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DiNapoli: State economic development programs ripe for abuse

New York State Comptroller Thomas DiNapoli on Feb.

New York State Comptroller Thomas DiNapoli on Feb. 22, 2016, in Albany. Photo Credit: AP / Mike Groll

ALBANY

State Comptroller Thomas DiNapoli on Tuesday criticized the Cuomo administration for eroding oversight in the awarding of billions of dollars in state contracts, saying it created “an environment ripe for self-dealing and abuse.”

DiNapoli said the reduced independent oversight of economic development spending sought by Gov. Andrew M. Cuomo and often approved by the State Legislature is at the heart of a continuing federal investigation that has targeted two longtime associates of Cuomo.

“The alleged contracting and kickback schemes uncovered by federal and state prosecutors show lax oversight over economic development spending,” DiNapoli said in a statement. “The state funneled taxpayer money to quasi-government organizations, avoiding scrutiny and sidestepping usual procurement practices. This created an environment ripe for self-dealing and abuse.”

In 2015 alone, state agencies issued more than $6.8 billion in contracts without independent review by the comptroller, said DiNapoli, a separately elected statewide official who has often clashed with Cuomo.

Cuomo referred comment to the State University of New York, through which he has directed many of the state’s biggest economic development projects, including the ones that drew DiNapoli’s criticism.

SUNY provided a Dec. 2 comment from board Chairman H. Carl McCall. “I cannot stress enough that this is an apples to oranges comparison in its finest form,” McCall said of criticism of the 2011 procurement regulations ushered in by Cuomo.

“Before 2011, comptroller preapproval was required for every SUNY contract totaling more than $250,000,” McCall stated. “This often caused delays in getting needed equipment to our campuses or beginning new construction. The 2011 legislation was put in place to eliminate pre-approvals ... the comptroller has always — and still has — post-audit oversight of every SUNY transaction.”

A longtime top aide to Cuomo, Joseph Percoco, a lobbyist who once worked for Cuomo, Todd Howe, and six others are accused by U.S. Attorney Preet Bharara of participating in two bribery schemes to rig bids and wield influence on upstate development projects. Cuomo is not charged with any wrongdoing. He said last week that he spoke with federal officials about the case months ago.

Since taking office in 2011, Cuomo has reduced the authority of the comptroller to review some contracts before they are approved. Cuomo also has refused to provide Attorney General Eric Schneiderman authorization to root out corruption wherever he finds it without a referral from the governor, although Cuomo sought the same power when he was attorney general.

DiNapoli on Tuesday proposed several measures to restore independent oversight of economic development contracts.

Cuomo has proposed his own reforms to the state procurement system, but they don’t include greater independent oversight from outside the administration.

The governor says his agencies thoroughly review projects faster than the Comptroller’s office and the taxpayers’ investments in the job-creating projects are protected. He has said no developer receives any advantage for contributing to his campaign.

Government watchdog groups, however, strongly supported DiNapoli’s proposals.

“The New York State Constitution created the Office of the State Comptroller to provide independent oversight over agencies and authorities controlled by the governor,” said a joint statement from Reinvent Albany, the Citizens Budget Commission, Citizens Union, Common Cause, the Fiscal Policy Institute, the League of Women Voters and the New York Public Interest Research Group. “Our groups support strengthening the Comptroller’s oversight authority and believe it will help prevent the further abuse of taxpayer funds.”

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