BILL NUMBER: S594

SPONSOR: KRUEGER
 
TITLE OF BILL:

CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing that the
constitution be amended by adding a new article V-A; in relation to
state government integrity

 
PURPOSE:

Proposed Constitutional Amendment to replace JCOPE and the LEC with a
single, truly independent, enforcement agency, similar to the Commission
on Judicial Conduct established in Article VI of the State Constitution,
to deter corruption in the legislative and executive branches of state
government.

 
SUMMARY OF PROVISIONS:

SECTION 1. DECLARATIONS OF THE PEOPLE

              

This section has no counterpart in current law and is possible because a
constitutional amendment must be approved by the people.

Section 1.a. sets forth the overarching purpose of this amendment: to
ensure that the New York State government and those that do business
with it conduct themselves with the highest levels of integrity, fideli-
ty and accountability to the people of New York. Maintaining ethical
standards as a means of preventing governmental corruption is a prereq-
uisite to the legitimacy of the functions of our state government. The
section also emphasizes that preventing the appearance of corruption can
often be as important as preventing corruption itself-the people of New
York must be confident that their government is working for them, and
only for them.

Section 1.b. declares that this anti-corruption goal requires a single,
truly independent and non-partisan enforcement agency in order to make
enforcement credible, uniform, fair and efficacious.  The proposed agen-
cy is designed to create a level playing field on which a person's
influence, status or role neither renders him or her above the law nor
frustrates his or her ability to receive fair and equal treatment.

SECTION 2. NEW YORK STATE GOVERNMENT INTEGRITY COMMISSION

This section replaces JCOPE and LEC with a constitutionally established
New York State Government Integrity Commission modeled in large part on
the constitutionally established Commission on Judicial Conduct.

If proposed by the legislature and adopted by the people, the Commission
would be one of the strongest ethics enforcement agencies in the coun-
try. New York's reputation as overly indifferent to ethics and prone to
corruption would be well on the way to transformation.

Section 2.a. establishes the Commission and delineates the Commission's
authority to, on an independent basis, receive or initiate and resolve
ethics and integrity complaints. This section makes clear that this
Commission authority should in no way impede or diminish the anti-cor-
ruption work of any other agency or law enforcement authority or those
entities' right to seek relief in the courts. Indeed, the Commission can
defer to proceedings by these other authorities and could choose to do
so in order to make the best use of its own resources.

Section 2.b. sets forth the Commission's power to enforce the laws with-
in its jurisdiction. Rather than merely possessing the ability to fine
violators of the ethics laws, the Commission's authority includes the
ability to admonish, censure, suspend, demote or remove a state employee
in the legislative or executive branches. In the case of an elected
official, the Commission could order censure of the official.

Granting the Commission power to admonish, censure or, in egregious
cases, remove a violator is a crucial step toward achieving the goal of
deterring corruption in New York State government. Any sanction imposed
by the Commission is subject to judicial review, helping ensure that the
Commission's decision-making power comports with due process.

Section 2.c. sets forth the composition of the Commission and the proce-
dures for appointing and removing Commission members, with a focus on
preserving the independent and non-partisan nature of the Commission.
Like the Commission on Judicial Conduct, members of the Commission would
be appointed by all three branches of government - the, one jointly by
the leaders of the legislature of each major political party in the two
houses of the legislature (total of two), two jointly by the Governor,
the Attorney General and the Comptroller, the three elective officials
of the executive branch, and five jointly by Chief Judge of the State of
New York and the Presiding Justices of the Appellate Divisions. This
helps ensure the Commission's independence and impartiality. This inde-
pendence is reinforced by the fact that a majority of the Commissioners
would be appointed by persons who are not subject to regulation by the
Commission but rather to regulation by the Commission on Judicial
Conduct.

The appointment process is also designed to be non-partisan. Two of the
four members appointed by the Governor and the Legislative Leaders will
not be of the same political party as the Governor and no more than
three of the persons appointed by the Presiding Justices will be of the
same political party.

To be eligible for appointment, a person may not have been a state offi-
cer or employee, a lobbyist or a political party officer within the
previous three years.

Commissioners would be compensated on a per diem basis pro rata to the
basic compensation of a member of the legislature.

Unlike JCOPE, where the person appointing a member can remove that
member for cause, members of the Commission could be removed for cause
only through a process by which a majority of the Commission votes to
make an application for removal to the Court of Appeals. This protective
removal process provides additional assurance of independence.

Section 2.d. provides for staggered four-year appointments.

Section 2.e. delineates the Commission's organization and procedure.
Unlike JCOPE, which has a complex and partisan voting system under which
two of its 14 members can block an investigation or adverse finding - a
system that is not comparable to any other state's ethics commission
voting system the Commission would act by majority vote.  Violations
would be determined based on a preponderance of the evidence, but orders
of censure or removal would have to be based on clear and convincing
evidence, a standard that recognizes the weightiness of the decision to
censure or remove any state official or employee. The evidentiary stand-
ard of clear and convincing evidence is also the standard used to
censure or disbar an attorney under Rule 1.3 of the American Bar Associ-
ation's Standards for Imposing Lawyer Sanctions. The section grants the
Commission the power to create its own rules and procedures that conform
with law and due process. It requires the Commission to establish rules
prohibiting ex parte communications between Commission members and their
appointing authorities (along with certain affiliates), another feature
designed to foster the independence of Commission members.

SECTION 3. ADDITIONAL POWERS OF THE COMMISSION

Section 3.a. provides that the Commission will appoint an executive
director and may appoint deputy directors. The executive director must
meet the same eligibility requirements as a Commissioner except that the
executive director may be promoted from within the Commission. The exec-
utive director may hire staff.

Section 3.b. grants the Commission and its designated hearing officers
the power to administer oaths, compel the attendance of witnesses and
issue subpoenas.

Section 3.c. makes it the Commission's power and duty to effectively
administer and enforce the state's ethics, lobbying and campaign finance
laws. The major change is to move the administration and enforcement of
campaign finance laws from the state and local Boards of Election to the
Commission. Campaign finance laws serve to manage the conflicts of
interest that can arise from campaign contributions so as to avoid any
appearance of corruption. Because these laws are enforced through
disclosure and investigation, they can be managed centrally to ensure
uniformity and take advantage of economies of scale.

This campaign finance responsibility is an important part of the Commis-
sion's broader purpose of avoiding the reality or appearance of
corruption, and close to half of the states that have independent ethics
commissions place the enforcement of campaign finance laws within the
jurisdiction of the ethics commission.

The section also requires the Commission to uphold laws prohibiting
misconduct related to the procurement of goods and services (e.g.,
related- party transactions and "kickbacks") and laws prohibiting work-
place misconduct such as sexual harassment. While many ethics commis-
sions throughout the country regulate conflicts of interest, lobbying
and procurement misconduct, New York's Commission would be among the
first in the nation to regulate workplace misconduct.  Deleterious work-
place misconduct such as sexual harassment is strictly prohibited in the
private sector and not infrequently results in termination of employ-
ment. Independent oversight of the administration and enforcement of
workplace conduct laws and regulations will help hold state government
to a high standard.

Finally, the section grants the Commission the power and duty to inter-
pret the laws within its jurisdiction, provide training to help secure
compliance with these laws and promulgate and interpret its own rules
and regulations that are not in conflict with these laws.
Section 3.d. bestows on the Commission the power to refer matters to
state or federal prosecutors or to the Attorney General for criminal
prosecution.

Section 3.e. grants the Commission the ability to issue advisory opin-
ions regarding any law that it has the power to administer and enforce
or any law whose administration and enforcement it has the power to
oversee. Before adopting an advisory opinion, the Commission would have
to provide notice and an opportunity for public comment.  Such opinions
would be subject to judicial review in accordance with law. The Commis-
sion would also be empowered to issue informal advice which would be
protected as an attorney-client communication.

SECTION 4. FUNDING OF THE COMMISSION

Section 4 sets a minimum level of funding for the Commission at ten
percent of the budget of the Department of Law. This provision helps
ensure that those regulated by the Commission cannot hinder or incapaci-
tate the Commission by refusing to give it the funding that it needs.
See N.Y. Pub. Interest Research Grp. v. Giuliani, 644 N.Y.S.2d 38 (N.Y.
App. Div. 1996) (holding that the provision in the New York City Charter
providing for minimum funding of the New York City Independent Budget
Office prohibited any delay in funding because "the power to delay
(without limit) is the power to destroy").

SECTION 5. STATE CODE OF ETHICS

Section 5.a. requires the Commission to monitor the adequacy of the
state code of ethics and propose revisions and amendments as it sees
fit. The state code of ethics shall aim to eliminate any appearance of
corruption or impropriety relating to state government, eliminate
conflicts of interest that frustrate officials' abilities to impartially
discharge their duties and bar breaches of the public trust, including
the misuse of official position. These objectives are crucial to govern-
mental integrity, and it is thus incumbent on the Commission to monitor
the state code of ethics.

Section 5.b. makes it the ethical duty of persons within the Commis-
sion's jurisdiction to report to the Commission any conduct such persons
know to be in violation of any law within the jurisdiction of the
Commission. In other words, it will itself be an ethical violation for
persons within the Commission's jurisdiction to not report the miscon-
duct of others. This provision is crucial to the Commission's ability to
learn of misconduct. The section's provision for a retaliation cause of
action for aggrieved reporting persons protects those who in good faith
report on the basis of information and belief. Thus, the standard for
protection against retaliation is broader that the standard for mandato-
ry reporting.

SECTION 6. RECOMMENDING REVISIONS OF CAMPAIGN CONTRIBUTION LIMITS

Section 6 requires the Commission to recommend to the legislature limits
for all categories of campaign contributions to candidates and political
organizations. The standard to be applied by the Commission is intended
to prevent an elected official from being so beholden to a contributor
such that the official's ability to impartially make independent policy
judgments in the public interest is materially impaired. This objective
standard related to the management of conflict of interest is intended
to equate the reasonable inference of a candidate being materially
beholden to a contributor with the appearance of quid pro quo corruption
between the candidate and contributor that justifies restriction under
Buckley v. Valeo, 424 U.S. 1 (1976), and its progeny. This standard
would not depend on coordination between the candidate and the contribu-
tor but rather on the objective likelihood that the candidate would know
of the contribution and become materially beholden. Cf. Citizens United
v.  Fed. Election Comm'n, 558 U.S. 310 (2010).

SECTION 7. TRANSPARENCY

Section 7 provides that the Commission shall be subject to all transpar-
ency and public access laws applicable to state government agencies or
instrumentalities. This provision helps hold the Commission, like any
agency, accountable to the public and reinforces the public's confidence
in the Commission's purpose and its commitment to that purpose. The
section, however, also recognizes the necessity of confidentiality
during pending investigations, and therefore allows for reasonable
confidentiality provisions as provided by law.

To further promote transparency, Section 7 requires that transparency
laws such as the freedom of information law and the open meetings law
apply equally to the legislative and executive branches. Currently the
"sunlight" duties of the legislature are much more circumscribed than
those of the executive.

SECTION 8 IMPLEMENTATION

Section 8 provides that the legislature and governor shall approve
necessary changes in law to transfer functions to the Commission within
90 days of the effective date of the article.

 
JUSTIFICATION:

It is widely recognized that New York has a corruption problem.  Polling
shows that over 80 percent of registered voters think corruption in
Albany is a "serious problem." Numerous former high-ranking New York
State government officials are on trial this Spring. One has just been
convicted. In the past 15 years, according to the Syracuse Post-Stan-
dard, at least 21 state legislators, former legislators and other
elected state officials have been sentenced to prison or house arrest.

History teaches that corruption is a breeding ground for authoritarian
governments. A government free of corruption not only protects the
people as taxpayers against waste and misuse of funds, but also helps to
secure their liberties against all forms of abuse of power and self-ag-
grandizing behavior that occur in defiance of the rights of the people.
For reasons explained below, vigorous ethics enforcement is an excellent
way to deter corruption.

The current mechanisms in the executive and legislative branches to
enforce rules that proscribe breaches of the public trust and other
ethical violations are the Joint Commission on Public Ethics ("JCOPE")
and the Legislative Ethics Commission ("LEC"). JCOPE investigates all
ethics complaints and can impose a civil penalty on executive branch
officers and employees. LEC can disagree with JCOPE's interpretations of
the State's ethical commands and has exclusive authority to impose civil

fines on legislative branch officers and employees. Neither has the
power to censure, suspend, demote or remove an egregious violator.

As the Committee on Government Ethics and State Affairs of the New York
City Bar Association has observed, this ethics enforcement structure
suffers from an extreme lack of credibility. And for good reason - the
structure is highly flawed.

The flaws are manifold. Unlike the Commission on Judicial Conduct, an
ethics enforcement agency for the judiciary that has worked well, JCOPE
is not made up of appointees from all branches of state government.
Ethics agencies in other states foster independence by including members
appointed by the judicial branch, but New York's JCOPE structure does
not.

Also unlike the Commission on Judicial Conduct, JCOPE does not operate
by majority vote. As few as two members of the 14 member Commission can
veto an investigation or a finding of violation. This obvious flaw is
unique to New York.

The flaws in the JCOPE/LEC structure are exacerbated by the fact that
JCOPE and LEC have no rule barring ex parte contact by an appointee with
that appointee's appointing authority. Also problematic is the fact that
the appointing authority can remove its appointees for (what it claims
to be) cause, and the chair serves expressly at the pleasure of the
Governor. The ability for an appointing authority to appoint currently
serving state officials to JCOPE as commissioners and senior staff and
up to four members of the legislature to LEC adds to the reality and
appearance of political control.

As noted above, JCOPE has no power to censure, suspend, demote or termi-
nate any state official or employee and has no power to impose any form
of sanction on a member of the legislature or a legislative employee. In
contrast, the Commission on Judicial Conduct does have the power to
censure or remove a judge. LEC also lacks sanction power beyond the
imposition of a civil fine. Additionally, the existence of two bodies
independently interpreting the State Code of Ethics allows for incon-
sistent results.

Finally, JCOPE is not guaranteed adequate funding, which is necessary to
secure its independence. If JCOPE is doing its job it will never be
beloved by those with appropriations power, and its funding will be at
risk without a sufficient guarantee.

There are those who seek to justify the convoluted JCOPE/LEC structure
found nowhere else in the nation on the ground that the JCOPE voting
structure prevents political witch hunts. The problem with this argument
is that any politician charged with wrongdoing will always claim that it
is a witch hunt. Giving the political allies of that politician an
effective veto power, as the current structure does, means that nothing
will ever happen.

It is time to beef up ethics enforcement through an agency with strong
powers similar to those possessed by the Commission on Judicial Conduct.
We know that vigorous and independent ethics enforcement deters
corruption. This is largely because an ethics violation is much easier
to prove than a criminal violation, yet can still have serious conse-
quences for the offender.
Criminal bribery and extortion are hard to prove not only because crimi-
nal liability must be established beyond a reasonable doubt and the
bribe must be shown to be in exchange for a specific "official act," but
also because the likely witnesses to the corrupt transaction are them-
selves corrupt. This problem was starkly illustrated by the difficulties
for the Percoco prosecution presented by their star witness, Todd Howe.

Ethics laws, on the other hand, do not require proof beyond a reasonable
doubt. These laws apply a "fiduciary breach of the public trust" stand-
ard of candor, freedom from conflict of interest and avoidance of self-
dealing, and can be established based on conduct alone without the need
for witnesses or documents establishing criminal intent.

Another important role of ethics enforcement is that ethical misconduct
investigations are likely to uncover related criminal activity, which
must then be referred to criminal prosecutors. Mr.  Percoco, for exam-
ple, in his 2014 disclosure form filed with JCOPE, listed consulting
payments from a developer and payments to his wife from a fictitious
source. With independent and vigorous enforcement, these disclosures
would have led to referral for prosecution.

The proposed constitutional amendment ("Amendment") is designed to cure
the fundamental flaws in New York's current ethics enforcement structure
by providing credible independence, ample powers and secure funding. The
result would produce a New York State Government Integrity Commission
("Commission") which can't be ignored or dismissed as paper tiger.

The Amendment would also strengthen the State Code of Ethics. It would
recognize that the regulation of the role of money in politics goes hand
in hand with the regulation of other activities that create conflicts of
interest, and it would improve the level of transparency in state
government by mandating that transparency laws apply equally to the
legislative and executive branches.

The principal features of the Amendment include:

*The current bifurcated JCOPE/LEC structure would be eliminated and
replaced with a single Commission, ensuring consistent enforcement in
both the legislative and executive branches. Most states have a single
ethics enforcement agency with jurisdiction over both those branches.

*Like the Commission on Judicial Conduct, Commissioners would be
appointed by all three branches of government. A majority of the members
would be appointed by persons whose conduct is not being regulated by
the Commission.

*The Commission would have the power to sanction serious misconduct
through censure, suspension, demotion or removal of a non-elected public
official and through the power to censure or remove an elected official,
unless overruled by a majority vote in either house of the legislature.

*Unlike JCOPE, where two of its 14 members can block an investigation or
adverse finding, the Commission would act by majority vote.

*Because of its mandate to avoid the reality or appearance of corruption
and conflicts of interest, the Commission would be responsible for the
administration and enforcement of the campaign finance laws. Its duties
in this area would include recommending contribution limits to the
legislature that are low enough to prevent a public official from becom-
ing beholden to a large contributor to such an extent that a reasonable
person would find real impairment of policy judgment.

*Unlike JCOPE, where the person appointing a member can remove that
member for what the appointing authority deems to be substantial neglect
of duty, members of the Commission could be removed for cause only
through a process by which a majority of the Commission votes to make an
application for removal to the Court of Appeals.

*Ex parte communications between Commission members and their appointing
authorities and related staff would be barred, and no member could have
held office, employment in state government or any political party or
been engaged as a lobbyist in the three years prior to his or her
appointment or during his or her term.

*Transparency laws would apply equally to the executive and legislative
branches.

*All state officers and employees would have an ethical duty to report
known misconduct to the Commission and would be protected against retal-
iation.

Establishing the Commission in the Constitution is necessary to make
clear that its mandate does not violate any constitutional principle of
separation of powers or legislative immunity. Rather, the Commission,
like the constitutional Commission on Judicial Conduct, would function
as an integral part of New York State's constitutional system of checks
and balances. It also makes clear that no constitutional objection can
be raised about the judicial branch making appointments to the Commis-
sion. Finally, in the past, legislative leaders have advanced an exag-
gerated view of the legislature's constitutional prerogatives, arguing
for example that the Constitution allows them to pay committee chair
stipends to fictional committee chairs. Amending the Constitution will
make clear that the Rule of Law applies to the legislature.

 
LEGISLATIVE HISTORY:

New Legislation

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
Resolved (if the Assembly concur), That the foregoing amendments be
referred to the first regular legislative session convening after the
next succeeding general election of members of the Assembly, and, in
conformity with section 1 of article 19 of the constitution; be
published for three months previous to the time of such election.