State Senator Brad Hoylman voted no on numerous parts of the budget that were ultimately passed. (Photo by Sabina Mollot)
By Sabina Mollot
In the latest “Big Ugly,” the state budget released on Saturday morning yanked $4.5 million from tenant protections by completely de-funding the housing agency’s Tenant Protection Unit.
State Senator Brad Hoylman, who voted no against that measure and numerous others included in the budget, blamed his own chamber for the move. However, he said he’s been assured the TPU will continue to be able to operate through emergency funding set aside by the governor, which was also done last year. Still, said Hoylman, “What kind of message does that send to New Yorkers? The budget is a real statement of our values.”
Meanwhile, the Republican-controlled chamber saw fit to spend $3 million of taxpayer funds on an upstate golf tournament because, they said, it would create jobs and spur economic growth in the area.
In arguments that are now online on YouTube, Hoylman responded, “Four and half million dollars was cut from the budget. I’d like to see the Dick’s Sporting Goods money put into the Tenant Protection Unit.”
State Senator Brad Hoylman is hoping to shine some light into the shadowy world of limited liability corporations which, under current New York law, do not have to provide names or addresses of their owners when the companies are registered. Because of the mysterious nature of LLCs, they can be used to give seemingly endless campaign contributions as well as hide illegal activities like tax evasion and money laundering. To combat the money laundering issue, which has also been linked to terror funding, legislation has already been introduced at the federal level by Congress Member Carolyn Maloney, and Hoylman said his own bill is modeled after that one.
Hoylman’s legislation, announced, on Monday, would:
Make it mandatory for LLCs organized in New York or that do business in the state to disclose who their owners as well as provide a current residential or business address
Require the creation and maintenance of a publicly available database of those LLCs and their owners
Impose penalties that range from ten thousand dollars in fines to three years in prison for LLC owners who knowingly provide false, incomplete or outdated information.
Following a stunning decision last Thursday by a federal judge to overturn the conviction for corruption against former Assembly Speaker Sheldon Silver, State Senator Brad Hoylman is predicting more of the same bad behavior in Albany.
“I am concerned that the overturning of the Silver verdict might give a green light for some public officials to engage in legal graft,” said Hoylman, who’s been pushing for ethics reforms for years. Those reforms include the closure of the so-called LLC Loophole, limiting outside income for legislators, prohibiting convicted legislators from using campaign cash on their own defense and taking away convicted legislators’ pensions.
Additionally, Hoylman said he believes the court’s decision will hurt tenants in New York City.
“The Silver case props up the status quo and the status quo if left alone will result in the end of rent stabilization as we know it,” said Hoylman.
Hoylman added, “It’s up to the legislature to provide clarification (on what constitutes corruption). It’s up to the state of New York to pass laws that prevent that from happening, but given what we’ve seen, I don’t think the current Senate leadership has any desire to address this disaster, especially since their former leader may get off using the same argument that Sheldon Silver’s attorneys did.”
State Senator Brad Hoylman (Photo by Sabina Mollot)
By Sabina Mollot
On Sunday night, when the New York State budget was passed by the Senate, landlords won an extension of the 421 tax break for new developments while tenants lost some leverage in the ongoing effort to renew and strengthen the rent laws.
The combined budget bills had totaled nearly 2,000 pages, as noted by State Senator Brad Hoylman last week. He’d voted no as a protest to being expected to review a Bible-sized stack in a matter of hours.
However, with the voting now over in the Senate as well as the Assembly, Hoylman gave Town & Village a recap.
The 421a tax break for developers, which was included in the budget, will no longer sunset at the same time as the rent negotiations. The timeline had previously been seen by tenants as an opportunity to bargain for stronger rent laws.
“The fact that the 421a real estate tax exemption was negotiated behind closed doors is scandalous,” said Hoylman, “but what is also extremely scandalous is that it was not linked to renewal of the rent laws. Albany made a colossal mistake in de-coupling the renewal of 421a with rent laws. That was a major leverage point.”
Additionally, ethics reforms, including the closure of the LLC Loophole (which allows donors to give nearly limitless campaign cash to politicians through LLCs), were not included.
“There was no mention of ethics reform in any part of the budget,” said Hoylman, “which is extremely disappointing. Not an iota. They blocked the LLC Loophole (closure), they blocked measures to limit outside income. Once again the Senate majority refused to take action. The budget process itself was dysfunctional.”
State Senator Brad Hoylman is opposed to the new policy. (Photo courtesy of Senator Hoylman)
Last week, State Senator Brad Hoylman, a frequent critic of his own chamber in Albany, posted a photo of that very chamber on his Twitter feed. It would likely be the last photo he’d be posting of the place, he revealed, thanks to a new rule voted in by the Republican majority to ban photo-taking there by anyone except official Senate photographers. This means lawmakers, members of the press and members of the public will from now on be made to ask permission first any time they think it’s important to record a moment, whether it’s of a vote or debate or any other relevant thing happening.
The vote came shortly after Congress proposed a similar policy to fine members for taking photos or livestreaming from the House floor.
The reasoning for the Senate rule, according to its sponsor, is that photo-taking and other cell phone use is disruptive during proceedings.
Fortunately, Hoylman has recognized this weak argument for what it is, an excuse to further shroud the legislative process in secrecy, since apparently having all major decisions impacting the state made by three men in a room just isn’t enough. Asked what inspired his colleagues to start 2017 with even less transparency than in prior years, Hoylman guessed it has to do with the fact that sometimes, other than candid photos of hands in the air that end up on social media, there’s no publicly available record of who voted for what. And many would like to keep it that way.
Congresswoman Carolyn Maloney and State Senator Brad Hoylman talk to voters outside Stuyvesant Town during the June congressional primary. (Photo by Sabina Mollot)
While it’s understandable that the minds of voters this coming Election Day are on the race for president, there are also a couple of local races to think about, in the case of the Stuyvesant Town/Gramercy/Kips Bay area, for Congress and for New York State Assembly.
Following publishing interviews with the opponents of two longterm incumbents, the editorial staff of Town & Village has come to the following decisions for endorsements:
Maloney’s opponent, Robert Ardini, has argued that our nation’s founding fathers never intended for elected officials to remain in one office for as long as the incumbent has, which is 23 years. While he makes a legitimate argument about how tough it is for someone to break in to the world of politics against someone who’s so well-known, we do not believe this is the only reason Maloney has consistently clobbered her opponents over the years.
It’s true, of course, that in the heavily Democratic borough of Manhattan, a Democrat is always going to have the advantage, as is the individual with more name recognition. However, an official’s experience is not something that goes unnoticed by voters and it shouldn’t be dismissed as a bad thing. Despite hitting brick walls in Washington thanks to partisan gridlock, Maloney has continued to remain responsive to the concerns of voters, both large and small. She has remained true to her platform of championing women’s rights from equal pay at work to the never-ending battle of protecting a woman’s right to choose. In her district, she pushes funding for mass transit infrastructural projects (good for commuters and good for job creation) and has remained on top of the looming L-pocalypse, a major concern of constituents. Additionally, the congresswoman, an Upper East Sider, has remained a dependable advocate for tenants.
In the past two weeks the former speaker of the New York State Assembly was sentenced to prison for 12 years for corruption and misuse of his government position. And the former Senate Majority Leader was handed a five-year sentence for similar crimes. These two convictions, and lengthy prison terms in a federal penitentiary follows a decade of state and city public officials having been found guilty of various felonies mostly having to do with self-enrichment at the public’s expense.
These cases have further soured the public on government and politics. They have ushered in a generation of cynicism about the honest administration of our government institutions.
The first responsibility of our current office holders in Albany and City Hall is to stanch the damage and restore public trust. This will not be easy, but it is necessary. Without the confidence of the electorate, democracy is badly undermined. Without trust in the basic honesty of elected officials the implied compact between voters and those they elect disintegrates and a representative form of government ceases to exist.
The Senate Democrats vote on closure of the LLC Loophole, which failed to make it into the budget. State Senator Brad Hoylman called the budget process unchanged since the Silver and Skelos scandals. (Photo by State Senator Brad Hoylman)
By Sabina Mollot
After an all-nighter in the Capitol, Governor Cuomo signed off on a budget that included none of the ethics reforms he claimed he’d be willing to pass during his state of the state address in January.
Those reforms included closure of the LLC Loophole, which currently allows nearly limitless donations from limited liability corporations, limiting legislators’ outside income and stripping pensions from any legislator who’s found guilty of corruption.
Following the 17-hour session that led to the budget’s signing on Friday morning, a groggy State Senator Brad Hoylman told Town & Village that even after two major scandals last year, nothing’s changed in Albany when it’s time for negotiations.
“The budget process doesn’t lend itself to transparency,” said Hoylman. “It’s still the same three men in a room.”
He then blamed the Republican majority in his own house for not allowing the proposed reforms to reach the floor.
Assembly man Brian Kavanagh has been pushing to close the LLC Loophole.
By Sabina Mollot
On Wednesday, Governor Andrew Cuomo said it was time to close the infamous LLC Loophole.
It was while making his State of the State address that Cuomo said that as far as the LLC Loophole is concerned, “The time for debate has passed. I call on the legislature to close the LLC Loophole. Pass it and I will sign it the very same day.”
He went on to say how there was a time when legislators, at the end of the day at the Capitol, went home to work on their farms. But nowadays, the governor said, they leave for their law firms, which is a recipe for conflict. He then proposed adopting the Congressional system of limiting outside income for legislators. He also acknowledged that the current campaign finance system makes it impossible for a candidate without funds to get anywhere. “We should encourage new participation,” he said, and also went on to say taxpayer money should not be used to pay the pensions of legislators who’ve been convicted of crimes relating to their jobs.
“2015 was a tough year. It was an ugly year on many levels,” said Cuomo, no doubt in reference to the Dean Skelos and Sheldon Silver corruption cases.
I was recently asked to speak at the inauguration of a local judge. When it was my turn to give remarks, I told the packed crowd that the judge had asked me to speak about Albany. Without much prompting, the crowd broke into giggles. It’s telling that our state legislature is a punch line.
I think some of us can’t help but laugh because the corruption in Albany has taken on comic proportions. Consider the fact that the criminal acts perpetrated by former Republican Leader Dean Skelos were so brazen as to have been committed after the governor created a special commission under the Moreland Act to investigate public corruption in the state legislature and after the U.S. attorney announced that he had personally taken up the cause. It’s pathetic, sad – and yes, even funny – that Skelos was so arrogant and inept as to pursue his transgressions while federal prosecutors were busy listening to his every word.
The Skelos conviction is just one example why the public has lost confidence in state government. Unfortunately, there are plenty of other reasons, too. Since 2000, 41 state elected officials have been accused, indicted or convicted of official misconduct, including five legislators this year alone, among their ranks, of course, Skelos and former Assembly Speaker Shelly Silver. In the Senate, it’s breathtaking that since 2008, five consecutive leaders of this body have been arrested.
While this will probably not come as a surprise to anyone who’s been following the scandals in Albany this past year, a report by State Senator Daniel Squadron found significant LLC loophole exploitation in state elections contributions, with Tishman Speyer Development LLC one of the names topping the list.
Assemblymembers Brian Kavanagh and Jo Anne Simon, along with Squadron and other advocates, announced the findings of the report last Wednesday.
While the state prohibits corporations from giving more than $5,000 a year to candidates and political campaigns, through the so-called LLC Loophole, limited liability corporations, which are defined as businesses that share attributes of corporations and partnerships, are allowed to donate up to $60,800 to a candidate per election cycle and up to $150,000 a year to candidates and political committees overall. Corporations and individuals are also allowed to set up an unlimited number of LLCs through which to donate, and developers often have an LLC for each of their properties.
“This is why Albany and real estate interests run roughshod,” State Senator Brad Hoylman said of the loophole. “They can manipulate the law. These are often shadowy entities and have multiple owners. They exist primarily to circumvent detection of true ownership. The fact that they’re treated as individuals is outrageous and that needs to be fixed.”
Hoylman is a co-sponsor of Squadron’s bill in the State Senate that would close the loophole.
By Sabina Mollot
On Monday, one of Albany’s former famed three men in a room, Sheldon Silver, was convicted on corruption charges, for a bribery and kickback scheme that netted him $4 million. Part of the scheme involved the Lower East Side pol using his influence to benefit two real estate developers, in particular Glenwood Management, while at the same time positioning himself as being tenant-friendly. He also directed taxpayer money to a cancer researcher while a doctor there steered patients suffering from asbestos exposure to a law firm that paid Silver referral fees.
However, his failure to sway a jury of his innocence won’t be enough to prompt Albany’s remaining power players to renounce their ways by pushing for campaign finance reform or the closure of the “LLC Loophole.”
Mike McKee, the outspoken treasurer of TenantsPAC, told Town & Village on Tuesday of this gloomy forecast, predicting things will be as they were before, with the onus on tenants to put pressure of their local elected leaders to make meaningful changes. Otherwise, forget it.
“I would hope,” McKee said, “that this would be a wakeup call to the public that something is fundamentally wrong with our system of government, and unless people start holding legislators accountable, the pay-to-play culture is not going to change ever. Why would it change?”
Following the conviction, Governor Cuomo promised some ethics reforms, according to news reports. (His office did not respond to a request for comment.) But when T&V asked McKee if he thought the embarrassment of an Albany ex-kingpin facing jail time might make the governor regret his decision to shut down his commission aimed at rooting out corruption, McKee laughed.
“I don’t think so,” he said. “Andrew Cuomo’s agenda is Andrew Cuomo. He has benefitted more than anyone from the system we have. He got more money from Glenwood than anyone else. When the Moreland Commission started investigating his fundraising, that’s when he shut it down. I really wish it’s going to change but it won’t unless constituents put on the pressure. Every time you see an elected official you have to ask, ‘What are you doing about campaign finance reform and the LLC Loophole and the election system so people can actually run against incumbents?’”
State Senator Brad Hoylman, however, disagreed with McKee, saying the Silver bombshell might be what it takes to get even his own house, where tenant-friendly legislation goes to die, to pass meaningful reforms.
“This is Albany’s Watergate moment,” said Hoylman. “I think this is a seismic event that has the potential to disrupt business as usual in Albany. The issue of outside income is key. The fact that Silver was able to take in $4 million in referral fees is on its face outrageous and is something we should consider ending.”
Hoylman said he’s been pushing for an end to this practice since his first year in office.
“It’s not a coincidence Congress came to this conclusion after Watergate,” he added. “The other key fact in the Silver case is the exploitation by real estate companies of limited liability corporations. The LLC Loophole is the primary vehicle of the real estate industry to hold sway over the legislature.”
The so-called LLC Loophole is a regulation that allows companies to make political donations for every limited liability corporation they run and real estate developers often have LLCs for each property they own.
“I think this is something we learned in the Silver case and I believe this issue is going to pick up steam — even in my house,” said Hoylman. “I think the public is rightfully outraged by what they’ve been hearing from the courthouse in Lower Manhattan.”
Earlier this year, Hoylman authored legislation that would make it a class C felony or a public servant to steer grants towards organizations that benefit their families or people they have business relationships with.
Assembly Member Brian Kavanagh, who’s been pushing to close the LLC Loophole, did not respond to a request for comment on the Silver conviction.
As a result of the conviction, Silver must give up the Assembly seat he’s held onto for four decades. By Tuesday morning, Silver’s official Assembly web page was down. A spokesperson for the Assembly said she’d pass on a request for comment, but admitted she didn’t know who’d be handling Silver-related queries. One of Silver’s trial attorneys, Steven Molo, didn’t respond to a request for comment although he did tell Real Estate Weekly he’d be appealing.
“Weʼre obviously very disappointed and we had hoped the jury would see it our way,ˮ Molo said. “We are sorry that they didn’t but we believe that we’re on strong legal ground.ˮ
Assembly Member Brian Kavanagh (pictured at a rally in May) is one of the plaintiffs. (Photo by Sabina Mollot)
By Sabina Mollot
On Tuesday, three Democratic state legislators filed a lawsuit against the Board of Elections aimed at closing the “LLC Loophole.”
The so-called loophole, created by the board in 1996, came under scrutiny this year due to all the campaign cash that had been legally funneled to legislators through limited liability companies. Many of the LLCs were controlled by real estate interests, most infamously Leonard Litwin of Glenwood Management. The loophole has allowed them to give nearly limitless contributions — up to $60,800 in a single election year by allowing them to be considered individuals.
“It’s not just (Litwin),” said Brent Ferguson, an attorney with New York University’s Brennan Center for Justice, which helped prepare the lawsuit. “In the real estate industry, they can operate a separate LLC for every building they own.”
He added, “We think it’s an incorrect reading of the law.”
The Brennan Center got involved with a suit on the loophole, said Ferguson, because it’s “become very popular” in recent years. “The amount has skyrocketed.”
Since 2011, $54 million has been donated by LLCs through the loophole, and while those doing the giving are usually traceable, they aren’t always.
“We think it’s one of the biggest problems in New York’s campaign finance system and democracy in general,” said Ferguson.
The legislators who are plaintiffs in the suit include Assembly Member Brian Kavanagh and Senators Liz Krueger and Daniel Squadron who are all Democrats as well as
Republicans John R. Dunne, a former senator and former U.S. attorney general for the Civil Rights Division, and Maureen Koetz, who ran a campaign against Assembly Member Sheldon Silver last year.
Another plaintiff is SUNY New Paltz Professor Gerald Benjamin, an upstate Republican Party leader. The suit was filed with the Albany County Supreme Court with the help of the Brennan Center and the firm Emery Celli Brinckerhoff & Abady LLP.
In April the Brennan Center and Emery Celli asked the BOE to close the loophole, but the board, after a 2-2 vote, didn’t reverse its decision.
Prior to the rent laws being renewed last month, Kavanagh had introduced legislation that would cap contributions from corporations at $5,000 per calendar year. The bill made it through the Assembly but not the Senate.
In an official statement, Kavanagh said, “The individuals and businesses who give large contributions through LLCs have much more power than those who have not contributed or have contributed under the lower limits that apply to other entities and individuals. The result is that government does not adequately represent those New Yorkers who do not have the ability or desire to exploit the LLC Loophole.”
Krueger said that she’s encountered would-be candidates for public office who got turned off from running because they didn’t think they’d be able to compete with candidates raising more money.
“The prominence of LLC contributions has a significant effect on the willingness and ability of people to run for office,” she said.
Ferguson said the plaintiffs are hoping the litigation will be resolved before the 2016 elections. The fight is not a new one though, he said, noting that in 2007, some good government groups raised some of the points to the BOE raised in the suit.
The lawsuit argues that an LLC is not individual because: “An LLC cannot vote. It holds no political view separate of its members.” It also noted how LLCs had been looked at by the governor’s now disbanded anti-corruption panel, who believed they contributed to Albany’s “pay-to-play culture.”
A spokesperson for the Board of Elections did not respond to a request for comment.
Note: the governor on Saturday made statements indicating he was interested in strengthening the rent laws further than his previous position of simply slightly raising the threshold at which apartments can be deregulated.
With Albany in a state of chaos brought on by allegations of bribery and corruption of two of the infamous three men in a room, the governor has stated that due to said chaos, the rent laws could just be renewed as is or maybe slightly tweaked. For instance, according to a Daily News article this week, he’s suggested raising the $2,500 rent threshold at which a unit can be destabilized by a whopping $200 to $2,700.
A minor change like this seems to be in sharp contrast to four years ago when the rent laws were somewhat strengthened for the first time in 18 years. This strengthening was due, at least in part, to Governor Andrew Cuomo’s influence. Clearly, the man has the power to make a difference if he wants to.
So the question is, does he want to now? It doesn’t really look that way. But hopefully, Cuomo, who is nobody’s fool, will see that with it being out in the open that legislators have essentially been for sale in Albany, it really is time for lawmakers to distance themselves from their deep-pocketed benefactors. After all, this isn’t just about bribery and kickback schemes. There is also the matter of the huge amounts of cash that have been steered to key players, including Cuomo, legally, from real estate interests.
Obviously all these elected officials want to get reelected and having the campaign cash helps, but with the state’s pay-for-play politics finally having been exposed due to ongoing federal investigations, this just isn’t a situation that’s going to be fixed with dollar bills. While we believe Cuomo damaged his credibility irreparably by shutting down his own anti-corruption watchdog panel, with the rent laws, he still has an opportunity to redeem himself in the eyes of voters. That is, if he can prove that it’s the citizens and not the powers that be he cares about protecting.