Cuomo’s circle of corruption
reports on the widening kickback scandal that is getting closer to the Democratic governor--and making a mockery of politics-as-usual in New York.
ALBANY HAS long been infamous for a secretive political system in which "three men in a room" make the key decisions behind closed doors about the fourth-most-populated state--and the largest city--in the country.
In the last couple of months, two of those three men--Democratic Assembly Speaker Sheldon Silver and Republican Senate Majority Leader Dean Skelos--have been arrested on corruption charges, while the third, Gov. Andrew Cuomo, is currently under investigation.
Silver and Skelos are the latest additions to a long list of elected officials charged with abuse of their political positions in New York. It is another chapter in the obscene history of intractable corruption in Albany that extends downstate to New York City Hall and the powerful business and real estate interests that have been reshaping the city since the 1970's.
Skelos and his son were charged in May on a number of corruption counts. That came a few months after Silver was charged in January with amassing millions of dollars in outside income since 2000 through kickbacks and bribes that he hid in multiple accounts across six different banks, according to an investigation by U.S. Attorney Preet Bharara that was initiated after the end of Cuomo's short-lived Moreland Commission, which was supposed to root out corruption in the state capital.
Cuomo abruptly shut down the Moreland Commission in 2014 when it began to look into Silver's growing outside income and also found that the Real Estate Board of New York was using Limited Liability Companies (LLCs)--a legal loophole well documented as a vehicle for large campaign contributions--to funnel money to Cuomo and other state politicians.
With rent regulations and millions of dollars worth of tax credits for New York City developers set to expire in June, the opportunities are enormous for state politicians to use their political power to vote and pass bills in the interest of powerful and wealthy real estate and legal firms, in return for enlarging their personal income.
Real estate firm Glenwood Development has the distinctive honor of benefiting from the corrupt practices of both Silver and Skelos. "Glenwood Development is one of the largest political donors in the state," according to Gothamist, "giving prolifically to members of both parties and all arms of state government, including a total of $1.45 million to Gov. Cuomo."
CUOMO'S UNEXPECTED dissolution of the Moreland Commission kicked off the corruption investigation by Bharara, who has taken commission's leads and followed the stench from one politician to another.
With two of the "three men in a room" already down, all eyes are on Cuomo, since seven of the governor's top ten donors are connected to real estate firms. The scandal has also cast a harsh light on the overly centralized decision-making process and complete lack of transparency in New York state politics.
To this point, however, few in the media have made the obvious connection between corruption in Albany and the massive wealth inequality 150 miles south in New York City.
In recent years, there has been an ongoing competition in the financial press about which city is the premiere global metropolis. Mayors of London and New York City have boasted that their respective cities had the largest financial output in the world.
In March, urban analyst Richard Florida declared New York City the winner, noting that its "metro economy is much larger than London's, with total economic output of $1.4 trillion compared to $836 billion for London."
Basing the measurement on the Global City Economic Power Index, which tracks a city's overall economic clout, financial power, global competitiveness, and quality of life and equity, New York City won based on Manhattan's strength as a center for global financial institutions.
"If we could get every billionaire in the world to move here," declared then-Mayor Michael Bloomberg in 2013, "it would be a godsend."
SUCH "TRICKLE-down" rhetoric reflects the global city competition that drove Bloomberg's economic and city policy throughout his 12-year reign, a practice that prioritizes the interests and concerns of the wealthy with unspoken ramifications on city politics.
According to an investigation in the New York Times, shell companies such as LLCs are used by wealthy international elites to hide corrupt practices and increase wealth by investing in the rising number of Manhattan's million-dollar luxury condominiums, with little to no transparency.
At best, the real estate industry's lack of transparency allows loopholes for wealthy people to not pay taxes. At worst, it is a money-laundering scheme.
These investments, from what the Times identifies as "a cross-section of American wealth: chief executives and celebrities, doctors and lawyers, technology entrepreneurs and Wall Street traders"--as well as a rising number of foreign investors, many of whom are the subject of government inquiries for corruption--represent one of the ways that New York's position as a global financial capital affects debate and discussion on local and state policy matters.
As labor writer and author Kim Moody explained in his From Welfare State to Real Estate: Regime Change in New York City, 1974 to Present:
The city rests not primarily on its local or regional economy, but on the world economy in which New York's business elite is a major player. Thus, the dependency of city officials on its business leaders goes far beyond campaign contributions. There is the power to take its export-created income, capital and jobs elsewhere either in whole through relocation or in part through outsourcing...[affecting the priorities] of the city's tax policies and practices.
This manifests itself in Manhattan's Central Business District, where there is 286 million square feet of office space in skyscrapers on some of the most expensive land on the planet, housing thousands of financial and corporate executives from many of the world's largest corporations.
This enormous amount of office space generates a gravitational pull that attracts, as Moody notes, the interests of a number of private actors: "banks to finance it; developers to assemble it; engineers and architects to design it; contractors to build it; lawyers to protect it; insurance companies for titles; construction operations; and the structures themselves and so on."
This conglomeration of wealthy interests based in the Central Business District have easy access to politicians like Silver and Skelos--and Cuomo--who shape city and state policy to their individual and private interests, over and against the interest of the majority of working people in New York.
With the number of homeless people at an all-time high of 60,000, it is obvious that years of trickle-down economics and catering to the international wealthy has created a greater chasm between the wealthy and New York's working class.
THE CITY'S current political alignment has its origin in the 1975 bankruptcy crisis, which united various business elites who saw the crisis as an opportunity to roll back the gains made by labor and community movements in the post-depression era's New Deal and Great Society policies. In the process, they were able to successfully push New York City onto the path of neoliberal privatization, affecting many of the city's landmark working-class institutions.
An example of this played out in struggle over public higher education in the City University of New York (CUNY) system, where tuition was instituted for the first time shortly after a militant student movement through campus occupations opened up the multiple college campuses to New York City's students of color after years of racially discriminatory admissions practices.
Combined with a ramping up of funds for police precincts to combat crime and drug use, New York City became a war zone where economic and political elites criminalized and locked up tens of thousands of the city's working poor, primarily people of color.
New York City has the highest union density in the country and organized labor has historically been a force to be reckoned with in local politics. But since the crisis in the 1970s, unions have largely fallen in behind the business elites and become a subordinate partner in the reshaping of the city.
Forty years later, the city's largely working-class residents have gained little from this union strategy, which has been based on endorsing politicians who have attacked working class living standards and often been busted in corruption scandals. It is no surprise then that voter turnout by working-class New Yorkers--and workers across the country--is at an all-time low.
Even as organized labor continues its backward policy of support for the Democratic Party, it has also found itself pulled into powerful protest movements by a variety of social struggles representing a cross-section of New Yorkers' everyday battles, including Occupy Wall Street, Black Lives Matter, Fight for 15 and the opt-out movement in public education.
But these struggles haven't been coordinated or strong enough to roll back the tide of 40 years of business-class dominance, especially when they have fallen for the posturing of progressive politicians seeking to direct them into the Democratic Party.
To state it bluntly, Albany is a cesspool of corruption that can only be eradicated with thoroughgoing and radical change. New Yorkers can expect to hear more stories uncovering the deep and intractable criminality on which their so-called representatives have built their own power and fortunes for quite some time.
As gentrification ravages New York City's outer boroughs, the upcoming fights over rent regulations and concerns about Bill de Blasio's "affordable" housing plans (which view rents of $2,500 a month as affordable) will play out over the summer.
Faced with an entrenched political regime dedicated to austerity and "broken windows" policing, New York residents and social justice activists need to accept that there are no shortcuts on the road to political power.
Instead, we will gain more from the long and painstaking work of building an independent social movement for our right to the city and its vast resources that currently line the pockets of the city's ruling elites than from falling for the progressive Democrat mirage.