More Transparency Needed to Improve Economic Development Programs

March 23, 2018

As was widely reported, earlier this month Joe Percoco, a former top-aide to Governor Cuomo, was found guilty of three corruption-related charges. While corruption convictions of state officials, sadly, are nothing new, the Percoco conviction was front page news because of his very close relationship to Governor Cuomo (Cuomo once said Percoco was his fatherís third son). Also, the trial shed light on how a few connected people have tremendous control over billions of dollars of public money that is supposed to be used for economic development. Because of lack of oversight and transparency in our economic development programs, it is hardly surprising that corruption is taking place. Supreme Court Justice Louis Brandeis famously wrote, sunlight is said to be the best of disinfectants. In light of the Percoco trial, it is time for New York to shed some sunlight on our economic development program.

One way to spread the sunshine would be to pass the Economic Development Transparency Act which most New Yorkers would see as a commonsense piece of legislation particularly in light of the Percoco conviction. The Economic Development Transparency Act would provide more oversight of our stateís multi-billion dollar economic development program. For starters, the act would establish a three-member committee to review and approve financial and personal relationships between potential grantees and the entity requesting the allocation to determine if a conflict of interest exists. The three-person committee would then be empowered to deny any allocation from these funds in order to prevent them from being granted to entities where a conflict has been found to exist.

The bill would also institute penalties related to late reports by state agencies including withholding salaries of those responsible for the reports. These reports serve the public and show how state investments are or are not working. The public deserves to have these on time and that has not always been the case in the past. Other than public criticism, there should be a consequence for those responsible for the late reporting. In addition, the bill would also prohibit the Legislature or the Governor from providing an appropriation or grant to an entity or individual that donated to their political campaign within the past year. Again, to anyone outside of the Albany political bubble, this would be a commonsense reform.

Finally, the bill requires an independent, third-party study of the cost benefits of the state's economic development programs. Such a study is long overdue. The state has moved away from broad-based qualifying economic development programs to policies that enable the Governor to subsidize various companies in the hopes that jobs are created. The programs have had mixed results and in too many cases have underperformed. For example, the state invested millions in a Central New York film hub which was supposed to bring in 350 jobs. The deal never materialized. The state is also providing film tax credits to the film industry. These credits totaled roughly $1.4 billion over two years which is costing taxpayers an estimated $42,000 per job. While there may be ancillary promotional and tourism benefits that coincide with the film industry in New York, it is not unreasonable to ask if they are worth the price.

If the state is going to continue to approach economic development by subsidizing various favored businesses, at the very least, accountability, oversight and transparency need to be part of the program. Indeed if anything has been illuminated by recent scandals, it is that unchecked access to money breeds corruption.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@nyassembly.gov or by calling (315) 598-5185. You may also find me, Assemblyman Barclay, on Facebook.