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Lawmakers: Too much ‘cronyism’ on Cuomo’s economic councils

State economic development chief Howard Zemsky in Albany

State economic development chief Howard Zemsky in Albany on Dec. 8, 2016. Credit: Hans Pennink

A bipartisan group of state legislators on Wednesday called for more transparency and less “cronyism” on Gov. Andrew M. Cuomo’s Regional Economic Development Councils.

The 10 councils, appointed by Cuomo, recommend local building projects, business expansions and worker training programs for state aid. The actions of individual council members should be publicly disclosed, the lawmakers said.

Assemb. Fred W. Thiele Jr. (I-Sag Harbor) said he was worried about potential conflicts of interest because some past recipients of state funding have close ties to council members.

“There’s a lot of cronyism that goes on with the Regional Economic Development Councils,” he said at a budget hearing in Albany. “The people that serve on them as volunteers — their organizations get a lot of the grants ... That creates the appearance of inside dealing.”

Thiele charged that council members abstain from votes to recommend state tax credits and grants for their projects, knowing that other members will ensure the endorsement is forwarded to Albany.

The development councils recommend projects to the state agencies that provide the money but don’t make the final decision.

Cuomo’s economic development czar Howard Zemsky shot back, “That is so unfair, the way that you are characterizing how these regional councils operate ... They do an amazing job.”

He said it wasn’t surprising that council members had ties to projects because they are also leaders in business, education and organized labor.

“They are trying to be as objective and independent as possible,” he said, adding council members must sign and abide by a code of conduct.

State Sen. Phil Boyle (R-Bay Shore), a nonvoting member of the Long Island council since August, said he requested copies of council members’ votes on funding applications but was denied by a local state official last year.

“I’m concerned about a lack of transparency and openness,” he said.

The local council has 23 voting members led by Lt. Gov. Kathleen Hochul and co-vice chairmen Kevin Law, president of the Long Island Association business group, and Hofstra University President Stuart Rabinowitz.

At least six of the council’s current members have close ties to projects that received state funding after being endorsed by the council, according to a review of state reports.

Since 2011, the council has secured a total of $486.5 million for 569 projects.

Asked by legislators if state agencies ever reject the development councils’ funding recommendations, Zemsky said, “It does happen ... it’s not unusual every year, in every region” of the state.

Some legislators also criticized Cuomo’s proposed changes to Start-Up NY, saying the tax-free zones on college campuses for expanding businesses had created 408 jobs in two years despite $53 million in advertising.

Zemsky said Start-Up NY, which was Cuomo’s idea, had helped to foster strong relationships between colleges and technology startups.

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