The April 13th Edition of City & State Magazine by City & State

CIT YANDSTATENY.COM

@CIT YANDSTATENY

NYSNA: Caring for ALL New Yorkers

Here in New York City and throughout our state, nurses are uniting to improve care for our patients. We’re working together to end healthcare inequality and to raise standards so that every New Yorker has access to quality care. Through our union, the New York State Nurses Association, we’re creating a better future for nurses and our patients:

Æ Safe RN Staffing. Having enough nurses at the bedside is key to safe patient care.

In our union contracts and in the legislature, we’re working to ensure that every patient has access to the care of a nurse whenever they need it.

Æ Community Voices. We believe that our communities should have a voice in decisions that

impact their access to care. Healthcare decisions should be based on community needs, not on the bottom line. That’s why we’re advocating to strengthen community voices in care.

Æ Quality Care for ALL. Every patient deserves equal access to quality care regardless of

income, borough, or insurance coverage. We’re working with fellow healthcare unions, patients, community leaders, and elected allies to stop the devastating tide of hospital cuts and closures in underserved communities.

www.nysna.org

nynurses

@nynurses

FROM THE EDITOR’S DESK

CONTENTS April 13, 2015

Michael Gareth Johnson Executive Editor

CITY

De Blasio’s poor MWBE record

22.......

By Sarina Trangle

12......

Health savings in de Blasio’s labor deals… upstate cities’ struggles with public safety unions…Cuomo’s ongoing fight with public sector unions…Q&As with Scott Stringer, Thomas DiNapoli, I. Daneek Miller, Jack Martins and Peter Abbate… Steven Greenhouse on the labor beat

STATE

The budget compromise of 2015 By Ashley Hupfl

14.......

BUFFALO

Poloncarz gears up for re-election By Justin Sondel

16.......

33.......

CUOMO TO CUBA

Is the governor’s trade mission selling more than his image? By Jon Lentz

SPOTLIGHT: MUNICIPAL UNIONS

HOUSING

Why is a housing court counsel bill on hold? By Kate Pastor

34......

AGENCY FOCUS: DEPARTMENT OF FINANCIAL SERVICES

A Q&A with Benjamin Lawsky…profiling agency leaders…areas of enforcement… bank settlements recap

CIT YANDSTATENY.COM

cit yandstateny.com

@CIT YANDSTATENY

Cover: Illustration by Guillaume Federighi

48......

PERSPECTIVES

50.......

BACK & FORTH

Michael Benjamin on Heastie’s budget

A Q&A with mixed martial arts champion Ronda Rousey

city & state — April 13, 2015

10......

he iconic image of Che Guevera, captured in a photograph by Alberto Korda, is a symbol of rebellion throughout the world. On the streets of Havana and throughout Cuba, where Che is a hero of the revolution, the image is omnipresent. City & State Senior Correspondent Jon Lentz saw this during his time in Cuba. He studied at the University of Havana in 2004, witnessing firsthand the struggles Cubans face every day. His perspective changed little during another a trip he took there this past March. As Gov. Andrew Cuomo prepares to embark on a trade mission to the Caribbean nation this month, we wanted explore the potential economic benefits to New York as well as to Cuba. Poverty is the norm in the island nation after more than 50 years under Communist control and a U.S. trade embargo, and many of the exports New York has to sell are too expensive for residents there. This dichotomy raises questions about whether this trip really is about trade or—as Republican critics are quick to suggest—more about raising the governor’s profile. The reporting bears out a little of both arguments. While there appears to be little short-term advantage to the arrangement, establishing early ties could help pave the way for larger investments down the road, especially for the state’s financial services sector. On the political side, the trip will let Cuomo claim that he was the first governor to visit Cuba following the announcement of a diplomatic thaw, which sounds great when rattling off foreign relations experience in a sound bite—but it’s not easy to see how he can make a lasting impression on Cuban officials when he will spend fewer than two days in the country. These factors played heavily on our minds as we were developing a concept for the cover of this issue, and we kept coming back to that image of Che. Our goal was not to suggest that Cuomo has much in common with the Argentine who fought for Cuba’s freedom, but to make the comparison that, like Che, Cuomo is an outsider coming into the country with an agenda—albeit a very different one. Since Che’s time, the global landscape has changed dramatically. When he landed in Cuba with Fidel Castro, many Cubans were eager for freedom from what they saw as a Western-backed oppressor. Now, Cubans are clamoring for food, medicine and other basic goods—as well as economic opportunity. And while it is not as romantic as fighting for freedom, opening trade may provide Cubans that chance.

Letters to the

Editor Transit Workers Union and others in supporting the plan. Or Queens state Sen. Jose Peralta, who vehemently opposed previous “congestion pricing” schemes but recently endorsed our plan, calling it “reasonable and fair.” Or the fiscally conservative Citizens Budget Commission, which recently added its name to the growing list of endorsers. We urge readers to visit iheartmoveny.org to familiarize themselves with the plan and learn how they can encourage elected officials to seize this historic opportunity. This chance won’t come along again soon.

CIT YANDSTATENY.COM

city & state — April 13, 2015

CITY AND STATE, LLC Chairman Steve Farbman President/CEO Tom Allon tallon@cityandstateny.com

PUBLISHING

@CIT YANDSTATENY

In the March 23 magazine, columnist Nicole Gelinas described New York City’s changing transit patterns and concluded that congestion pricing will be necessary to fund the MTA’s next capital plan.

61 Broadway, Suite 2235 New York, NY 10006 Editorial (212) 894-5417 General (646) 517-2740 Advertising (212) 894-5422 info@cityandstateny.com

Nicole Gelinas is right: New York’s subways, buses and rail lines are bursting with riders, even as some elected officials think they can get away with underfunding the transit system. But they can’t get away with it if they want New York to thrive. Gelinas points out that it’ll take billions to fund just the next five-year MTA plan alone, which is essential just to keep the system close to a state of good repair. The best hope—really the only hope—is the Move NY Fair Plan. Implemented wisely, Move NY could not only fund a substantial part of the MTA’s capital program for the next five years but also could provide funds for future capital programs as well. But the beauty of the Move NY plan is that it does more than finance transit, roads and bridges. It would, for the first time, significantly lower tolls for hundreds of thousands of motorists and truckers while creating 30,000 new jobs and boosting economic output by $2.8 billion a year. Move NY would reduce tolls on seven MTA crossings, including the Verrazano and the Whitestone, which have faced an unrelenting series of toll increases. The plan would reinstate tolls for drivers crossing into the hyper-congested central business district, which would end “bridge shopping” and the insanity of incentivizing 53-foot-long trucks to use city streets just to avoid tolls. Move NY is winning support, and not just from the usual suspects. Just ask the Staten Island Chamber of Commerce and New York Building Congress, which have joined SEIU 32BJ,

—Alex Matthiessen, Move NY campaign director Nicole Gelinas’ latest insightful piece draws attention to one of the major public policy issues facing New York today. She accurately cites Move NY’s plan as a solution that must be adopted by the city and state if the MTA and public transit are going to remain viable and affordable. With a system overrun with riders and a region that is experiencing population growth in areas long underserved by mass transit, the MTA has proposed a 5-year, $32 billion capital program that barely meets the needs of our 100-year-old subway system and bus and railroad network. The plan, currently unfunded by $15 billion, prioritizes ensuring the infrastructure and rolling stock are safe and reliable, that the Second Avenue Subway and East Side Access projects continue toward completion, and, very importantly, that signal systems are replaced and upgraded to allow an increase in system-wide subway service to relieve overcrowding and shorten wait times. The plan does not contain much for increasing the transit footprint in the outer boroughs. In trying to come up with a politically palatable request, the MTA was forced to work on the margins and ignore expansion in the many communities not served by the agency’s two mega-projects. Our transit system is one of the greatest in the world and vital to the state economy, and, like all systems its size and age, requires infrastructure investment to stay healthy and efficient. Without the regular infusion of significant capital dollars, the frustration of a region trying to become less car dependent will continue to grow as the rise in passengers overtaxes the current capacity. There is no escaping this fact.

Publisher Andrew A. Holt aholt@cityandstateny.com Vice President of Advertising Jim Katocin jkatocin@cityandstateny.com Events Director Jasmin Freeman jfreeman@cityandstateny.com Business Development Scott Augustine saugustine@cityandstateny.com Director of Marketing Samantha Diliberti sdiliberti@cityandstateny.com Office Administrator Jeff Stein jstein@cityandstateny.com EDITORIAL Executive Editor Michael Johnson mjohnson@cityandstateny.com Senior Correspondent Jon Lentz jlentz@cityandstateny.com Web Editor/Reporter Wilder Fleming wfleming@cityandstateny.com Albany Reporter Ashley Hupfl ahupfl@cityandstateny.com Buffalo Reporter Justin Sondel jsondel@cityandstateny.com Staff Reporter Sarina Trangle strangle@cityandstateny.com Editor-at-Large Gerson Borrero gborrero@cityandstateny.com Copy Editor Ryan Somers PRODUCTION Art Director Guillaume Federighi gfederighi@cityandstateny.com Graphic Designer Michelle Yang myang@cityandstateny.com Marketing Graphic Designer Charles Flores, cflores@cityandstateny.com Web Manager Lydia Eck, leck@cityandstateny.com

To have your letter to the editor considered for publication, leave a comment at www.cityandstateny.com, tweet us @CityAndStateNY, email editor@cityandstateny.com or write to 61 Broadway, Suite 2235, New York, NY 10006. Letters may be edited for clarity or length.

cit yandstateny.com

This is what happens when the 25,000 landlords of 1 million rent-stabilized apartments have the financial resources to make repairs and improvements. They re-invest the rent in their buildings and our neighborhoods. They provide work to small businesses and jobs to local residents – and, most importantly, they preserve existing affordable housing.

But some Albany and City Hall politicians, like Mayor Bill de Blasio, want to turn back the clock to old policies that failed in the past. They want stricter rent laws, and they want to freeze rents while raising property taxes and water and sewer rates. That would push affordable housing right back into the 1970’s and 80’s. We need to move forward, not backwards.

IT’S TIME FOR NEW SOLUTIONS TO AN OLD PROBLEM.

SOMOS EL FUTURO

SOMOS

28th Annual Spring Conference Albany, March 20-22, 2015

EL FUTURO L

SHANNON DECELLE

Mario Cilento

State Comptroller Thomas DiNapoli

Assemblyman Marcos Crespo

New York City Comptroller Scott Stringer

Leecia Eve

ABOVE & BEYOND

Honoring Women of Public and Civic Mind Broad Street Ballroom, March 26, 2015

-M Public Affairs President and CEO Maggie Moran, the 2015 Chairperson Award Winner

“

On the Irish side of the house there’s a picture of John Kennedy and Jesus, and the picture of Kennedy was bigger than Jesus. … My Italian grandmother … had a picture of Mario Cuomo and Jesus, and Mario Cuomo’s picture was bigger than Jesus. Now I don’t know if the Catholic Church has a marketing problem or politicians are egomaniacs, but it was always interesting to me that we each are proud when we see ourselves in that political world.

city & state — April 13, 2015

Catherine Rinaldi

Lisa Flores

Maggie Moran

Julie Menin

Lynne Brown

cit yandstateny.com

“

As I’ve said, I’ve always tried to be a consensus builder. So in discussions with the governor on all issues, from ethics to health to education, what’s the conscience of the conference? Outside opinions and— forgive me, the media—even the governor, it doesn’t matter. It’s a representative government. -Assembly Speaker Carl Heastie

New York City Councilwoman Elizabeth Crowley

Bronx Borough President Ruben Diaz Jr.

State Sen. Ruben Diaz Sr.

City Councilwoman Vanessa Gibson

New York City Public Advocate Letitia James

Assembly Speaker Carl Heastie

Margarette Purvis

Elaine Kim Wanda Williams

cit yandstateny.com

Jean Barrett

Rachel Haot

Maureen Salter

city & state — April 13, 2015

ARMAN DZIDZOVIC

TWO TAKES ALL THINGS POSSIBLE: SETBACKS AND SUCCESS IN POLITICS AND LIFE By Andrew M. Cuomo Publish Date: Oct. 14, 2014 Pages: 528

THE CONTENDER By Michael Shnayerson Publish Date: March 31, 2015 Pages: 544

ON ANDREW’S DECISION TO WORK FOR HIS FATHER, MARIO CUOMO

“On one level, Andrew didn’t compete with his father. Mario was the intellectual, quoting his favorite religious philosophers. Andrew was smart, but not a reader, certainly not an intellectual. He cast himself instead as the practical guy, the problem solver, the mechanic. The righteous end was his father’s election, the means was whatever got him there. ‘It went beyond what a dedicated political supporter would give to a candidate,’ one former colleague would suggest. For Andrew, operationalizing was … whatever it took. Not for nothing would he soon be known as the Prince of Darkness.”

“I would have never considered turning him down. I found his strong showing of trust and confidence tremendously gratifying. Besides, I learned growing up in Queens, the standard was clear: sons help their fathers. We were Cuomo & Son. And my father and I had a relationship that exceeded the usual parental-filial bond. This would mean five campaigns in eight years … Although we generally agreed on strategy, I nevertheless wouldn’t be afraid to challenge his ideas if my father couldn’t back them. He would lose his temper with me, and I wouldn’t quit. When a situation gets tough I fight.”

ON HIS PRESENT-DAY RELATIONSHIP WITH KERRY KENNEDY “ ‘Kerry will never say a bad word about Andrew,’ her brother Douglas declared. ‘Literally to this day she will not. And Andrew will spend the rest of his life trying to take her down.’ ”

“Kerry and I had developed a good warm relationship. She does much good work in the area of human rights that I try to help her with when I can. She has a very good relationship with Sandy. It’s really all about the girls. Divorce, ironically, requires more coordination than marriage.”

ON ANDREW CUOMO’S INFAMOUS CONTROLLING NATURE: “All power and all control—that was Andrew’s management style. To his inner circle, there was nothing new about it. The micromanaging, the top-down decisions on every matter, no matter how local, the tight control of even the most innocuous news emanating from the second floor—this was Andrew as he’d always been, only more so. Others were taken back.”

“Giving up control is not something I’ve done often in my life. But sometimes you have no other choice.”

city & state — April 13, 2015

ON THE SAFE ACT’S PASSAGE IN 2013: “Offstage, Andrew was holding tense meetings on gun control with senior Republicans and their staffers. He wanted to ban not just assault weapons but rifles with pistol grips. Surely no hunter used guns like that. The Republican staffers spent hours one day trying to explain the differences between long guns and different pistol grips, how some were used for hunting, and some for kinds of game. ‘If you ban all pistol grips, you get into problems,’ one lawmaker observed. To Andrew they all looked like assault weapons; he wanted to ban them all.”

“My strong belief is that placing the firing limit at seven rounds saves lives. Why? If you look at the rampages that have occurred you find that many shooters had semiautomatic handguns, rifles and dozens of magazines. That’s why we eliminated high-capacity magazines and limited the number of rounds that could be placed in a magazine. If someone is shooting a gun at people, the only opportunity law enforcement has to step in comes when the gunman is changing the magazine.”

ON THE PASSAGE OF MARRIAGE EQUALITY: “Marriage equality would make him overnight a national figure—a presidential contender.”

“I’d been inside the Albany bubble so long I had no inkling how far the reverberations of the Marriage Equality Act would carry.”

cit yandstateny.com

CIT Y

REACHING THIRTY ACTIVISTS URGE DE BLASIO TO FOLLOW CUOMO’S LEAD ON MWBE CONTRACTING By SARINA TRANGLE

city & state — April 13, 2015

SARINA TRANGLE

inority activists called on New York City Mayor Bill de Blasio to increase the city’s procurement with minority- and women-owned businesses (MWBEs), in part, by following Gov. Andrew Cuomo’s lead. Flanked by elected officials and minority business leaders, Working Families Party co-founder Bertha Lewis released a report last week showing under 4 percent of city contracts went to MWBEs last year, compared with the state’s rate of more than 25 percent. The study urged the city and state to aim to do 35 percent of their procurement with MWBEs, however, several on the steps of City Hall instead focused their efforts on pushing the city to match the state’s goal of 30 percent and hire a chief diversity officer, as Cuomo did in 2013. “If the state is saying we need to get 30 percent, on the federal level we’re pushing towards 30 percent, we need to be assessing things here in the city as well,” Bronx Assemblyman Michael Blake said. “Five percent, 7 percent, whatever the numbers somebody may be saying—the reality is, it is not enough.” Blake and New York City Public Advocate Letitia James stressed that they respected de Blasio’s legal counsel Maya Wiley, who was tapped to improve the city’s MWBE record, but would like to see a chief diversity officer take the reins. “The city of New York needs a chief diversity officer solely focused on the issue of increasing opportunities for businesses of color, period,” James said. “3.9 percent is unacceptable and it sends the message that businesses of color need not apply.” As a candidate, de Blasio said at a City & State panel that his predecessor Michael Bloomberg was not “serious” about the issue, and he believed the city should aim to do 20 percent of procurement with MWBEs. His campaign website said the mayor

Bertha Lewis releases a report urging the city to do more business with minority firms. would “empower a deputy mayor with the responsibility of increasing diversity in city contracts and procurement.” De Blasio spokeswoman Ishanee Parikh said the city spent $690 million on contracts with MWBEs last year— more than the $529 million spent when contracts with MWBEs accounted for 5 percent of city contracts under Bloomberg in fiscal year 2012. “This administration is committed to increasing city contracts to minority- and women-owned business enterprises, and we’ve already seen a 57 percent increase in the past fiscal year—that’s millions of dollars more to our city’s MWBE businesses,” Parikh said in a statement. The administration also pointed out that Lisette Camilo, the director of the Mayor’s Office of Contract Services, and the Small Business Services Commissioner Maria Torres-Springer are working to get more contracts with MWBEs, in addition to Maya Wiley.

But Parikh did not respond to a question about how the administration’s goals compare to the 30 figure floated by advocates. Instead, she focused on the state law mandating the city to choose the lowest bidder or best proposer for prime contracts. City Councilman Robert Cornegy pointed out that the city has issued a request for proposals, to hire a firm to study disparities in the city’s business with MWBEs. Responses were expected last week. But advocates said the city does not need to wait on the study to stop giving tax breaks, zoning variances and other benefits to developers that don’t commit to using at least 30 percent of MWBEs in construction. The Rev. Johnnie Green, pastor of Mount Neboh Baptist Church in Harlem and president and CEO of Mobilizing Preachers and Communities, said his church coalition has had meetings with Cuomo on MWBE contracting, but has not gotten the same response

from de Blasio. “When you make promises to us at election season and election time, we are demanding that you keep those promises. You forget us now, I assure you, that we will forget you at election time,” he said. After a 1992 study MWBEs received 7 percent of city contracts, former Mayor David Dinkins issued an executive order directing 20 percent of city contracts to be awarded to MWBEs, according to the report issued by the Black Institute public policy group. This allowed the city to accept bids if they were within 10 percent of the lowest offer. A legal challenge overturned the 10 percent preference, and former Mayor Rudolph Giuliani ended the program in 1994, the report said. The city revived its MWBE program in 2005, which set goals on how much business it aspired to do with firms run by blacks, Asians, Hispanics and white women. The report noted the city consistently fell short of its goals. cit yandstateny.com

prompt payments to subcontractors and using 1 percent of the pension fund to offer MWBEs loans, grants and other assistance. Lewis, now president of the Black Institute public policy group, said she informed the administration about the report, but did not get feedback. She said she still supports the mayor, but believes he must do more. “The most progressive City Council, the most progressive mayor—if you’re not going to get it done, when are you?” she said. “If you do the right thing, we got your back. But if you don’t we’re going to run up on you.”

CIT Y

In 2013, the city enacted a law lifting the $1 million cap on construction and professional service procurement for establishing MWBE goals, but it lowered the cap on contracts for goods to $100,000, according to the report. Still, the Black Institute’s research suggested the city fell short of its goals in 2014. For instance, it aspired to do 8 percent of professional service procurement with Hispanicowned firms, but did 0.2 percent. Some of the key recommendations from the report were extending the MWBE program beyond the existing 34 city agencies to all 72 agencies, authorities and commissions, more

Senator Jeff Klein

ew York City Comptroller Scott Stringer issued letter grades to mayoral agencies by assessing what portion of their spending went to minority- and womenowned business enterprises in fiscal year 2014 compared with the goals established for them by a 2013 city law. Stringer’s team assessed 31 mayoral agencies it said fell under the law, but it noted the Police Department and Department of Investigation were excluded due to security concerns about disclosing vendor data. The report gave the best marks—B’s—to the Department of Cultural Affairs, which was praised for superseding benchmarks for doing construction with Hispanic and Asian businesses, and the Landmarks Preservation Commission, which reported strong spending with Asian construction businesses and Hispanic professional and standard service firms. On the other end of the curve, four agencies received F’s, including: the Department of Environmental Protection, the Department of Finance, the Department of Information Technology and Telecommunications and the Department of Sanitation. The Department of Sanitation received low remarks for having “extremely low” procurement levels with black and Hispanic businesses across all industries.

F GRADES: • Department of Environmental Protection • Department of Finance • Department of Information Technology and Telecommunications • Department of Sanitation

cit yandstateny.com

ADVERTISE WITH CITY & STATE TO:

Reach elected officials Educate NY’s most engaged leaders Raise awareness and shape legislation

For advertising information, please contact Jim Katocin at 212.284.9714 or Jkatocin@CityandStateNY.com

city & state — April 13, 2015

D GRADES: • Business Integrity Commission • Department for the Aging • Department of Buildings • Department of Citywide Administrative Services • Department of Consumer Affairs

Joan McDonald, NYS Department of Transportation

Senator Dean Skellos

C GRADES: • Administration for Children’s Services • Civilian Complaint Review Board • Commission on Human Rights • Department of City Planning • Department of Health and Mental Hygiene • Department of Probation • Department of Youth and Community Development • Law Department • Office of the New York City Comptroller

• Department of Correction • Department of Design and Construction • Department of Homeless Services • Department of Parks And Recreation • Department of Small Business Services • Department of Transportation • Fire Department • Housing Preservation and Development • Human Resources Administration • NYC Taxi and Limousine Commission • Office of Administrative Trials and Hearings • Office of Emergency Management

Commisioner Ken Adams

B GRADES: • Department of Cultural Affairs • Landmarks Preservation Commission

STATE

THE COMPROMISE OF 2015 FINAL BUDGET MARKED BY DEALS ON ETHICS AND EDUCATION By ASHLEY HUPFL

city & state — April 13, 2015

arrested on corruption charges in January, which led to his removal as speaker of the Assembly, Albany insiders could not predict how this year’s budget negotiations would go. Seizing on Silver’s arrest, Gov. Andrew Cuomo proposed sweeping ethics reforms and demanded that they be included in the budget, setting up a fight that dominated negotiations. There was a breakthrough when Cuomo, in a rare move on March 18, announced an ethics deal with the Assembly—but not with the state Senate. Cuomo’s decision to announce a partial deal was outside his norm and clearly designed to put pressure on Senate Republicans, who were engaged in negotiations with the governor. Legislative leaders failed to reach a deal before March 28, forcing Cuomo issue a message of necessity in order for the budget bills to be passed ahead of the April 1 deadline because there would not enough time for the bills to go through the mandated three-day aging period. While Cuomo has used the message of necessity power in the past—far less often than previous governors— he has often tried to avoid the measure after facing public criticism for wielding the executive power in order to pass controversial legislation like the SAFE Act and the Marriage Equality Act. Last year, Cuomo used a message of necessity to facilitate a timely budget. He agreed to disband the Moreland Commission to investigate corruption in the state Legislature if lawmakers approved the budget on time. They did, and later that year, during his gubernatorial re-election campaign, Cuomo frequently touted overseeing four on-time budgets after decades of dysfunction and late budgets in Albany. In the budget agreement announced March 29, the ethics reforms that Cuomo and Heastie originally agreed on remained largely unchanged. However, the Senate

MATT VALENTINE

fter Sheldon Silver was

was granted one major modification: Any legislator who is also a practicing attorney will be able to request that a client’s name be redacted from public records if that client is found not to be directly involved with legislation or other state affairs. The Office of Court Administration or the Joint Commission on Public Ethics will ultimately make that determination. As Heastie and Cuomo previously agreed, the ethics deal will require legislators who receive outside income to disclose the source of any compensation in excess of $1,000 and disclose the name of clients when receiving compensation in excess of $5,000. Legislators who are employed by law firms and are serving as counsel and have no specific clients are also required to disclose their income. A lawmaker who is paid to bring in clients,

but does not represent them, must also reveal those clients. The final ethics agreement also included pension forfeiture, per diem reform, prohibition of personal use of campaign funds and campaign finance disclosure reforms that were outlined in the Cuomo-Assembly deal. But the use of a message of necessity this year allowed leaders to strike an ethics deal just hours before the deadline, setting up the all-too-frequent scenario in which lawmakers were forced to pass the legislation in the middle of the night, leaving rank-andfile lawmakers mere hours to comb through the massive bills. The budget’s total growth is 2 percent, with $94.25 billion in total state operating funds. It also allots $17.741 billion for Medicaid and $100 million for the New York City Housing

Authority, which will be distributed through the Division of Housing and Community Renewal, a state agency. Also included is a commission to determine whether legislators should receive a pay raise and $1.5 billion for Cuomo’s Upstate Revitalization Initiative. The other major sticking point in the negotiations was education, where Cuomo’s sweeping reforms were met with disdain from teachers unions and many of the Assembly Democrats whom they trust to support their interests. In his budget plan, Cuomo had pushed for 50 percent of teacher evaluations to be tied to state tests, and for the time it takes to gain tenure to be extended to five years. Instead, the Assembly negotiated a new teacher evaluation system to be operated cit yandstateny.com

Several key issues that advocates had hoped would be part of the budget were left out of the final deal. They include raising the minimum wage, the DREAM Act, the Education Investment Tax Credit, criminal justice reforms and mayoral control, which will all be taken up post-budget. The ethics and education reforms agreed to in the budget will also continue to be discussed. New York State United Techers is continuing to organize parents to have their kids opt out of state tests, making the implementation of teacher evaluations difficult. Meanwhile, most good-government groups said the ethics reforms fall flat. “This is not what we were hoping for. We’ve dealt for so many years now with half measures and passing them off as the best thing in the history of the state and unfortunately they aren’t,” said Barbara Bartoletti, legislative director for the League of Women Voters. “I think for over 30 years I’ve been saying, ‘It’s a good first step’ so many times that I’m tripping over it now. I’ve climbed the staircase too many times and I just don’t see that this is going to change the culture.”

STATE

by the state Education Department and compromised on a four-year evaluation period before a teacher is eligible for tenure. The long-controversial 3020a process, used to remove tenured teachers whose performance is deemed unacceptable, has also been reformed. Now, if a tenured teacher receives an “ineffective” score two years in a row, the district can begin proceedings to remove them and have them out of the school within 90 days. If a teacher receives an “ineffective” score three years in a row, the district must bring charges against them, and that teacher can be out within 30 days. In the testing category, localities can choose to administer only the state assessment to students, or they can request a second test to be given as well. If they choose the latter, the state will then design a second set of assessments for the locality to use. If a teacher, tenured or not, is evaluated on students’ performance on the official state test and is rated “ineffective” by that metric, he or she cannot be graded “effective” on their overall evaluation score. The highest rating that teacher could receive is “developing.”

ISSUE BRIEF:

On April 30th, City & State is publishing its first ever Queens Special Issue, focusing on the landscape of Queens politics and featuring industry spotlights specific to the borough.

FEATURES INCLUDE:

• Back and Forth with Queens Borough President, Melinda Katz • Top 10 Queens Political Hangouts • Views of Queens, featuring insights on the intersection of Queens culture and New York politics from some of the borough’s most influential players and residents

QUEENS-SPECIFIC INDUSTRY SPOTLIGHTS ON: ...Track Confidently!

Why is LRS the BEST choice for bill tracking? Because your...

• Transportation/Infrastructure • Economic Development • Cultural Institutions EXPANDED DISTRIBUTION:

• City & State will partner with Queens-based organizations to enhance print distribution and increase magazine drops in prime Queens locations. The Queens Special Issue will premier at City & State’s On Queens Cocktail Event on Thursday, April 30th at Penthouse 808 in Long Island City from 6:30 – 9:00pm. The event will feature Borough President Melinda Katz.

MATTERS!!! Call today for your FREE trial-ID! (800) 356-6566 or (518) 455-7677 http://nyslrs.state.ny.us

cit yandstateny.com

Exclusive Airline Sponsor:

In Partnership with:

For more information on pricing and content, please contact

Aholt@CityandStateNY.com or call 212.894.5422

city & state — April 13, 2015

Presenting Sponsor:

BUFFALO

BRICK BY BRICK

POLONCARZ OUTLINES GOALS BEFORE RE-ELECTION RACE By JUSTIN SONDEL

rie County Executive Mark Poloncarz will be shifting his focus in the final year of his first term. The Buffalo Democrat, who is gearing up for a re-election campaign against a yet-to-be-decided GOP opponent, used his State of the County address last month to recount his achievements in the area of creating a robust jobs environment, but also said that he will now focus on making sure that everyone in the region benefits from the economic gains seen in recent years. “We have made great strides in the county, but now is not the time to rest,” Poloncarz said. “There are still people in need in our community.” Poloncarz unveiled an ambitious plan to fight poverty, which he is calling Initiatives for a Stronger Community, in the week leading up to his address, noting that while the region has taken positive steps in some areas—falling unemployment

and gains in private sector jobs—high poverty rates persist. He says his administration will adopt a similarly sensible approach to tackling poverty as it did when implementing his economic initiative beginning in 2013. “Similar to how we constructed our economic agenda, Initiatives for a Smart Economy, we took our time to come up with a workable and attainable plan to address the issues we face,” Poloncarz said. Determining Poloncarz’s likely opponent has been a game of political musical chairs, with a series of possible GOP candidates bowing out and endorsing another Republican over the course of the last month. Erie County Clerk Chris Jacobs and Erie County Comptroller Stefan Mychajliw Jr. were both sizing up Poloncarz before Mychajliw announced last month that he wouldn’t run and would endorse Jacobs instead. Jacobs last week announced that

he too was not going to make a run at the office and endorsed Ray Walter, a Republican assemblyman from a Buffalo suburb, as the right candidate to dethrone Poloncarz. Walter told City & State that he is considering a run, but was noncommittal in a statement last week. “I have certainly looked at this opportunity and believe that it is a winnable race,” Walter said. “I will continue to talk with my family and party leaders and a decision will be made sooner rather than later.” The incumbent’s handling of the November snowstorm that dumped over six feet of snow in some areas of the county in a matter of days was largely viewed as somewhere between competent and exemplary, and he has also avoided major scandal or fiscal calamity during his first term. A recent internal poll leaked to The Buffalo News by a pro-Poloncarz group shows the county executive was leading Jacobs and Mychajliw by more than 20

points, though it remains to be seen how Walter, an attorney who was first elected to the Assembly in a special election in 2011, will stack up. Poloncarz spent the majority of his 45-minute address laying out his vision for the future—poverty initiatives, a plan to spend $25 million on roadwork and the continuation of improvements to county parks, which will see $4 million in upgrades this year. His administration has laid a strong financial foundation to build upon: more folks are working, fewer young people are leaving the area, and the county’s credit ratings are at an all-time high. But for the story of Buffalo’s economic turnaround to be a true success, the benefits need to reach the entire community, Poloncarz said. “Brick by brick,” Poloncarz said. “We will not finish the work until we build inclusively on our past accomplishments to create the successes of tomorrow.”

DYNGUS DAY

ANNUAL TRADITION DRAWS WESTERN NEW YORK POLITICIANS

city & state — April 13, 2015

oliticians from every level of government walked through one of Buffalo’s poorest neighborhoods during the annual Dyngus Day parade, the Americanized celebration of a Polish tradition in which men and women squirt one another with water guns and hit one another with pussy willows on the day after Easter. Lt. Gov. Kathy Hochul used her power as acting governor over the holiday weekend to declare the march through the Broadway-Fillmore district an official state parade. The neighborhood was once a

diverse hive of factory workers, including many Polish- Americans, but now exhibits some of the city’s worst blight, with entire blocks of houses abandoned decades ago. Thousands of Western New Yorkers descend on the area, downing Tyskie and Zywiec and eating sauerkraut, pierogi and kielbasa along the parade route before dispersing into the social halls of the enormous century-old churches that were once the gathering places of the community to polka to “Roll Out the Barrel” and “Who Stole the Keeshka?”

NANCY PARISI

By JUSTIN SONDEL

Erie County Executive Mark Poloncarz is seeking re-election in 2015.

cit yandstateny.com

The Race to the Bottom Affects Us All!

Enforce the Law! It’s Time to throw the Bad Apples out of the Big Apple!

Abuse, Wage Theft & Illegal Misclassification of Workers Cheats City & State Taxpayers Out of $500 Million a Year!

“ I worked for companies that had no respect for the lives of their employees, disregarded safety laws, stole wages and were abusive. I put my life on the line every day and now I’m standing up for what is right!” — Abraham Rosado

city & state â&#x20AC;&#x201D; April 13, 2015

cit yandstateny.com

Cuomo Cuba to

Is the governor’s trade mission selling more than his image? Story by JON LENTZ Photos by JON LENTZ and ANNE DENES Illustration by FVTVRO STRVN

cit yandstateny.com

Malcolm X. As the new prime minister of Cuba, Castro also held meetings with world leaders streaming into the city for the United Nations General Assembly, including the Soviet Premier Nikita Khrushchev. In a marathon four-hour address to the U.N., Castro complained bitterly of America’s “aggression” and “imperialist” policies and dismissed John F. Kennedy, then a candidate for president, as “an illiterate and ignorant millionaire.” An official Cuban aircraft was confiscated at Idlewild by an advertising executive who sought to recoup an unpaid bill, prompting Castro to conclude his 10day visit with a flight home in a Soviet plane provided by Khrushchev. More than half a century after Castro’s visit to New York, the state’s top elected official is returning the favor. When President Barack Obama and Cuban President Raúl Castro announced a landmark framework in December to resume diplomatic relations, Gov. Andrew Cuomo scrambled to be the first governor to visit the island. On April 20, he will board a Havana-bound charter plane at John F. Kennedy International Airport—formerly Idlewild, now bearing the name of Fidel Castro’s old foe. Cuomo, who was barely a year old when Castro took power, will lead a very different kind of delegation. He

will be accompanied by a contingent of state officials and business executives in suits and ties, and will stay at the Capri, one of Havana’s poshest hotels. His mission will be to spur trade, he says. Thorny political issues—such as Cuba’s jailing of dissidents and travel restrictions on its own citizens—will be off the table. Fidel Castro, now 88, remains the country’s symbolic leader, but his brother, Raúl, took over in 2008 and has taken steps toward liberalizing the economy. Instead of entrenched divisions between the neighboring countries, things are finally looking up. However, despite the hopes for new ties, the U.S. trade embargo implemented in the early 1960s is unlikely to be lifted any time soon, especially with Republicans controlling both houses of Congress and a presidential race getting underway. The two countries have yet to reopen their embassies, and the U.S. is still in the process of removing Cuba from its list of state sponsors of terrorism. Apart from those hurdles, the biggest question may be how far and how fast Raúl Castro wants to go in allowing new competition, which could loosen his grip on power. As for New York, one area of trade already permitted is food and agricultural products, but the state produces little that is in demand in

Cuba. Sectors in which New York could be a major player, such as banking and financial services or telecommunications, may not open up for months or even years. Since Cuomo is often mentioned as a potential presidential candidate, some observers wonder whether his trade mission is more about establishing foreign policy credentials and generating good press than securing substantial business deals. When Cuomo comes back from his whirlwind trip, returning less than 48 hours after he departs, what will he have to show for it?

n his joint State of the State and budget address in January, Cuomo announced that he would visit Cuba in a matter of weeks. It will be the first of a string of international trade missions during his second term, to be followed by trips to Mexico, Canada, Italy, China and Israel. The governor, who developed a reputation for staying at home during his first term, changed course last year with excursions to Israel, Afghanistan, the Dominican Republic and Puerto Rico. His upcoming itinerary will inject an economic development component, building on a series of in-state initiatives to create jobs, particularly in upstate New York. The destination getting the most

city & state — April 13, 2015

n a stormy afternoon in September of 1960, a plane carrying Fidel Castro touched down at New York City’s Idlewild Airport. The 34-year-old revolutionary, decked out in green fatigues, was subdued and unsmiling. Tensions with American officials had been rising ever since he and a ragtag band of barbudos had toppled a U.S.-backed regime in Cuba the year before. Although Castro had yet to declare that his revolution was socialist, he had nationalized U.S. companies and farmland, consolidated political power and cultivated ties with the Soviet Union. President Dwight Eisenhower, who famously played a round of golf to avoid meeting Castro in 1959, had halted the purchase of Cuban sugar, oil and other goods. The CIA was already plotting Castro’s overthrow. Disillusioned Cubans had started moving to the U.S., many settling in Miami, just 90 miles north of the island. The day before the Cuban delegation landed in New York, the nation seized all U.S. banks within its borders. Shortly after arriving in the city, the Cubans claimed that a Midtown hotel they booked had jacked up its rates, and threatened to camp out in Central Park instead. They eventually found lodging at the Theresa Hotel in Harlem, where Castro met with

opportunity to be the first state to get its foot in the door. At least 10 governors have gone to Cuba to promote trade, several from farm belt states taking advantage of a humanitarian exception to the embargo for agricultural goods. Gov. George Ryan of Illinois was the first, in 1999, followed by roughly one new governor every year through 2010. Another Republican, Gov. Dave Heineman of Nebraska, made several trips to Cuba in 2005 and 2007, and secured contracts worth tens of millions of dollars for wheat, corn, beans and

The capitol building in old Havana resembles the U.S. Capitol.

city & state — April 13, 2015

buzz has been Cuba, which the Cuomo administration says will bring new business to the state’s “real estate developers, construction companies, manufacturers of building materials and technology providers.” The administration claims that the state’s “great agricultural bounty” offers additional opportunities, while Cuba’s vibrant biotechnology industry could be ripe for partnerships. “We would like to be one of the first states to Cuba, just from a competitive point of view, economically,” Cuomo said in his January address. “Let us be the first one there, let us develop the relationship, let us open the markets, and let us get opportunities for New York companies.” José Ramón Cabañas, the chief of the Cuban Interests Section in Washington, D.C., echoed Cuomo’s line in February, calling the upcoming trade mission “historic” and applauding him for being the first governor “to lead an official state trade mission to our beautiful island.” Yet New York long ago missed the

livestock. Even George Pataki, the former Republican governor of New York, oversaw a short-lived initiative to boost trade with Cuba, although he never actually ventured there, according to Assemblyman José Rivera. New York tried to ship apples to Cuba under Pataki, “who used to be a farm boy, a farmer until he got a better job and elected like I did to the New York State Assembly,” said Rivera, a Bronx Democrat originally from Puerto Rico who has visited Cuba and supports lifting the embargo. “Under his administration, we did for a brief moment ship apples to Cuba, but the farmers came back to us and said, we

can no longer do this. We have to ship to the ports of Houston and the ports of the Everglades—we cannot afford that and the Cuban people cannot afford to pay for the costs.” Just last month, a delegation headed by Missouri’s first lady and the state’s agriculture director traveled to the island and met with Cuban officials and the U.S. ambassador. Missouri Gov. Jay Nixon dropped out at the last minute when the state auditor died, paving the way for Cuomo to stake his claim to being the first governor to visit since Obama announced the bilateral effort to normalize relations. New York may disagree, but Missouri is still calling itself “the first U.S. state trade delegation to visit since the announcement that the U.S. was working to normalize diplomatic relations with Cuba.”

t’s also an open question what New York can offer that Cuba or its citizens would like—or

be able—to buy. Despite the embargo, the United States is actually a major trade partner with its island neighbor, trailing only Venezuela, China, Spain and Brazil in exports to Cuba. Branded food products and commodities make up the bulk of the U.S. exports, but last year’s $291 million in such sales was well below a peak of $710 million in 2008, thanks to Cuba’s trade deals with friendlier countries like Venezuela and Vietnam. Last year Cuba’s top import from the U.S. was, by far, frozen chickens, followed by soybeans and soybean products, corn and animal feed. Another exception to the trade embargo allows the export of medicine and medical supplies from the U.S., although that accounted for less than $1 million in sales last year. New York’s top exports, meanwhile, are diamonds, gold, jewelry, civilian aircraft and artwork. Agricultural commodities and food products don’t even crack the state’s top 20. “Generally, from New York State, there isn’t a lot,” said John

Late to the Game

hen Gov. Andrew Cuomo unveiled the details of his upcoming trade mission to Cuba, it was billed as the “first official state delegation to Cuba” since the Obama administration took steps to normalize relations with the island nation. But the claim, while technically true, overlooks the many elected officials who have already travelled to Cuba to promote trade—including at least 10 governors who made the trip well before Cuomo even took office.

1999 GEORGE RYAN (R) ILLINOIS

2002 JESSE VENTURA (I) MINNESOTA

2002 JOHN HOEVEN (R) NORTH DAKOTA

2005, 2007 DAVE HEINEMAN (R) NEBRASKA

cit yandstateny.com

focus of his trip and the potential that it offers for our farmers in New York to sell their goods and products in Cuba,” Steve Ammerman, a New York Farm Bureau spokesman, said of Cuomo. One obstacle, according to Ammerman and others, is that New York is unable to ship goods directly to the island nation. Currently, in-state producers would have to send products by rail or truck to the Gulf of Mexico before shipping them out from ports in Florida or Texas. After confronting

2005 JOHN BALDACCI (D) MAINE

cit yandstateny.com

the issue during the Pataki years, Rivera has been urging state officials to authorize the export of goods to Cuba through the Port Authority of New York and New Jersey. In fact, some suggest that how aggressively Cuomo tackles the issue could signal how serious he is about spurring trade with the Caribbean nation. “If you’re coming from a northern state, you obviously have an extra cost, and so that puts you at a price disadvantage,” said Antonio Martinez, a consultant who has coordinated business and government trips to Cuba. “This is why it’s important that the infrastructure is in place. I want Governor Cuomo to succeed and I want him to come back with contracts, and I want him to really open up the space, but the infrastructure is the critical piece here, so this isn’t a oneshot deal.” A more obvious area of expansion into Cuba for New York is banking and financial services, a sector long dominated by big Wall Street players. Among the steps that Obama took in December was relaxing rules that barred U.S. banks from doing business in Cuba, including allowing Americans to use credit and debit cards there. American Express and MasterCard have already announced that their cards will be accepted on the island. At a summit meeting of Latin American leaders over the weekend, Obama was widely expected to announce the removal for Cuba from the U.S. list of state sponsors of terrorism. That could pave the way for banking between the two countries by removing the risk of major penalties. For example, last year the French bank BNP Paribas was hit with a $8.9 billion fine for carrying out and covering up transactions with Cuba, among other countries. New York’s banking

2005 BUTCH OTTER (R) IDAHO

2007 KATHLEEN BLANCO (D) LOUISIANA

Old Fords and Chevrolets still cruise the streets of Havana. regulator secured $2.24 billion for the state. At the time, Cuomo said that the “enforcement action should serve as a warning to any company that provides financial support to global terrorism and enables human rights atrocities.” Congress could still try to block the change in Cuba’s status, however. “Right now being on the sanctions list, financial institutions, even though President Obama’s initiatives have included some meaningful opportunities for them, none of them want to touch Cuba until it’s off the sanctions list,” Kavulich said. Other segments of the New York economy that could capitalize on the historic thaw are real estate, construction and building materials and the tech sector, according to the Cuomo administration. Yet little will open up in the immediate future, experts say. Even Cubans need government permission to buy or sell property. Spain has invested in the hotel and resort business in Cuba, but only through joint partnerships with

2009 BILL RICHARDSON (D) NEW MEXICO

state-run companies. The Obama administration in December lifted restrictions on sales of building supplies to Cuba’s emerging private sector, but since the Cuban government still controls imports, the rule change hasn’t had an impact. “The other challenge we have is while we are allowed to do more with the Cuban private sector, it’s still not possible yet for the Cuban private sector to have direct importation,” Martinez said. “They have to go through the government, and that’s, I think, something that’s going to evolve.” In the meantime, some state lawmakers say that Cuomo should focus instead on expanding trade with existing partners instead of rushing into an uncertain situation. Of the five other countries on Cuomo’s secondterm itinerary, four are in the top 10 in terms of buying New York goods. The fifth, Italy, is No. 17, while Cuba is not even in the top 25. Asked in January why he would visit a country with a

2009 MIKE BEEBE (D) ARKANSAS

2009, 2010 SONNY PERDUE (R) GEORGIA

city & state — April 13, 2015

Kavulich, president of the U.S.-Cuba Trade and Economic Council, who has arranged trips for several governors. “The majority of the governors who have visited thus far have been from those states that are shipping agricultural commodities, because that’s the majority of what Cuba’s purchasing.” Nonetheless, the New York Farm Bureau is optimistically pitching the state’s apples and dairy products like cheese and yogurt—even maple syrup—as products that might somehow catch on in Cuba. Others have suggested the state’s wineries as promising potential exporters. “We are hoping that agriculture remains a

relatively insignificant economy— ranked 68th in the world in gross domestic product—Cuomo reminded reporters that he would be travelling to the state’s top trade partners as well. But why Cuba? “We could be first,” he said. Ted Henken, a Baruch College professor who has studied the Cuban economy, defended the governor’s decision to visit, even if the diplomatic kinks are still being worked out. “Adding Cuba to the portfolio is smart, but I would also say that we shouldn’t necessarily hold our breath or expect the farm any time soon,” Henken said. “Cuba’s going to open

few days before the state budget was finalized, Assemblyman Rivera stood before his colleagues to rally support for a resolution commending Cuomo on his upcoming trade mission. “I hope that when he comes back, he doesn’t come back empty-handed,” he said. “I believe this is good, not only for the state of New York, but for America and for the people in Cuba—

Tobacco for Cuba’s famous cigars is grown in the fertile Viñales valley. up, I think undeniably, but it’s going to be slow, partly because there’s a lot of restrictions in the embargo that are still firmly in place that make any kind of deal difficult or impossible.” The hoped-for flurry of economic activity could also end up flowing primarily in the other direction. If U.S. travel restrictions are eventually lifted, thousands of New Yorkers could be jetting off to Cuba and spending hefty sums at beachside resorts and bringing back cigars and rum. Republican Assemblyman Michael Fitzpatrick suggested that the only

city & state — April 13, 2015

thing to come out of Cuomo’s trade mission would be “a lucrative contract to stock future upstate casinos with Cuban cigars.”

the people in Cuba, nobody else—who are hungry and looking forward to a renewed relationship with this great country.” Assemblywoman Nicole Malliotakis, a Republican whose mother is Cuban, stood up and denounced the resolution as “nonsense.” She recounted the shortages and deprivations she saw firsthand on the island in 2009 while visiting relatives, who needed basic items like aspirin, razor blades and shampoo. Lifting the embargo without any strings attached would help the

The image of Che Guevara is seen all over Cuba.

Castro regime at the expense of the average Cuban, Malliotakis argued, since revenue from expanded trade would flow to the government. She urged her fellow Assembly members to instead pass resolutions calling for better pay and unrestricted travel for Cubans and “for freedom of speech without fear of being beat, jailed or murdered.” Cuomo told reporters in January that the goal of the trip would be to “stimulate business” and added, when pressed, that he would not “advocate for human rights,” a matter he would leave to Obama. Picking up where Malliotakis left off, other Assembly Republicans criticized Cuomo for planning a visit to a “brutal dictatorship which has shown no inclination to give its people the freedom that we enjoy here” and for supporting “a totalitarian regime.” A few days later, state Republican Party Chairman Ed Cox branded Cuomo a hypocrite for banning state travel to Indiana, which had passed a religious freedom bill widely criticized as anti-gay, while a Cuba trip was in the works. “Now that Andrew Cuomo has banned travel to Indiana, he can cancel his upcoming trip to Cuba, where gay marriage is illegal, political dissidents are imprisoned and tortured, and the Castro regime is on the U.S. State Sponsors of Terrorism list,” Cox said. “Or he can admit that both moves are political stunts meant to bolster his national profile with no grounding in reality or substance.” Republican attacks aside, Cuomo’s trip will likely be popular with the public—even if the investment of taxpayer dollars doesn’t garner a strong return. (Business representatives and journalists joining the governor will pay their own way.) A Washington Post poll in December found that nearly two-thirds of Americans support renewed diplomatic ties with Cuba, with even stronger support for ending the embargo and eliminating restrictions on U.S. travel. For decades Cuban Americans have driven U.S. policy and kept the embargo in place, but polling has also shown a marked generational shift, with younger Cuban Americans far more supportive of lifting the embargo. “Politicians know that going to Cuba today, they will generally receive positive media coverage,” Kavulich said. “There isn’t a tremendous amount of risk going to Cuba today. However, if you’re going as the chief marketing officer of the state, and the local media narrative supports that, as

it would for a governor of a Midwest state that’s shipping corn, soy, poultry, etc., it becomes potentially more complicated.”

hen Cuomo’s charter flight arrives in Cuba, it will land at Havana’s José Martí International Airport. Martí, one of the country’s founding fathers, spent time living and writing in New York City, one example of the many longstanding ties between

the state and the island nation. Unlike much of Latin America, Cuba’s No. 1 sport is baseball, and one apocryphal tale claims a young Fidel Castro was offered a tryout with the New York Yankees before he took to condemning yanquis. Castro honeymooned in New York City in 1948, and New York City’s current mayor, Bill de Blasio, honeymooned in Cuba years later. Countless singers, performers and artists from Cuba have moved to New York City or performed there. New York Reps. Charles Rangel, Gregory Meeks, Nita Lowey, Eliot Engel, Nydia Velázquez and Steve Israel have all traveled to Cuba. But the U.S.-Cuba storyline has been dominated for decades by division and discord. Cuban dictators were propped by American presidents, and democratically elected leftist leaders throughout Latin America were ousted or even assassinated with the help of the CIA. Castro, who was also targeted, proved to be the exception. On his way out of office, Eisenhower imposed much of the Cuba trade embargo and cut off diplomatic relations. Kennedy, in one of his first moves as president, authorized the Bay of Pigs invasion, a failed effort to depose Castro. The cit yandstateny.com

following year brought the Cuban Missile Crisis, a standoff over Soviet nuclear arms being shipped to Cuba that brought the world to the brink of nuclear war. When the Soviet Union collapsed in the early 1990s, the U.S. ban on Cuban trade or travel remained as a vestige of the Cold War. The island remains frozen in time, with 1950s Fords, Chevrolets and Buicks still rumbling along its streets, and crumbling edifices serving as reminders of the city’s former glory. Even for those who receive remittances from American relatives—which makes up a growing segment of the economy—there is not much to buy. Large stores that appear to have changed little in decades have a limited assortment of products and lots of empty shelves. Locals line up to get their rations of eggs and other staples. The state provides universal health care and education, but Cubans say that their paltry wages—only $20 a month for many workers—still make it hard to get by. In Havana’s Parque Central, a young self-employed Cuban named Roberto complained about the sluggish economy and the lack of food, clothing and other products in his country. “The Cuban people need the change,” he said. “In Cuba, it is not possible to get anything, unlike in other parts of the world. In Cuba, the people only eat chicken and pork. Every shop has nothing. The people work and work, and they get nothing.” Now, the question is how Cuba will respond. The U.S. is taking major steps to resume diplomatic ties, while critics say Raúl Castro has benefitted while having to do very little. Without significant reforms in Cuba, many companies may continue to find investment opportunities too limited or too risky, given the country’s history of defaulting on payments and seizing cit yandstateny.com

assets. “Businesses here are going to be skeptical of trading with Cuba,” Malliotakis said, “because they are going to be reluctant to send shipments without the assumption that they are getting paid, which has happened in many other transactions.” Cuba also has a long history of doing all it can to avoid making real changes, scuttling past efforts to improve relations with the U.S. and backing away from promised economic liberalization measures. Under Raúl Castro, the country authorized a nascent private sector, drawing international praise for encouraging entrepreneurship in a wide range of professions, from restaurateurs and hoteliers to auto mechanics and manual laborers. But the government has kept the country’s cuentapropistas under tight control. “I call it Raúl’s economic mambo,” Henken said. “He takes two steps forward and one step back. He’s moving forward but very cautiously, and even though he is a ray of sunlight compared to his brother, he’s still a Communist and wants the state to be in charge of the fundamentals of the economy.”

fter his Assembly showdown with Malliotakis, Assemblyman Rivera left Albany and returned to New York City to address a small crowd about Cuba trade opportunities. The gathering, hosted by Gotham Government Relations & Communications at an Upper West Side steakhouse, was attended by business executives, lobbyists, a Cuban diplomat and several Cuomo administration officials. Rivera opened the event with a joke. As ties between Cuba and the U.S. were rapidly deteriorating in the early 1960s, Rivera said, one of Fidel Castro’s closest confidantes, Che Guevara, asked whether the rift would

banking on exports Ahead of the governor’s trip to Cuba, state officials have touted new trade possibilities. However, there is little overlap between the top imports and exports on each side.

Cuba’s Top Exports

Raw Sugar

Refined Petroleum

Nickel

Rolled Tobacco

Hard Liquor

Cuba’s Top Imports

Refined Petroleum

Wheat

Corn

Poultry Meat

Concentrated Milk

New York’s Top Exports

Diamonds

Gold

Jewelry

Paintings And Drawings

Civilian Aircraft, Engines And Parts

New York’s Top Imports

Diamonds

Paintings And Drawings

Gold

Jewelry

Natural Gas

Sources: U.S. Census Bureau; MIT Observatory Of Economic Complexity

city & state — April 13, 2015

The average Cuban has to get by on $20 a month.

ever be mended. “I don’t think Fidel knew what to say to Che in that very sad moment,” Rivera said. “He turned to Che and said, ‘Che, that day will come when the United States has a black president and the pope is an Argentinian like you.’ ” Kay Sarlin Wright, an executive vice president at Empire State Development, spoke next, offering few details except to say that “New York State is the state of opportunity, and boy, is there an opportunity with Cuba and with this upcoming trade mission.” Rivera interjected that a meeting he had with Cuomo on Cuba had gone well, and that the governor had his guayabera ready for the trip. Ariel Hernández, the first secretary of the Cuban mission to the U.N., said that the renewed diplomatic activity had him feeling optimistic. “My country is an amazing country, and the Cuban people are a smart and amazing people, too,” he said. “If you have your will to approach Cuba, we only ask your respect to Cuba, so that’s why we are open—we are waiting for you, we are waiting for your intention, your will, your business, your friendship, so that’s why we are here today.” Antonio Martinez, the consultant on Cuba trade opportunities, gave the feature presentation. He said that Cubans remain wary of the U.S., given its history of exploitation and meddling in the affairs of Latin American countries. The country now has a flood of potential investors to pick from, Martinez added, and will assess who is “committed to a long-term approach or a one-shot deal.” “You have to think incrementally,” Martinez cautioned. “It’s not going to happen where you’re going to go there and make a presentation and you’re going to close this huge transaction— probably not likely. Everything is going to be done step by step, and in a confidence-building approach. The Cubans will do things in baby steps. It’s just the nature of it. It’s also because the relationship is still not totally restored or reconciled completely.” After the event, several of the attendees said they were thrilled about the opening of Cuba, even if the going will be slow. Henry Goodfriend, the president of Goodfriend Global Group, an international commercial real estate firm, said he hopes to set up shop on the island quickly to beat the rush. “You’ve got to start somewhere,” Goodfriend said. “It’s going to happen. If opportunity knocks, you’ve got to at least open the door.”

SPOTLIGHT: MUNICIPAL UNIONS

oughly a quarter of all workers in New York State are either members of a union or are represented by one. That adds up to more than 2 million people, the vast majority of whom are state or local government employees. New York is the clear leader compared with all other 50 states—the state has more than double the U.S. average of union membership. The only state that comes close to rivaling New York in union employment per population density is Alaska—a state with a twentieth the number of people and 13 times as much land. These statistics only scratch the surface when it comes to understanding how union membership, and in particular municipal unions, are integrated into the entire social construct of New York State. Here, more than anywhere else in America, organized labor is weaved into the fabric of society. Unionized workers are our family members, our friends and our neighbors. The issues that impact them also impact the communities in which they live, even if people don’t realize it. New York got to this place following decades of activism and political organization by unions. Throughout that process, the labor movement has wielded, and continues to wield, more influence on government proceedings here than anywhere else. The dynamic leads to heightened battles over issues—because the stakes are higher in New York than in any other state. Every victory for labor in New York can serve as a model for unions in other states. Every failure emboldens interests trying to strip away labor’s power. In this section we highlight some of the most pressing issues facing unions, from the new contracts for workers in New York City and in the state, to the fiscal strength of upstate cities burdened by contracts and pensions that were negotiated in better times.

city & state — April 13, 2015

CONTENTS:

24... How healthy are de Blasio’s labor deals? By Sarina Trangle

30... Cuomo’s ongoing fight with public sector unions By Ashley Hupfl

28... Niagara Falls’ struggles with public safety unions By Justin Sondel

32... A Q&A with Steven Greenhouse, dean of the labor beat

cit yandstateny.com

7’6”

7’0”

6’6”

6’0”

5’6”

5’0”

4’6”

4’0”

3’6”

3’0”

2’6”

Vision Zero is TreaTing Bus operaTors Like Common CriminaLs . . .

MTA Bus Operators carry more than two and a half million passengers every day over the most difficult routes in the world, constantly congested with traffic and pedestrians. Bus Operators, thanks to strong union contracts, have good jobs and are pillars of their communities. Now, these same men and women are being criminalized by Mayor de Blasio’s Vision Zero law. TWU Local 100, the TWU of America AFL-CIO, and the Amalgamated Transit Union Locals 726, 1056, 1179 and 1181 – representing thousands of New York City Bus Operators – believe that this was not the intent of the Vision Zero right-of-way law. It must be amended immediately. Twenty-five members of the New York City Council, the Working Families Party, the New York City Central Labor Council AFL-CIO, the New York State Federation of Labor AFL-CIO, and the Coalition of Black Trade Unionists agree. Stop scapegoating Bus Operators for the flaws in the system. Start addressing the systemic causes of right-of-way accidents involving MTA buses, including street design, MTA bus routing, pedestrian and cyclist behavior. We urge the New York City Council and Mayor de Blasio to immediately get behind City Council amendment Int. 663 to eliminate the unintended consequences of Vision Zero. Fix the system. Stop arresting Bus Operators.

We Are Not CrimiNAls #AmendVisionZero NYC CLC, AFL-CIO Vincent Alvarez President

ATU Local 1179 Ben Caughman President

ATU Local 726 Daniel Cassella President

ATU Local 1181 Mike Cordiello President

ATU Local 1056 Mark Henry President

TWU Local 100 John Samuelsen President

TWU of America Harry Lombardo President

MUNICIPAL UNIONS

HEALTHY CONTRACTS? CITY ARGUES HEALTH CARE SAVINGS MAKE RAISES AFFORDABLE, BUT SOME DISAGREE

city & state — April 13, 2015

here’s little debate that the de Blasio administration has moved quickly to settle contracts of the municipal workforce after assuming office with all agreements outstanding. But what the legacy of these commitments will be has already become a contentious debate. New York City Mayor Bill de Blasio has said the city could afford to pay retroactive raises for years workers went without contracts and new raises because unions agreed to find $3.4 billion in health care cost savings over four years. New York City Labor Commissioner Robert Linn and some economists say settled contracts benefit the city through improved morale and with unions using a more collaborative approach on matters such as health care. But some contended the health care cost reductions detailed by the administration this fiscal year are not entirely composed of actual savings, which points to the risk in de Blasio’s arrangements. Linn’s team has reached agreements with 67 collective bargaining units, which account for 76.2 percent of the city’s workforce. The administration first worked with unions whose contracts had lapsed for five years, such as the United Federation of Teachers’, which ultimately served as a template for future negotiations. A pattern emerged of 10 percent raises over seven years and $1,000 ratification bonuses, while including lump sums for retroactive raises—in this case amounting to the 8 percent raises teachers missed when contracts lapsed under the prior administration. The city then moved on to labor groups working without a contract for three years, like municipal employees covered by District Council 37. Next, Linn said he would focus on settlements with firefighters, correction officers and sanitation workers, among other,

Mayor Bill de Blasio and DC37 announced a contract last July. smaller labor groups. But, he noted, the administration will be busy in May and June as it goes to binding arbitration with the NYPD Patrolmen’s Benevolent Association, which has balked at agreements modeled after other unions’ that do not include a raise in the first year. “There’s hardly a week or two that we don’t announce some new settlement that we’re reaching,” Linn said. “The process was a substantial one of coming in with 144 unsettled labor agreements and now working through all those agreements and reaching toward a conclusion, where hopefully, before too long, 100 percent of city workers all have labor agreements.” Union leaders and Linn say new contracts boost public personnel’s morale and can pave the way for more collaboration. While many labor leaders said there was no connection between having a contract and attendance, Winslow Luna, vice president for SEIU 1199, said he believed the roughly 3,700 personnel at city hospitals and other facilities he represented were calling out sick less.

The Health and Hospitals Corporation did not respond to a request for attendance data. And employees also appear more flexible. Luna said his members did not receive all of a scheduled 3 percent raise this February, but were understanding when the city explained the accounting glitch and agreed to pay the difference in late April. “Some members, of course, they were upset,” Luna said. “But it wasn’t a really big deal. … They know the city will eventually pay it.” Linn said such cooperation has allowed the city to tackle rising health care costs that the government had so far struggled to rein in since the 1980s. “There was a relationship where nothing was accomplished. We were unable to implement some of the types of changes that employers all across the country have been implemented,” Linn said. “We reached an agreement with the unions that we would together establish savings … that would dramatically reduce health care costs.” Linn announced at the beginning of the month that the $400 million

in savings the Municipal Labor Committee, an umbrella group for unions, agreed to find this fiscal year had been identified. Roughly $153 million of the savings would come from unions authorizing the city to use payments it made to a stabilization fund for federally mandated mental health care costs, $108 million from an audit launched under the prior administration aimed at removing ineligible dependents, $58 million from shifting to a less expensive insurance plan and $17 million from lower premium hikes than anticipated, the administration said. Nicole Gelinas, a fellow at the rightleaning Manhattan Institute policy research group, contended some of these projected cost reductions—such as rooting out fraud—do not qualify as savings. She added that there is still a lot of room for cutting costs, noting that health care and other benefits accounted for the most unaffordable elements of the contracts. She described the agreements as risky for pushing payments for retroactive raises into 2021. “No mayor has ever gotten to do two terms without a recession, and so then you are back to that same problem—if we have another recession, but yet we can’t afford the current services because we’re paying for past services,” she said. But James Parrott, chief economist at the left-leaning Fiscal Policy Institute, said the administration had accounted for savings and was on track to reduce costs $3.4 billion in the coming years. He said the contracts were fiscally responsible. “If somebody wants to cry wolf in that context, they’re going to cry wolf in any context,” Parrott said. “The city has budgeted for it, and the city is showing surpluses that it never has before for the entire four years of the financial plan.” cit yandstateny.com

ED REED FOR THE OFFICE OF MAYOR BILL DE BLASIO

By SARINA TRANGLE

MUNICIPAL UNIONS on pension asset balances, we have worked diligently with our trustees and their consultants to adopt an asset allocation that will serve the long-term needs of city taxpayers.

SCOTT STRINGER New York City Comptroller Q: Mayor Bill de Blasio and others have warned of an economic downturn in the next few years. How would another recession affect New York City’s pension systems? SS: The New York City pension funds have a very long time horizon when investing assets to support the city’s promise to provide retirement security to our more than 700,000 employees, retirees and their beneficiaries. While an economic downturn that is not fully anticipated by the markets may have a temporary negative impact

Q: What measures have been taken to prepare the city’s pension systems to handle another potential downturn? SS: We must always seek to earn a healthy long-term return in line with the risks that we take in the securities markets, but market returns are only one factor in the resiliency of the pension systems in the face of economic downturns. Equally important is the city continuing its consistent practice of making the statutorily mandated contributions—calculated annually, using sound methodologies and responsible and accurate assumptions by the city’s actuary. The budget impact of these contributions is currently projected to be manageable, with pension expenses anticipated to grow more slowly than the overall budget. However, in the coming years, those figures will be affected by the growth in personnel service expenses, changes in benefit

levels and market returns. Q: There has been some criticism from fiscal conservatives over the contracts de Blasio cut with city employees during his first year in office. What do you think will be the long-term impact of those contracts on the city’s finances? SS: The city’s budget currently includes the costs of settling all of the remaining contracts, following the civilian and uniform patterns of those already settled. Through fiscal year 2019, those expenses assume the required health care savings also reflected in the budget produce manageable budget gaps. In fact, the Comptroller’s Office’s report on the fiscal year 2016 preliminary budget projects sufficient funds in fiscal year 2015 and fiscal year 2016 to roll forward to nearly close the Comptroller’s Office’s projections of the out-year gaps. Of course, these projections rely on continued strong revenue growth and modest expense growth throughout the years of the financial plan. It is important to remember, however, that some of the contract expenses continue into fiscal year 2021 and

thus are beyond the scope of the city’s current financial plan. Q: There has been criticism of the city’s use of hedge fund managers who command large investment fees. Are they necessary to manage the city’s funds? SS: A well-constructed hedge fund portfolio can provide equitylike returns in a manner that is not correlated with public equity returns. This dynamic promises an improvement in the overall riskadjusted return of the pension portfolios. I recently put out a report that examined whether we are getting real value from the fees we pay to those who manage pension fund dollars. Right now, money managers are being paid exorbitant fees even when they fail to meet baseline targets for investments. Fees and, in some instances, poor performance have not only wiped out any benefit to the funds but have in fact cost taxpayers billions of dollars. Moving forward, I will be working with my fellow trustees to evaluate all aspects of the pension funds’ investments, disclosures and fees.

city & state — April 13, 2015

cit yandstateny.com

MUNICIPAL UNIONS

he de Blasio administration has reached agreements with the following unions, although not all of these have yet been formally ratified:

Mayor Bill de Blasio announcing contract deals with the UFT (above), Teamsters Local 237 (top left) and Uniformed Superior Officers Coalition (top right).

• United Federation of Teachers • New York State Nurses Association • Local 1199 of Service Employees International Union • District Council 37 • United Probation Officers Association • Local 300 of the Service Employees International Union • Teamsters Local 237 • Council of Supervisors and Administrators • United Superior Officers Coalition, which represents eight unions • Local 891 of the International Union of Operating Engineers • Local 306 of the International Alliance of Theatrical Stage Employees • Plumbers Local 1

• Civil Service Bar Association • Local 1180 of the Communication Workers of America • Local 1183 of the Communication Workers of America • Council of Interns and Residents • Sergeants Benevolent Association UNSETTLED CONTRACTS INCLUDE • Patrolmen’s Benevolent Association • Uniformed Firefighters Association • Correction Officers Benevolent Association • Uniformed Sanitationmen’s Association • Professional Staff Congress • Uniformed EMTs, Paramedics and Fire Inspectors Local 2507 of the FDNY • Uniformed EMS Officers Union Local 3621 of the FDNY • Local 1182 of the Communication Workers of America • Organization of Staff Analysts

CUNYNeeds a Raise THE CITY UNIVERSITY OF NEW YORK (CUNY) makes a college education possible for half a million students a year. But New York State’s share of support for CUNY keeps shrinking, and the students’ costs keep rising. Now the State is stalling on funding the faculty union contract. The professors and advisers who make CUNY great have worked five years without a contractual raise and are paid significantly less than faculty members at comparable universities. CUNY is becoming uncompetitive in the national academic labor market. Faculty and staff are being forced to choose between their students and their families; many may have to consider leaving CUNY for other jobs just to make ends meet.

city & state — April 13, 2015

Albany lawmakers must act this session to protect the quality of a CUNY education.

Tell Albany:

Fund the PSC-CUNY Contract Paid for by the Professional Staff Congress, the union of CUNY faculty and professional staff. www.psc-cuny.org

cit yandstateny.com

ROB BENNETT AND DEMETRIUS FREEMAN/OFFICE OF MAYOR BILL DE BLASIO

DEAL OR NO DEAL

MUNICIPAL UNIONS

Chair, New York City Council Civil Service and Labor Committee Q: What have you been focusing on as chair of the New York City Council Civil Service and Labor Committee? IDM: We started out with paid sick leave, which was obviously very significant. We didn’t get any of the backlash that we had anticipated, and I think partially that’s because we did our recon work early and went to communities and spoke to business owners. We did an employee protection provision, which was a really big deal around the school bus operators. They took away that provision and immediately they lost about between 1,000 and 3,500 workers. Those who stayed, their wages were cut in half. I’m really proud of being able to put that package together, working with the mayor’s office and subsidizing their benefits for a year. Now we are waiting on the state to legislate that so that we don’t have to go back and do it again. Q: What have you been discussing with the administration in terms of New York City’s employment initiatives? IDM: They’re talking about phasing the Work Experience Program out. Right now, you have a couple thousand of them below ground working in the subways, in the Parks Department, the Department of Citywide Administration, doing their job and they’re doing that job for a benefit, for a check that is less than minimum wage. The resources exist to pay attention to creating real jobs, but more importantly, it’s the return that you get on your investment. These public employees for the most part are city residents and these positions often create advancement opportunities. There should be opportunity for those folks who are qualified to transition, and it would be criminal if we did not give them the utmost opportunity to make that happen. Q: What is your strategy when it comes to New York City’s reduction

cit yandstateny.com

Q: What does the focus on a higher minimum wage mean for unions? Would they push for more compensation? IDM: No, I don’t think so at all. We bought into it because it was the right thing to do. And the labor movement in general has been a movement of social conscience. If you look at the civil rights movement, that had been funded by trades unions, had been funded by the 1199 and the TWUs of the world. If we create that environment where an underbelly of low-wage workers within certain industries is acceptable, what makes it not acceptable in your industry? We have to stand firm with those values of the labor movement. Q: What do the de Blasio administration’s affordable housing goals mean for organized labor? IDM: There used to be sort of like an unwritten rule that you can’t do an affordable housing union, and I dismiss that premise. I am trying to facilitate or mediate a project labor agreement between labor, the building trades and the administration for large projects. I have seen in my community many, many, many times, people come in and talk about local hiring, and you have someone doing flag work for $10 an hour, if that, and other menial jobs. Once that building is up, that’s it. And so the beauty of the building trades and what we have been discussing is that there is an apprenticeship opportunity, and for those who have skills then, there is opportunity to segue right into union membership, and this is a major difference, not just in wages and benefits, but this is a career.

THOMAS DINAPOLI New York State Comptroller Q: Rising pension costs have hamstrung many upstate municipalities, prompting the state to create the option of pension smoothing. Is this working? TD: It has worked for those communities that needed short-term help to cover increased costs. As a reminder to your readers, in 2011, we created the Contribution Stabilization Program as an optional tool to help municipalities manage their pension costs after the 2008 financial nearmarket collapse and recession. The program gives municipalities the option of amortizing a portion of their bill with interest over time. While only 213 of the more than 3,000 municipalities actually participated in the program, it has helped them responsibly manage the increase in pension costs. From 2011 through 2015, municipalities have paid $14.7 billion in pension costs and have amortized a significantly smaller amount—$1.4 billion. The vast majority have instead continued to pay their pension bills in full each year, which is always the best option. And as we anticipated, as the economy has improved, fewer municipalities are finding it necessary to utilize the program. The good news for municipalities and taxpayers is that contribution rates have declined for fiscal years 2014-2015 and 2015-2016. Q: The economy has experienced an unprecedented run of growth. Do you expect that to stop in the coming years and how prepared is the pension system to deal with an economic downturn? TD: We live in a global economy that is influenced by many factors. While the economy has seen many ups and downs in recent years, we have had a recent period of relatively stable growth, which I am optimistic will continue. I am confident that our strategy of diversified, long-term investing will keep the state pension fund strong and ready to help meet the needs of the public service retirees across the state. We have weathered many economic roller coasters in the

past and continue to make certain that our projections are realistic and that we remain financially strong. I’m proud that the pension fund ended the state fiscal year 2013-2014 with a value of $176.8 billion. And, as of Dec. 31, 2014, the estimated value of the fund has grown to $181.7 billion. Last year, we paid out $9.9 billion in pension payments to retirees and beneficiaries, the vast majority of whom continue to live in New York where their spending contributes to our state and local economies and communities. I think it’s also important to point out that the average pensions are modest and meant to be partnered with savings and Social Security. Last year the annual pension amount for Employees’ Retirement System retirees was $21,285, and the average for Police & Fire Retirement System retirees was $45,075. Q: There has been criticism of the state’s use of hedge-fund managers who command large fees. What’s your response to the criticism? TD: As a long-term investor, the New York State Common Retirement Fund manages a diverse portfolio to help minimize market volatility. Hedge funds are a small part of that, about 3.2 percent of total assets. I made transparency on investment fees a priority when I entered office, by reporting all costs, some of which, such as fees to underlying managers, had not been previously reported. To reduce the higher fees associated with hedge funds, investment staff have invested directly in managers—rather than fund of funds—which not only cuts out a layer of fees, but also increases their transparency. We have also kept fees in check by renegotiating them whenever possible and eliminating underperforming managers. Because hedge funds receive performancebased fees, higher fees are often seen in years they provide solid returns. Q: You also manage the fiscal stress monitoring system. Has this been an effective tool to help communities? TD: As state comptroller it was important for me to develop, implement and manage the fiscal stress monitoring system to call attention to the financial issues that many local communities are facing. Municipal officials, state lawmakers, labor unions and citizens have found the information provided through our system to be useful, relevant and unbiased. The system has served as an effective communication tool to foster dialogue between local officials and taxpayers.

city & state — April 13, 2015

I. DANEEK MILLER

of its provisional workforce? IDM: They are reducing the numbers, but I think that labor has to be realistic that there are some job titles that are kind of antiquated and obsolete. Coming out of transportation and coming out of the Metropolitan Transportation Authority, we were able to look towards the future and how this industry is growing and what it’s going to be 10 years from now and what are going to be those needs. Let’s invest in those needs, as opposed to me fighting you over holding on to jobs that have no value. That comes from each individual union and each individual agency having a relationship. The culture has been nobody cares if it’s reduced or not. Unless there’s somebody to enforce that, they are going to do business as usual.

MUNICIPAL UNIONS

FALLING BEHIND

LIKE MANY UPSTATE CITIES, NIAGARA FALLS STRUGGLES TO NEGOTIATE POLICE, FIREFIGHTER CONTRACTS WHILE KEEPING THE COMMUNITY AFLOAT

city & state — April 13, 2015

iagara Falls Mayor Paul Dyster was already facing a tough budget year when he found out how much the city owed police brass and firefighters unions after an arbitration decision last spring. While the city had set aside money for the possibility of back pay coming out of the decision, the amount was well below the $4 million that would need to be paid out. “I think for us what was surprising was the total dollar amount of the payout when you applied those percentages through those contracts,” Dyster said. He ended up submitting a budget with a proposed 4 percent tax hike, layoffs and a reduction in services. Niagara Falls is one of many upstate municipalities dealing with the challenge of keeping unions happy while maintaining services, as tax revenues are outpaced by growing costs. Richard Ravitch, the former lieutenant governor who has been called in to help fix financial messes in New York City, the Metropolitan Transportation Authority and now Detroit, said that the issue is widespread. “This is the universal problem we have all over the country,” Ravitch said. “We have all this pressure on the cost side to provide public services and public benefits and we have an enormous reluctance on the part of the people who can afford it to pay more taxes to pay for it.” And there’s no easy solution for governmental leaders, particularly those running smaller, poorer cities. “The guy who lives on Park Avenue doesn’t want to pay for anything in Niagara Falls,” Ravitch said. “But on the other hand, the people in Niagara Falls can least afford to pay the level of services necessary to provide the poor people with a minimal level of living.” As jobs disappeared over the years, municipalities struggled to provide the level of services required to keep their communities running with a shrinking tax base.

Vacant houses in shrinking cities attract crime and are far more likely to be set on fire. In Niagara Falls, that has led to grass on some city-owned lots growing chest high during the summer. Dyster points out that while the population shrinks, the streets still need to be paved and plowed and the same amount of ground needs to be covered by police and fire departments. “Your city may have half the population that it did in the 1960s,” Dyster said. “It doesn’t mean the demand for services is half of what it was in the 1960s.” In fact, as more people move out of the city, the vacant houses left behind attract crime and are far more likely to be set on fire than occupied homes. Making matters worse, Dyster said, many of the people who left the city over the decades were upwardly mobile, educated people. Many of those who remained were poorer. “At the end of the day, you end up with a city that maybe has a lot of poverty and therefore has a disproportionate crime rate by comparison to a city of the same size that’s more prosperous,” Dyster said. Finding a balance among tax rates acceptable to his constituents, critical city services and legacy costs like the pensions and health care expenses of retired city employees is something the mayor of the poor city—half the residents live within 200 percent of federal poverty guidelines—has

struggled to do in recent years. The city has used a total of $14 million in fund balance to bring the books in line in the last three budgets. The reserve is so depleted it is no longer a realistic option for plugging holes. The city is again looking at a sizable bill for work already performed by its uniformed employees. The police patrolmen’s union, Police Club Inc., is set to enter into arbitration with the city this summer, and an award similar to those granted last year is expected late this year or in early 2016. When going to the negotiating table with uniformed officers, politicians know that they are at a disadvantage from a public perception standpoint. Dyster says he understands that his uniformed officers have difficult jobs and deserve to be paid well. “People understand the need for public safety,” he said. Mike Lee, the president of the Police Club, agrees with Dyster on that point. And he says it is his responsibility to get the best deal he can for his members, particularly considering the dangerous and difficult work that they do. “I don’t think it’s my job to manage (the city’s) finances,” Lee said. Lee, who took over as president in January after spending seven years on the union’s negotiating team, said he realizes that many upstate cities, including Niagara Falls, are facing

tough decisions. But, he says, taking care of the people that keep the city safe should be a priority. Niagara Falls is far from alone in struggling to deal with union contracts while contending with other fiscal challenges. The city puts about 80 percent of its general fund toward those costs each year, a number that is common for upstate municipalities. Brian Butry, a spokesperson for the state comptroller’s office, said many counties, towns and cities across upstate face very similar challenges to Niagara Falls. “We certainly stress that when officials are doing their long-term budget planning that they take these costs into consideration,” Butry said. In 2012, the state comptroller’s office’s Fiscal Stress Monitoring System listed Niagara Falls as in “significant stress.” The city was taken off the list in 2013 after casino revenue payments that had been withheld for nearly four years were released. Still, the city’s recurring deficit and growing personnel costs remain worrisome to officials. Dyster has been eliminating non-essential jobs after employees retire. Last year, with the budget negotiations extremely tense, the city offered a retirement incentive in an effort to reduce the workforce, ultimately eliminating 16 jobs. “We’re trying, where possible, to reduce the size of city government through attrition,” Dyster said, adding that he is trying to maintain services on fewer dollars so that the city remains a desirable place to live, in the hopes that the population and tax base can rebound. As tax bases have stagnated or declined, some unions have come to realize that they, too, need to consider the fiscal strength of the places they work in order to ensure long-term benefits for their members. Finding that common ground can be a delicate balancing act, but one that both sides strive for. As Butry said, “It’s in everybody’s best interest that you can work out a mutually beneficial agreement.” cit yandstateny.com

JUSTIN SONDEL

BY JUSTIN SONDEL

MUNICIPAL UNIONS

HIGH ACHIEVEMENT NY: STATE TESTING TAKES LESS THAN 1% OF CLASS TIME; COALITION CALLS FOR BETTER COMMUNICATION TO PARENTS (NEW YORK) – With state assessments scheduled to begin throughout New York next week, a new analysis by High Achievement New York finds students in grades 3-8 spend an average of just 0.75 percent of their time in school taking state tests annually. Despite this reality, many parents and residents believe that the new state assessments, implemented in alignment with the Common Core State Standards, have greatly inflated testing time.

PETER ABBATE JR.

Chair, State Senate Labor Committee

Chair, Assembly Governmental Employees Committee

Q: What does the recently passed state budget mean for municipal unions? JM: There are some good things in the budget. We’ve made a multibilliondollar investment in infrastructure projects, which will benefit every region throughout the state. We’re delivering funding increases for road and bridge projects, mass transit systems and highway aid to municipalities to make infrastructure repairs after a very harsh winter which caused significant damage to roads. We’ve also increased funding to SUNY/CUNY schools, including increases in capital for infrastructure investments on campuses across the state. Additionally, we preserved funding levels for many state agencies so that they can maintain their workforces and/or fill vacant positions. Q: The negotiations with some of the larger public-employees unions in 2011 were very intense. Do you expect difficult negotiations again after the unions agreed to a pay freeze in 2011, or have the attitudes changed toward municipal unions? JM: The attitude towards public employees should be one of respect and appreciation; they should never be treated as the enemy. They provide valuable services and it’s important to remember that they are New Yorkers; they live in our communities, they pay taxes and they support our economy. The state’s fiscal condition has certainly improved since 2011, but that has come as a result of better fiscal discipline and controlled spending, neither of which would have been possible without the commitment of our public employees. While I have no role in the negotiations, I am confident that as long as both sides negotiate in good faith, they can reach a fair deal that protects workers and recognizes their many contributions to our state while ensuring that we adhere to the fiscal policies that have moved New York State forward—a true win-win.

cit yandstateny.com

Q: What does the 2015-16 state budget mean for municipal unions? PA: This year’s state budget contained a few proposals affecting municipal unions. Most of these related to staffing levels, savings from facility closures and mergers. The Assembly Majority listened to union leadership and members’ concerns and tried to create a budget that all could live with. Q: The negotiations with some of the larger public-employees unions in 2011 were very intense. Do you expect difficult negotiations again after the unions agreed to a pay freeze in 2011, or have the attitudes changed toward municipal unions? Will tensions be higher after PEF endorsed Zephyr Teachout last fall? PA: Contract negotiations are tense by nature since both sides come to the table with numerous goals and firm bargaining positions. Whether or not endorsements during last year’s gubernatorial election play a role is left to be seen, though they didn’t have a great impact after the 2010 election. I don’t think Gov. Andrew Cuomo has changed his attitudes toward public employees’ unions and will most likely continue to play hard ball during the bargaining process; but these matters are better left not negotiated out of the public eye. Q: Is the state in a stronger position financially, and could that pave the way for more flexibility in approving pay raises for public sector employees? PA: The state’s finances are considerably better this year than they were the last time these contracts were up, but there are many factors that would determine whether the state can afford raises. Again, since negotiations are currently happening it would be ill advised to speculate.

OVERALL TIME The State Education Department (SED) has capped state testing to less than one percent of school time every year. As a result, the most students are spending annually is 520 minutes ( 8 hours and 40 minutes) on state tests over the course of their 64,800-minute school year, while the least is 400 minutes (6 hours and 20 minutes). All state assessments are broken up into shorter, more manageable sessions. Over a three day period, the longest exam takes no more than 90 minutes at a time, or 0.16 percent of time spent in school, a test from which third graders are exempt. In fact, the total time a student will spend on state tests over the course of their elementary and middle school education is 2,900 minutes. The other 385,900 minutes, or 99 percent of their school life, will go towards class room instruction and other formative school activities. In addition, state law prohibits the testing for students in Kindergarten through second grade, meaning these students do not participate in state assessments and therefore spend no time in each school year on the tests. OVERALL PERCENTAGE On average, New York students in grades three through eight spend 0.75 percent of their time in school on state tests, including both Math and English Language Arts exams. In other words, students spend over 99 percent of their time in school learning and in other school based activities. Third graders spend the least amount of time on state tests, with a total of 0.62 percent each year devoted to the assessments, while fourth graders commit 0.65 percent of their time to the state tests.

Students in fifth through eighth grade spend the most time on state testing, at 0.8 percent. ENGLISH LANGUARGE ARTS Students in the third and fourth grades spend no longer than 210 minutes taking the English Language Arts state assessments each year. That amounts to three and a half hours, spread across three separate sessions. And with these students spending a minimum of 1,080 hours in school every year that accounts for 0.32 percent of the whole school year. Although slightly greater for students in grades five through eight, ELA state testing time still only amounts to 0.42 percent of annual school time. Indeed, the three 90-minute sessions represent a fraction of the 64,800 minutes spent in class over the course of the year. MATH By and large, Math assessment take less time than the ELA, with the exception of students in the fourth grade who are spending an equal amount of time – 210 minutes or 0.32 percent of their school year – on both. Third graders have the shortest state Math assessments, totaling 190 minutes, which is broken into two 60-minute sessions and one 70-minute session. Fourth grade Math exams experience a gradual step up from the third grade level, allotting an additional 20 minutes to bring the total Math state test time to 210 minutes, while fifth through eighth grade students spend 250 minutes over the course of the three days. HANY CALLS FOR MORE PUBLIC INFORMATION SED has worked hard to ensure assessments are limited to as little instructional time as possible, but there remains widespread belief that students of all ages have experienced a dramatic increase in testing time. To help dispel myths about the state standardized tests, HANY is calling on the State Education Department to make additional resources available, including a dedicated “Testing Time” website, which would house not only information on the length of standardized assessments, but also the “testing transparency reports” local districts are required to publish. HANY is also joining SED in its call for the release of more sample items from state tests. In order to do so, SED must be provided the necessary funding to ensure that all New York parents understand exactly what is being assessed, and to help build confidence in their children taking the tests. “Too many parents and other New Yorkers believe the myth that opponents of Common Core perpetuate; that students are spending an ever increasing amount of time on tests. That’s just a falsehood when the average student spends a mere 0.75 percent of their time in school on state assessments. Our education leaders need to better educate New York parents on how much time students are actually spending on the state tests, and why it’s important,” said Steve Sigmund, Executive Director of High Achievement New York.

city & state — April 13, 2015

JACK MARTINS

MUNICIPAL UNIONS HHC RNS RATIFY CONTRACT THAT CAN BE A MODEL FOR PUBLIC HEALTH EMPLOYEES By Anne Bove, RN President, HHC/Mayoral Agencies Executive Council Secretary, New York State Nurses Association

We, the NYSNA nurses serving the patients of HHC and the mayoral agencies, the greatest public hospital system in the United States, are excited to announce that, after years of working without a contract, we finally secured an agreement with our employer. The contract we won, and the way we won it, can serve as a model for public health workers all across New York State. The terms lay a solid foundation for a strong future: we established two new funds, one for education and training and the other for child and elder care, as well as pay increases responsible to the cost of living increases.

Just as important as the outcome, however, was the path we took to arrive at it. We won these terms the way union contracts are supposed to be won – not by leadership dictating terms to members, but through member-driven action and engagement. Members turned up in consistently high numbers to the monthly HHC and mayoral agencies Executive Council meetings, where they provided substantial engagement, input, and direction. Both public hospital RNs and Mayoral nurses posed questions, shared information, and helped shape the negotiations early on. This process mirrors one of our union’s central tenets: the people closest to the front lines of health care delivery should have a major voice in how the decisions regarding patient care are made.

ROUND TWO CONTRACT NEGOTIATIONS WITH STATE’S BIGGEST PUBLIC EMPLOYEE UNIONS BEGIN BY ASHLEY HUPFL

“

Contentious” and “difficult” don’t begin to describe the Cuomo administration’s negotiations with the state employees unions in 2011. Nationally, labor felt under attack after Wisconsin Gov. Scott Walker’s efforts to strip collective bargaining rights from unions in his state. And with the country still recovering from a recession, there wasn’t much money to be handed out, even in traditionally labor-friendly New York. In the end, the state’s two largest public employees unions, the Civil Service Employees Association and the Public Employees Federation, ended up striking deals with the Cuomo administration, making large

concessions and establishing a narrative that the new governor was no friend to these labor unions. “The first round of negotiations were extremely contentious, obviously, with the unions having to accept ‘zeros’ and also reductions in the workforce. If government is broke, it’s very hard to deal with an employer that has no money,” said Ed Draves, a labor lobbyist for Bolton St. Johns. “The economic climate is better now than it was the last round of negotiations.” Now both the PEF and CSEA are about to enter into contract negotiations with the Cuomo administration—PEF’s contract expired in April, and CSEA’s expires next year—with the economic landscape looking much different than

Throughout the process, we were guided by the commitment we make as HHC nurses. It’s a simple philosophy, but a deeply humane one: to provide every single patient with high quality care, and never to turn a patient away, regardless of their ability to pay, regardless of their immigration status. It is well-known that New York City is one of the most unequal cities in the country, with billionaires and oligarchs living just blocks from low-income communities struggling with unemployment and insufficient access to crucial resources, like healthcare. New York City’s wealthiest residents have their boutique health care facilities; the people on the other end of the spectrum have us.

city & state — April 13, 2015

KEVIN P. COUGHLIN/OFFICE OF THE GOVERNOR

We will never stop fighting for our patients, and we will never stop standing with the public health workers all across this great state who are fighting for theirs.

cit yandstateny.com

MUNICIPAL UNIONS four years ago. While there may be more money to go around, the negotiations are likely to still be complicated. CSEA’s Communications Director Stephen Madarasz admits as much, saying even though there are ongoing conversations between state officials and the unions, the very nature of the talks leads to conflict. “State unions of New York and the governor of New York have a very different dynamic than other kinds of labor management relations, largely because the governor is the boss,” Madarasz said. “For CSEA, the relationship with the governor is very dynamic and we’ve been around for 105 years now and we’ve had a dynamic relationship with Franklin Delano Roosevelt, Nelson Rockefeller and Mario Cuomo and even Paterson. And Andrew Cuomo is just the latest in succession of governors.” E.J. McMahon, president of the Empire Center for New York State Policy, agrees that the upcoming talks will likely be as complicated as they have been in the past, even with the improved economy. “[Cuomo’s] financial plan is tight,” McMahon said. “He’s pledged to hold the net spending increase at 2 percent a year for the rest of his term and because the budget is absolutely dominated by

school aid and Medicaid, it doesn’t leave a lot of room for anything else. Happy days are not here again. There isn’t a huge pot of money out there to give them raises from.” McMahon said it will be interesting to see how the new leadership at PEF— which changed when former President Ken Brynien was ousted by members after the last contract negotiations and replaced by Susan Kent—will handle the upcoming negotiations. “These unions have never been as powerful in negotiations as local unions are, like the New York City union,” McMahon said. “So what kind of contract do they intend to negotiate when the governor essentially always has the union over a barrel?” The Cuomo administration did not immediately respond to requests for comment. There is one obvious difference heading into this year’s round of talks that Draves says shouldn’t be overlooked. “Back then (in 2011) you were going into the negotiations without any interactions—that’s different too,” Draves said. “The state and the current union leadership know each other better than they did back then. I think … it will help in certain cases and it hurts in some cases. But the difference now is both are known quantities.”

3 REASONS WHY ‘OPTING OUT’ Sigmund Jennifer Hensley SPELLS DISASTER ByAndSteve The politics of education may make for great theater, but when politics threatens to harm the well-being of children, it becomes a dangerous game. Calls from some for students to opt out of this month’s state assessments are irresponsible. Parents need to know the facts about these state tests and the rhetoric coming from some so-called education leaders is not part of a constructive conversation. Opting out does nothing to improve our student’s futures -- instead it ignores the opportunity for important feedback on student progress. Every child across our state should take these exams. As leaders of High Achievement New York, a coalition of education, business and civic groups, we want to make sure parents understand what these tests tied to the Common Core standards are -- a measure to evaluate progress toward career and college readiness. We should dispel certain myths right away. Testing is not taking over our classrooms and monopolizing our teachers’ time. Our coalition released an analysis this week that found students spend less than 1% of their time in school taking state tests -- that’s just 480 minutes over the course of their 64,800-minute school year. Further, the state Education Department also limits “test prep” to no more than 2% of classroom time in a year.

So why shouldn’t parents have their kids refuse to take the state assessments? Students will lose a ‘checkup’ Under the old system, hundreds of thousands of children -- from the suburbs to the cities -- slipped through the cracks and could drift along without intervention. That led to more than 60% leaving high school in New York without being college or career ready. The assessments being administered this month are designed as an annual “checkup” to ensure all kids are making progress and providing teachers and schools more information when they’re not to help get students who may be falling behind back on track.

The assessments are the only common measure to compare how students are doing across the state. A disproportionate number of opt-outs would skew the results and be a step back when it comes to closing the achievement gap among minority students. We must make sure every child is advancing; to opt out is to do a disservice to high-need schools.

FILIP WOLAK

The above excerpt from an op-ed is that ran in AM New York and Newsday on April 9/10

cit yandstateny.com

city & state — April 13, 2015

No basis for comparison

MUNICIPAL UNIONS

STATE OF THE UNIONS A Q&A WITH

STEVEN GREENHOUSE

city & state — April 13, 2015

teven

Greenhouse,

veteran labor reporter for The New York Times, left the newspaper in December—but that doesn’t mean he has stopped reporting. As a freelancer for the Times and The Guardian, Greenhouse has been covering the push to raise fast-food wages, a unionization campaign by graduate students and Wisconsin Gov. Scott Walker’s ongoing battle with organized labor. He is also working on a follow-up to his 2008 book, “The Big Squeeze: Tough Times for the American Worker.” In an interview with City & State Senior Correspondent Jon Lentz, Greenhouse talked about the challenges facing organized labor over the years, the different ways public and private sector unions have been affected and how coverage of labor issues has changed. The following is an edited transcript. City & State: You are one of the most experienced journalists in the United State covering the labor beat. What are the biggest changes

that you have seen with organized labor? Steven Greenhouse: I’ve covered labor for The New York Times for 19 years, and I’d say that the biggest difference is that unions have become a good deal weaker over those two decades and inequality has worsened over those two decades and the leverage of workers collectively and individually vis-a-vis their employers, usually corporate America, has grown weaker. And as a result, we’re still seeing things like wage stagnation, even when the unemployment rate is down to 5.5 percent. Another big difference is in the 1980s and 1990s, a lot of Republicans worked closely with labor unions and labor unions worked closely with Republicans. Now, generally Republicans are engaged in the concerted nationwide effort to weaken labor unions in many ways, whether it is pushing to enact right-towork bills or to abolish the prevailing wage. C&S: To what degree does the weakening of the labor movement or labor unions factor into that increasing inequality? SG: There have been several academic studies finding that the weakening of the unions, the decreasing density in the United States, have contributed to 25 to 30 percent—one can debate the numbers—of the increased income inequality. Generally in American history when workers have more leverage, have a stronger collective voice in the workplace, they’re able to pressure their employers more to share the profits and prosperity. C&S: Have these trends affected public sector unions any differently

than private sector unions? SG: In the 1980s and 1990s, we saw a great weakening of private sector unions because of competition from abroad, because of deregulation, because many companies got much more aggressive in locking out workers and even permanent replacement workers. And during that time public sector unions were getting stronger, and as of two or three years ago, there were more union members in the public sector than private sector workers nationwide. So the private sector workers took it on the chin in the 1980s and 1990s, and public sector workers continued to do quite well. And we reached a point where pensions for some workers were generous and with the budget problems exacerbated by the Great Recession caused by the financial sector, a lot of political leaders said, we need to tackle problems like generous pensions and pension underfunding. So in the last five years or so, led by Scott Walker seeking to curb collective bargaining of public sector unions, they have really sought to weaken the unions and roll back public sector union gains in pensions and health coverage. I think many people would agree that in some places, the pensions for public sector workers are quite generous and some cities can’t afford them. In other cases, some politicians see that they can make a lot of political hay by going after public sector unions, period. C&S: What has this meant for teachers unions? SG: So a lot of hedge fund billionaires have adopted the cause of charter schools, abolishing tenure and using high-stakes testing as a way to determine whether teachers should

receive bonuses or get fired. A lot of them say that they’re pushing this only to improve the schools, for education reform. Teachers unions feel that these hedge fund billionaires who are pushing this educational agenda—also part of that agenda is to weaken or cripple teachers unions. And teachers unions feel that there is a target on their head. Everyone admits that there are problems with public schools, but the teachers unions find it very frustrating that there’s very little academic proof that charter schools do a better job than public schools. And they say that the time when teachers are being beaten over the head, a lot of people are reluctant to go into teaching, people feel discouraged and it’s going to make teaching that much less attractive. And the teachers unions also say that high-stakes testing that will determine whether teachers receive tenure or get bonuses or get fired—again, there’s very little academic proof that that is a good way to assess teachers. Teachers feel like they are being unfairly targeted, and that’s why in state after state, beginning with New York State and Governor Cuomo, there are huge fights between some lawmakers, Republican and Democrat, and the teacher unions. C&S: In 2008 you came out with your book, “The Big Squeeze.” What will the topic of your next book be? SG: I’m going to write about the state of workers in America and the not-sohappy state of labor unions in America. And there’s really much more than that, but I don’t want to show my hand too much.

To read the full interview, including Greenhouse’s take on the state of labor coverage, go to cityandstateny.com.

cit yandstateny.com

HOUSING

THE WAITING IS THE HARDEST PART

LAWMAKERS CAN’T EXPLAIN DELAY OF HOUSING COURT COUNSEL BILL

New York City Councilman Mark Levine is a co-sponsor of the Right to Counsel bill.

he Right to Counsel bill that would guarantee attorneys to low-income tenants facing eviction in housing court now has 35 sponsors. There is an “unprecedented citywide coalition” supporting his bill, New York City Councilman Mark Levine said. Backers include Comptroller Scott Stringer and Public Advocate Letitia James. Both Council Speaker Melissa Mark-Viverito and Mayor Bill de Blasio took time in their annual State of the City speeches to help make the case that tenants need lawyers in housing court. Introduced by Levine and Councilwoman Vanessa Gibson last year, the legislation has been met with a groundswell of support in a city where affordable housing is being made a major priority. The only question is, will the bill move toward law anytime soon? Mark-Viverito’s office could offer no timeline for the measure reaching cit yandstateny.com

the Council floor. As of this writing, more than a year after its introduction, not even a committee hearing has been scheduled for it. And despite the mayor’s support for more funding for tenants in legal trouble (as well as multiplying funds for helping lowincome people get representation in court), de Blasio’s office would not say if he’ll get behind the measure. “We are reviewing the legislation, and clearly tenant representation is a significant priority for this administration,” a spokesperson from the mayor’s office said. The bill would guarantee attorneys for tenants in housing court if they are facing eviction and if their income is less than 125 percent of the poverty level. More than 90 percent of landlords are represented by attorneys in housing court—according to recent statistics—while over 90 percent of tenants are not. More than one in three cases of family homelessness in

New York City is the result of eviction. A recent City Limits investigation found that the lack of tenant attorneys in housing court lends daily operations in those facilities little resemblance to the pursuit of justice. The City Hall spokesperson would not elaborate on which elements of the bill were under consideration. But the sticker price is a possible sticking point. The city’s Independent Budget Office has estimated that the bill would cost somewhere between over $150 million and more than $250 million annually, but that it would also save the city some $53 million in shelter expenses. “When you go to housing court and the lawyer meets you at the door to tell you what’s in their interest, that’s the lawyer representing the landlord. There’s nobody representing you. And that’s got to change in this town,” Stringer told a group of housing

advocates recently in the Bronx. Another piece of legislation touted by Mark-Viverito in her State of the City speech would create an Office of the Civil Justice Coordinator, charged with creating a plan to ensure New Yorkers have access to legal help. That measure could make it to the floor first, and the office it creates used to build momentum for Right to Counsel. And there has already been a huge increase in funding from the City Council and the mayor’s office for legal services in the past year, meaning many more tenants have access to an attorney now than when de Blasio took office. But they continue to get nudged. “Both the mayor and the City Council speaker in both of their speeches put this as a priority to get representation for tenants in housing court,” Stringer said. “That doesn’t happen often. That has never happened before. This is a civil right.”

City Councilwoman Vanessa Gibson also sponsored the Right to Counsel bill.

city & state — April 13, 2015

WILLIAM ALATRISTE FOR THE NEW YORK CITY COUNCIL

By KATE PASTOR from CITY LIMITS

AGENCY FOCUS: DFS

AN INSIDERS GUIDE TO NEW YORK STATE’S AGENCIES AND AUTHORITIES

AGENCY FOCUS SPOTLIGHT ON:

NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES

city & state — April 13, 2015

he state Department of Financial Services was created in 2011 when Gov. Andrew Cuomo merged two older agencies—the state Banking and Insurance departments—as part of the budget agreement. The new department, which has around 1,400 employees and an operating budget of $250 million, is empowered to oversee a much broader swath of the financial services industry than either of the previous departments. But some say DFS has transcended what even the governor had in mind. Superintendent Benjamin Lawsky, formerly the governor’s chief of staff and a special adviser to Cuomo when he was state attorney general, has assumed a decidedly prosecutorial stance from the beginning, even though the agency he oversees lacks the power to indict individuals or convene grand juries. Lawsky has obtained over $6 billion in financial settlements with big, mostly foreign banks for violating New York regulations since 2014. He has also gone after those in leadership roles deemed responsible for the transgressions. As Lawsky remarked at a speech at Columbia Law School in February, “If there is wrongdoing at a corporation, that wrongdoing was committed by people … And, in my opinion, if in any particular instance we cannot find someone, some person, to hold accountable, that just means we have stopped looking.” All of this has earned Lawsky a reputation as Wall Street’s newest top cop, as well as an innovative and visionary advocate for stronger state-based financial oversight, while also solidifying the new agency as a force that can’t be ignored. In City & State’s DFS user guide, we give our readers a snapshot of the agency’s initiatives, along with a rundown of its key players and insight from Superintendent Lawsky.

cit yandstateny.com

AGENCY FOCUS: DFS

SUPERINTENDENT Q&A

BENJAMIN LAWSKY Superintendent New York State Department of Financial Services

cit yandstateny.com

a real leader and very active in that area and we have a unit that does that as well. We tend to spend more time on licensing issues and becoming more efficient there, and we’ve spent a lot of time on non-bank mortgage servicers, companies like Ocwen, Nationstar, Walter. Typically Schneiderman has been involved with some of the more national banks, like JPMorgan Chase and others who we don’t directly regulate because they’re national banks. Even there, there hasn’t been much conflict. C&S: It’s been four years since the state merged two separate agencies—on banking and insurance—to create DFS. How has that worked? BL: The biggest challenges have been that we had two of everything. We had to HR departments and two IT departments and two general counsel’s offices and as we merged we called it our Noah’s Ark project because we had two of everything. We had to merge each of those areas. We didn’t go around firing people, but we have a healthy amount of attrition like most of government does, and given the level of attrition we strategically back-filled or didn’t back-fill in ways that allowed us to bring our budget down, 10 percent the first year and 10 percent the second year. We were able to recognize quite a few efficiencies, and at the same time the merger allowed us to do even more interesting work. The biggest challenge was there were two different cultures at those two different agencies. Insurance was a very forward-leaning agency and the banking department was less so. It’s not to criticize either one of them, it was just that insurance regulation is largely done at the state level—there aren’t really federal

regulators for insurance. In the banking sphere, there’s a significant amount of federal regulation, and so over time that smaller banking department was less forward-leaning. We’ve now inculcated a single culture into the entire department. I’d say it’s more the forward-leaning model the insurance department had but the biggest challenge has been embedding that culture. C&S: The state attorney general and the U.S. attorneys’ offices have considerable discretion in terms of deciding which cases to pursue. What is it like at your agency? BL: We have some discretion in some areas and no discretion in other areas. How I describe it is we have five main verticals in the office: insurance, banking, capital markets, real estate finance and financial frauds. Within each of those units, there is very basic prudential regulatory work which we just have to do. We have to visit our banks periodically and send our examiners in to look at their books. We have to do that with our insurance companies. We have to do the licensing of the money transmitters or the mortgage brokers, and those are very basic things and the press doesn’t want to hear about it, it’s very boring—but it’s essential to being a good regulator. If you’re not making sure your banks and insurance companies are safe and sound and not going to collapse, you’re not really doing your job. That’s the ultimate protection for consumers and policyholders and depositors—to make sure the banks and insurance companies are going to be there tomorrow. That’s one level where we don’t have a lot of discretion. Then in each of those verticals there’s a second

level where we have the ability to have our larger projects or initiatives. The key for me in running this place is to make sure we don’t overload any one vertical with too many of these big projects so they can’t do their daily prudential work of being a basic regulator. That’s a challenge of running this office, and something I have a dashboard on my desk and worry about each day. We want to be doing interesting projects and be worried about the next thing coming around the bend in financial regulation, or the new product that’s out there that could pose a risk or maybe it doesn’t, but we make sure to spread it out amongst the verticals. C&S: There’s been speculation about what’s next for you professionally. Any comment on your short-term or long-term plans? BL: I have no idea. I haven’t made any decisions about my future at this stage. I feel incredibly lucky that the governor asked me to do this job and I love coming to work each day, and I don’t know how many people can say they get up in the morning and they’re really excited every day about their job, and I really am. You don’t do these jobs forever. They have shelf lives, there’s no question. My 7-year-old daughter recently said to me, “Daddy, don’t you think you should let someone else have a turn at being superintendent?”— which I thought was kind of funny. Hidden in that is the point that these jobs don’t go on forever, but I haven’t made any decisions and I love this job and I’m going to continue to try to do it really well. I feel a responsibility to the governor as well as the state to really perform.

city & state — April 13, 2015

City & State: Some areas you oversee have been policed in the past by the state attorney general. Is there overlap between the work of state Attorney General Eric Schneiderman and your agency? Benjamin Lawsky: Someone said to me the other day, “You know, when DFS was first created, I remember reading articles about how you were going to have all this conflict with Attorney General Schneiderman, and you said at the time you wouldn’t,” and they said to me, “You turned out to be right. I haven’t read about any conflict you have had with them.” That’s very true, I’m happy to say. I personally have a very good relationship with the attorney general. Our offices work together all the time, because frankly, unfortunately we get sued a lot because we take a lot of actions, and when we get sued, they represent us, so that has to be a very important relationship. A lot of people who work here, including myself, used to work in the attorney general’s office, so we have a very good sense of what’s in the heart of the A.G.’s jurisdiction, and frankly we try to stay away from that—not only because it’s conflict but it’s inefficient. They have a lot of resources, we have a lot of resources, both of us have limited resources, and for both offices to be working on the exact same issue doesn’t seem to make a lot of sense. I’m really happy as I look back on the last four years to see that whenever it looked like we might get involved in an issue the attorney general was already doing, in almost every case we went and did something else. I’m guessing it’s the same thing for them. We just haven’t had that kind of overlap. In terms of overlap, the biggest place is in the mortgage finance area. Schneiderman has been

AGENCY FOCUS: DFS city & state — April 13, 2015

LEADERSHIP

ANTHONY ALBANESE

DAN BURSTEIN

PETER DEAN

MATT ANDERSON

Anthony Albanese is the chief of staff at the New York State Department of Financial Services. He is responsible for all operations of the department, and manages all major regulatory and enforcement initiatives. Prior to joining DFS, he was a partner at Weil, Gotshal & Manges. He received a B.A. from Union College and a J.D. from St. John’s University School of Law. Following law school, Mr. Albanese clerked for the Honorable Joseph W. Bellacosa, associate judge of the New York State Court of Appeals.

Dan Burstein serves as executive deputy superintendent for real estate finance at the Department of Financial Services. He oversees Mortgage Banking and its approximately 900 regulated entities and 7,000 regulated mortgage professionals; the Mortgage Assistance Unit, which helps individuals resolve issues with their mortgage lenders or servicers; and the department’s Mobile Command Center, which travels the state helping New Yorkers avoid foreclosure and recover from natural disasters. Mr. Burstein also directs the department’s homeowner-related policy initiatives, from its review of non-bank mortgage servicers to licensing of title insurance agents. Mr. Burstein was previously a litigator at Willkie Farr & Gallagher LLP. He graduated from Columbia University in 2000 and magna cum laude from Georgetown University Law Center in 2004.

Peter Dean is the general counsel for banking at the New York State Department of Financial Services, where he handles legal issues arising out of the department’s regulation of state-chartered financial institutions and certain matters arising out of the work of the department’s Capital Markets, Real Estate Finance and Financial Frauds, and Consumer Protection divisions. In that role, Mr. Dean provides legal counsel to the department on a broad range of issues relating to the banking and financial services laws. Before assuming his current position, he was the department’s deputy general counsel for insurance. Mr. Dean obtained his J.D. from American University’s Washington College of Law and his B.A. from the University of Pennsylvania.

Matt Anderson is the deputy superintendent for public affairs at the New York State Department of Financial Services. He oversees communications strategy and media relations for the department, and serves as an adviser to Superintendent Benjamin M. Lawsky. Prior to his current position, Mr. Anderson was as a spokesperson for the U.S. Department of the Treasury and several New York governors, and served as communications director for the New York State Division of the Budget. Mr. Anderson received his A.B. in government from Harvard College and is a native of upstate New York.

Kitty Kay Chan serves as the chief economist at the state Department of Financial Services. She oversees quantitative analysis across divisions and provides expert advice and evaluation spinning risk assessment, pricing, regulation design, emerging industry trends, data management, and investigations, among other issues. Before joining the department, Ms. Chan served as chief economist and director of audit and review for the state Joint Commission on Public Ethics, as a deputy inspector general for the state Inspector General’s Office, and as director of economics for the state Attorney General’s Office. She has also worked for the federal government in various capacities and in the private sector. Ms. Chan is an adjunct professor at Columbia University and has also taught at New York University. She received her Ph.D. in economics and a doctoral certificate in environmental sciences, policy, and engineering from the University of Southern California. KITTY KAY CHAN

cit yandstateny.com

AGENCY FOCUS: DFS

MARIA FILIPAKIS

MARTHA A. LEES

ROBERT H. EASTON

SHIRIN EMAMI

Maria Filipakis is the executive deputy superintendent for capital markets, leading a division tasked with monitoring and regulating the latest developments, trends, and products in the financial services marketplace. Ms. Filipakis is also leading the department’s cybersecurity and virtual currency initiatives. Before joining the department, she held senior positions at the New York State Insurance Department and Attorney General’s Office, including running the Investor Protection Bureau. Ms. Filipakis received her J.D. from Brooklyn Law School and her B.A. from New York University.

Martha A. Lees is general counsel for insurance at the New York State Department of Financial Services. She advises the superintendent and other senior staff regarding a wide array of legal matters, such as the Terrorism Risk Insurance Act and the impact of federal and international financial services reform on U.S.-based insurers. She also supervises the insurance law attorneys in the department’s Office of General Counsel. Ms. Lees previously served as general counsel and deputy general counsel of the New York State Insurance Department. She also has worked as an assistant attorney general at the New York State Attorney General’s Office. She earned an A.B. from Harvard College and a J.D. from Harvard Law School.

Robert H. Easton is the executive deputy superintendent of the Insurance Division at the Department of Financial Services. In that capacity, he oversees the regulation of the life, health, and property and casualty insurance industries in New York. Mr. Easton joined the department after serving as deputy general counsel, chief compliance officer, and risk manager at Integro Insurance Brokers, and as deputy superintendent and general counsel at the New York State Department of Insurance, the predecessor agency of DFS. Mr. Easton earned a Bachelor of Arts degree in history from Johns Hopkins University, where he was Phi Beta Kappa, and a Juris Doctorate from the New York University School of Law.

Shirin Emami is the executive deputy superintendent of banks at the New York State Department of Financial Services. She oversees three divisions of banking within the Department: community and regional banks; foreign and wholesale banks; and licensed financial services. Prior to joining the department, she was director and associate general counsel at Barclays Investment Bank; director and counsel at WestLB in New York; vice president and counsel at J.P. Morgan; deputy counsel at the Bank of Tokyo Trust Company in New York; and associate at the law firm of Shearman & Sterling in New York. She graduated from Cambridge University Law School with a degree of LLB, and from Columbia University Law School with a degree of LLM.

Joy Feigenbaum is the executive deputy superintendent responsible for the Financial Frauds & Consumer Protection Division, which includes: civil investigations, criminal investigations, consumer assistance, consumer compliance/fair lending/CRA examinations and community development, student protection, producer licensing, producer investigations and disciplinary, and the Holocaust Claims Processing Organization. Ms. Feigenbaum also worked on the legislation which merged the Insurance and Banking departments to form DFS in 2011. Before joining the department, Ms. Feigenbaum served for 14 years at the New York Attorney General’s Office, where she was special deputy attorney general for consumer frauds & protection and led major consumer fraud and deceptive practices investigations, including the attorney general’s groundbreaking investigation of the student loan industry. Prior to her government service, Ms. Feigenbaum worked in private litigation practice. JOY FEIGENBAUM

cit yandstateny.com

city & state — April 13, 2015

LEADERSHIP

AGENCY FOCUS: DFS

THE ISSUES financial institutions to use multifactor authentication in their daily operations, whereby the traditional username/password combination is strengthened by added login criteria such as a second, randomly generated password texted to the user’s phone.

PAYDAY LOANS

city & state — April 13, 2015

all Street accountability: In a recent speech at Columbia Law School, Lawsky outlined a concept he calls “financial federalism”—a philosophy encouraging states to play a more active role in devising and implementing financial regulatory policy. Financial regulation, Lawsky points out, is primarily handled at the federal and international levels, and while there is good reason for this—today’s international business climate demands consistent policies that transcend borders—the 2008 financial crisis illustrates that more could be done to plug the gaps and loopholes in the national regulatory framework. Lawsky said states can serve as “incubators for new approaches to vexing policy problems,” and indeed, his time at the helm of DFS has reflected this logic: Investigations of big banks like Commerzbank and PNB Paribas have resulted in the termination of executives from both institutions, making him the first regulator to hold specific individuals accountable for their actions in the aftermath of the financial crisis.

IMPROVING TRANSACTION MONITORING Lawsky has also detailed two broad challenges regulators face when it comes to criminal activity and terrorism. The first, money laundering via illicit bank transactions, is of vital importance for drug dealers and terrorists. Because hundreds of millions of transactions flood the global banking system daily, it would he impossible to analyze each one for suspect activity. Instead, automated filtering systems check for patterns in the transactions and flag any suspicious activity. But according to Lawsky, problems can arise when a bank’s filtration software is improperly designed, or when bank management is willfully blind or even purposefully engaged in facilitating criminal or illicit behavior. (The sensitivity of a filtering system could be turned down, for example.) Lawsky claims a more comprehensive approach is needed to make sure banks are adequately monitoring the daily flow of money around the globe, and has proposed two measures: conducting random

audits of financial firms operating in New York, and requiring bank executives to personally report to DFS on the robustness of their systems.

CYBERSECURITY Cybersecurity, according to Lawsky, poses one of the most significant threats to global financial markets, and as such, is one of the biggest issues DFS faces. The prospect of a malicious cyber attack on the financial system deliberately intended to create panic and widespread disruption in the markets could in turn cause turmoil in the broader economy, potentially leading to another meltdown and global recession. Such an event has at times been referred to as a “Cyber 9/11.” While the prospect is a top priority for federal regulators, Lawsky has said DFS is also looking at incorporating new review measures into its regular inspections of banks and insurance companies, as well as beginning to assess the security systems used by third-party vendors. Lastly, the agency is considering requiring

One of the latest and most highprofile cases of DFS clamping down on companies that make small, short-term loans at exorbitant return rates—an illegal activity in New York State—was a $2.1 million fine slapped on MoneyMutual, a company that TV personality Montel Williams had previously endorsed. But the agency’s fight against these shady lenders, who have found increasingly innovative ways to bypass the legal ban, started in 2013 when 35 online companies operating out of state were given the order to cease and desist. “Every time it’s a little bit of whack-a-mole. Each time we cut off a way for those lenders to do business in New York over the Internet, they come back in a different form,” Lawsky said in an interview with City & State. Since 2013, DFS has successfully shut down out-of-state payday lending via money wire and over the debit card network. The agency is now in talks with federal regulators to address further machinations from unscrupulous lenders.

MORTGAGE LENDING AND FORECLOSURES While DFS provides everyday assistance for homeowners who are struggling or failing to pay their mortgages, it has also taken one major mortgage servicer to task for “serious conflict of interest issues” at the company. The agency’s investigation into Atlanta-based OCWEN Financial Corporation, the largest subprime mortgage servicer in the United States according to DFS, resulted in the termination of Executive Chairman William C. Erbay, “significant operational reforms” at the company and $150 million in penalties and restitution payments, a third of which will go directly to New Yorkers who had foreclosures filed against them by the company between 2009 and 2014. cit yandstateny.com

LIFE INSURANCE A 2013 DFS investigation found that New York-based life insurance companies were engaging in financial transactions that enabled them to inflate their books by billions of dollars in order to appear stronger to customers, shareholders and regulators. Although insurance companies are expected to keep enough reserves on hand to pay off all future claims, some were diverting their money elsewhere—sometimes toward executive compensation— since they appeared more robust than they actually were, according to the report. Comparing this activity to that which led to the mortgagebacked securities crisis of 2008, Lawsky has since moved to limit the companies’ practice of moving tens of billions of dollars into affiliated shell companies—known as captives—that aren’t subject to the same stringent reserve requirements. As of early 2015, DFS has said it will lower the amount insurers are required to keep on hand by up to 15 percent, an acquiescence to industry complaints that the current standards

are too high and designed to encourage life insurers to discontinue the use of captives, which Lawsky has dubbed “shadow insurance.” But the industry has lobbied instead for an alternative, “principles-based” approach, which Lawsky fears would be too lenient. In 2013 DFS also helped recover $1.1 billion in unclaimed life insurance payouts across the country. More recently, the agency has investigated life insurance companies for luring in potential buyers with overly optimistic predictions about gains over time, and has also raised the alarm about companies using math-driven formulas to predict how likely a customer is to shop around for different plans and then overcharging the ones who will stick around regardless of price.

BITLICENCE So-called financial intermediaries dealing in virtual currency like bitcoin will soon have to comply with a new regulatory framework, which DFS will likely finalize this spring. The regulations would only apply to firms that “exchange, transmit, and hold virtual currency

on behalf of customers,” according to a DFS spokesperson. This means that individuals using virtual currencies for personal use, merchants who accept such currency, software developers and even those who “mine” the currency will not have to obtain a license from DFS to keep operating. In response to criticism from industry players that some of the proposed rules were too cumbersome or already existed at the federal level, DFS unveiled a revised draft in early

2015. But while Bitcoin Magazine said the updated proposal reflects “tremendous developments,” it also noted that many in the industry still feel there are “onerous components” that would inhibit new companies. For his part, Lawsky has noted that while some regulations would indeed be stronger than they currently are for banks, DFS is looking into using the new rules as a model for stronger regulation of traditional financial institutions.

Have you heard?

Financial Backbone of Communities Insurance provides New Yorkers with financial security and enables people to live life to the fullest. People would not be able to own a home, drive a car or start a business without insurance. In 2013 alone property and casualty companies paid $19 billion in claims.

Economic Driver The industry is a major contributor to New York’s economy, contributing $42 billion to the gross state product (GSP) in 2012, accounting for 3.3 percent of the GSP. In 2013, the industry provided 191,930 jobs in New York, paid premium taxes totaling $1.4 billion, and held more than $18.4 billion in municipal bonds.

KNOw BETTEr NEw yOrK CONNECTiONs

www.nyia.org

cit yandstateny.com

city & state — April 13, 2015

Giving Back Insurance companies and agents are dedicated to serving their communities. The industry donates financially to a myriad of worthy causes, providing a total of $1 billion annually in philanthropic giving. Even more importantly, employees dedicate their time to help those in need—whether it’s Meals on Wheels, flood recovery efforts, building a playground or encouraging greater safety—the industry is always looking to make a difference.

AGENCY FOCUS: DFS city & state — April 13, 2015

DFS SETTLEMENTS DATE

COMPANY

MISCONDUCT

MONETARY PENALTY

ADDITIONAL TERMS AND NOTES

3/12/2015

COMMERZBANK Germany’s second largest bank

Conducting transactions on behalf of Iran, Sudan and other sanctioned clients.

$610 MILLION

Bank terminates multiple executives, including the individual serving as head of regional compliance for the New York branch during relevant period; installs independent monitor.

3/11/2015

MONEYMUTUAL Payday loan lead generator

Marketing payday loans in excess of New York’s interest rate caps.

$2.1 MILLION

First successful nationwide enforcement action against a payday loan “lead generator.”

12/22/2014

BANK LEUMI Israel’s largest bank

Facilitating tax evasion.

$130 MILLION

Bank terminates three senior employees; bans chief administrative officer from compliance activities; installs independent monitor.

12/22/2014

OCWEN FINANCIAL Largest subprime mortgage servicer in the U.S.

Mortgage servicing misconduct.

$100 MILLION

Chairman of Ocwen steps down; firm appoints two independent board members; $10,000 for each foreclosed New York borrower; continued ban on acquiring mortgage servicing rights; extends independent monitor for three years (plus additional requirements).

12/19/2014

CONDOR CAPITAL Subprime auto lender

Consumer abuses in subprime auto lending.

$3 MILLION

DFS is the first state regulator to bring a federal suit under the Dodd-Frank Act; the company surrenders license and liquidates.

11/18/2014

BANK OF TOKYO MITSUBISHI Japan’s largest bank

Deceiving DFS on an anti-money laundering report regarding transactions on behalf of Iran, Sudan and Myanmar.

$315 MILLION

The $315 million penalty is in addition to the original $250 million fine imposed in June 2013, after the bank deceived DFS in negotiations; bank terminates a senior employee and DFS bans two additional senior employees from conducting business with New York banks; extends independent monitor for an additional 18 months.

10/31/2014

AIG

Unlicensed insurance activity; intentional misrepresentations to regulators.

$35 MILLION

The $35 million penalty is in addition to the $50 million penalty imposed in March 2014 on MetLife, the company to which AIG sold the subsidiaries involved in the misconduct.

8/19/2014

STANDARD CHARTERED BANK

Violating a 2012 consent order regarding anti-money laundering compliance.

$300 MILLION

The $300 million penalty in addition to $340 million fine imposed in August 2012, after bank violated its consent order; bank suspends dollar clearing through its New York branch for clients at its Hong Kong subsidiary; exits other international high-risk relationships; banned from accepting new dollarclearing clients without DFS approval

8/18/2014

PWC A “Big Four” auditing and consulting firm

Conducting transactions on behalf of Iran, Sudan and other sanctioned clients.

$610 MILLION

Bank terminates multiple executives, including the individual serving as head of regional compliance for the New York branch during relevant period; installs independent monitor.

Plus $50 million in restitution for foreclosed New York borrowers.

Plus $8 to 9 million in restitution for abused consumers.

cit yandstateny.com

MISCONDUCT

MONETARY PENALTY

ADDITIONAL TERMS AND NOTES

6/30/2014

BNP PARIBAS France’s largest bank

Conducting transactions on behalf of Sudan, Iran, Cuba and other sanctioned clients.

$2.243 BILLION

Bank terminates or separates 13 senior employees, including the chief operating officer; suspends U.S. dollar-clearing through its New York branch and other U.S. affiliates for one year at BNP business lines where misconduct centered; extends independent monitor for an additional two years.

5/19/2014

CREDIT SUISSE

Facilitating tax evasion.

$715 MILLION

The bank terminates three senior employees involved in the misconduct; installs independent monitor for up to two years.

3/31/2014

METLIFE

Unlicensed insurance activity.

$50 MILLION

DFS later imposed an additional $35 million fine on AIG, the company that sold MetLife the subsidiaries involved in the misconduct.

3/17/2014

AXA EQUITABLE

Violating consumer protection laws on annuity projects.

$20 MILLION

The largest insurance fine in DFS history for insurance law consumer protection violations.

12/11/2013

RBS

Conducting transactions on behalf of Sudan, Iran and other sanctioned clients.

$50 MILLION

Bank terminates four senior employees, including the head of global banking services for Asia, Middle East and Africa, and head of the money laundering prevention unit for corporate markets.

6/20/2013

BANK OF TOKYO MITSUBISHI Japan’s largest bank

Conducting transactions on behalf of Sudan, Iran, Myanmar and other sanctioned clients.

$250 MILLION

DFS later imposed an additional $315 million fine on the bank in November 2014 for deceiving the department during the course of settlement negotiations.

6/18/2013

DELOITTE

Whitewashing a report to regulators on antimoney laundering compliance at Standard Chartered Bank.

$10 MILLION

First successful enforcement action in the country against a consultant by a bank regulator; the firm is banned from regulatory consulting work at DFS-regulated institutions for one year; implements new code of conduct on consulting independence.

5/30/2013

AMERICAN MODERN; CHUBB; FIDELITY & DEPOSIT CO. OF MARYLAND; FINSECURE

Force-placed insurance kickbacks; insurance law violations.

$1 MILLION

DFS force-placed insurance reforms banning kickbacks and other consumer abuses now cover the entire New York market.

4/18/2013

QBE Second-largest forceplaced insurer in the U.S.

Force-placed insurance kickbacks; insurance law violations.

$10 MILLION

The company implements DFS force-placed insurance reforms banning kickbacks and other consumer abuses.

3/21/2013

ASSURANT Largest force-placed insurer in the U.S.

Force-placed insurance kickbacks; insurance law violations.

$14 MILLION

The company implements DFS force-placed insurance reforms banning kickbacks and other consumer abuses.

8/14/2012

STANDARD CHARTERED BANK

Conducting transactions on behalf of Iran and other sanctioned clients.

$340 MILLION

DFS later imposed an additional $300 million fine on the bank in August 2014 for violating the August 2012 consent order.

Plus additional DANY forfeiture.

SOURCE: The New York State Department of Financial Services cit yandstateny.com

AGENCY FOCUS: DFS

COMPANY

city & state — April 13, 2015

DATE

Congratulations to the 2015

Honorees City & State is pleased to honor these 25 EXCEPTIONAL NEW YORK WOMEN who have demonstrated leadership in their fields and communities.

The New York State Conference International Union of Operating Engineers

Proudly Congratulates Our Political and Legislative Director

MARINA V. O’DONNELL

and All of this Year’s “Above & Beyond” Honorees Daniel J. McGraw

JOHN DUFFY VICE PRESIDENT THOMAS CALLAHAN SECRETARY TREASURER EDWIN CHRISTIAN TRUSTEE WILLIAM LYNN TRUSTEE LOUGHLIN TRUSTEE CVP ads 2015_City-State 9.75x6 4/1/15 JEFFREY 2:24 PM Page 1

President

SCHOLARS

access to success

LUAT T. VUONG

cuny.edu/welcome

cit yandstateny.com

Assistant Professor of Physics Queens College National Science Foundation Career Award

city & state — April 13, 2015

very year, hundreds of thousands of students choose The City University of New York for a multitude of reasons that can be summed up as one: opportunity. Providing quality, accessible education has been CUNY’s mission since 1847, a commitment that is a source of enormous pride. The powerful combination of quality academics, remarkable affordability, financial support and 24 modern campuses spanning the five boroughs of New York – the world’s most exciting city – makes CUNY a singular value in higher education. — James B. Milliken, Chancellor

Congratulations to NYSUT President Karen E. Magee on your recognition for consistently going “Above and Beyond” in advocating for students and families!

MAGGIE MORAN RECEIVES CHAIRPERSON AWARD BY CITY & STATE

city & state — April 13, 2015

Karen E. Magee, President Andrew Pallotta, Executive Vice President Catalina R. Fortino, Vice President Paul Pecorale, Vice President Martin Messner, Secretary-Treasurer

Representing more than 600,000 professionals in education, human services and health care.

www.nysut.org 800 Troy-Schenectady Road, Latham, NY 12110-2455 518-213-6000 • 800-342-9810 • Affiliated with AFT / NEA / AFL-CIO

acked House to Honor 25 New York Women and Award $5,000 Donation April 1, 2015, New York, NY Commissioner of New York City’s Department of Consumer Affairs Julie Menin emceed City & State’s annual Above & Beyond gala this past Thursday which honored 25 exceptional professional women and awarded a $5,000 donation to the Covenant House NYC, a nonprofit that assists underserved youth. City & State’s Above & Beyond feature recognizes

New York female professionals in the sectors of business, labor, media, public service and nonprofits, and features each awardee in a special print publication, on CityandStateNY.com, and at the gala event. “This year’s honorees are an incredible mix of accomplished women who are not only role models for young professionals, but inspirations for anyone trying to make their mark in these fields,” said City & State Executive Editor Michael Johnson. This year marked the first live interview discussion with editor-atlarge Gerson Borrero. In his sit down

cit yandstateny.com

Congratulations to MARINA V. O’DONNELL

Political and Legislative Director, NYS Conference of Operating Engineers and All of this Year’s “Above & Beyond” Honorees

International Union of Operating Engineers AFL-CIO

Local 15, 15A, 15B, 15C & 15D Thomas A. Callahan President and Business Manager

cit yandstateny.com

her honor. “Maggie is incredibly accomplished and we are honored have her as the 2015 Chairperson Award recipient,” said City & State Publisher Andrew Holt. “This year’s donation was the largest City & State has ever awarded,” said City & State CEO Tom Allon. “We’re proud to be able to support Covenant House NYC and their incredible work.” Below is the full list of the Above & Beyond Class of 2015. Each of their profiles can be read at CityandStateNY.com. Event photos are available on Flickr and Chairperson Maggie Moran’s speech is available on City & State TV.

Christopher R. Thomas Robert J. Burns Michael A. Salerno Anthony LaRosa Augustino Martiniello John McNamara Andrew Cullimore Daniel Gilmartin Robert G. Shaw Jr.

44-40 11th Street, Long Island City, NY 11101

city & state — April 13, 2015

with Commissioner Menin, she shared her experience as a woman working in banking and highlighted Mayor de Blasio’s focus on increasing female leadership in his administration, which is currently over 50 percent. “There’s no elevator to success,” Commissioner Menin told the 250 attendees, “you have to take the stairs.” This year’s Chairperson Award, a distinct honor given to just one of the 25 awardees, went to Maggie Moran of M Public Affairs. She captivated the crowd with her acceptance speech and chose Covenant House NYC to receive City & State’s $5,000 donation in

Business Representatives

TAKING THE STAIRS City & State editor-at-large Gerson Borrero interviewed NYC DCA Commissioner Julie Menin.

Women are still paid 78 cents on the dollar, and its lower for women of color

“

he New York City Department of Consumer Affairs Commissioner Julie Menin was interviewed by editor at large Gerson Borrero at the fourth annual Above & Beyond awards ceremony in lower Manhattan. Commissioner Menin used the interview to highlight the diversity of New York City Mayor Bill de Blasio’s administration, the implementation of paid sick leave, universal pre-kindergarten, and a substantial increase in contracts to MWBE’s. Here are some highlights from the interview.

“

SOMETHING BIGGER. ECONOMIC IMPACT

ACADEMIC

EXCELLENCE

A powerful return on investment:

$20 billion annual impact on the state economy.

direct employees

city & state — April 13, 2015

15o+

startup companies formed

alumni living and working in NYS

degrees granted since 1949

93,ooo+

degrees granted annually

89,ooo+ $46o,ooo,ooo in state and local taxes 2,432,942

3,5oo,ooo+

17o,ooo jobs supported

7,262

academic programs

34,o24 faculty

31%

capture rate of NYS high school graduates

$1B

in research expenditures

www.suny.edu cit yandstateny.com

New York University congratulates Lynne P. Brown, Senior Vice President for University Relations and Public Affairs, on receiving a 2015 Above & Beyond Award. During her three decades at NYU, Lynne has led the university’s planning for a thoughtful, sustainable future in New York City and beyond. She is a champion of local neighborhoods, through her leadership of business districts and neighborhood groups in Greenwich Village and Union Square, and a powerful advocate for the higher education sector and its economic

NYU IS AN AFFIRMATIVE ACTION/EQUAL OPPORTUNITY INSTITUTION.

City & State_Lynne_v3.indd 1 cit yandstateny.com

3/31/15 11:38 AM

city & state — February 23, 2015

contributions to a vibrant New York City.

PERSPEC TIVES

KNOW WHEN TO HOLD ’EM

MICHAEL BENJAMIN

come to the floor. Frosh Assemblyman Todd Kaminsky, a former federal prosecutor, was credited with helping to craft the ethics reform compromise. For all that Heastie did to manage a successful first budget, he must still guide the Assembly through the legislative briar patch over the remaining months of session. Among the thorny issues that threaten to prick him are renewal of New York City rent regulations, a constitutional amendment governing pension forfeiture for corrupt public officials, legalization of mixed martial arts, and the controversial 421-a real estate tax break, which figured in the federal criminal complaint against former Speaker Sheldon Silver. I want to believe that Heastie will heed what he told UFT members and join the Invest In Ed Coalition, providing the “support and investment our students need to succeed.” All of New York’s students and their parents deserve support for their school choices. The Education Investment Tax Credit is a win-win for public and private school students, parents and teachers. I have often wondered why the “bright line” between public and

private/religious education funding disappears when it comes to state aid for post-secondary education. I hope Carl creates space for that discussion. In the countdown to the end of session, I am also hopeful the speaker will institute a more transparent and bipartisan process for getting bills to the floor. The Assembly needs a real committee process, real public hearings and consequential debates. In the meantime, Heastie deserves recognition for bringing tablet technology to Assembly members’ desks. Heastie does not fear technology and understands that members appreciate tangible improvements. After his freshman turn as speaker, Heastie will face many more demands for reforms because that’s the nature of Albany politics. But it’s also the nature of Albany politics that new leadership consolidates control by making minor concessions. So we will continue to learn more about Heastie’s style and substance as time goes by. Former Assemblyman Michael Benjamin (@SquarePegDem on Twitter) represented the Bronx for eight years.

ell, I guess Albany insiders now know who Assembly Speaker Carl Heastie is. He’s not nearly as taciturn as some believed. He’s very much the steely negotiator that few thought he could be. Many overlooked his successful herding of the cats known as Bronx Democrats during his tenure as county leader. The lessons of 10 years as a backbencher apparently taught him how to deal with a governor whose initial “mandate” has dissipated or has succeeded in turning off legislative

allies. Or it could simply be that Cuomo’s “tells” were too obvious to ignore and not exploit. Heastie smartly agreed to a package of ethics reforms—lukewarm reforms roundly panned by good-government groups—that Cuomo tied to an on-time budget. Nonetheless, those reforms ensured ending per-diem expense abuses; making clearer rules prohibiting personal use of campaign funds; and broadening disclosures of independent campaign expenditures. Understanding Cuomo’s desire for an on-time budget and distaste for protracted negotiations, Heastie (and Senate Majority Leader Dean Skelos) got Cuomo to deal with controversial measures post-budget. By all accounts, it seems that Heastie is listening to his leadership team as well as his junior backbenchers. His onetime rival for the speakership, Assemblyman Keith Wright, praised Heastie for doing “extremely well” on behalf of the conference. Heastie appears open to democratizing the Democratic Conference, recognizing and rewarding talented members and giving members more input in policymaking and about which bills

city & state — April 13, 2015

The Must-Read Morning Roundup of New York Politics and Government Our morning email delivers daily exclusives from City & State, as well as a curated summary of the day’s most pertinent headlines, editorials, news tidbits, schedules and milestones from across the political landscape in New York—all before 7 a.m.

Be the first to know. www.cityandstateny.com/subscribe for more information.

cit yandstateny.com

is proud to salute City & Stateâ&#x20AC;&#x2122;s 25 Above & Beyond Award Winners.

city & state — April 13, 2015

onda Rousey is on an

C&S: How did you get into mixed martial arts? RR: My mother was actually the first American to win at the World Judo Championships and when she first started competing there were no women’s world championships for judo and by the time she retired, there were world championships for judo for women and she won them! But there was no world judo in the Olympics yet. By the time I competed, I was able to fight in both the World Judo Championships and the Olympics, but there were no women in the UFC yet and then we finally made that possible a couple years ago. It’s pretty ridiculous to me that MMA has been presented as a sport that promotes hate for women, because how can you say that about a sport that has a woman as the highest draw in all of it? I just headlined the Staples Center with women as both the main and co-main for the first time in history. We sold out the Staples Center and had amazing numbers—the best numbers I’ve ever had yet. Fighting isn’t a men’s thing—it’s a human thing and to say it is anti-women is I think an anti-feminist statement.

impressive winning streak: she boasts an undefeated record in mixed martial arts, she is the Ultimate Fighting Championship’s reigning bantamweight women’s champion and she is one of the UFC’s top pound-for-pound female fighters. But one fight she hasn’t won—at least not yet—is legalizing professional mixed martial arts in New York, the only state that still bans it. The state Senate has repeatedly passed legislation to allow professional competitions, which could boost revenue to the state, but opponents the state Assembly, concerned about violence in the sport, have blocked it. Rousey spoke with City & State Albany Reporter Ashley Hupfl about the effort to legalize MMA in New York, her career in combat and female empowerment. The following is an edited transcript. City & State: Why do you think mixed martial arts should be legalized in New York? Ronda Rousey: I’m here to try to get the bill passed in order for MMA to be regulated in New York. Just last year there were over 1,600 unregulated bouts, so all of those fighters had no medical testing, no drug testing, all the women fighters didn’t have any pregnancy testing so they could be fighting pregnant without their knowledge and none of the referees were educated by a commission in order to keep the athletes safe. Because of the lack of a commission, New York is the most dangerous place for anyone to do MMA and all 1,600 of those fighters in New York are fighting under the most dangerous conditions possible. This isn’t about keeping MMA out of New York. This is about making MMA safe because it’s already happening. C&S: Now that Sheldon Silver is no longer Assembly speaker, is it more likely that the state will legalize MMA? How was your conversation with Gov. Andrew Cuomo on this subject? RR: I have a really good feeling about

A Q&A WITH

RONDA ROUSEY this for many reasons and Heastie as speaker is one of them. It went great. Cuomo seemed very supportive of our cause and expressed the same amount of optimism that we have. C&S: Earlier this year, you gained national attention for saying female MMA fighters should earn more money than the ring girls. Can you elaborate on that? RR: It actually got clarified to me later that is not the case. I was led to believe that really incorrectly. The one thing I just wanted everyone to know is the distinction between a job and a career, and the female fighters have a career and the ring girls have jobs. I think it’s really great for women that in MMA we get to see the difference—that the

female fighters get much more of the respect and the accolades and things like that and the ring girls, they want to help themselves make a living. Brittney Palmer is one of them. She used being a ring girl to pay herself through art school and is now supporting herself just through her art because of the opportunities given from that. I’m so happy for her and have respect for her. I was misinformed on that subject. C&S: Do female and male MMA fighters have equitable pay? RR: Yes. I don’t personally look at everyone’s contracts but the way I’m paid is extremely comparable to the men. Within a couple more fights, I think, I’ll be one of the top 10 paid of all time.

C&S: Do you find it MMA to be empowering to you and to other women? RR: It’s definitely empowering. Everything in my life is less scary because I’ve fought and I think sports is a metaphor for life. The fearlessness and ambition that I have is all originated from what I learned from fighting. C&S: In a fight in the ring, who would win: Gov. Andrew Cuomo or Assembly Speaker Carl Heastie? RR: I don’t know, I don’t know. Heastie sounds like a great fight name. It has a ring to it so I would lean towards him. You never know though, that’s the thing about fights—you never know until it happens.

To watch the complete interview on City & State TV, go to cityandstateny.com.

cit yandstateny.com

SHUTTERSTOCK.COM/ TINSELTOWN

MARTIAL LAW

Responsibly Green, Elegantly Glenwood

The finest Manhattan rentals in the neighborhood of your choice. Near the Best NYC Public Schools • Unparalleled Service • Fitness Center Children’s Playroom & Swimming Pool • 24-Hour Doorman • Magnificent Lobbies Landscaped Gardens • Exciting City Views • Spacious Layouts Building-Wide Water Filtration Systems On-Site Parking Garage • No Fee

GLENWOOD BUILDER OWNER MANAGER

UPTOWN LUXURY LEASING OFFICE

212-535-0500

DOWNTOWN LUXURY LEASING OFFICE

glenwoodnyc.com

212-430-5900 Equal Housing Opportunity

Albany: Stand Up for Workers and Protect the Scaffold Safety Law

COALITION

NORTHEASTERN ON OCCUPATIONAL NY COALITION SAFETY & HEALTH

For further information on what theyâ&#x20AC;&#x2122;re saying, straight facts and the 12 things you need to know about the scaffold safety law, please visit:

w w w. S c a f f o l d S a f e t y L a w. c o m