February 2, 2015
New York City

Video and Transcript: Governor Cuomo Outlines 2015 Ethics Reform Agenda at NYU School of Law

TOP Video and Transcript: Governor Cuomo Outlines...
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Governor Andrew M. Cuomo today outlined his ethics reform agenda for the 2015 legislative session at the NYU School of Law in New York City.

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A rush transcript of the Governor's remarks as delivered is below: 

 

Thank you very much. Thank you all very much for taking the time to be with us today. I want to thank the Dean and the School for its kindness; for allowing us to set this up on short notice. Let’s give the Dean a round of applause for his good work and his kindness. You have one of the real greats with it comes to ethics – Professor Stephen Gillers who has literally written the book and is the expert and has forgotten more about the topic than I will ever learn. But he really is an extraordinary asset and I understand many of you are from his class. 

 

I don’t know that he has told you the most relevant ethical story. Did he tell you the story about the ultimate sanction for the unethical lawyer? Oh you didn’t get to that yet. Oh it’s very important.

 

Ultimate sanction for the unethical lawyer. There’s a young lawyer, he goes to law school, works very, very hard, he wants to be a success, does well in law school, earns good grades, gets into a big firm. He sits down in the big firm and they say in the firm you know this is all about billing billable hours and getting the business of the law firm solid – that’s a big part of it, it’s not just the substance of the law, it’s the business of the law. And he wants to make partner so he’s working seven days a week and he’s keeping account of every hour that he works. And he’s very happy because he’s at the top of the billable hour chart and they circulate the billable hours chart and he is right up at the top and he’s working very hard, it’s going fine and then bang – he drops dead of a heart attack. 32 years old.

 

Then he goes up to heaven, gets to the pearly gates and he meets St. Peter and St. Peter says, “welcome to Heaven.” And the lawyer says, “well thank you, I guess it’s better than the alternative, but you know, St. Peter, I’m confused why I’m here. I’m so young.” And St. Peter looks at some papers and he says, “we have you down for 89 years old.” He said, “No, no, no I’m 32 years old, this has been a terrible mistake.” St. Peter says “we normally don’t make these mistakes, we have you down for 89 years old, let me do a little checking.” And he ruffles some papers and he says, “oh I understand what happened – we calculated your age by adding up your billable hours.” The ultimate sanction for the unethical lawyer. Keep that in mind when they’re pushing you for the billable hours sheet.

 

As you heard from the Dean, this has been a difficult month for the State of New York – the reputation of the State of New York. The headlines have been ugly. It has been a difficult January in many ways all across the board. We started January 1 with a terrible loss to me. We lost my father, Mario Cuomo, who was a great governor for twelve years of the great State of New York and I think most sons probably think of their father as a hero but I certainly did. And he’s been a big force in this state for many years, a great spokesperson and a great progressive that has done great things.

 

I’m sure he would be outraged and angered at reading these headlines because the reputation of the state and the dignity of public service were maligned. I know that I am. I’m sure too that he would seek to use the opportunity of the moment because he always understood the wisdom and the old adage “never waste a crisis.” He would look to history to provide guidance and set the context. 

 

One of the books my father wrote, and he wrote quite a few, was entitled Why Lincoln Matters. The point of the book was that the essential debate involving democracy and representation and freedom has been a work in progress since Lincoln’s times. And that many of the pressing issues we face today are not new issues, they are just old issues, unresolved. And Lincoln’s insights, and Lincoln’s principles are still relevant today. Thus, Lincoln matters.

 

The reputation for corruption in Albany is nothing new; it actually goes back to the time of Lincoln. My father’s administration saw Speakers indicted, saw assemblymen go to jail, he established commissions, he made proposals, he wrote reforms, he wrote books on ethics reforms. He battled the dragon of corruption for 12 years. The dragon obviously survived. There is much to be drawn from, and we should begin by remembering the goal of the effort and why these acts of corruption are so damning.

 

My father’s driving philosophy was as simple as it was powerful. We should do good things while we are on Earth. We should try to make this place a better place. Why? Because it’s the right thing to do, and because it’s the smart thing to do. It is right to help upstate New York get their economy running. If upstate can’t pay the bills, then downstate New York is going to have to pay for them. And the sense of community and humanity. He called himself a progressive pragmatic – doing the right thing but also the smart thing. How do you get that done? 

 

You get that done through a vehicle called government. And government is just a collective vehicle for action. That’s the way the “we” works, is through government.

 

My father focused on convincing people of the righteousness and intelligence of this argument. He was very persuasive partially because he was right, and partially because he was very persuasive. I believe people agree with the basic premise now that we should work together. They get the connectivity and people are inclined to do good things but we still must prove that government is the vehicle that can actually accomplish those good things. We need to resolve the seminal political debate of whether government is the solution or the problem. If people are going to believe that government is part of the solution, we are going to have to prove two things. First, that it has the capacity to competently perform and second that it can be trusted ethically. To overcome the skepticism that has built up over years, the proof must be in deeds and not words. Only seeing is believing when it comes to trusting government. 

 

Over the past four years we have come a long way in enhancing government’s ability to perform – to be competent. We passed four budgets in a row, it doesn’t sound like much. But it was the first time in 40 years that we’ve had 4 on time budgets in a row, not since Nelson Rockefeller. We are turning around upstate cities like Buffalo that people had long ago given up on. Our taxes are down, and jobs are up. We passed national legislation like marriage equality and gun control that has actually led the way for the nation. So it’s clear that the government is working.

 

But we have not yet proven the second challenge -- that Albany writ large can be trusted. If anything, recent headlines of scandal and corruption have fed the cynicism. 

 

The history is interesting here. There are reasons why of the past five Assembly speakers, three have been charged with crimes, and why we have seen this reputation and reality of corruption go on for decades. 

 

The New York State Legislature is a citizen legislature: part time legislators who are expected to have private sector employment. While this has been the basic idea since the state began, our theory has changed over time.

 

There is a document outside my office in the Capitol, on display for the public known as the General Association of 1775. It is New York’s version of the Declaration of Independence. One of the grievances referenced in that document is a complaint against the concept of paid legislators. Why? Because their experience was the King paid legislators in England and therefore the legislators were beholden to the King. Their response was no salary for the legislators, because they don’t want that connection to the government. How ironic. Today’s problem is the exact opposite. That we don’t have enough trust from the government.

 

So, no salary was to be paid that could unduly influence the legislators. The legislators were supposed to meet for a short period of time and then get back to their “real lives.” The ideal was Cincinnatus, the Roman leader who was called from his farm to service, did his duty and went back to his farm. 

 

Over time, the property requirements fell away, allowing more New Yorkers to run for office, and by the middle of the 19th century, legislators began receiving a modest salary. The Constitution was amended in 1946 to make it easier for the legislature to raise the salaries themselves. They used this new power, on average about every six years for a salary increase, until 1999. And that was the last time there was a governor who would sign a raise for the legislators – 1999 – and that’s how the legislators’ salary of $79,500 was set. 

 

Since then, there has been no increase. And what we’ve seen is lulus and committee chairmanship bonuses and an expansive use of per diems – wrongly used as a proxy for a legislative pay increase. Meanwhile, beginning in the 1960’s, New York’s part-time legislators began meeting more and more and in longer and longer sessions. Today our legislature has one of the longest sessions, some of the most populous districts, and the largest body of staff of any legislature in the nation. 

 

The concept of part-time employment as a legislator is problematic in modern society. A legislator is away from their hometown about six months a year, and for the remainder of the year they have numerous political duties. What job would really accommodate that schedule?

 

In New York, most outside employment of legislators is as lawyers at law firms. Although, we do have several preachers, a pharmacist, an auctioneer, a retired actor and a funeral home director. In the Senate, 29 of 63 have outside income. In the Assembly, 55 of 150 have outside income. 

 

That said, most legislators are not wealthy. Assemblyman Sheldon Silver was the exception. The rule is quite the opposite. Only 10 Assemblymembers in a body of 150 made over $100,000 in outside income and only 7 of 63 Senators. The total is 17 of 213 legislators made over $100,000. A modest amount to be sure. But a single corruption case is one too many.

 

The challenge is the inherent conflict of interest posed by outside employment. The constant question is whether clients are seeking undue influence. Are clients paying privately for the actions of a public official? And who does the legislator really represent at the end of the day – his or her constituents or some undisclosed client interest? Paradoxically, campaign contributions must all be disclosed, but money that is paid to a legislator privately is not disclosed. It makes no sense. 

 

The bottom line is that New Yorkers will never trust the government’s authenticity until they know the who, what and where of outside employment. If we want to resolve it once and for all, either end it entirely or thoroughly disclose it. There is no middle ground and that’s why this has gone on for so long and that’s why it has literally festered for decades.

 

The cleanest solution is to end the conflict rather than attempting to police or regulate it. To end the conflict would be to say we have a fulltime legislature; to pay them a decent salary and ban outside income. This is the absolute remedy and it requires us to grapple with difficult philosophical questions – do we want a fulltime legislature, or a part time legislature? Is the “citizen legislature” model possible today without significant conflicts? Do we want representatives of wealth that don’t need to earn the government salary or do we want working families who actually need the salary? Do we want shorter legislative sessions so people really could have meaningful outside jobs? Do we want to ban any outside income from clients with matters before the State? 

No state has done it in the nation – but it would end the conflict, certainly. This is not just a New York issue. Every state and every city deal with it, including the Federal Government. New York City has a part time council paid, they are paid $112,000 with unlimited outside income. 

 

Congress, probably has the best compromise model. A part time legislature that pays $174,000 and allows outside income of up to an additional 15%.

 

These are difficult decisions, politically charged, and slow to implement once made, but none-the-less, issues worth our analysis. 

 

In the meantime, and if outside income is allowed, the only viable alternative is to design a system where it is tightly regulated. This is easier said than done. The potential conflicts are too numerous to anticipate and the temptation is too great. 

 

And it’s not that we haven’t tried. Over the decades there have been numerous commissions and experts, and still the problem persists. My father enacted numerous reforms over his twelve years. Over the past four years we were extraordinarily aggressive on ethical reform and there is no doubt our current system is the most restrictive and most regulated in our history. We are installing a database of all law firms and consultants who do business with the State and we have unprecedented financial disclosure by the legislators today. But despite all of these reforms conflict cases still occur as we have read in the headlines. 

 

In short, the past has shown that this problem will reoccur unless we have total disclosure that leaves no question unanswered and brings sunlight to the ethical shadows. I propose a dramatic 5 point plan to Clean up Albany and restore trust.

  1. We will propose what we call “total disclosure” – the most extensive disclosure of outside income in the United States of America. You have heard the phrase “follow the money”. We’re creating a new expression, “explain the money.” Officials will have to disclose to the public all the outside income they receive, from who, for what and whether there is any connection to the state government or the office that they hold.
  2. Public officials who are convicted of public corruption should not have taxpayers pay for their retirement. Therefore, we are proposing a constitutional amendment to require public officials convicted of corruption to forfeit their pensions. Also, the rules of the State Assembly centralized power so that individual members are virtually powerless to move legislation. This is the Assembly’s opportunity to enact a new fair and open system. They should not merely change the ruler but they should use this as an opportunity to reform the rules.
  3. Per diems have become backdoor salary supplements. Legislators travel to Albany because they make money on the per diems, believe it or not. We must ensure that per diems are only for actual and necessary costs or paid as a fixed amount. Nothing more. The days when officials make money on per diems must be over.
  4. Campaign funds are called campaign funds because they are supposed to be spent on campaigns – hence campaign funds. However, personal use of campaign funds has become another way to supplement income. This is wrong and it must stop this session.
  5. Our campaign finance laws are outdated and porous. Housekeeping accounts and LLC loopholes are glaring. Public finance is the only option to ensure democratic access to the system. After the federal Supreme Court case, Citizens United, a state cannot stop money from coming into the electoral system. Independent expenditure committees which are now allowed under the federal law, institutionalize unlimited donations. Fortunately the one things a state can do is require disclosure. It must be a transparent donation system. We must be able to see the contributions and be able to follow the money. We are proposing the strongest campaign finance disclosure rules in the nation by increasing the frequency and the detail of campaign and independent filing expenditures.

Now, the legislature will not want to pass new ethics laws. My father’s administration had this debate many, many times. I remember it myself: Legislators will say that this is an intrusion into their private business and they will be right, but my answer is that their private business has intruded into state government first, and that public service is a privilege and an honor and it is a sacrifice that they must make. They will say that their client list is private and privileged. Well it doesn’t have to be, you can’t find that anywhere in the bible and a new law can make that clear. Legislators will argue with some merit that they are judged by a few bad apples and that despite all of our reforms to date, “it’s never enough, it’s never enough.” I understand the frustration. The overwhelming majority are honest, they are ethical and sincere. I know most of them and I like them, if you got a chance to meet them, I think you would like them too. I have already proposed a pay raise commission to consider additional compensation to members with no outside income, because I understand their point about not getting a pay raise for sixteen years. But it is true that the few have created an issue for the many, which we must resolve now.

 

A Governor’s maximum leverage vis-a-vis the legislature is in the budget process. In that exchange the Governor can effectively can say to the legislature either pass my budget or shut down the government. 

 

As you recall President Clinton had a fundamental disagreement with Speaker Gingrich and that’s what it came to – either pass the budget or shut down the government and they shut down the government. I was there. It was ugly but sometimes ugly is necessary. Change is disruptive, and transformative change is highly disruptive. And make no mistake, this will be highly disruptive.

 

So I will not sign a budget that does not have an ethics plan as outlined in my proposal that addresses the current problems in the system.

 

I need to be able to look every New Yorker in the eye and say we have a system to deter, detect and punish, and that that system works. 

 

This means in all probability that we will not have a fifth on time amicable budget. I think that’s safe to say because these reforms going to meet with significant resistance, but I am okay with that. I think New Yorkers know after four on time budgets we could perform collegially to accomplish a fifth if that was the goal. But there are different ways to pass a budget first of all and it is more important to me to prove that we have corrected the problem and restore trust then just check a box of getting another budget done on time. 

 

Why is all of this important? 

 

Because Mario Cuomo was right and his point was right. His point was we should be working together to make this place better, that this is the right thing to do and it is the smart thing to do. And people get that, people understand the connectivity. You feel in in the City of New York, 8 million people all here. One person sneezes, you catch a cold. We are one society, we are one community, as you go, goes all of us. People get that and he convinced them of the intelligence of the argument so we should do something about it and the “we” is what? The “we” is government.

 

That’s where we still run into the problem because people are skeptical about government. And by the way, not for no reason. They have very good reason to be skeptical about government. You look at what they have heard. We want to help poor people so we will start the welfare system and we operate the welfare system and there are all sorts of criticism about the welfare system and then thirty years later, someone stands up and says the welfare system doesn’t work and we need welfare reform. And everybody says that is right. 

 

Government says we want to help people; we want to help build affordable housing. 1949, every American should have a safe, clean, decent place to live and we went out and built public housing projects. And people saw these big public housing projects and they saw them go up, the big cinderblock monsters. One after the other after the other after the other and they saw government make a mistake and concentrate too many poor people, with too many problems in one place and destroyed the surrounding neighborhood and actually increase the move to suburbanization.

 

“Well you should trust the government.” I’ve seen mistake after mistake after mistake. I have seen act of corruptive after corruption after corruption, I have seen a whole string of politicians one coming one after another saying, “I’m different, trust me. I’m not like the other guy.” And I had my heart broken again and again and again. 

 

If you can prove the capacity of government, if you can prove it can actually function and function well. If you prove that it could be trusted, then what you can do is put the potential of government as a vehicle together with the latent intent to do good things and that my friends is TNT. That is TNT, because people do want to do the right thing. They do get it. And if you show them that it could actually happen and the “we”, the collective, could actually operate through government, I think you would unleash one of the most powerful forces we’ve ever seen.

 

And then think about the good we could actually do. Think about how we could transform that public education system and really make it a model of pride and be able to say to every child in this city and in this state, “you are going to get every shot you deserve,” because we have a public education system that is second to none. Think about what we can do in all those poor communities where you still have one of the highest poverty rates in the nation and the help we could do to people and the effect you could have on humanity. 

 

Think of the national model that New York could be, because when New York leads, the nation follows. And institutional incompetence – the bureaucracy – is not enough to frustrate this dream. Personal greed of an assemblyman or a legislator or a state official, who does something venial and greedy and stupid is not enough to destroy that dream because that dream is too important. It’s the dream this state this state; it is the dream that made this nation this nation. Come here and we will work with you.

 

Education, healthcare, and you will do well and you will bring us all up. That’s Mario Cuomo’s vision, that’s my vision, that’s the message of a progressive New York and that is the message of the progressive New York that has radiated all across this country. 

 

We have to show that it is possible to do in this state and you prove possibility and you will have recreated fire and you will see people excited with a hope and an expectation and an optimism we haven’t had in a long, long time. Make it work, make it trustworthy. That’s our goal. This plan will be a big step forward. 

 

Thank you for having me. 

Contact the Governor's Press Office
Contact the Governor's Press Office

NYC Press Office:  212.681.4640

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