4 April 2015

The good intentions of politicians are often seen by cynical observers to be tainted by self-interest – usually to their financial advantage.  Perhaps that is why JK Galbraith noted that “…politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable…”

A media focus last week was on New York’s unpalatable politicians.  Ethics reforms were being enacted late on 31 March to take some heat out of a growing perception that corruption was rife in the Empire State.  A number of the State’s politicians have been convicted of offences including misuse of public money and fraudulent allowance claims. A Speaker of the State Assembly, elected for the eleventh time on 7 January 2015  resigned on 30 January when arrested on charges of extortion and undeclared payments of more than $4 million from law firms that specialise in property-tax avoidance.

Last week he attempted for a second time to have the charges struck out as not being sufficient to constitute a bribe! His defence is that “…there is simply nothing wrong with an attorney earning referral fees for the business he brings in…” Although first elected in 1976 and the fourth in seniority of the 150 New York assemblymen his notion of ethical conduct seems undeveloped.

The New York Governor’s response was to introduce ethics reform as part of the State budget.  Politicians who have legal practices will be required to disclose the names of clients paying fees greater than $5,000. However the effectiveness will be diminished because the law will not apply to existing clients and excludes retainer payments for general advice.  The law may well be “largely meaningless”. The introduction of an electronic recording system to verify attendances for which politicians claim allowances may be more effective in countering the lack of integrity implicit in the history of false claims.

Community groups have been critical about the tactics used by the government. The Bill was introduced only 12 hours before budget legislation had to be enacted. There was no opportunity for public scrutiny or comment. “It is unacceptable in a functioning democracy that an ethics bill about the disclosure of legislators’ outside income hasn’t even been disclosed to the public”. The claim by the Governor that New York  “will now have the nation’s strongest and most comprehensive disclosure laws for public officials” is sad if true.  Proposals that were not enacted mean there is little change in “pay to play” in New York State government;

  • Unconstrained access by politicians to secondary employment means conflicts are inevitable
  • An individual can still give up to $60,800 to a candidate’s election campaign
  • As a limited liability entity is treated as an individual and not a corporation, the wealthy can create numerous entities and donate the maximum through each of them
  • Unlimited contributions can be given to political party “housekeeping” accounts for operating expenses (allegedly a total of $133 million over the last 15 years has been paid for access and influence).