Cuomo: Still ‘Systemic Corruption Issues’ in Comptroller’s Office

ALBANY—Andrew Cuomo just announced the latest in his ongoing probe of the state comptroller’s office: a guilty plea from a California-based private equity manager made in connection with what Cuomo called “an old-fashioned, ‘pay off of state officials’ case.”

“This is effectively bribery of state officials. And not just one, but a number of officials in the state comptroller’s office,” Cuomo told reporters on a conference call just now. Cuomo said Elliott Broidy, paid gifts–including luxury travel and a girlfriend’s hospital bills–totaling $1 million between 2002 and 2006 in order to secure a $250 million investment in his firm, Markstone Capital Partners, from the state’s common retirement fund. Broidy pleaded guilty to a felony charge of rewarding official misconduct; he will re-pay $18 million of management fees the fund gleaned from the state and his sentence will reflect his cooperation with Cuomo’s “ongoing” investigation, Cuomo said. Broidy faces jail time.

Cuomo was asked how this could happen in the office, and used the opportunity to rage at the “systemic corruption issues” present in the comptroller’s office. Structurally, the comptroller is the sole trustee of New York’s $126 billion common retirement fund; Cuomo has introduced legislation to change this. While the abuses Cuomo spoke about occurred during the tenure of Alan Hevesi, who was forced from office in 2006, other, unrelated, ongoing investigations of pay-to-play practices have tainted the office, and by association current Comptroller Tom DiNapoli. He has also worked to increase transparency.

But Cuomo might prefer the taint. He is quietly working toward a race for governor next year (he publicly insists he isn’t) and is reportedly looking to replace DiNapoli on the ticket. (Cuomo’s spokesman has denied this.)

Cuomo refused to name three of the “four senior officials” who were bribed, citing an office policy, but did confirm they were still not employed. But when asked how this could happen, he said this:

“Your question is a good one. How did this happen to that extent? Where were the controls? Where were the whistleblowers?” Cuomo said. “That’s why I say the office has, these are, systemic corruption issues, and you need fundamental reform of the office to make sure this doesn’t happen again.”

“And none of that has changed. None of that has changed! That’s why I’m working so hard for the reform legislation,” Cuomo said later on in the call.

Cuomo has repeatedly denied any semblance of political calculation: when asked if he has political motivations for his actions, he talks about how focused he is on being the best attorney general he can be.

UPDATE:

From DiNapoli spokesman Dennis Tompkins:

“Tom DiNapoli has done more than anyone to clean up the stain of corruption left behind by the Hevesi administration.  Comptroller DiNapoli is the first and only one in the state to ban the use of placement agents in pension fund investments.  He is the first and only one in the state to ban play to play.  He’s instituted a series of substantial reforms to way the pension fund does business.  He’s implemented a code of conduct for the fund and its advisors.  Comptroller DiNapoli has made the pension fund the most transparent, open and accountable fund in the state, bar none.  And he’s brought in a new investment team that’s committed to ethics and reform.  Any innuendo suggesting a hint of impropriety in Comptroller DiNapoli’s office is baseless and irresponsible. “Attorney General Cuomo has made remarkable progress in ferreting out bad apples in the investment community and bringing them to justice.  We’ll continue to cooperate as his investigation moves forward.”