Scandals are nothing new at the state Capitol, but after the leaders of both the Assembly and state Senate were arrested during the 2015 legislative session, new scrutiny from the public has pushed ethics reform to the forefront.

LLC loophole

The LLC loophole stems from a 1996 state Board of Elections ruling that found any limited liability company should be treated as if it were an individual under election law. Critics argue the loophole allows special interest groups to funnel millions of dollars into political campaigns by creating multiple LLCs to get around contribution limits.

Legislation to crack down on the practice has repeatedly failed in the state Legislature, but in July, New York University Law School’s Brennan Center for Justice and Emery Celli Brinckerhoff & Abady LLP filed a suit on the behalf of lawmakers against the state Board of Elections to close the loophole.

“I think every time there is focus on this issue, it raises the chances that it will be closed because it’s such an appalling loophole,” said state Sen. Daniel Squadron, a vocal opponent of the loophole and sponsor of legislation to close it. “I think there’s no question that this wasn’t a proper decision by the Board of Elections and that it should be corrected by the courts.”

Pension forfeiture

The initial 2015-16 state budget agreement between Gov. Andrew Cuomo and the new legislative leaders included legislation that would strip retirement benefits from public officials who are convicted on corruption charges, but the measure was excluded from the Assembly’s budget vote because they thought the language was too broad and would apply to all government employees.

Afterwards, both the state Senate and Assembly passed their own versions of the bill, but failed to reach an agreement on legislation before the end of the session. The Assembly’s new version introduced language that would specifically strip pensions from convicted state and local elected officials, judges, political appointees of the governor and board members who sit on public benefit corporations or authorities.

“I am very hopeful that the Assembly and Senate will be able to reconcile the versions of the bill that each passed and that we will be able to move the constitutional amendment forward,” said Assemblyman David Buchwald, who sponsors the bill in the Assembly. “This is light-years ahead from where this legislation got before last year when it barely saw the light of day.”

Senate GOP spokesman Scott Reif, meanwhile, said the party stood behind the original version of the bill. “We have already passed a pension forfeiture measure that was the result of a three-way agreement between the governor, Senate and Assembly. The Assembly should act on it as soon as possible.”

Buchwald credited the arrests of then-legislative leaders Sheldon Silver and Dean Skelos for pushing the legislation into the spotlight.

“The increased public scrutiny of government led to more and more of a call to addressing the taxpayer-funded pensions of those who violate their oath of office,” Buchwald said.

Up next

As the session creeps closer, some legislators remain hopeful that ethics reform legislation will be passed and Albany will not go back to “business as usual” after the high-profile arrests last year.

“I think New Yorkers more and more are demanding high levels of responsiveness from their elected officials and we have an opportunity with new leadership to respond much more dynamically to the needs of New Yorkers, and that’s what the new session will all be about,” Buchwald said.

Reif wouldn’t elaborate on what other ethics reforms the Senate Republicans might take up. “That will be a question for the members of the conference to discuss in the coming months.”

Lawmakers and political observers are also waiting to see if there will be further indictments. After Skelos’ arrest, U.S. Attorney Preet Bharara once again warned Albany to “stay tuned.”

“If you look at the underlying issues that we saw pop up last year, they really haven’t been addressed,” Squadron said. “These problems continue to be urgent even if it’s not on the front page and I hope folks continue to realize that.”