Albany lawmakers have showered local governments across the Hudson Valley and Catskills with dozens of grants for construction over the last two years, a bounty that includes gifts as small as $50,000 for sidewalk repairs in Gardiner and library improvements in Cornwall, and as large as $2.7 million for the purchase and renovation of a new city court building in Middletown.
Each grant came through the State and Municipalities program, the newest in a series of hidden money pots that New York’s governors and the Legislature’s ruling parties have mined for almost two decades to support favored projects. All told, the four senators and seven Assembly members representing Orange, Ulster and Sullivan counties appear to have ladled out almost $18 million in grants in their districts since the program was created in 2013, based on public documents, press releases and information supplied by legislators’ staffs. Still more gifts are likely awaiting approval or a ceremonial announcement as their sponsors campaign for re-election this fall.
The recipients of this largesse are invariably elated that Albany has helped local taxpayers shoulder the cost of a needed project – a dam repair, a sewer-plant upgrade, a new roof on Town Hall. But budget watchdogs condemn the escalation of an entrenched practice that no scandal has yet dislodged: the secretive spending of millions of dollars in borrowed money for pork-barrel projects. Like other “capital project” funds before it, the State and Municipal Facilities program is funded with public authority bonds that state taxpayers must repay with interest, and carved up behind closed doors with no public scrutiny and no hint of equity.
The only thing Gov. Andrew Cuomo and lawmakers disclose about their so-called SAM grants in the budget is that they have so far authorized the state to borrow up to $1.5 billion for the program, the sum of $385 million in blank checks they wrote in each of the past four budgets. Details about how the governor and ruling parties in each chamber – the Republicans in the Senate, the Democrats in the Assembly – will split the money and what it will be spent on are all worked out later in private, outside the budget process.
Information about the actual spending is elusive. Under pressure from news organizations and budget watchdogs, the Senate and Assembly each released lists of their members’ grant requests last October, but did so in a format that hindered analysis, and have done no updates since then, even though the grants are processed continuously and individual lawmakers have announced many more since the Legislature posted its lists nine months ago. In June, the state Dormitory Authority – the agency that administers the program and issues the bonds that pay for it – posted a list of $328 million in SAM grants awarded by the executive branch, Senate and Assembly, but omitted the names of legislative sponsors. The authority says it doesn’t get the sponsors’ names.
An opaque process
The Empire Center, an Albany-based think tank, has probed the state for SAM grant information since last year and compiled a searchable database of 915 grants totaling $286 million. After adding its latest trove, the organization lambasted officials in May for spending borrowed money on “local political interests instead of state needs,” listing $300,000 in grants for skateboard parks in Newburgh and two other places as one of its examples.
“Part of the problem with this is there’s no public explanation of how this is being divvied up,” said Ken Girardin, an Empire Center policy analyst. “The public at large has no idea how this program is being run.”
In addition to its “completely opaque process,” Girardin criticized the program for piling on more state debt and spending state taxpayers’ money on local projects.
“Why pay for a Buffalo Zoo?” he asked, referring to $800,000 in SAM grants that legislators bestowed for the creation of an $18 million arctic exhibit. “What’s the point of building every town a salt shed? What’s the point of building every town a skateboard park? The only ‘state value’ in this program is that it helps the state lawmakers look good in their community.”
Assemblyman Kevin Cahill, a Kingston Democrat, dismisses criticism of the SAM grants and lawmakers’ other capital funding sources as the carping of “radical conservatives.” He argues those funds support projects with “great public benefit” and are subjected to multiple layers of scrutiny, a process so long and onerous that he said he sometimes hesitates to request grants. Cahill said the sheer time consumed by that increasingly complex vetting is what makes it impractical to choose and list individual grants in the budget, as some critics advocate.
“There’s no secrecy here; that’s just the way the process works,” he said. “I would have no problem with any of my projects being lined out in the budget. I would welcome it.”
Sen. John Bonacic, a Mount Hope Republican, has so far awarded $5.2 million in SAM grants, the most by far of the 11 lawmakers representing the region. He has given out smaller amounts than some of his colleagues – most of his grants range from $50,000 to $100,000 – but has spread them like a crop duster, giving one or more to every or almost every municipality in his four-county district. His office has announced 38 grants this year alone in a blizzard of press releases.
In an awkward coincidence, one of those announcements included words of gratitude from Bonacic’s daughter, Melissa, who is an Orange County legislator and leader of the Legislature’s Republican majority. She was applauding a $180,000 grant for park improvements in Greenville, where she lives.
Sen. William Larkin Jr., a Cornwall-on-Hudson Republican, and Sen. James Seward, a fellow Republican whose sprawling district in Central New York reaches into four Ulster County towns, have awarded about $2.9 million and $3.9 million, respectively. Larkin’s biggest grants include four awards of $250,000 apiece and one for $300,000, which he said in April that he had given to the Rockland County Town of Haverstraw to improve roads, sidewalks and curbs.
The Haverstraw grant won him across-the-aisle praise from that town’s Democratic supervisor, Howard Phillips, who was quoted in Larkin’s grant announcement as saying, “I have no doubt that without Senator Larkin’s presence, leadership and commitment, Haverstraw would not have received these much needed funds.” Coincidentally, Phillips had endorsed Larkin for re-election just three days earlier, promising his “unconditional support.” The words that Larkin’s aides attributed to Phillips in the two press releases – the grant and re-election announcements – were strikingly similar.
Democrats dispense most of the discretionary funds for the Legislature’s other chamber. Assemblywoman Aileen Gunther, a Forestburgh Democrat, announced a $2.7 million grant last year for Middletown to buy a vacated federal court building and turn it into a new city court. Assemblyman Frank Skartados, a Milton Democrat, has gotten $1.6 million in grants for projects in Newburgh, Marlborough and elsewhere, and plans to make another $625,000 in funding requests under the SAM program or another capital account.
Whatever the criticism of how the sausage is made and then divided in Albany, the grants undoubtedly earn lawmakers the appreciation of local officials and organizations back home.
“We’re thrilled that Senator Bonacic was able to help us,” said Mamakating Supervisor Bill Herrmann, whose Sullivan County town got a $100,000 grant to replace the heating and upgrade the air conditioning in Town Hall.
A new kind of hog
Until about 20 years ago, the only discretionary funds state lawmakers could dispense in their districts were “member items,” a traditional pork program that used up to $200 million in budgeted funds each year. But in 1997, the state created its first capital project fund, authorizing $424 million in public authority bonds that lawmakers and then-Gov. George Pataki could dole out as they saw fit. H. Carl McCall, then the state comptroller, had immediate misgivings, saying in a report that year that the new program “uses back-door borrowing for unspecified projects” and will distribute funds through secret agreements between the governor and legislative leaders, “rather than through an open process with public participation.”
The practice increased in subsequent years with the creation of additional slush funds. In 2004, the Syracuse Post-Standard published the first in-depth at look at the debt toll, discovering the grants had generated $1.2 billion in borrowing that would cost state taxpayers $248 million in interest alone. The bond debt had risen to $1.7 billion two years later, when the Rochester-based Center for Governmental Research issued the scathing results of its own dive inside what it called Albany’s “massive barrels of pork.”
The report, titled, “Capital Pork: How State Politicians Divvy Up Billions for Favored Capital Projects,” called the funding distribution “intensely political,” a tool for power brokers to “curry favor or secure re-election.” The authors tartly surmised that legislators began borrowing money for grants in 1997 not because budget funds were short, but simply so they could dispense meatier portions of pork than they could with relatively modest member items.
“This allowed legislators to get in on what had previously been the Governor’s purview: allocating large sums for big-money economic development projects – projects much larger than what legislators could pay for out of their cash member-item allocations,” they wrote. “With the new borrowing, legislators could purchase the gratitude of their constituents by funding much larger endeavors.”
The State and Municipal Facilities program became the newest cut of capital pork in 2013. Cuomo and legislative leaders created the program that year during budget negotiations, authorizing up to $385 million in bonds for discretionary grants. An identical amount was added the next year, and the next and the next. Little was known about the results until last October, when the Senate and Assembly released their grant lists and Politico reported on the starkly partisan distribution. In the Senate, only Republicans and the five breakaway Democrats who help them retain power had gotten any SAM money; the other Democrats got none. In the Assembly, Democrats had spent $34 million, and Republicans had awarded just $2 million.
Sen. Jeff Klein of the Bronx, who leads the Independent Democrat Conference, had awarded a whopping $11 million in grants by Politico’s count, a possible measure of how that money helps Senate Republicans cement the loyalty of the allied Democrats who kept them in power. Sen. David Carlucci, an independent Democrat who represents parts of Rockland and Westchester and used to have Warwick and Tuxedo in his district, had gotten a $1.8 million cut of the SAM pork pie at that time.
In the Assembly, members submit their requests for grants from the SAM program and other capital-project funds to the Ways and Means Committee, which reviews the proposal twice, first with a quick glance, then in greater detail. The committee ultimately forwards them to the agency that will administer the grants and issue the bonds to pay for them, the state Dormitory Authority. Lawmakers and others say in defense of the grant system that each request is scrutinized more than once, an onerous approval process that takes much longer than the grant sponsors and beneficiaries would like and generates mounds of paperwork.
How do members know how much money they can distribute in their districts? The speaker tells them so in a letter, according to two Assembly staffers. How those amounts are decided is part of the mystery.
Senate pork requests likely follow a similar route, with the Finance Committee as that chamber’s clearinghouse. But that, too, is uncertain. A spokesman for the Senate Republicans didn’t respond to questions about how the conference apportions SAM money and reviews requests. Bonacic’s spokesman, Conor Gillis, said the grants “face an approval process in the Senate” but declined to describe it. He said the Dormitory Authority extensively reviews the requests and gives them to the state Budget Division, which then shows them to the governor, Senate and Assembly and allows them 15 business days to object before giving final funding approval.
In addition to the SAM program, lawmakers have a variety of older capital funds at their disposal, enabling them to build pork sandwiches when necessary. Skartados and Sen. George Amedore, a Rotterdam Republican who represents part of Ulster County, have collaborated to provide $450,000 from SAM and another capital program for construction of the Highland Public Library. Amedore and Cahill obtained grants totaling $2.1 million from three separate programs to buy land for a planned Irish cultural center in Kingston and pay for its construction.
Call that one a ham-bacon-and-tenderloin sandwich.
Cahill, in an interview, described the Irish center as a future anchor and “focal point” for downtown Kingston, a project well worth funding because it will spur foot traffic and economic activity, promote cultural awareness, provide a community meeting place and enhance “the fullness of character” in the area. He linked it with other grants he said he had sought to revitalize Kingston, including ones for the Arts Society of Kingston, a daycare center for migrant farm workers and repairs to the Rondout Creek bridge.
All told, he said, he has secured “tens of millions of dollars” for his Assembly district since taking office.
“I seek projects that will provide an actual benefit to the region beyond the amount of the grant,” Cahill said.
Other lawmakers touted their grants in a similar fashion, saying the funding supports important projects and is awarded only after strict scrutiny.
“When I assign a SAM grant, it is a way for me to help our local municipalities to pay for large capital projects,” Skartados said in an emailed statement. “It improves our cities and towns and keeps taxes from going up. I also believe that the state agencies that manage these grants look at every bill and receipt to make sure the funds are being appropriated properly.”
Assembly Republicans, members of a minority conference that stands no chance of taking control of its chamber and its pork barrels, tend to be the only legislators who complain about the secretive and flagrantly inequitable way in which Albany’s leaders slice their swine. “I think it’s unfair to the 130,000 people I represent,” said Assemblyman Karl Brabenec, a Deerpark Republican who took office last year. “If there’s taxpayer money coming back to the districts, it should come back equally.”
Assemblyman Peter Lopez, a Republican whose seven-county district in the Catskills includes Saugerties in Ulster County, went further, calling it “wildly offensive” that the majority parties in the Senate and Assembly hog the pork for their own members. He has a mixed view on the grants themselves, saying they often support good projects but are clearly used at the same time to bolster their sponsors’ political standing. But the partisan control of the money is all bad in his view – an old-fashioned prerogative of power that must end.
“I am aghast, and continue to be infuriated at this to-the-victors-belong-the-spoils mentality,” Lopez said. “It’s a culture and mentality we should have outgrown a long time ago.”
Carl Heastie, the Bronx Democrat who succeeded Sheldon Silver as Assembly speaker last year after Silver’s arrest on corruption charges, threw a bone to Republicans shortly after taking the helm of the Assembly, informing the minority-party members that each could award a single SAM grant of $100,000, a sliver of what each Democrat can spend. Brabenec chose to spend his allowance on flood mitigation in Orange County’s Black Dirt farming region and is awaiting approval of his grant. Lopez gave his funding to SUNY Cobleskill, money he said has been used to develop an online marketing program that helps farmers in three counties sell their products.
But resentment over the secretive spending lingered. In March, shortly after Citizens Union released its latest “Spending in the Shadows” report, Assemblyman Jim Tedisco held a press conference with reform advocates and fellow Assembly Republicans to demand that the upcoming budget list every grant that the administration and legislators plan to award, instead of disclosing only lump sums for those discretionary accounts. Those calls went unheeded.
Lopez, who was at Tedisco’s press conference, argued in an interview that the state could make the awarding of grants more transparent by formally soliciting requests from local governments and other potential recipients in an open process, and finding a way to distribute equal amounts of funding in each legislative district. But he didn’t sound optimistic, and he even expressed some anxiety that the administration or Assembly leadership would block his $100,000 grant for SUNY Cobleskill as punishment for speaking out.
Lopez said he has heard a lot of talk about government transparency since joining the Assembly 10 years ago, but that the continuing reality in Albany is that leaders “hide things from view.”
“The system perpetuates itself, regardless of who’s in,” he said.
Citizens Union, a Manhattan-based budget watchdog, has published critiques of large, undefined budget lines each of the last four years. In its latest version of “Spending in the Shadows” in February, the group reported that Cuomo’s budget proposal contained $2.6 billion in 66 different “lump sums,” not including the SAM program. Each of those pools of unspecified spending posed a risk of corruption, noting two recent scandals involving discretionary funds. One was fresh on everyone’s mind: Silver’s conviction in November on corruption charges that included his steering $500,000 in grants to a doctor who had steered lucrative patient referrals to Silver’s law firm.
For reformers, the allegation illustrated the perils of letting legislative leaders control the flow of vast, undefined budget funds. When the Legislature was forced to identify member items and their sponsors almost a decade ago, it turned out Silver had given out more money than the combined totals of the Assembly’s next eight biggest givers, according to a 2006 New York Sun article.
Citizens Union and other groups had hoped the stunning scandals that felled both Silver and former Senate Majority Leader Dean Skelos in 2015 would force Albany to reform its least savory practices, including the secretive distribution of discretionary funds. As lawmakers returned to Albany in January, those groups trotted out a three-part “Clean Conscience Pledge” for Gov. Andrew Cuomo and legislators to sign, which included a promise to “work zealously” for legislation that would require the state to identify all grant recipients and the purpose of the spending.
“There’s a cloud of corruption hanging over the Legislature, and it’s everyone’s responsibility to clear the air,” Susan Lerner, executive director of Common Cause New York, said then in an announcement about the pledge. “It shouldn’t take continued criminal convictions by the U.S. Attorney to get lawmakers to understand that corruption is a systemic problem, not a matter of just a few bad apples.”
The response was underwhelming. Among the 11 lawmakers representing Orange, Ulster and Sullivan, only Assemblyman James Skoufis, D-Woodbury, signed the pledge.
That didn’t portend well for a bipartisan bill that has languished in Albany since 2009 and was reintroduced at the start of this year’s session, with a litany of sponsors that included Bonacic, Gunther and Assemblywoman Claudia Tenney, R-New Hartford. That proposal would expose Albany’s pork production to sunlight by requiring that all discretionary grants be itemized. It also would require certification that the lawmakers awarding the money have no conflicts of interest with the recipients.
The bill’s fate this year was the same as always. Lawmakers ended their session in June with no action taken.
© 2016 Times Herald-Record