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What you need to know for 02/25/2017

Economic development deals exemplify soft corruption

Economic development deals exemplify soft corruption

I’ve been thinking a lot lately about soft corruption — about how the insider game works.

I’ve been thinking a lot lately about soft corruption — about how the insider game works. There is much to think about. It all goes far beyond the Moreland Commission duplicities.

On the surface, the general rules of the game are transparent: Hide self-aggrandizement behind legal façades. Legal complexity apparently enables much of the insider corruption. This goes for both corporate and individual corruption. In the end, only the supremely arrogant or the dumb ones get caught.

The Cuomo Administration is now more or less caught in an election year. Self-dealing arrogance has led them in just four years to this point.

How the abrupt termination of the Moreland Commission will play out in an election year is still an open question.

Certainly the Moreland Commission mess and the $2.7 million collected from gambling interests by the Committee to Save New York — in the same year that Andrew Cuomo was banging the drum to expand gambling in New York state — suggests that some people near the top of the Cuomo Jr. Administration are not exactly blessed with brains.

One can imagine Mario Cuomo sitting at home in Queens just gashing his teeth in exasperation at the sight of such political ineptitude.

Both these big errors of judgment will probably be finessed under some slippery standard of nominal legality. That is the way the insider’s game is played. And regarding the Committee to Save New York: Apparently a slush fund is not a real slush fund if it is made nominally legal under ambiguous campaign finance rules. Just call it a PAC and give it a name that sounds innocent.

Another issue, though, looms as a threat to the current governor and to the leadership in the State Legislature. I am referring to the New York state economic development grants and payment in lieu of taxes grants being given to private companies.

This is soft corruption at its most transparent. It involves all the public money filtered through the economic development grants and PILOT deals being handed over through the Cuomo Administration to the private sector.

With 112 Industrial Development Associations scattered around the state, the possibilities for veiled corruption are vast. It would be naïve for us to assume that the state Attorney General’s Office has the staffing to police all these deals, especially since the IDAs are not required (!) to publish annual reports with detailed information about the individual projects they finance.

In May, the state Comptroller’s Office released a report documenting that businesses in the Capital Region were provided $93.6 million in IDA-granted tax breaks. The same report finds that tax exemptions increased by more than 9 percent between 2011 and 2012, but they produced 2,400 fewer jobs across the state. A grand total of $554 million in incentives to business interests was provided through the IDAs using public taxpayer money.

Sen. Liz Krueger, chair of the state Budget and Tax Reform Committee, said that this report from Comptroller Thomas DiNapoli’s office is evidence that the state wastes millions of taxpayer dollars on ineffective programs.

These ineffective programs divert public money to private businesses under the pretense of job creation. Yet, inexplicably again, some of these sweetheart deals do not allow for the recapture of funds if job creation goals are not met.

What public official who was not involved in insider’s game of soft corruption would sign off on an arrangement whereby a company could tap into public money by promising to create jobs, but then never be required to actually create those jobs in order to keep the public grant money?

The danger for the Cuomo Administration, above and beyond the other ethics problems involving the Moreland Commission and the Committee to Save New York, is that some people will actually start reading the state Constitution.

The state constitution, in Article VII, Section 8.1 clearly states: “the money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking, nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking.”

I don’t know what kind of legal reinterpretation of the constitution could possibly justify the diversion of public taxpayer money to private business interests. This is potentially a very messy problem for the governor.

Soft corruption — I love to try to figure out how the insiders do it — even while I am exasperated by the hapless inability of the citizen public to do anything about soft corruption New York style.

L.D. Davidson lives in Amsterdam and is a regular contributor to the Sunday Opinion section.

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