February 17, 2005
Hevesi, Spitzer, Silver, Brodsky Issue Sweeping Public Authority
State Comptroller Alan Hevesi, Attorney General Eliot Spitzer, Assembly Speaker Sheldon Silver and Assemblyman Richard Brodsky today unveiled sweeping comprehensive public authority reform legislation that includes the best provisions identified in debates over the last year. The bill, which is expected to be approved by the Assembly, would fundamentally alter the way public authorities operate in New York State to provide unprecedented transparency and accountability to the public.
The bill, sponsored by Silver and Brodsky, includes provisions from
the Comptroller’s legislation proposed last year, the bill sponsored
by Assemblyman Brodsky passed last year by the Assembly and a bill
sponsored by Senator Vincent Leibell that was considered in the Senate.
It also contains provisions from Attorney General Eliot Spitzer, Governor
George Pataki, and the Milstein Committee, which was appointed by the
Governor last year to examine issues of public authority governance.
“There is a unique and overwhelming consensus that the public
demand for accountability from its public authorities can no longer
be ignored,” Hevesi said. “All statewide elected officials
and both houses of the Legislature have worked on their own approaches
to improving public authorities. Now, is the time to come together
to develop a new milestone in creating transparency and accountability
in New York State government. Reform can and must be achieved.”
Assembly Speaker Sheldon Silver said, “By adding greater transparency
and accountability to the more than 700 public authorities and their
subsidiaries we are providing all New Yorkers a more complete view
of their State government, improving their overall efficiency and instituting
safeguards for taxpayer dollars. This joint effort by state leaders
with differing responsibilities and scopes of authority is a true indication
of how serious a problem the State’s ‘shadow government’
Assemblyman Brodsky, who chairs the Assembly Committee on Corporations, Authorities and Commissions, said, “Our comprehensive legislation is the culmination of three years of work. It now falls squarely on the governor and Senate whether there is serious reform or continued scandal and inefficiency.”
The bill issued today is the culmination of an 18-month effort during which the State witnessed new efforts to reform public authorities. In 2004, three significant pieces of legislation were advanced in the Legislature regarding public authorities and both Assemblyman Brodsky and Senator Leibell have held extensive hearings on authority reform. Also, the Governor proposed corporate governance principles and appointed a panel to study related issues and compel adoption of corporate governance reforms. For the first time in recent history, the Office of the State Comptroller identified the number of public authorities and published information about their finances. In 2003 and 2004, the Office of the State Comptroller increased oversight of public authorities, completing 46 audits of public authorities and uncovering financial malfeasance and mismanagement at a number of authorities including the Metropolitan Transportation Authority, the Long Island Power Authority, the New York Power Authority and the New York Racing Association, among many others.
“Many of New York’s public authorities do important work and do it well, but their good work is eclipsed by the irresponsible actions and mismanagement by others,” Hevesi said. “Public consciousness has been raised about the need to control public authority debt, which now totals more than $70 billion, in addition to the $43 billion authorities have borrowed on behalf of the State government. This is an enormous sum and is a clear danger to New York’s finances.”
Hevesi noted a number of troubling characteristics of public authorities:
The 44 public authorities that do report procurement activity to the Comptroller’s Office awarded 11,270 contracts valued at more than $10.5 billion in 2002 alone. With minor exceptions, none of those contracts were subject to review by the Comptroller, as is the case with State agencies.
In the meantime, Hevesi is implementing other improvements administratively, including increased reporting requirements for public authorities, focusing on personnel and compensation. He also has issued new Debt Issuance Approval guidelines, which describe the process and criteria by which the Office of the State Comptroller reviews and approves the terms and conditions of mainly negotiated or private sales of bonds issued by many public authorities, municipalities and school districts.
In a report released concurrently with the legislation, Hevesi outlined ten instances where increased attention to public authorities resulted in improved actions at specific authorities, but said comprehensive changes are needed to avoid a piecemeal approach.
“The days when people running public authorities thought no one was watching are over,” Hevesi said. “This bill is the start of a new era, and there is both consensus of what the goal is and how to get there.”