Politics on the Hudson

Some lawmakers expressed concern today about an inter-agency agreement that allows the New York Department of Taxation and Finance to share state employees’ and legislators’ tax records with the Inspector General’s Office in connection with investigations.

Commissioner Thomas Mattox told legislators at a joint Assembly/Senate budget hearing that the state agencies have had a formal working relationship in this area since at least 1996. Following a reorganization of the Inspector General’s Office last year, the Department of Taxation and Finance no longer has on staff a deputy inspector general, who automatically came under the requirement to maintain secrecy.

The two agencies signed a memorandum of understanding specifying that dozens of employees of the inspector general would have access to the records, provided they received special training.

That didn’t sit well with Senate Finance Committee Chairman John DeFrancisco, R-Syracuse, a lawyer. He believes the memorandum of understanding provides overly broad authority to investigate state employees, without needing to go through the court system to get subpoenas.

“The inspector general is allowed to ask for information that he or she feels is necessary for an investigation. There’s nobody that there to have a check and balance over that request,” he said.

The Department of Taxation and Finance and the Inspector General’s Office just released a statement defending the memorandum of understanding, which the agencies have not released publicly. The Times Union published a story on the memorandum of understanding today.

“The story that appeared this morning in the Albany Times Union was misleading and inaccurate. The Department of Taxation and Finance’s Office of the Deputy Tax Inspector General previously reported directly to the State Inspector General, but was housed within DTF. To promote efficiency, the Office of the Deputy Tax Inspector General was consolidated into the Office of the New York State Inspector General. In light of this consolidation, the agencies entered into a memorandum of understanding to ensure that the Deputy Tax Inspectors General maintained the same authority and function as they always had. The MOU does not and was not intended to expand or diminish any authority or function, and to assert otherwise would be wrong.”

The Times Union posted the memorandum of understanding:

Commissioners Mou

Several dozen Occupy Albany and Occupy Wall Street protesters interrupted a joint Assembly/Senate budget hearing on taxes this morning as state Tax and Finance Commissioner Thomas Mattox was testifying about the the income-tax cut for the middle class and higher taxes on the wealthy adopted during a special legislative session last December. The Legislature and Gov. Andrew Cuomo also raised $1.9 billion through higher taxes on wealthy New Yorkers.

The protesters did what they call a “mic check,” meaning one person will call out statements and the rest will repeat them. They all chanted, “Hey you millionaires, pay your fair share!”  Lawmakers at the public hearing waited until the protesters had their say before continuing.

They said lawmakers should have increased the income-tax rate more for the rich. A higher surcharge for New Yorkers who earn more than $200,000 expired Dec. 31. The deal struck in December keeps higher taxes on people who earn more than $300,000 a year, but it was lower than the expiring rate.

Members of Occupy Albany and Occupy Wall Street handed out a flyer that said they “denounce a tax policy for the 1 percent.” The state should “fully extend the millionaires tax and cut corporate tax loohoples,” it said. It also said the December tax deal was a $3 billion tax cut for the wealthiest New Yorkers.

This is a video of Colin Donnaruma, 31, speaking about what the Occupy protesters did today:

Attorney General Eric Schneiderman filed a lawsuit today against Bank of America, J.P. Morgan Chase Bank, Wells Fargo and Virginia-based MERSCORP Inc. and its subsidiary, Mortgage Electronic Registration Systems Inc., charging that a private electronic-mortgage registry system (MERS) they developed has led to “deceptive and fraudulent” foreclosure filings that have harmed homeowners. Additional defendants are BAC Home Loans Servicing, Chase Home Finance, EMC Mortgage Corp. and Wells Fargo Home Mortgage Inc.

The lawsuit alleges that employees and agents of the bank have acted as MERS certifying officers and “repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have,” Schneiderman’s news release said.

The lawsuit claims the MERS system has “effectively eliminated” homeowners’ and the public’s ability to track property transfers through the traditional public records system because it is stored in a private database, which is full of inaccuracies and errors.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” Schneiderman said in a statement.

“Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners,” he said. 

More than 70 million MERS loans have been registered in the MERS System, roughly 30 million of which are active, Schneiderman said. The system was created in 1995 to get around county fees for recording, “avoid the hassle and paperwork of publicly recording mortgage transfers” and speed up the sale and securitization of mortgages, he said. (more…)

After telling the Gannett Albany Bureau that she had no information on the appointment of Ellen Biben, Theresa Schillaci, acting executive director for the state Joint Commission on Public Ethics just put out a news release announcing the new hire. Biben will be leaving her job as state inspector general to take the helm of the new ethics panel, which oversees the executive and legislative branches of government.

Janet DiFiore, chairwoman of the commission, said in the release that the panel looked at “many well qualified candidates” and determined Biben “is the clear choice to become Executive Director of JCOPE.

“Ellen’s reputation as a tough and independent defender of public integrity has been demonstrated throughout her career,” said DiFiore, Westchester County district attorney. “I am pleased the Commission has authorized her being offered this important position and that she has accepted this offer. We look forward to Ellen’s arrival to assist us in our work.”

Biben, inspector general since Jan. 1, 2011, will earn $148,000 a year in her new post. She was an assistant district attorney in the New York County District Attorney’s Office and worked for Gov. Andrew Cuomo when he was attorney general as special deputy attorney general for public integrity.

“I am honored to accept the position of Executive Director of JCOPE, and I look forward to assisting the Commission in its critical mission of restoring ethics and public trust in government.”

Former New York Chief Judge Judith Kaye said she worked closely with Biben for more than a year on an important public-integrity investigation. “Based on my daily experience with her, I found her to be a consummate professional, totally trustworthy, and knowledgeable in the law,” Kaye said. “Ellen’s experience and integrity make her the perfect person for this position.”

David Grandeau, who led the now-former state Temporary Commission on Lobbying, said he thinks the appointment is a “superb” one. Grandeau was critical of the state Commission on Public Integrity, which replaced the Temporary Commission on Lobbying and the state Ethics Commission in 2007. He has been particularly critical of Barry Ginsburg, the commission’s director for the past few years.

Grandeau said Biben “will bring some legitimacy to a group of people that for the last four years has been an embarrassment.”

It wouldn’t be fair to accuse Biben of not being independent because she’s worked for Cuomo, Grandeau said. “You’ve got to let people prove their independence and I think if you look at her body of work at the AG and the IG, this is a tough lady,” he said.

“I don’t think she takes marching orders from anybody,” he said. “I think it’s a good day for Albany when we get someone capable, smart and tough in that position because for four years we haven’t had anybody that fit that description.”

 

The state League of Women Voters just issued a statement applauding the appointment of Inspector General Ellen Biben as executive director of the Joint Commission on Public Ethics.

“The League supported the establishment of JCOPE and its strong oversight role as a step toward restoring trust in state government.  We believe the appointment of Ms. Biben will contribute to that goal,” the group said in a statement.

Barbara Bartoletti, legislative director for the League, said the organization had not been aware of the appointment before reading it on news blogs this afternoon. It was first reported by the New York Times, which used anonymous sources.

The League is happy to see progress in staffing the commission so it can move forward with its work, Bartoletti said.

JCOPE hasn’t issued a release confirming the appointment. Janet DiFiore, chairwoman of the panel and Westchester County district attorney, could not immediately be reached for comment. Neither could a spokesman for Biben, a former assistant district attorney in New York City and was special deputy attorney general for public integrity for Gov. Andrew Cuomo, who was attorney general at the time.

 

Theresa Schillaci, acting executive director of the state’s new Joint Commission on Public Ethics, said she had no information on this week’s vote by the state’s Joint Commission on Public Ethics to name Inspector General Ellen Biben as the new executive director, as was reported this afternoon by the New York Times.

Ellen Biben, pictured here, has been the state’s inspector general since Jan. 1, 2011. She was appointed by Gov. Andrew Cuomo. She is a former assistant district attorney in the New York County District Attorney’s Office. She served for 10 years, rising to the position of deputy bureau chief of rackets.

Janet DiFiore, chairwoman of the Joint Commission on Public Ethics, could not immediately be reached for comment, nor could a spokesman for Biben.

DiFiore, Westchester County district attorney, said last month that resumes were due by Jan. 20 and the panel wanted to have someone in place by the beginning of this month so the commission could start to fill empty positions.

The panel replaced the Commission on Public Integrity following passage of an ethics law last year that expanded oversight to include the executive branch in addition to the Legislature. Sixty investigations were placed on hold in August as the former commission shut down. Commission members have said there is a backlog of hundreds of cases.

According to the New York Times, which cited anonymous sources, Biben was appointed Tuesday in a secret vote of the ethics panel.

The Alliance for Quality Education released a report today that found that 52 percent of the proposed $805 million in new education funding next year would go to high-needs school districts under Gov. Andrew Cuomo’s proposed budget. Thirty-one percent of the money—$250 million—would go toward a competitive-grant program and 14 percent would be directed to average-need school districts. Low-needs districts would get the remaining 2 percent.

Lawmakers and the governor agreed last year to boost education aid 4 percent to $20.3 billion. The governor has recommended expanding a competitive-grant program that was set up in the current budget. The $50 million in initial funding for the two grants—for improved student achievement and management efficiency—is scheduled to be awarded in the 2012-13 fiscal year. The governor wants to greatly expand the program.

AQE is recommending that the $250 million—or at least $225 million of it to allow the existing program to be tested—be redirected. Of the total, $53 million should be spent on expanding pre-kindergarten. The balance of the money should go to school districts as operating aid. And the state should add additional funding to restore some of the $2.7 billion in education funding that has been cut in the past two years, Billy Easton, AQE’s executive director said at a news conference in Albany, one of seven AQE held around the state today.

The governor’s plan would restore $1 in $5 of cuts in the classroom over the past two years, Easton said. Redirecting the competitive grants would restore $1 in $4 of reductions, he said. Data on the impact by school district is available on AQE’s website. ”Still not enough, frankly. It’s going to be even at that point hard for districts not to make more cuts because of the double impact of inflation and the (property) tax cap,” Easton said.

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Hundreds of people with mental illness and advocates for the mental-health system were at the Capitol today to lobby for the state to invest more money in housing, peer support and employment opportunities. They participated in the New York Association of Psychiatric Rehabilitation Services’ 14th annual Legislative Day.

According to NYAPRS, Gov. Andrew Cuomo’s budget would continue the state’s overhaul of its health and mental-health systems in ways that are intended to continue consolidating and closing Office of Mental Health psychiatric hospitals, improve coordination of care and help avoid Medicaid hospitalizations and emergency-room visits. To achieve these goals, the state has been expanding managed care, establishing health homes and using behavioral health organizations. New York has 27 state psychiatric hospitals, about seven times the national average.

The organization said the state needs to do more than improve access to medical services and medications. It wants the state to “reinvest” the savings in community wellness, prevention and support systems. Research has shown that housing and economic stability and a community support system can reduce relapse rates and costly hospital visits, NYAPRS said in a statement.

“Otherwise, we will only be repeating the deinstitutionalization failures of the past where we closed the door to hospitals and ERs without placing sufficient services and supports in the community,” the group said.

Josue Hernandez, 32, of the Bronx said people with mental illness have a lot to offer, but they need more help finding jobs and housing and getting peer support after they are discharged from hospitals. He participates in a psychosocial club in the Bronx called the Boulevard Clubhouse, which provides placement in transitional jobs, advocacy and referrals and social programs. He finished a transitional-employment program and is now looking for a permanent position.

“My situation now, I’m dealing with finding a job after finishing my program. And it’s been a little hard,” he said.

He and his wife, Margaret, got married last July. They both belong to the Boulevard Club.

“They think that because I get disability and I work part time, they think I have enough to support the both of us. So until he gets a job, a lot of things are a stretch,” said Margaret Hernandez, 33.

Taxpayers spend more when someone is in a state psychiatric hospital than if they live in the community, said Christian Florio, a generalist/case manager at the Boulevard Clubhouse. “It actually costs less if you reinvest the money back into the community,” he said.

Non-profit groups that provide counseling and legal services to homeowners at risk of foreclosure and a number of lawmakers are urging Gov. Andrew Cuomo to include $25 million in the state budget to continue the statewide Foreclosure Prevention Services Program. They held a news conference this morning, and advocates are giving lawmakers keys attached to tags that detail the number of homes at risk for foreclosure in their districts’ counties and the potential economic impact.

“A key is a symbol of the sanctity, safety and security of the home,” said Justin Haines, director of foreclosure prevention at Legal Services NYC – Bronx. “It represents the hard-earned down payments made to the American dream of home-ownership and also the equity that’s slowly slipping away.”

Cuomo did not include money for the program in his proposed budget for the 2012-13 fiscal year, which begins April 1. Without funding, the Foreclosure Prevention Services Program will shut down. The state has spent roughly $50 million in the past four years for 120 non-profits statewide that provide housing counseling and legal assistance. They have helped more than 80,000 homeowners and at least 14,000 homes, preserving more than $3.4 billion in property value and tax base.

Statewide last year, 345,000 homeowners received a 90-day notice of serious delinquency, according to a new report from the Neighborhood Economic Development Advocacy Project. Roughly 95,000 of them were in New York City. For every foreclosure filed, there are 14 homeowners in serious delinquency.

“These figures demonstrate what advocates already know, we’re not halfway through the foreclosure crisis,” Haines said. “And recent estimates indicate that it could take as long as 14 years to work through the current foreclosure docket in the courts.”

State legislation adopted several years ago gives homeowners whose residence is being foreclosed on to sit with representatives of the lending institution in hopes of restructuring the mortgage so they can stay in their home, said Sen. Jeffrey Klein, D-Bronx.

“The only way this program is going to be effective, the only way we’re going to stop foreclosures is making sure that that individual, with a stack full of paperwork, sitting next to a bank attorney, has the representation of people behind me here today,” Klein said at the news conference, referring to help from the non-profit groups.

Another recently adopted state law requires lending institutions to maintain foreclosed properties, Klein said.

“A lot of these banks are very quick to foreclose. But then when they own these properties, they take title to these properties, they don’t want to maintain these properties,” he said.

In announcing legislation today to increase New York’s minimum wage, Assembly Speaker Sheldon Silver, D-Manhattan, said President Franklin Delano Roosevelt signed the federal minimum-wage law in 1938 to “give flight to the American dream.” But the dream is in peril as corporate profits continue to rise while the “wages of working people remain stagnant or are eroding in value.” Nearly one in two Americans have fallen into poverty or joined the ranks of the worker poor, the 2010 U.S. Census found, the speaker said.

The bill would increase minimum hourly pay in New York from $7.25 to $8.50 on Jan. 1, 2013. It would be indexed to inflation “so the value of the minimum wage would not erode as the cost of living rises,” Silver said.

The speaker disputed critics of increasing the minimum wage, who have said that would reduce the number of jobs and hurt the economy. ”Studies show that minimum-wage earners spend extra dollars immediately in their corner stores, their local pharmacy, neighborhood restaurants, and thereby spurring economic growth and creating jobs,” he said. “Equally important, rigorous research conducted by economists in 2010 has debunked the myth that raising the minimum wage has caused job loss.”

Groups like Citizen Action, the Retail, Wholesale and Department Store Union and the state AFL-CIO are supporting the Assembly Democrats’ legislation.

The state Business Council and New York Farm Bureau oppose it, said the increase would hurt its membership. The groups said in a statement that studies have show increasing the minimum wage doesn’t decrease poverty or increase employment. Dean Norton, president of the Farm Bureau, called the proposed increase “a stealth tax masquerading as a benefit for workers.”

Heather Briccetti, president and CEO of the Business Council, said creating more private-sector jobs is the way to improve New York’s economy. ”Raising the minimum wage would only hurt New York’s small businesses, farms and not-for-profits that are struggling to make their current payrolls, and reduce job opportunities, in this difficult economy,” she said.

Scott Reif, a spokesman for Senate Majority Leader Dean Skelos, R-Nassau County, said the Senate GOP “will continue to promote policies that encourage job growth and make New York a more business-friendly state, just as we did last year partnering with Governor Cuomo.”

As for Cuomo, “The governor has been supportive of previous proposals to raise the minimum wage, and we will be reviewing the proposal through the legislative session,” spokesman Matt Wing said.

This is a video of Silver introducing the legislation: