NY Times: Cuomo Accepts Millions From Interests He Assails

Cuomo Accepts Millions From Interests He Assails
The New York Times by SERGE F. KOVALESKI and GRIFFIN PALMER - June 24, 2010

Attorney General Andrew M. Cuomo, declaring his candidacy for governor of New York, could not have been clearer. “The influence of lobbyists and their special interests must be drastically reduced with new contribution limits,” Mr. Cuomo said last month. “We will be taking on very powerful special interests which have much to lose. We must change systems and cultures long in the making.” But as he delivered his announcement, Mr. Cuomo was sitting on millions in campaign cash from the very special interests whose influence he said he wanted to limit. An analysis by The New York Times shows that of the estimated $7.1 million that the Cuomo campaign has received from political action committees, associations, limited liability corporations and other entities, more than half has come from the biggest players in Albany: organized labor, the real estate and related industries like construction, the health care sector and lobbying firms. In the spirit of reform, Mr. Cuomo pledged in 2007 not to accept donations over $10,000 from most categories of contributors during an election cycle. But he did not stick to that vow and has at times received amounts five times as great. The donations underscore the awkwardness of Mr. Cuomo’s effort to run against Albany and its insiders at the same time he is benefiting from their largess and, in some cases, his long relationships with them. He drew a similar proportion of his campaign money from special interests in his failed 2002 campaign for governor and his 2006 bid for attorney general. Mr. Cuomo, a Democrat, declined repeated requests to be interviewed for this article. But an adviser, Phil Singer, said the attorney general had consistently demonstrated his independence from special interests and others who contribute to his campaign. As of its last campaign filing, the Cuomo campaign had about $16 million. “Any donor who could possibly think they are buying anything other than good government is delusional and blind to all facts,” Mr. Singer wrote in an e-mail message. He cited a number of cases in which the attorney general’s office had taken action against those who had made political donations to Mr. Cuomo. The analysis by The Times shows that in the current election cycle, lobbying firms and companies that have registered to lobby on their own behalf have given Mr. Cuomo about $555,000 in donations. Organized labor, long regarded by Democrats and Republicans as perhaps the most powerful force in Albany lawmaking, has given him more than $1.4 million. Real estate and construction interests have donated more than $1.3 million, and the health care industry has contributed about $570,000.

As attorney general, Mr. Cuomo has undertaken several major initiatives that have coincided with interests of those donors. In 2007, Mr. Cuomo’s office opened an investigation into whether health insurers were systematically overcharging patients who used doctors and hospitals outside the insurers’ networks. The inquiry was related to an earlier federal lawsuit whose plaintiffs included the Medical Society of the State of New York, which represents physicians, medical residents and medical students; New York State United Teachers, a union; and the Civil Service Employees Association union, all of which have given generously to him through their political action committees. In 2009, he announced a settlement to shut down the payment system used by the industry and establish an independent database to replace it. Also in 2007, during New York City’s real estate boom, Mr. Cuomo, after receiving complaints from real estate officials, pushed for passage of a state bill to increase financing for his office to speed up the approval process for co-op and condominium conversions and ease a backlog. The measure was written into the state budget the next year with the blessing of the industry and other stakeholders and also allowed the office to better handle complaints against developers over construction flaws. But Mr. Singer pointed out that the attorney general had also aggressively pursued some of his contributors. His office reached an agreement in 2009 with WellPoint, the nation’s largest health insurer, to pay $10 million toward an overhaul of the health care reimbursement system. This year, Mr. Singer said, Mr. Cuomo’s office sued Bank of America and two of its former top officers, saying they had duped shareholders and the federal government to complete a merger with Merrill Lynch. This month, the office sued a developer, Yair Levy, saying he stole $7.4 million from a reserve fund of a troubled downtown luxury building. Mr. Singer also said the campaign required prospective donors to show that they had no matters pending before the attorney general’s office and had not had any in the previous 90 days.

The Times review did not examine donations from individuals, like health care executives or union leaders. But an analysis conducted by the New York Public Interest Research Group recently found that 20 percent of the money Mr. Cuomo’s current campaign committee received from individuals came from people working in real estate or as lobbyists. Representatives of several organizations that gave to Mr. Cuomo said it was natural that their agendas sometimes dovetailed with his. They said they believed that Mr. Cuomo was right on many of the most important issues affecting their clients or constituents. Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, pointed to a settlement that the attorney general’s office reached in July 2009 with the owners and former owners of two Brooklyn supermarkets. They were forced to pay $1.1 million for underpaying workers and violating other state labor laws.

“A lot of what Andrew has done as attorney general,” said Mr. Appelbaum, whose group gave Mr. Cuomo $27,000 through a political action committee, “has involved going after employers who have not paid legal wages or overtime or have mistreated employees in other ways.” George W. Reilly, business manager of Plumbers Local Union No. 1, which gave $29,500 through its political action committee, said Mr. Cuomo’s tenure as assistant secretary and then secretary at the Department of Housing and Urban Development had made him more knowledgeable about issues important to the union’s members. The political action committees that are among Mr. Cuomo’s largest labor contributors include the Sergeants Benevolent Association of the New York Police Department, which gave $54,000; the United Food and Commercial Workers International Union, which contributed more than $53,000; and Local 32BJ of the Service Employees International Union, which gave $45,500. Lobbyists, meanwhile, continue to contribute generously to Mr. Cuomo despite three campaigns in which he has criticized their influence. During his failed bid for governor in 2002, Mr. Cuomo called New York “the Wild West of lobbying” and proposed a ban on contributions by lobbyists to campaigns.

James D. Featherstonhaugh, a well-known lobbyist in Albany, said he had written Mr. Cuomo “a personal check for $10,000 a month or so ago.” Mr. Featherstonhaugh’s law firm has contributed $19,873 to the campaign. Political contributions by lobbyists can be the currency of access to a governor and an administration, but several lobbyists who were willing to discuss their giving to Mr. Cuomo said they had donated because of relationships spanning two decades or so. Mr. Featherstonhaugh, whose firm has represented the New York State Academy of Trial Lawyers, Goldman Sachs and the Metropolitan Life Insurance Company, does not take umbrage at Mr. Cuomo’s statements about lobbyists. “I hope what he is saying is not that we should get rid of lobbyists,” Mr. Featherstonhaugh said, “but that we should reform a system that people find offensive because in some instances lobbyists exert an unfair or disproportionate influence on how government works.” Kenneth L. Shapiro, managing partner of the Albany office of the law firm Wilson Elser Moskowitz Edelman & Dicker L.L.P., is also not put off by Mr. Cuomo’s remarks. “No one feels good about it, but we are big boys and big girls,” said Mr. Shapiro, who has known Mr. Cuomo since the early 1980s. “You take your shots.” “We contribute to him,” he added, “because in our business you have to believe in somebody, and at a perilous time like this in the state, we badly need someone who can lead us out of it.” A political action committee of Mr. Shapiro’s firm and the partnership itself — whose clients have included the Atlantic Yards Development Company, Consolidated Edison, the New York State Hospitality and Tourism Association and numerous hospitals — has contributed about $59,200 to the Cuomo campaign.

Mr. Cuomo has drawn a considerable amount of political money from the health care industry, including doctors’ groups. “He has a good track record making sure that insurers treat doctors and patients fairly,” said Moe Auster, an in-house lobbyist for the Medical Society of the State of New York, a nonprofit advocacy group with about 30,000 members. Its political arm has given $50,793 to Mr. Cuomo’s campaign, making it his second-largest health care donor. Medical groups also applauded a 2008 agreement that the attorney general reached with Excellus BlueCross BlueShield and CareCore National to streamline pre-approvals for tests ordered by doctors. Those specializing in cancer, for instance, no longer had to obtain approval for CAT scans, a test frequently used for cancer patients. Other big health care donors to the Cuomo campaign include Physicians’ Reciprocal Insurers, which has given $45,000, and the political action committee of the New York State Dental Association, which contributed $24,532. Little attention has been paid to Mr. Cuomo’s abandonment of his 2007 pledge to accept no donations of more than $10,000 per election cycle — about 18 percent of what state law allows — from individuals, unions, political action committees and trade associations.

The Times analysis shows that Mr. Cuomo’s campaign has accepted donations far beyond that limit many times. He took in $55,900 from the political arm of Local 6 of the Hotel Employees and Restaurant Employees International Union and $55,900 from the political action committee of the New York State Association of Realtors. Mr. Singer wrote in an e-mail message that in 2007, the governor at the time, Eliot Spitzer, had voluntarily limited his own campaign contributions, and that Mr. Cuomo had decided to do so in solidarity with him while a campaign finance bill was being promoted for passage. “After the bill failed and the governor resumed following the existing law, the Cuomo campaign did the same,” Mr. Singer said. Albany, of course, is known for turning promises on campaign finance into something far more complicated. During his campaign for governor, Mr. Spitzer talked vigorously about reforming the state’s campaign finance laws, and yet he exploited loopholes by accepting donations from limited liability corporations set up by individuals who could legally circumvent contribution caps. “New York’s campaign finance system is horribly broken,” Mr. Singer said, “a disservice to the public and a burden on the candidate who must raise money to compete.” “To be in public service today,” he also wrote, “one must either raise money as carefully and as diligently as possible or be a multimillionaire who can self-finance. Many people, including Andrew Cuomo, simply do not have the latter option.”