Senators Push for Hearing on Ethics

An “Arcane” Senate Rule? Only in NY.

ar-cane
-adjective
known or understood by very few; mysterious; secret; obscure; esoteric.

“Arcane” was the word used yesterday to describe the Senate Democrats’ petition for a public hearing. Given that public hearings are such rare event in Albany, you might be inclined to think they only happen when a top-secret rule is employed. But the reality is that there is nothing mysterious, secret, obscure, or even esoteric about petitioning for a public hearing. The rules are quite clear and publicly available. Senators may force a public hearing with a petition signed by one third of committee members. Unless a majority of committee members vote to not hold a hearing, a public hearing must be held in 14 days.

Bravo to the Senate Democrats for finally using this rule in a very public way. We hope to see more of this type of thing -- it's the way legislature's are supposed to work. If some in the legislature are squelching efforts at transparency, at the very least, the public has a right to know who is responsible.

As we have said before, hearings provide an important opportunity for legislators to obtain important testimony from both experts in the field and the general public -- and to provide momentum for issues that many legislators would otherwise love to see go away -- like reforming the redistricting process, the State's ethics laws, or our campaign finance rules. State of Politics notes that the bills in question are on establishing an independent commission on governmental ethics; stripping elected officials convicted of misusing office of pensions; increasing financial and client disclosure requirements, restricting the personal use of campaign funds; and eliminating Pay-to-Play.

Given the recent and all too familiar corruption scandals, ethics reform should not be left up to three men in a room. As we recently wrote, our elected leaders need to regain their standing with the public by reforming a system that far too many see as corrupt and lacking legitimacy. Public trust simply cannot be restored without public input.

Senate Rules Committee Continues to Undermine Reform

Without notice, discussion, or explanation, the Majority in the Senate Rules Committee introduced a resolution yesterday to change the rules of that chamber that will give greater power to the Senate Majority. Likely gearing up for an upcoming budget battle, the resolution seeks to do three things:

1) Increase the membership of the Finance Committee and the Rules Committee with members from the majority party;

2) In the event of an excused absence from a meeting, allow for a member to fill in for a Senator on the Finance Committee and Rules Committee; and

3) Allow budget bills from the Finance Committee to bypass the Rules Committee and go straight to the third calendar reading.

The resolution passed committee and is headed for the Senate floor. Capitol Confidential reports that when the Minority objected to the introduction of the new rules, the Majority presented a letter from counsel overruling the objection stating that this was a “privileged resolution” that did not require advance notice.

Whatever the actual substantive impact of these changes (time will tell), the process sure makes it look like a simple power grab.

Waiting for the Promised Ethics Bill: What Does Meaningful Client Disclosure for Public Officials Look Like in Other States?

We spent a good part of our holiday break thinking about this question and doing some reading. The anticipated ethics bill should include meaningful financial disclosure for all public officials. Comprehensive disclosure of private interests would set a new tone in Albany, and be a declaration by lawmakers that their first priority is to the public. Officials should disclose all sources of income that might serve to influence their decision-making: commercial tenants, sources of brokerage fees and commissions and other third-party payments, and business clients of law firms and other professional practices.

Though dull reading, here are a few examples of client and income disclosure from a handful of states that should serve as useful models to bill drafters:

In Wisconsin, public officers are required to disclose commercial customers, clients and tenants who are not individuals:

“For each unincorporated business, subchapter S corporation, service corporation (SC), limited liability company (LLC), partnership, or income-producing real estate (in which the officer or his family owns 10% or more), list businesses, organizations, and lobbyists that paid the enterprise $1000 or more in [the calendar year] Furthermore, please place a checkmark in the appropriate column if an organization listed in Item 3 authorized you to represent it in its dealings with others as an attorney-at-law, agent, spokesperson, or representative.

List: both a third-party payer as well as the customer, client or tenant if the business received income from a third-party payer (such as a fee, commission, or insurance payment received by a realtor, travel agent, or medical practice).

Do not list: an individual (unless the individual was a lobbyist or acting on behalf of a business or organization); a decedent’s estate.

Further, Item 7 requires disclosure of entities that appoint officials as agent, representative or spokespersons to third parties. “List organizations that authorized you or a family member to represent it in its dealings with others as an attorney-at-law, agent, spokesperson, or representative…

List: each business, labor union, association, cooperative, partnership, or other organization for which you or a family member was an authorized representative or legal agent.

In the case of a lawyer, business clients for which you or a family member was authorized to provide representation in dealing with other parties or before a tribunal.”

To read more about Wisconsin’s progressive financial disclosure, visit http://gab.wi.gov/node/205

In California, public officials must disclose “commission income,” defined as “gross payments of $500 or more received …as a broker, agent, or sales person, including insurance brokers or agents, real estate brokers or agents, travel agents or salespersons, stockbrokers, and retail or wholesale salespersons…The “source” of commission income generally includes all parties to a transaction, and each is attributed the full value of the commission.”

Officials must disclose “the name of each reportable single source of income of $10,000 or more.” This includes clients, and, as interpreted by California’s Fair Political Practices Commission: “A person's name is not ordinarily protected from disclosure by the law of privilege in California. Under current law, for example, a name is protected by the attorney client privilege only when facts concerning an attorney's representation of an anonymous client are publicly known and those facts, when coupled with disclosure of the client's identity, might expose the client to an official investigation or to civil or criminal liability.” http://www.fppc.ca.gov/Legal/Regs/18740.htm Regulations set out a procedure that must be followed in order to omit a source of income on the basis of privilege. (id.)

In Washington State, officials must disclose “the name of each governmental unit, corporation, partnership, joint venture, sole proprietorship, association, union or other business or commercial entity from which such entity has received compensation in any form in the amount of $10,000 or more during the preceding twelve months.” (Washington Public Disclosure Commission Personal Financial Affairs Statement, F-1 Supplement.). www.pdc.wa.gov

Washington’s Commission can allow modification of client reporting when a “literal application…works a manifestly unreasonable hardship” and such suspension “will not frustrate the purposes of the chapter.” In PDC Interpretation 02-03, the Commission states: “The Commission shall suspend or modify the reporting requirement or requirements only to the extent necessary to substantially relieve such hardship, and only upon clear and convincing evidence.”

A footnote to this PDC Interpretation provides:

Ordinarily, the identity of a client does not fall within the purview of the information protected by the attorney-client privilege unless there is a “strong probability” that the disclosure would convey the substance of a confidential communication between client and attorney. Splash Design, Inc. v. Lee, 104 Wn.App. 38, 14 P.3d 879 (2001) (describing Rule of Professional Conduct 1.6 and citing to Dietz v. Doe, 131 Wn.2d 835, 935 P.2d 611 (1997)); Tegland, Washington Practice, Vol. 5A, § 501.15 (1999); United States v. Hunton & Williams, 952 F.Supp. 843 (D.C. 1997)(under federal law, absent special circumstances, identity of a client of a lawyer or law firm is not protected by attorney-client privilege); C.K.

In Alaska, officials must disclose each source of income over $1,000 from their sole proprietorships, partnerships, limited liability companies, and professional corporations. The instructions to the APOC Financial Disclosure Statement note that

“Source of income is the origin of the payment, requiring disclosure of:

the client or customer of the sole proprietorship, LLC, partnership, PC, or corporation where filer and/or family hold a controlling interest. If the origin of payment is not the same as the client for whom the service is performed, both are considered the source of income, and both must be reported. Example: A realtor must report the real estate company that pays him/her and the clients the agent represented. … the financial disclosure law requires a detailed description of services rendered”

We especially like the salty instructions to Alaska’s form, which require:

““a description sufficient to make clear to a person of ordinary understanding the nature of each service performed.” Do NOT give one-word answers or vague phrases. One-word answers such as “consultant” or “researcher” are NOT acceptable. Provide a clear, detailed description of the work.”

The law also allows for exceptions:

Filers may be exempt from reporting a source of income if (1) the information is legally confidential and disclosure would violate the source’s legal rights; or (2) a filer meets specific exemption criteria described in detail in APOC regulations. Filers seeking an exemption from disclosing a source of income must submit a written request with facts that show how the filer meets the qualifications for an exemption. Examples: Medical practitioners required by law to protect patient privacy under HIPAA (the federal Health Insurance Portability and Accountability Act); tax preparers adhering to the IRS Code of Confidentiality; lawyers protecting client confidentiality in certain cases, such as those involving a minor. APOC will grant or deny a request based on whether the facts and circumstances qualify the filer for an exemption. For detailed exemption qualifications, criteria and requirements, consult the following APOC regulations. For public officials and candidates: 2 AAC 50.100-102. For legislators: 2 AAC 50.780.

http://www.doa.alaska.gov/apoc/forms/2010FinancialDisclosureInstructions.doc

How to Fix Committees

As we've written before, the Senate has one major hurdle to clear before it largely fulfills its promise of making the chamber more deliberative, open, and accountable. Below is a letter that the Brennan Center sent the Temporary Committee on Rules and Administration Reform and other Senate leaders yesterday outlining the specific reforms that the chamber must make.

November 11, 2009

Dear Senators Valesky and Bonacic:

We write regarding the work of the Temporary Committee on Rules Reform. First, we congratulate the Senate on making significant strides in reforming its operating rules to distribute member resources more equitably, allow members to move legislation to the floor over the wishes of the majority leader, impose term limits on chamber leadership, and increase transparency for the actions of individual members, committees and the full chamber. All of these are significant reforms that provide the Senate with the opportunity to become a more accessible, accountable and efficient chamber. And they place the Senate far ahead of the Assembly in creating a more democratic body, where rank-and-file members will have a greater opportunity to represent their constituents and ensure that the concerns of those constituents get a public airing in the full chamber.

Our greatest reservation about the Senate’s rules changes thus far has been the failure to significantly alter the committee process. Based on our studies in this area, as well as our work in other state legislatures and Congress, we believe that there is no area in the New York state legislative process in greater need of reform than the committee process. We understand from communications with Senators and legislative staff that the Temporary Committee plans to take up this important topic in the coming weeks.

As you are aware, Senators currently sit on so many committees that it is difficult for many these Senators to devote enough time to any of them. There is still no process for reading bills in committee or even for requiring committee members to show up to meetings. Committee reports are almost always perfunctory and lack any description of committees’ work on bills (in addition to making it more difficult for other legislative members and members of the public really understand these bills, a lack of real committee reports -- unique to New York -- makes it exceptionally difficult for the courts to determine legislative intent in cases where the law is unclear). And while the new rules allow members to petition for hearings, it does nothing to require hearings on major legislation.

We strongly urge you to recommend the following changes to the committee process:

1. Reducing the number of legislative committees on which individual Senators may serve to no more than three to four, as is typical in other state legislatures (including such large states as California, Florida, Illinois, Michigan, Ohio and Pennsylvania);
2. Requiring committee reports issued with any bill voted out of committee to set forth the purpose of the bill, the proposed changes to existing law, section-by-section analysis, the bill’s procedural history, committee or subcommittee votes, and any individual members’ comments on the bill;
3. Requiring a process for reading, debating and amending any bill before it receives a vote from the committee (absent a vote by the committee to forego that process for any particular bill);[1]
4. Providing each committee with explicit control over its own budget and the hiring and firing of all committee staff; and
5. Institutionalizing conference committees, so that when bills addressing the same subject have been passed by both chambers, a conference committee will be convened at the request of the prime sponsor from each chamber or the Speaker and Majority Leader.

If the Senate passes these changes, it will largely fulfill its promise to overhaul its operating rules to promote representation, deliberation, accessibility, accountability and efficiency. Given the challenges New York currently faces, we believe that such changes could not come at a better time.

Sincerely,

Lawrence Norden
Senior Counsel, Democracy Program

cc: Sen. Pedro Espada
Sen. Joseph Griffo
Sen. Jeffrey Klein
Sen. Kevin Parker
Sen. John Sampson
Sen. José Serrano
Sen. Malcolm Smith
Sen. Daniel Squadron
Sen. Andrea Stewart-Cousins
Sen. George Winner
Shelly Mayer, Counsel to the Majority
Andrew Stengel, Senior Policy Adviser for Government Reform

---

[1] This process could be similar to the process used by the Senate Committee on Cities on May 19, 2009.

Reconciling Differences on Mayoral Control

This Thursday, The Senate will reconvene to vote on its version of the New York City school governance (‘mayoral control’) bill. By all accounts, the Senate bill, which was the subject of intensive negotiations within the Democratic conference and between the Senate and Mayor Bloomberg, looks significantly different from the version passed by the Assembly in June.

The Senate version is slated to pass with a chapter amendment that would require the establishment of a parent training center, an arts advisory committee, public meetings on school safety, and quality of curriculum and instruction as a component of the principal review process, none of which are included in the Assembly version.

In most state legislatures, the two chambers would convene an open meeting of a conference committee comprised of members from both chambers to reconcile the differences between the two bills. In New York, differences are usually worked out in closed-door meetings that often cut legislators out of the process. If rank-and-file members want to open the discussion, they’re usually out of luck – the current rules of the New York legislature vest the Assembly Speaker and Senate Majority Leader with sole authority to convene a conference committee.

Assembly Speaker Sheldon Silver has expressed reluctance to use this option, instead stating that he will bring the issue up with his conference when the Assembly reconvenes in September. Last week, Silver said the Senate can probably rely on Mayor Bloomberg’s promises to implement the reforms contained in the amendment regardless of whether they become law, stating that the changes in the chapter amendment "can be done by the City of New York Board of Education without any legislation, anyway."

If the Mayor’s verbal commitment is not sufficient for some in the Senate – and I suspect it won’t be, given how contentious the issue has been – there is little that rank-and-file members can do. But there’s a better way. Both chambers should amend their joint rules to allow bill sponsors or the chairs of the committees of a bill’s original jurisdiction to call a conference committee. Open and robust debate with the aim of crafting the best possible legislation should not end until a bill is signed into law.

"Up Close" on Albany's Dysfunction

On Sunday, our colleague Eric Lane was on WABC's "Up Close" to discuss dysfunction in Albany. The video of Eric's appearance is here. In the preceding Up Close segment, Malcolm Smith also mentioned the Brennan Center's work.

More Ink for Reform

The Daily News has run two stories this week about Albany's dysfunction, both of which quote our own Larry Norden. Sunday's article gives a broad overview of the 'disgraceful' state of affairs, and an article running today focuses on the leadership stranglehold on the legislative process. The bottom line of both articles is simple: enough is enough - time to clean up in Albany.

Why Rules Still Matter

Yesterday, the day 3000 pages of budget bills hit state legislators’ desks in advance of a vote scheduled for only 48 hours later, the Times ran a story on Assembly Speaker Sheldon Silver's unprecedented power in Albany. The story details Silver’s stranglehold on the legislative process in general, and the budget process in particular, attributing this year’s secret-even-for-Albany negotiations to Silver’s penchant for closed-door meetings and something hovering between oligarchy and autocracy. Readers of the article could be forgiven for thinking that we've never been further from meaningful reform in Albany, but we prefer to see the article as an illustration of why legislative rules are so important -- and why it may be darkest just before the dawn.

It will take more than one or two individuals to loosen the Speaker's 15-year grip on the legislative process; the legislature needs the weight of an entire chamber to act as a countervailing force. A robust committee process, regular and substantive legislative analysis, and rules that protect the voices of rank-and-file members can all help ensure that the locus of power in the legislature lies with the body of representatives elected by New York voters, and not with any one individual. With the recommendations of its Temporary Committee on Rules Reform due in just a week or two, the Senate may well become this essential counterbalance to unchecked power.

Now back to those budget bills. Speaker Silver has often touted the punctuality of his budgets, arguing that open budget negotiations might get in the way of meeting the state deadline. Looking around the country during budget season, it’s clear that this is a false tradeoff. Ohio, faced with the same number of weeks to consider its budget as New York, holds extensive budget hearings. Virginia, acting under similar time constraints, posts all budget documents, including early proposals, on a website where members of the public are welcome to comment. A total of nine states have budget deadlines similar to New York’s, but only New York shuts rank-and-file legislators and the general public so completely out of its budget process.

The Cautionary Tale of MTA Math

Yesterday, the Times ran a story with the ignominious headline, “Math Appears Faulty in Senate MTA Plan.”

It does indeed.

The problem, as it turns out, is twofold: first, the plan added the cost of buses to be subsidized by the payroll tax to the MTA’s income, rather than removing the cost from the balance sheet; and second, the plan accounted for four quarters of payroll tax revenue in 2010, even though it will only have access to three quarters of tax revenue (fourth quarter payroll taxes are not available until the following year).

Both are easy enough mistakes to make, but this is exactly why the Senate rules require a fiscal note prepared by a Budget Division analyst to be attached to any bill before the bill is reported from committee. As we wrote in our most recent report, bill sponsors do not always submit fiscal notes when they should and the quality of the notes is highly variable.

We have yet to see the legislation that would enact the Senate Majority proposal, and when we do, the mathematical errors will in all likelihood be corrected. But given the March 25^th deadline for the legislature to pass a rescue plan, it’s frightening to think about how close the Senate may have come to swiftly ushering a deeply flawed bill through the legislative process.

Rules - as they say - are there for a reason, and when the legislature is operating under a tight timeframe, the Senate’s own rules may prove more important than ever.