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From Albany, this is the legislative gazette, a weekly half-hour review of New York State
government and politics.
The host is political scientist and syndicated columnist Dr. Alan Sharton of the State University.
Hello and welcome to the legislative gazette.
This week, criminal charges against dozens of government officials across New York State
as a result of a two-and-a-half-year sting operation by the FBI.
We'll hear about a major hospital reimbursement plan that was vetoed by the governor, and
which has the legislature rambling about an override.
Candy and soda may not be sold in the schools until after lunch hours, the result of a bill
signed by Governor Cuomo, and the issue of surrogate parenting, Senator John Donne talks
about where the bills develop this year will be going next year.
That's all coming up on the legislative gazette.
Officials from the Federal Bureau of Investigation in the U.S. Attorney's Office this week
unsealed federal criminal charges against 58 people, including 44 current and former officials
across New York State.
Most of those indicted are highway superintendents for localities, charged with accepting bribes
by a federal agent posing as a steel supplier.
The legislative gazette's Leslie Prokaw reports.
The corruption charges were made by U.S. Attorney Rudolph Giuliani, who says the 44 officials
all accepted bribes in an FBI sting operation, and undercover agent posed as a steel product
salesman and contacted officials involved in purchasing materials and equipment.
Giuliani says that out of 106 bribes offered only one was refused.
That was when the official wanted more bribed money.
Federal officials said at a series of press conferences that towns and villages from one
end of New York to another were defrauded of more than $750,000.
While Giuliani was not at the Albany press conference, his assistant Michelle Hirschman
was.
She said there were two types of schemes involved, kickbacks, and so-called no-ship transactions.
No-ship transactions involved arrangements with suppliers and officials whereby the officials
would place an order with the supplier.
Delivery receipts would be signed by the official.
Invoices would be exchanged, and payment would be made by the municipality to the supplier.
The goods, however, according to the complaints were never delivered.
And the scheme operated such that the proceeds of the payment by the municipality to the
supplier was then split between the vendors and the municipal officials.
The second scheme involves basically straight kickback payment arrangements whereby public
officials received a percentage on every order that they placed with the supplier.
Also indicted with the 44 officials are 14 businessmen and suppliers and a New Jersey corporation.
Thomas Sheer, an assistant FBI director, said that two and a half years ago, the FBI took
a federal agent and gave him a new identity.
He became Vincent Seilan, an independent manufacturer representative who sold fabricated steel products
to municipalities.
He created a legitimate business but also accepted and paid out bribes.
Sheer says that the officials targeted were not randomly chosen, that FBI didn't simply
hit pay dirt by lucky guesses, but that the FBI was pursuing people who had already thought
were corrupt.
Approximately two and a half years ago, a local law enforcement official notified the New
York Office of the FBI of what he considered to be corrupt practices engaged in by local officials
as they pertained to kickbacks for steel purchases of steel fabricated items such as snowplow
blades, fencing and signposts.
That information was pursued by the New York Office of the FBI in the Southern District
of New York for about a year at the conclusion of that preliminary stage of the investigation.
We thought that we had developed enough information to warrant or justify the establishment
of an undercover operation to pursue and round out the allegations themselves.
Some defense attorneys are expected to argue that the federal operation was in fact entrapment,
which is illegal.
If a person is pressured to take a bribe, that can be entrapment, but if a person is considered
pre-deposed to corrupt activity, entrapment is often ruled out.
Albany Law School Professor George Carponello says that this predisposition can be showed
in a variety of ways.
It's a very nebulous concept that I think what you're asking the jury to do is conclude
whether these agents really coerced this person or induced an otherwise innocent person
to commit a crime, or if the person was out there already willing and able to commit
the crime and it was question of whether it was going to be the government agent who
paid the bribe or the next vendor coming down the pike.
And I think you have to look at all the facts and circumstances in the case of this side,
which is true.
Carponello notes that records compiled by federal officials before the operation began
that those targeted did have a record of corrupt activity would preclude an entrapment
defense.
Federal authorities said that similar investigations are continuing and they said that clear inventory
procedures by localities should be implemented across the state if future corruption is to
be avoided.
And Leslie Brokaw in Albany.
This was the week that Governor Cuomo made public his decisions on which of the final
bills of the session would be signed and which would be vetoed.
Among those rejected was a major bill to change the way hospitals are reimbursed in the
state by insurance companies.
As Leslie Brokaw reports Cuomo and the legislature had some areas of agreement and some areas
of disagreement over this heavily lobbied measure.
Right now insurance companies and the government help pay the costs of a person's hospitalization
on the basis of how long that person stayed in the hospital.
That's the per day system of reimbursement.
Both the legislature and the executive branch are in agreement that that system should
be changed to case payment.
That means that the rate of reimbursement would be based on what kind of illness a person
had rather than simply how long they spent in the hospital.
The problems came as they often do in the details of how to implement the bill.
The governor argued in his veto message that hospitals should be grouped in regions
and rates for specific illnesses set for the entire region.
That way the more expensive hospitals would receive the same amount of reimbursement as
less expensive hospitals, which Cuomo has argued would provide long-term incentive to
lower costs.
But in the bill passed unanimously by the legislature, each hospital would be reimbursed on the basis
of their specific rates so that the most expensive hospitals would receive more money.
In vetoing the bill Cuomo so that the State Health Department and Commissioner Dr. David
Axelrod project that the legislature's plan would cost an additional $400 million
a year for insurance companies and that those costs would have to be met by the businesses
and New Yorkers who pay insurance.
He said it would amount to an unfortunate tax increase in the year of major tax cuts.
The Health Department numbers however are disputed by one of the leading legislators on
the bill.
Assembly Majority Leader James Talon, the Binghamton Democrat says that he thinks there are
other reasons for the bill's veto.
We recognize that the Health Department would fight hard for a veto on the bill.
In 1985 the Health Department advocated that Hospital Reimbursement Legislation be vetoed
and we recognized that the department was likely to be an opponent.
When in the last week of the legislative session the Health Department produced this highly
inflated cost analysis to support its own position from its own data.
The legislature sought an outside analysis.
Our original estimate had been that the added costs would be slightly more than 1 percent
above the current reimbursement system projected forward.
We went outside to an independent analyst and we thought the best place to go was to the
Blue Cross companies in New York State who are major payers of health care and certainly
have the technical expertise to do the analysis.
Our estimate was that the actual increase was only about 1,300 of 1 percent an actual
estimate of about $19 million on the base of a $6 billion system.
By getting that independent analysis we felt that we were confirmed in our original estimate
that the bill did not pose major new cost increases.
In fact the estimate was a little bit lower than we had made.
The Health Department analysis which of course supports its own position just stands out
there quite a part from any analysis that anyone else has done in the legislation.
We simply rejected.
Well, why do you think the Health Department is so opposed to the legislative plan?
Well, I think that the Health Department essentially has pursued a strategy of trying to centralize
under its own control the hospital reimbursement system where it would not be guided by the
legislative enactments.
But it would have centralized in the Health Department a great deal of broad and discretionary
authority on elements of hospital reimbursement is consistent with the department's pattern
in the nursing home reimbursement in home health care reimbursement and in the capital
financing of hospitals.
In the last couple of years the department has consistently sought to centralize under
regulatory authority.
Any aspects of control of the health care system in the state and therefore its position
on this bill is consistent with where it's been in the past.
It wants power centralized in the New York State Health Department.
Tellens contention that there is an effect at turf war going on over who will make health
care policy the legislature or the health department comes of course at a time when the
health department is trying to get public smoking banned in New York State through regulation.
The department is arguing in court challenges to the rule that they have the authority to
go over the legislature and promulgate such rules.
Tellens says that he and other legislative leaders from both parties and both houses will
be deciding in the next two weeks what to do next.
Assembly Speaker Mel Miller said last month that he would consider bringing the legislature
back into session if the reimbursement bill was vetoed and Assemblyman Tellens says that
one of the issues lawmakers will be discussing is whether to override the governor's veto.
It would be the first legislative override for the Cuomo administration.
And Leslie Brokoff reporting.
Starting this fall it will be illegal for New York schools to sell certain sweet snacks
for most of the day.
Signed this week was a bill intended to boost students consumption of nutritious foods.
The new law will ban the sale of soda chewing gum and many candies and chocolates from
the beginning of the school day to the last lunch period.
The assembly sponsor of the bill democrat Helene Weinstein told Leslie Brokoff that the
bill was designed not to keep sweets from school kids entirely but just for the part of
the school day before they eat lunch.
Clearly the schools don't spend the same kind of money advertising, they're nutritional.
And good food as to the candy manufacturers and the soda manufacturers when they spend
literally billions of dollars a year on advertising.
Not saying that people shouldn't be having these items but not at the night instead of
lunch.
Were you lobbied heavily when you were promoting the bill?
I talked to the court frankly I think that some of the candy manufacturers and soda manufacturers
will tell you themselves that somehow this got by them initially.
And it wasn't until it appeared on the floor, had already passed the Senate appeared on
the assembly floor that all of a sudden the lobbyists for all of the, any of the groups
that might have potentially not have access to the children started to do some heavy
lobbying.
In fact they did though at that point it was already at committee and it already passed
the Senate.
Exempt from the bill or potato chips in ice cream a point argued by the confectioners
association is unfair.
Weinstein says the snacks heavy and refined sugar and caffeine were indeed targeted because
they affect the attention spans and energy levels of students more adversely.
The plan is the broadest statewide plan in the country according to the groups that had
tried to kill the measure.
That subject to the part time ban are apple muffins as well.
What started as a fourth grade civics lesson on how a bill becomes law was this week actually
signed into law.
The apple muffin now joins the rose, sugar maple tree, bluebird, glenic gem and beaver
as an official symbol of the state.
The veto process is one of the more contentious but important processes of the executive office.
The legislative gazettes, Maurice Smalls spoke with lieutenant governor, Stan Lundin about
how the process works in Albany and who the players are.
It absolutely is the decision of the governor whether to sign or veto legislation and he
takes this period of time very seriously.
Almost never will governor Cuomo give advanced notice of whether he's going to veto or sign
legislation.
Then he asks his counsel, Evan Davis is the head counsel, to get all the information,
not just legal analysis but all the facts that are relevant to particular legislation
and he makes a decision.
As for myself, I will send him a memorandum about a few bills that I think he might be
interested in the perspective I've gained by traveling around the state or in which I
have a particular interest.
I will also contribute to the process by being available and discussing a number of important
bills that he has to act on as he's in the process of making that decision.
Do you ever have a situation where legislators interested in that piece of legislation?
Do you try to do some personal lobbying with either you or Cuomo or anyone?
Well, absolutely.
Legislators who are sponsors and interested in legislation will often call up, Evan Davis,
the governor's chief counsel with information that they want him to take into consideration.
Their lawyers might call with legal opinions.
We've been engaged in that as a matter of fact this very morning and yesterday with respect
to the final group of bills that the governor has to act on and even individuals with
interest in legislation will be calling he and myself and Jerry Crowdy, the secretary
to the governor up until the final moment of his decision.
What about after a veto?
Do you ever hear reaction from legislators who didn't want it vetoed?
Oh yes, legislators who are disappointed in vetoes often will sort of bear a grudge
or feel badly about the disposition of their laws.
Usually though you try to use this period of time to try to work out problems.
I have not been in the state government before but I've been at least close enough to it
to understand the process that in the aftermath of a veto of a bill that maybe we wanted out
in southwestern New York very badly.
The governor and his staff people make themselves available to a legislator and people who have
a community of interest to try to work out the details of a compromise.
So the next year the legislative review and approval can be smoother.
Were you surprised that the governor signed the bill this week making Apple muffins the
official muffin?
No I wasn't really surprised by it.
It isn't obviously very important legislation but it's very compelling when these young
great school students from Syracuse come down here.
I was presiding over the Senate the day the Senate acted on it and it gets to be a bit
of a joke.
I was getting like saying that I didn't look very favorably on the legislation because
they hadn't delivered me an Apple muffin as they did to the other senators in the chamber.
But I think the governor looked at it more as a civics lesson, a very important one for
them involved youngsters than he did on the merits of the issue as the weather one muffin
or another audit could be given recognition.
Okay.
On a much more serious topic the big news today is that U.S. Attorney Rudolph Giuliano
has Giuliani is announcing corruption charges against 44 officials in New York State.
Have you are you familiar with this story yet?
I have simply read the early reports of the announcement that a sting operation has
netted 44 officials of municipalities in New York.
I don't know anything more than the early press reports about this incident.
Find it alarming at all?
I find it absolutely shocking.
But I would say and share with the listeners that as most people who listen to public radio
know most public officials are honest and really want to do a public service not just to
serve their own ends.
Now unfortunately there are those who are not and I think it is very important to have
vigorous law enforcement available and the federal prosecutions are one manner of
acting against government corruption.
The governor and I believe very strongly that corrupt activities by public officials have
to be stamped out.
That's why we work so hard this year to get an ethics bill and strong bill setting up audits
of state government.
Do you think New York is going to get an even worse reputation because of these charges?
Well I don't think that the state deserves a worse reputation when we are moving aggressively
to expose and correct corrupt conditions.
I believe you deserve a reputation when there is a culture of corruption that is ignored.
In this state not only in New York City but throughout the state we are paying it serious
attention and taking corrective action.
Stan Lundin, Lieutenant Governor of New York, he spoke with Maurice Moll.
New York law makers considered and then put off action on a surrogate parenting bill
this year.
A bill to regulate the practice of a woman bearing a child for another couple.
One of the leading proponents of the bill is Senator John Dunn, the deputy majority leader
of the Senate and a Republican from Long Island.
He spoke with Ellen Chartalk about where the proposed legislation now stands.
The bill which we thought addressed this problem, particularly one that is growing in New
York, is now being re-examined by both houses of the legislature.
We are addressing the very serious problems of one whether the mother should be compensated
for her serving as a surrogate mother.
The other is whether that surrogate mother ought to have the right to change her mind after
the birth.
Both of these have been crucial issues which have been focused on by both houses.
They were the stumbling points in trying to get a bill passed in 87 but we think we'll
have one in shape for 88.
You have two major interest groups, the Catholic Church, now the National Organization of Women.
Both of them have problems with surrogate parenting.
How does the state senator like yourself respond when those kinds of pressures are put on you?
You respond cautiously, great respect for the bishops who have characterized any surrogate
parenting agreement as a moral disaster.
The now organization feels that this has really debased women, the practice of hiring a
woman's uterus for the purpose of carrying somebody else's child.
You must work very sensitively and negotiate with them.
I'm not sure that we're ever going to be able to satisfy them totally but they have legitimate
concerns and I have warned my colleagues that if I'm going to ask them to support a bill
it is going to be one which will have to accommodate as far as we can both of those concerns.
Isn't this pure proof that the major interest groups can really stime the legislature from
doing what has to be done?
Oh, indeed they can and I think that this was a classic case of falling to the legislature
clearly.
It shouldn't be left to the courts, shouldn't be left to health officials but to the
legislature to determine a public policy for the entire state with regard to a very sensitive
issue.
Our principal concern here, Alan, has been to craft a bill which will guarantee a protection
of the best interests of the child.
Not the selfish interests of the intended couple or the surrogate mother but to create
an aura which will protect the best interests of the child which is the product of the surrogate
agreements.
You've been watching the governor on this and negotiating with them.
Is the governor doing what he has to do to make this thing get put into shape?
Yeah, I think the governor has been helpful at the outset he felt that it was too early
to act on a bill in 87 that we had to examine it more closely.
He has offered the services of his task force on life and the law which is presently looking
at the subject and I'm encouraged that if they become involved and come up with a proposal
which will be helpful to us, we will have the commitment of both the governor and the
legislative leaders and that's why I'm optimistic for a bill next year.
The governor's involvement here is very helpful.
I'm just one other subject.
Senator Richard Skirmohorn and Associate of yours from Newberg is now accused of having
taken a $6,000 bribe.
Senator Andrew Jenkins from Queens, a Democrat, has now been involved in a sting operation
in which the FBI allegedly gave them some money to take out of the country illegally
for laundering purposes.
What do you make of this as the deputy leader in the state Senate?
Well, of course I'm very troubled by it on two levels.
One, I know both of those men I've worked with them.
I think they have been very effective in their representation of their constituents as well
as participating in a very positive fashion in the work of the Senate and so as a friend
and colleague I feel very badly about it.
Second, it casts a severe shadow upon the Senate as an institution to which so many of
us have devoted most of our adult lives and I just hope that these what are so far in
formal charges, there have been no indictments brought down against them, will be resolved
as quickly as possible so that we can get on with the work of the Senate and they can
get on with their personal lives.
You don't feel that it has essentially hampered the work of the Senate as a legitimate body
or representative body.
No, it is not.
These are disclosures which rose after the close of the session.
There was no hint of them prior there too and that's why I'm hopeful that they'll be
a resolution before we resume our activities as a Senate.
John Dunn is sponsor of the surrogate parenting bill that was debated this year in the legislature.
He's the second in charge in the New York State Senate serving as deputy majority leader.
This is the last week that Leslie Brokow will be producing the legislative gazette and
working at WAMC to say that Leslie has done wonderful things would be an understatement.
Week after week it's been Leslie who has toiled over the show and made it what it was.
We wish her well in her new job in Boston and hope that we can call on her for advice
and counsel as we continue to bring you the legislative gazette.
Leslie, we'll miss you.
Help on our program comes from Mori Small, Dan Analeck and Brenda McMahon and I'm Alan
Shartock, tuning next week for more news about your state government.
The legislative gazette is a production of WAMC news.
Dr. Alan Shartock is executive producer.
This program is made possible with funds provided by the State University College at Newpops.
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