NEW YORK STATE OINT OMMISSION ON UBLIC THICS J C P E 2013 ANNUAL REPORT JCOPE.NY.GOV DANIEL J. HORWITZ LETIZIA TAGLIAFIERRO EXECUTIVE DIRECTOR CHAIR DAVID ARROYO PAUL CASTELEIRO HON. JOSEPH COVELLO LASHANN M. DEARCY NEW YORK STATE MITRA HORMOZI JOINT COMMISSION ON PUBLIC ETHICS MARVIN E. JACOB PHONE: (518) 408-3976 SEYMOUR KNOX, IV 540 BROADWAY FAX: (518) 408-3975 GARY J. LAVINE HON. MARY LOU RATH ALBANY, NEW YORK 12207 DAVID A. RENZI www.jcope.ny.gov MICHAEL A. ROMEO, SR. HON. RENEE R. ROTH GEORGE H. WEISSMAN MEMBERS April 3, 2014 The Honorable Andrew M. Cuomo Governor of New York The Honorable Dean G. Skelos The Honorable Sheldon Silver Senate Republican Conference Leader Speaker of the Assembly The Honorable Andrea Stewart-Cousins The Honorable Brian M. Kolb Senate Democratic Conference Leader Minority Leader of the Assembly The Honorable Jeffrey D. Klein Senate Independent Democratic Conference Leader To the Honorable Andrew M. Cuomo and Members of the Legislature: On behalf of the Commissioners and staff of the New York State Joint Commission on Public Ethics, I am pleased to present you with the enclosed 2013 Annual Report. Among other information provided, the report highlights the Commission’s achievements during its second full year of operation, and summarizes its efforts in offering guidance and education and in regulating lobbying and ethics in State government. The Joint Commission on Public Ethics remains dedicated to promoting integrity in State government on behalf of all New Yorkers. Respectfully, Letizia Tagliafierro Executive Director TABLE OF CONTENTS INTRODUCTION 7 THE JOINT COMMISSION ON PUBLIC ETHICS 9 STATEMENT OF THE EXECUTIVE DIRECTOR 9 THE PUBLIC INTEGRITY REFORM ACT OF 2011 11 COMMISSIONERS 11 THE EXECUTIVE DIRECTOR 17 STRUCTURE AND STAFFING OF THE AGENCY 18 GUIDANCE AND OUTREACH 21 ADVISORY OPINIONS 21 TRAINING AND EDUCATIONAL SERVICES 23 DEVELOPMENT OF REGULATIONS AND GUIDELINES 25 WEBSITE 28 LOBBYING OVERVIEW 31 OVERVIEW OF DEVELOPMENTS IN 2013 31 2013 LOBBYING DATA 31 2013 LOBBYING DATA HIGHLIGHTS 33 FINANCIAL DISCLOSURE STATEMENTS 43 ANNUAL FINANCIAL DISCLOSURE STATEMENTS 43 INVESTIGATION AND ENFORCEMENT 45 OVERVIEW 45 2013 REVIEW AND DISPOSITION OF INVESTIGATIVE MATTERS 46 2013 ENFORCEMENT ACTIONS 49 APPENDIX A: EXECUTIVE LAW §94 51 APPENDIX B: 2013 LISTING OF LOBBYISTS AND PUBLIC CORPORATIONS 67 INTRODUCTION The Joint Commission on Public Ethics (the “Commission”) was established by the Public Integrity Reform Act of 2011, Chapter 399 of the Laws of 2011 (“PIRA”). (See Executive Law §94 attached hereto as Appendix A.) PIRA comprehensively reformed the oversight and regulation of ethics and lobbying in New York State and granted the Commission broad regulatory authority and oversight over State legislators, candidates for the Legislature, and legislative employees, as well as the four statewide elected officials, candidates for those offices, executive branch employees, certain political party chairs, and lobbyists and their clients. The Commission’s statutory mandates include providing information, education, and advice regarding current ethics and lobbying laws, and promoting compliance with these laws through audits, investigations, and enforcement proceedings. The Commission commenced operation on December 14, 2011 with the appointment of its fourteen Commissioners, who, in turn, appointed its first Executive Director. During 2012, the Commission’s first full year in operation, the focus was on creating the agency. This included filling critical staff positions and restructuring the agency to best achieve its mission. In 2013, the Commission built on this foundation, meeting statutory mandates and appointing Letizia Tagliafierro as its second Executive Director. Pursuant to Section 94(9)(l) of the Executive Law and Section (1-d)(g) of the Legislative Law (the “Lobbying Act”) this annual report summarizes the activities of the Commission in 2013, including data relating to ethics and lobbying regulation. The report also highlights some of the Commission’s achievements during 2013, including the administration and improvement of procedures relating to the new disclosure requirements in PIRA; reviewing nearly 200 potential investigative matters; processing more than 27,000 Financial Disclosure Statements filed by State officials and more than 40,000 disclosure filings by lobbyists and their clients; and significantly expanding the Commission’s advisory and guidance platform with the introduction of its new comprehensive ethics training NNUAL EPORT 2013 A R 7 NEW YORK STATE JOINT COMMISSION ON PUBLIC ETHICS INTRODUCTION program. The Commission continues its efforts to conduct a comprehensive review of the effectiveness of existing laws, regulations and opinions that address ethics and lobbying, and will include its findings in a report by February 2015 in accordance with Executive Law §94(1). Among other information detailed in this report, total lobbying expenditures for 2013 topped $210 million, a slight increase from the prior year’s lobbying expenditures. Notably, lobbying advertising expenses continued to decrease significantly, while spending on professional lobbying services through retained or employed lobbyists continued to rise as it has for the last five years. Lobbyist compensation reached a record of $191 million in 2013. In contrast, the level of spending among top spenders did not change significantly between 2012 and 2013. In 2013, the top spenders included a tobacco manufacturer and retailers, teachers unions, and health care associations. Separately, in conjunction with this annual report, the Commission will publish in spreadsheet format on its website the complete data filed by lobbyists and their clients for 2013. Introduced last year, these spreadsheets give the public easy access to, and the ability to perform custom analyses of, the data, thereby increasing transparency. Additional summaries of lobbying data are included in this report. The full 2013 listing of lobbyists and public corporations and their financial data is attached hereto as Appendix B. 8 THE JOINT COMMISSION ON PUBLIC ETHICS Statement of the Executive Director I am pleased to present the 2013 Annual Report of the Joint Commission on Public Ethics (the “Commission”). The Commission serves a significant role in the operation and oversight of government – promoting integrity by helping those in public service understand their ethical obligations, ensuring transparency through rigorous public reporting disclosures, and providing accountability through enforcement actions to address ethical misconduct. During the past two years, the agency has built a solid operational foundation as it implements landmark changes in the State’s ethics and lobbying laws and meets unprecedented oversight responsibilities. In 2013, critical work was accomplished, including: adopting guidelines and regulations enacting new lobbying disclosure and gift restrictions; overseeing the first disclosure of the outside income of elected officials, as well as providing convenient access to the information on the Commission’s website; and investigations and enforcement actions generating approximately $450,000 in penalties, including the first independent ethics enforcement action against a sitting legislator. The Commission also continued to promote transparency, from both those attempting to influence policymakers and those subject to such influence, through the administration of periodic disclosure filings representing more than $200 million in lobbying spending, as well as nearly 27,000 annual Financial Disclosure Statements from executive and legislative branch officers and employees. I am honored to have been appointed in 2013 as the Commission’s Executive Director. While the vast majority of public officials are dedicated and honest, the public’s faith in our NNUAL EPORT 2013 A R 9 NEW YORK STATE JOINT COMMISSION ON PUBLIC ETHICS THE JOINT COMMISSION ON PUBLIC ETHICS government has been damaged by those who have breached the public trust. The public has a right to hold their public officials to a higher standard, and public officials must be vigilant in complying with their ethical obligations and the special responsibilities that accompany public service. I am committed to providing the tools, education, and resources that enable those public officials who seek to comply with the law to do so. For those public officials who engage in misconduct, the Commission will continue to hold them accountable by pursuing enforcement actions under the ethics laws and working with our partners in law enforcement when the conduct is criminal, which falls outside of our jurisdiction. I believe the Commission can foster a culture of ethical compliance and strengthen the public’s confidence that the government is operating with integrity and impartiality. To that end, the Commission will undertake a series of outreach initiatives in 2014 – including dynamic and robust new trainings and materials for State employees, a new ethics training course for lobbyists, an open dialogue with the regulated communities and the general public, and enhancements to the Commission’s website. We remain mindful of the tension between the public’s interest in transparency and the statute’s requirement of, and need for, confidentiality in certain aspects of our work. During the past year, we have taken steps to provide more public information about Commission business when we can and we will continue to do so going forward. The Commission looks forward to continuing