jacob Gershman at jacob.gershman@wsj.com

Monday, October 11, 2010

Andrew Cuomo and His Deadly Court Cartel

Andrew Cuomo
AG Candidate Carl Person:CUOMO HELPED TO CREATE THE MORTGAGE FRAUD

Posted on October 10, 2010 by Ron Moore
LINK

According to Libertarian Attorney General candidate Carl Person, Andrew Cuomo , as HUD Secretary helped to create the mortgage fraud and predictably has done nothing to stop banks from using false affadavits. Person says “Andrew Cuomo has a duty as NYS Attorney General to start lawsuits to stop Bank of America, JPMorgan Chase, GMAC, Countrywide, Wells Fargo and other lenders from using the New York courts to foreclose mortgages on homeowners in NYS.”

Person explained that “these banks and lending institutions have been filing false affidavits in New York foreclosure actions for several years and have been illegally obtaining judgments of foreclosure and illegally selling the homes of many tens of thousands of homeowner victims.” Presently, there are approximately 80,000 foreclosure cases in the New York courts, with more being filed every day.

“Cuomo is trying not to get involved”, said Person, “because he helped to create the mortgage fraud when he was Secretary of Housing and Urban Development (HUD).” Person also stated that “Cuomo should have recused himself and let someone else in his Office of New York State Attorney General be assigned the responsibility for ensuring that mortgage foreclosure fraud is stopped in NYS.”

Person went on to say that the banks, servicing companies, and other participants in the illegal activities should be penalized by not being able to use the New York courts to commence or pursue any foreclosure actions in New York State as to any residential mortgages, and that the banks should not be able to assign the residential mortgages to anyone else for the purpose of starting foreclosure proceedings in New York State.

What needs to be done, according to Person, “is to require the banks to enter into modification agreements with residential homeowners decreasing the monthly payment to the current low mortgage rate of 4.5% or so and decreasing the principal amount of the loan to 90% of the present value of the property.” As to each property for which this takes place, the bank would then be able to enforce the modified mortgage in the New York courts.

“Everyone can see that Cuomo is unable to serve honestly as New York State Attorney General, and this should disqualify him from becoming Governor of New York State,” according to Person.

Cuomo’s running mate for NYS Attorney General hasn’t done anything in Albany to stop the fraud, and can be expected to do nothing except benefit the banks.

Person said “If elected, I would commence the needed lawsuits to stop this devastating fraud on the NYS courts and homeowners.”

From Betsy Combier: If the banks dont condemn your property, then the Courts will. It's all the same land grab. Is anyone checking into Andrew Cuomo's connections to New York State Surrogates Courts, where property of the dead are grabbed from the next of kin by the State under color of law?

In Defense of Eminent Domain
Michael Cardozo, Corporation Counsel, Columbia Law Review

NY Court of Appeals Upholds Eminent Domain
Posted on November 24, 2009 by Mark Axinn
LINK

From the Institute for Justice:

WEB RELEASE: November 24, 2009

Media Contact:

Christina Walsh (703) 682-9320

Arlington, Va.—The New York Court of Appeals, the state’s highest court, today announced that it would uphold the decision of the Empire State Development Corporation (ESDC) to condemn privately owned homes and small businesses to make way for wealthy developer Bruce Ratner’s so-called “Atlantic Yards” development of 16 mammoth skyscrapers centered around a basketball arena.

“Today’s decision puts homes and businesses throughout New York at risk of condemnation,” said Dana Berliner, a senior attorney at the Institute for Justice (IJ), which filed a friend-of-the-court brief in the case. “Courts have a duty to look carefully at the government’s claim that it has the right to take someone’s home or business, and the Court of Appeals has simply refused to do that.”

While upholding the taking, the New York court did not go so far as to embrace the United States Supreme Court’s much-maligned reasoning in the 2005 Kelo v. City of New London case, which held that the U.S. Constitution allows governments to condemn property for economic development alone. Instead, the Court found the takings were for a “public use” because of the ESDC’s determination that the area to be condemned was “blighted”—a determination that was based on a study paid for by the would-be developer and not even initiated until years after the Atlantic Yards project was announced.

In a dissent, Judge Robert Smith excoriated the majority for abandoning its duty to critically examine the ESDC’s assertions. “To let the agency itself determine when the public use requirement is satisfied is to make the agency a judge in its own cause,” Judge Smith wrote. “I think that it is we who should perform the role of judges, and that we should do so by deciding that the proposed taking in this case is not for public use.”

“The developer’s study did not find anything a normal person would call ‘blight,’” explained Berliner. “Instead, it found that the neighborhood was ‘underutilized’—in other words, that the developer could think of bigger things that could be built where these homes and businesses are. If that is all that is necessary for condemnation, then literally every piece of property in New York is at risk.”

The majority’s opinion frankly acknowledges that the court may be opening the door to “political appointees to public corporations relying on studies paid for by developers . . . [as] a predicate for the invasion of property rights and the razing of homes and businesses.” But, it says, preventing such abuses is not the job of the courts, advising New Yorkers to look to their legislature to fix any problems.

“New York is one of only seven states that has failed utterly to pass any kind of eminent-domain reform in the wake of the Kelo decision, and today’s opinion will only make things worse,” said IJ Staff Attorney Robert McNamara. “The state courts are looking to the legislature to fix the problem, while the legislature is apparently looking to the courts. And that means more and more New Yorkers will be looking at condemnation notices.”

“Property rights are as sacred to citizens of New York as they are to Americans nationwide, and New Yorkers have rightly looked to their courts to protect those rights,” concluded IJ President and General Counsel Chip Mellor. “Today’s opinion should be a clarion call to the state legislature that they cannot avoid this issue any longer. Now is the time to give state residents the reform and protections they desperately need.