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Long IslandPoliticsSpin Cycle

Cuomo, Schneiderman, and the flap that hasn't happened

Twice this week, Benjamin Lawsky, who is Gov. Andrew M. Cuomo's top financial services regulator, found his way into the limelight.

First came word that Lawsky's powerful office was probing whether insurance companies are masking their financial condition through affiliate entities. Of wider import, Lawsky filed papers charging that a British bank used its New York branch "as a front for prohibited dealings with Iran."

Lawsky served as a high-ranking aide when Cuomo was attorney general. When the new Department of Financial Services was being crafted last year by merging state banking and insurance and other agencies, some critics asked if this would usurp what had been the attorney general's terrain -- essentially allowing Lawsky to take part of his former office's portfolio with him to the administration.

En route to the new office's creation, Cuomo's initial proposal to have Lawsky enforce the state's Martin Act against securities violations, an approach first developed by Eliot Spitzer, was rejected. Cuomo's successor as attorney general, Eric Schneiderman, kept responsibility for the Martin Act in his domain.

Each New York attorney general has always carved out his own political presence beyond the more routine duties of acting in court as lawyer for the state. While competition for turf and credit are common among various enforcement agencies, in the first year and a half of their incumbencies, the Cuomo and Schneiderman camps seem to have avoided public collisions.

When some news reports raised questions about the administration's handling of archived material, Schneiderman appeared to support the governor. On July 25 he told WNYC radio, "There is nothing unusual about going through a set of documents to check them for attorney-client privilege, for confidential information to make sure that once they get to the archives they're not released to the public inappropriately," Schneiderman said.

"My understanding is that there are documents that got through without having been checked before they were released to the archives, and they went back and checked them."

Not that Schneiderman and Cuomo always collaborate from start to finish. In the recent legislative session, they reached agreement on what had been their own separate proposals to address prescription abuses. They've also seemed to follow different, but not conflicting, courses in response to the growing threat posed by so-called "synthetic drugs" sold over the counter as "bath salts" or under other innocuous names.

In recent months, Schneiderman went after so-called "head shops," citing violations of the state's labeling laws. Fans of the strategy say that has the advantage of quickly forcing removal of dangerous products from the shelves without the need for forensic tests. One target of his court action has been a smoke shop in Baldwin.

Yesterday, Cuomo announced an outright ban of these products using the regulatory power of the state Health Department.

Is the attorney general's effort on a separate track?

"I think we have a number of tracks that we are pursuing simultaneously," Cuomo said at a Manhattan news conference. "You have the federal government, which is focusing on the manufacture, sale, distribution. The attorney general is bringing legal actions. The attorney general will also bring legal actions for the Department of Health under the ban, in closing establishments . . ."

On that front, it sounds like there's plenty of work for all the relevant offices.

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