Tighter economic development rules included in Cuomo budget


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By Chris Carola

After a pair of high-profile corruption trials ending in convictions for two of Gov. Andrew Cuomo's top advisers, the Democrat is proposing tighter oversight of New York state's economic development funding, something good-government groups have been seeking for years.

The first state budget plan of Cuomo's third term includes proposals to boost procurement regulations for certain state contracts and to create an online database of projects receiving funding from his administration's economic development agencies.

The governor's move follows last year's convictions of a former top aide and Cuomo's own “economic guru" on corruption charges stemming from upstate development projects. Government watchdog groups have said the two cases spotlight the need for better oversight of the billions the state doles out each year in corporate tax breaks and business grants.

Strengthening economic development funding oversight is supported by the state Senate and Assembly, both controlled by Democrats.

“If we can come to an agreement with the Legislature, that would be fine with us," said Alphonso David, counsel to the governor.

“If the governor's on board, there's no reason this shouldn't pass both houses of the Legislature very quickly," said David Friedfel, director of state studies for the Citizens Budget Commission, one of the government watchdog groups pushing for more transparency in contracts awarded by Empire State Development, the state's main economic development agency.

The state budget office said there's no specific funding in Cuomo's 2019-2020 spending plan for Amazon's Queens campus, a project that's expected to take years to complete. Cuomo landed one half of the company's second headquarters by offering more than $1.5 billion in state tax incentives if Amazon meets its hiring goal of 25,000 jobs in 10 years.

Even before the Amazon deal was announced last fall, critics of Cuomo's economic development policies said New York taxpayers weren't getting good returns on their multi-billion-dollar investments in terms of the number of jobs created. Cuomo says his strategy has been a success, creating more than 1 million jobs since he became governor in 2011.

While Cuomo hasn't been accused of any wrongdoing, his administration's economic development apparatus has been linked to scandals.

Former Cuomo aide and friend Joseph Percoco was sentenced in September to six years in prison for fraud and accepting bribes stemming from companies seeking to do business with the state.

Another Cuomo administration official, Alain Kaloyeros, was convicted last year of rigging bids in the state's Buffalo Billion project. Cuomo once called Kaloyeros, former head of the State University of New York's Polytechnic Institute, his “economic guru."

Cuomo addressed state government corruption in last Wednesday's State of the State speech.

“If you read the headlines over the past few years, they have been continuous and they have been disappointing, and they have been disgraceful, and they have been widespread," Cuomo said in his speech. “It looks terrible and it is terrible."

Government watchdog groups say one way to improve transparency in economic development funding is to create a “database of deals" that would allow online access to information clearly showing who's getting state business grants and how much. Cuomo is on board, proposing a database he says will combine information from many state sources into “one dynamic, user-friendly website."

“He gets the value of the idea. Now he just needs to talk to the Legislature and agree to put this into law," said John Kaehny of Reinvent Albany, another good-government group advocating for creation of a projects database.

As for contract procurement, the state comptroller's office resume pre-audits of certain State University of New York and City University of New York construction contracts, something the agency had been doing before that oversight was eliminated in Cuomo's first state budget in 2011. Under an agreement with Cuomo, Comptroller Thomas DiNapoli's auditors as well as the state Inspector General's Office will have the authority to audit SUNY and CUNY construction contracts.

DiNapoli's office called the agreement “a positive step forward" that will ensure independent checks and balances are in place to prevent abuse.



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