Lawmakers voice hope for reform of economic development contracts

May 10, 2017

One of the top issues remaining before the state Legislature adjourns for the summer is fixing problems in the state’s economic development contracts. That’s after a scandal led to federal corruption charges against nine former associates of Gov. Andrew Cuomo.


A bill by State Comptroller Tom DiNapoli to reinstate the comptroller’s ability to oversee economic development contracts is gaining momentum in the Legislature.

DiNapoli said for the past several years, hundreds of millions of dollars in contracts connected to the governor’s Buffalo Billion and other projects were negotiated largely in secret without any outside monitoring. Those dealings led to nine former Cuomo associates, including the governor’s former closest aide and a highly paid former State University of New York official, being charged with felonies ranging from bribery to bid-rigging.

The comptroller’s bill, would, among other things, restore oversight powers that his office held for nearly a century but lost in a law passed in 2011.

“You’re talking about billions of dollars that previously had been under our review that is not,” DiNapoli said in an interview with public radio. “Can we find everything maybe that could go wrong? Maybe not, but at least if you have an independent set of eyes looking, we might be able to catch some things before you have a problem.”

DiNapoli said the additional oversight also could serve as a deterrent and make people “think twice before they try to get away with something.”

Six years ago, Cuomo persuaded the Legislature to rescind the comptroller’s oversight powers, arguing that too many layers slowed progress of his signature economic development projects.

The governor has introduced a different bill. It would instead create a new inspector general to investigate potential corruption in the awarding of economic development contracts. The inspector general would report to the governor.

Cuomo, who has often feuded with DiNapoli, dismissed the comptroller’s bill as simply a review of the contracts after the fact.

“The problem is not an audit function,” Cuomo said.

Cuomo said “criminal investigators” are needed to fix the system.

“That’s what I think the system needs — inspector generals, special prosecutors,” Cuomo said. “We’ve had a series of criminal violations.”

DiNapoli’s bill, however, requires a review of the economic development contracts before they are signed. The comptroller said he already has the power to audit state agencies and authorities periodically after they’ve signed contracts and made decisions.

“It’s one thing to audit an entity after there’s a problem, but it’s something else to be able to review a contract ahead of time,” DiNapoli said. “We have broad audit authority, but what good does it do to audit an entity after something has gone off the rails?”

Senate Majority Leader John Flanagan, a Republican, said he’s open to Cuomo’s ideas, but he said more of his GOP members actually back the Democratic comptroller’s plan. He calls it an “extraordinarily important” issue.

“I truly believe that the comptroller plays an absolutely critical role in public policy in the state of New York,” Flanagan said. “His regulatory discretion is something we embrace.”

Flanagan spoke at a forum sponsored by the Albany Times Union. He was joined by Assembly Speaker Carl Heastie. Heastie said the Democrats, who hold a majority in the Assembly, have begun talking about the measures, and he thinks it’s important to restore public trust.

“The people of the state of New York will still feel better knowing that there’s some other entity looking at it, like the state comptroller,” Heastie said. “Another set of eyes will make people feel better that, yes, things are done correctly.”

Flanagan predicted there will be a law on procurement reform enacted before the end of the session.