Sunday, December 28, 2008
Non-Disclosure For Sale
Mayor Michael R. Bloomberg is on a board that is not subject to the new public authorities law, but he files disclosure forms anyway.
The public needs to take account of the random and arbitrary way that the Conflicts of Interest Board rules in financial disclosure cases. As this blog deals mostly with the New York City Public School System, we need to ask, I think, why the Fund For Public Schools doesn't have to disclose financial records of it's administrators/Board Members?
The answer, folks, is Mayor Bloomberg, on his own say-so, decides who is above or below the laws of the City of New York. I'm willing to look at other answers, of course, as this is just mine, and mine alone.
October 12, 2008
Gray Areas Seem to Grow in State Law on Disclosure
By ALISON LEIGH COWAN, NY TIMES
Under a state public authorities law that passed two years ago, the board members of nonprofit organizations that are “affiliated with, sponsored by or created by a county, city, town or village government” were required to begin filing lengthy annual financial disclosure forms.
The legislation, designed to bring additional transparency to government, proved stressful to many influential volunteers who feared that, for the sake of an unpaid post on a civic panel, they would have to lay bare the details of their financial lives.
But many of them, it turns out, did not need to fret.
In recent months, city officials have concluded that most of the 125 or so nonprofit groups that once looked like they might have to comply with the law do not need to file. The Conflicts of Interest Board, a city panel that is empowered to enforce the law, and city lawyers considered the many technical and legal arguments presented by the groups and concluded that, at most, 30 organizations are covered under the law.
The Queens Borough Public Library, for example, whose board is appointed by the mayor and the borough president, filed a protest that got it removed from the list. The Brooklyn Public Library, whose board is appointed the same way, did not.
The World Trade Center Memorial Foundation, whose chairman is Mayor Michael R. Bloomberg, successfully argued that it was independent of the city.
The city also did not require the Fund for Public Schools, which provides private financing for the city’s Department of Education, to file.
Caroline Kennedy and Mortimer Zuckerman
The fund operates out of the city department’s headquarters. It has the city schools chancellor, Joel I. Klein, as its chairman, and it shares the city’s Web site. But city lawyers found that the fund, which has Caroline Kennedy, Mortimer B. Zuckerman and Wendi Murdoch on its board, did not need to ask them to file because the school system is not “a county, city, town or village government.”
“You’re not going to get a dispute from us that they’re affiliated with us,” said Michael Best, the Education Department’s general counsel.
But he said the fund’s affiliation is to a school district, empowered by state law, and not to a “county, city, town or village” as referenced in the authorities law.
That sort of hairsplitting, though, has drawn the attention of state lawmakers who had hoped to shine a light on civic groups that operate in quasi-governmental capacities.
“That kind of wiggling around is not acceptable,” said Assemblyman Richard L. Brodsky, a Westchester Democrat who is chairman of the Assembly’s Committee on Corporations, Authorities and Commissions, which had a hand in developing the law. On Friday, Mr. Brodsky announced that he would hold a hearing on compliance with the law in coming weeks.
“If people want to argue that we’ve captured the wrong kind of organizations, we’re going to listen very carefully,” he said. “But we’re not going to accept wild gyrations that turn words on their heads.”
Assemblyman James F. Brennan, a Brooklyn Democrat who is chairman of the chamber’s Committee on Cities, said it was possible that Albany had erred in giving New York City too much leeway in interpreting the law. “In some instances they appear to have not undertaken to enforce these laws against some people because they have so much discretion,” he said. Maybe, he said, it is time to “go back to the drawing board.”
City officials say that at least some of the confusion arises out of the law itself, which is open to a variety of interpretations as to who must comply.
In interviews, Mark Davies, the executive director of the conflicts board, and Julia Davis, his special counsel and director of financial disclosure, said they tried to weigh “a totality of factors” in deciding which groups qualify as “public authorities.”
Mr. Davies told Assemblyman Brennan’s committee last year that his board and city lawyers studied each organization’s “formation, purpose and control,” with the last factor being the “single biggest issue.”
Ms. Davis said in an interview, “We are endeavoring to apply the law to the appropriate entities and would be assisted by clearer direction in the law as to which entities should be subject to financial disclosure requirements.”
Needless to say, there has been confusion. The Primary Care Development Corporation, a nonprofit group that supports health services in poorer neighborhoods, was one of 41 organizations that received a letter from the conflicts board in recent weeks suggesting its board members would most likely have to file.
“I asked them, too, how did we get on this list?” said Diana J. Lee, a lawyer for the corporation. She never got an answer, Ms. Lee said, but her client was excused from the filing requirement in a Sept. 12 letter.
One concern about the new filing requirement is that compelling volunteers to divulge personal information may dissuade some from sitting on boards, especially if they have to fill out the same 32-page disclosure form New York City requires of 8,000 of its public servants. Mr. Davies and the conflicts board are drawing up a shorter questionnaire that they hope to use for the nonprofit sector.
After the law passed, according to public records, correspondence and interviews, the city initially developed a list of more than 125 nonprofit institutions that might need to file, a copy of which was provided to the Assembly Committee on Cities. The filings were supposed to commence in 2006, but city officials said that the work of clarifying who should file led them to miss that deadline.
Wendy Deng Murdoch (pictured at right)
As time passed, the list shrank so that in August, when the city’s Conflicts of Interest Board began notifying the remaining nonprofit groups whose officials it believed might need to file, the number of groups had dwindled to 41.
Officials would later learn that 7 of the 41 organizations were defunct or inactive. Four others — including the World Trade Center Memorial Foundation and the Queens Borough Public Library — were crossed off the list after appeals.
Queens library officials argued that while government officials may put people on the library board, they cannot remove them or keep them on if other directors want them removed. Though the bylaws currently give the mayor veto over any ouster, the library argued that two-thirds of its board could remove directors, as long as its members first voted to change the bylaw provision that gives the mayor veto power.
The World Trade Center group was released from the filing requirement after arguing that the mayor’s duties as chairman are limited to presiding over meetings and handling tasks assigned him by the board.
Records indicate that about 15 organizations have agreed to file, though eight of them have officers and directors who already complete an annual disclosure because of other public service.
Among the groups still expected to have their board members file are the American Museum of Natural History, the Brooklyn Public Library and the Gracie Mansion Conservancy.
The Fund for Public Schools was on the long preliminary list of potential filers that city officials gave Mr. Brennan’s committee last year. But the fund was not among the 41 groups that received a letter from the conflicts board this summer.
Other organizations that were similarly dropped were the Central Park Conservancy, the Metropolitan Museum of Art, the Big Apple Circus, the Staten Island Children’s Museum and the Socrates Sculpture Park in Long Island City, Queens.
Mr. Best, the counsel for the Education Department, said that he had spoken with the city’s Law Department about the filing issue not long after the bill passed in January 2006.
“I had consulted with corporation counsel’s office when the issue arose, and I am confident that the state law does not apply to the fund or its board members, as it is written,” he said, referring to the Fund for Public Schools. Lara Holliday, a spokeswoman for the fund, said, “That’s my understanding of the situation as well.”
Assemblyman Brodsky called the Department of Education’s argument “nonsense,” especially in light of the mayor’s increased powers over the department since 2002.
“The law is written broadly,” he said. “What we said was if you’re acting in the place of government, you should be treated like government.”
“The Department of Education of the City of New York,” he said, “is an agency of the City of New York and not of the State of New York.”
Disclosure Bill's Uncertain Future
by Courtney Gross, Gotham Gazette, 22 Sep 2008
Mayor Michael Bloomberg's disclosure bill went pretty much unnoticed when it was introduced in June.
A measure meant to ease financial reporting requirements for citizens who volunteer on city-affiliated nonprofits, the legislation was supposed to move smoothly from committee hearing to City Council approval so those volunteers would no longer have to fill out a weighty 32-page form.
That scenario shifted quickly last week, when good government groups lashed out against elements of the legislation that they argued weakened disclosure requirements for public officials.
Now, some involved say, their best hope is for a compromise on the less controversial elements of the bill. Others question whether the legislation will come back to the City Council at all.
The bill had been on the agenda of the Conflicts of Interest Board, the regulatory body overseeing financial disclosure -- outside of campaign finance-- in the city for more than a decade.
Weakening or Not?
Unlike other municipalities and cities in New York State, New York City has not been able to come up with its own disclosure forms since 1990. Because of this, about 8,000 public officials are subject to a 32-page state document, which requires individuals reveal investment holdings, real estate, ranges of outside income and gifts.
Earlier this year, the state legislature passed legislation requiring those who serve with city-affiliated nonprofits to also disclose some of their financial interests.
As a result, the city was given the go-ahead to create a three-tiered disclosure system, requiring an extensive form for public officials and employees; another form for those who sit on influential boards and commissions, like the Landmarks Preservation Commission; and a final one for unpaid volunteers at city-affiliated nonprofits, such as the Gracie Mansion Conservancy. The amount of information a filer would need would depend on his or her influence in city government.
The Conflicts of Interest Board drafted a bill and sent it to the City Council. Some officials, including Mayor Michael Bloomberg, expressed support for the bill, saying it would help the nonprofits attract more skilled volunteers, who might have previously declined because of the financial disclosure requirements.
"I had people that I tried to get to be on different committees and boards, and they didn’t want to fill out the paperwork," said Councilmember Leroy Comrie, one of the sponsors of the bill in the City Council. "They felt like it was too intrusive."
Most agree it is unfair for unpaid members of commissions or city nonprofits to disclose the same information as the speaker of the City Council.
"If we rule out every potential conflict, then we are going to keep the best and the brightest out of government and not get their services," Bloomberg said at a seminar at New York Law School earlier this year. "So it’s finding that right balance."
Balance, according to some good government groups, was not reached.
Part of the legislation -- say groups like Citizens Union, the sister organization to Gotham Gazette’s publisher -- rolls back financial disclosure requirements for public officials. Under the bill, councilmembers would no longer have to disclose property they had outside of the city or the range of income they make outside of City Hall (being on the council is a part-time job, and many members make outside income).
After these groups voiced their opposition , a public hearing on the legislation was canceled and reports emerged that the administration was taking a second look at the proposal.
A spokesman for the administration said revisions to the bill are not a response to criticism from good government groups.
What is A Conflict?
Mark Davies, the executive director of the Conflicts of Interest Board, says the bill is meant to identify what really is a conflict of interest. It is far more important to know the connections than to know how much money someone made at another job, he says.
Many of the amounts currently required for disclosure have been deleted in the new bill. For instance, an official would not have to disclose the value of investments, just the names of the holdings.
"The categories or amounts, they tell you nothing," said Davies. "The connections are the critical thing for the Conflicts of Interest Board."
That is why, he added, the board added family disclosure in the bill. The legislation, as currently drafted, would require filers to identify the employers of siblings, parents and adult children in addition to their spouses.
Others argue, when it comes to an elected official, the public has a right to know how much he or she made as an attorney in Brooklyn outside of his or her district office or how the market treated him or her.
If legislation is not approved by the City Council, those civic volunteers will have to reveal far more than their name and address. They would be held to the same scrutiny elected officials currently have under the state law.
Because of that, some think the council will vote on a bill sometime soon. How far reaching that legislation will be has not yet been determined.
"My hope is that they do pass a comprehensive bill, but I wouldn’t be shocked in the current climate if they settled in with dealing with the unpaid boards and commissions," said Gene Russianoff of the New York Public Interest Research Group . "There is a general agreement that people that are uncompensated should have disclosure, but not have anywhere near the 32-page form."