Testimony on the Public Authorities Accountability Act's Impact on Local Public Authorities

Citizens Union of the City of New York

Testimony to the Assembly Standing Committees on Corporations, Authorities & Commissions and Cities

On Application of the Public Authorities Accountability Act of 2005 to local authorities

December 11, 2008

Good morning Chairs Brennan and Brodsky and other members of the Assembly Standing Committees on Corporations, Authorities and Commissions and Cities.  My name is DeNora Getachew, and I am the director of public policy and legislative counsel for Citizens Union of the City of New York, and I am joined by my colleague Rachael Fauss, the Research and Policy Associate for Citizens Union.  Citizens Union is an independent, non-partisan, civic organization of New Yorkers who promote good government and advance political reform in our city and state.  For more than a century, Citizens Union has served as a watchdog for the public interest and an advocate for the common good.  I thank you for holding this hearing and giving us the opportunity to present Citizens Union’s views on this important topic.

Citizens Union has long been concerned about conflicts of interest, and believes that the best way to prevent them from occurring is to shine a bright light.  Transparency of information regarding potential conflicts of interest in New York City is crucial to prevent them from occurring. While Citizens Union advocates for as much public disclosure as possible, we are also mindful of the need to balance the privacy and other interests of those required to disclose their personal information. New York City currently has a model system in the state, and requires more disclosure of information from its employees, including public officials, than does New York State government.  We believe that it is imperative that its system of disclosure remain strong, while balancing it with the need to adapt the eighteen year old law to increase disclosure appropriately.

As you are aware, pursuant to the mandate contained in the Public Authorities Accountability Act of 2005 (Act), the New York City Conflicts of Interest Board (Board) is required to process financial disclosure forms from local public authorities – which the Act defines to include not-for-profit corporations affiliated with, sponsored by, or created by the City government.  In addition, the New York State Legislature amended section 811 of the General Municipal Law to empower the Board to develop more than one form of annual disclosure, though such forms must comply with the minimum state disclosure requirements. 

 

In an effort to implement the state mandates, the Conflicts of Interest Board crafted legislation which was introduced by the City Council earlier this year as Int. No. 782-A.  While this legislation has not yet been enacted, one of Citizens Union’s major concerns with the proposed bill is that it would lessen the disclosure requirements for compensated City employees, such as elected officials and public officers.  In reconciling the important objectives of lessening burdensome requirements for certain individuals and maintaining or creating disclosure requirements that have the potential to reveal conflicts of interest, Citizens Union believes that the Board, the Mayor and the City Council must not decrease the current disclosure requirements for elected officials and high-ranking City employees.  Citizens Union is apprehensive about the bill’s proposal to change the disclosure forms for City employees to cut approximately one third of the information currently provided, much of which does have the potential to reveal conflicts of interest. 

Citizens Union also recommends that the Board consider developing a separate financial disclosure form for city council members.  We believe this recommendation is necessary since council members are the only city employees who are technically still part time and are allowed to earn outside income.  This separate form should require greater disclosure of how much time is spent on outside employment and in what ways and on behalf of whom where appropriate.

Under the current law, without any change to the disclosure forms, many important not-for-profit staffs and boards are required to file the same thirty-two page disclosure reports as elected officials and other compensated City employees, regardless of whether such persons are compensated for their service.  For example, as reported by the New York Times in September, the law may be interpreted to require entities such as the American Museum of Natural History, the Gracie Mansion Conservancy, and the World Trade Center Memorial Foundation to have their officers submit disclosure forms. Citizens Union believes that volunteer board members that commit themselves to public service should not be required to file the current long forms, and supports lessening the requirements for these individuals.  The elimination of certain disclosure requirements for uncompensated members of boards and commissions, as well as for City-affiliated non-profit board members and staff, is also warranted, given the need for these entities which provide crucial services to the citizens of New York City to recruit and retain qualified and civically engaged board and staff members. 

According to published reports, the Board initially believed that approximately 125 nonprofit groups would be required to file financial disclosure forms.  After protest from some of those groups and further consideration by the Board, that number was significantly reduced to approximately thirty groups.  Although Citizens Union is not in a position to question the legitimacy of the Board’s decision, Citizens Union is concerned about the lack of information regarding the criteria the Board utilized to make the determination that many of these not-for-profits are exempt from the disclosure requirements.  We strongly believe that there needs to be a clear, consistent and public standard for how the Board makes these determinations.  This standard can come from further statutory guidance from the State Legislature, Council legislation or Board rules.  We believe that the lack of clear mandates regarding who is required to file a financial disclosure form only further undermines the integrity and purpose of the laws and avoids the transparency that the law was passed to guarantee. 

 In summation, Citizens Union supports lessening the requirements for volunteer board members of non-profits and uncompensated members of city boards and commissions; and

urges the City to maintain the current levels of disclosure for compensated City employees such as elected officials and high-ranking City employees that could reveal potential conflicts, if not increase them, and to conduct a thorough review of the information proposed to be eliminated in Int. No. 782-A to ensure that valuable information is not eliminated.  Along those lines, Citizens Union also looks forward to advancing ethics reform at the state level in the near future to strengthen the state’s ethics laws.

 Chairs Brennan and Brodsky and other members of the State Assembly, Citizens Union again thanks you for holding this important hearing and for making it possible for us to express our views.