Senator Flanagan Calls On Governor Spitzer To Join In Reforming Public Authorities

John J. Flanagan

May 25, 2007

Senator John Flanagan (2nd Senate District), the Chairman of the Senate Corporations, Authorities and Commissions Committee, today called on Governor Eliot Spitzer to join him in providing real reform regarding the oversight of how New York State public authorities operate. This call follows Senate passage of legislation sponsored by Senator Flanagan that will strengthen the Public Authorities Reform Act of 2005 by instituting reforms that will ensure greater openness, transparency and accountability in New York State’s public authorities.

Joining with Assemblyman Richard L. Brodsky (92nd Assembly District), the Chairman of the Assembly Committee on Corporations, Authorities and Commissions, Senator Flanagan is pushing the legislation to regulate the workings of all public authorities throughout the state of New York including the Long Island Power Authority, the Metropolitan Transportation Authority and other organizations that have tremendous effect on the lives of all New York residents.

But in a wholesale retreat from reforms he advocated for as Attorney General, Governor Spitzer today proposed his own public authorities "reform" bill that would have left Attorney General Spitzer less than enthused.

"Governor Spitzer has proposed reform that is less effective in six major areas and it is less than New York State residents deserve. Assemblyman Brodsky and I have, in a bipartisan effort, proposed truly effective reform that will protect the taxpayers money. It has already passed the Senate and I would like to see Governor Spitzer join in our efforts," stated Senator Flanagan.

Senator Flanagan pointed out that legislation proposed by Governor Spitzer would:

-Place the "Independent" Office of Public Authority Accountability in the Department of State with the appointment under the control of the Governor;

-Deny the Comptroller the right to review and pre-approve authority contracts even though, as Senator Flanagan noted, the 40 public authorities which reported activity to the Comptroller in 2006 awarded 10,290 contracts valued at more than $3.2 billion;

-Fail to include any protections for whistle blowers. This protection for employees who observe or have knowledge of wrongdoing is critical to effective information gathering and important to revealing waste and inefficiencies;

-Withhold the ability to issue subpoenas from the Independent Authority Office to ensure compliance with its requests for information;

-Neglect to control the proliferation of public authorities’ subsidiaries. The list of over 700 public authorities includes approximately 155 subsidiaries created by public authorities, most of which were created without approval by the Legislature; and

-Fail to place any controls on public authority debt which continues to grow unchecked to more than $45 billion currently. While debt service on this borrowing is paid by the taxpayer, none of it is approved by the voters. Senator Flanagan’s legislation would begin the process of inquiry into appropriate debt caps, while the Governor’s bill opts for more study.

Senator Flanagan noted that then-Attorney General Spitzer endorsed Assembly Bill A.5626 of 2005 and urged its immediate implementation in a press release issued February 17, 2005.

"What I find most disappointing is that these are provisions which Governor Spitzer supported when he was the Attorney General. With recent audits uncovering mismanagement at a number of authorities including the Metropolitan Transportation Authority, the New York Power Authority and the New York Racing Association, I am hopeful that he will reacquaint himself with his earlier position and join the legislature to provide the reform that is needed," added Senator Flanagan. "With so much taxpayer funding passing through these entities, we need to make sure that it is being used for legitimate purposes."