The scandal surrounding Brooklyn Assemblyman Vito Lopez is about more than the groping, more even than the coverup. It’s about Albany’s lack of checks and balances when it comes to sending taxpayer money out the door.
Who is keeping an eye on the most powerful state comptroller in the nation? The answer is: Don’t worry — he’s watching himself.
They say power is the ultimate aphrodisiac, but it didn’t work for Lopez. Last month, news broke that at least two Lopez staffers accused the powerful Brooklyn boss of unwanted sexual advances. Lopez didn’t fight the claims.
Assembly Speaker Sheldon Silver approved a $103,080 payment out of taxpayer funds to quash the cases. He kept the public, if not the public’s money, out of it.
But Silver should never have even had the option of keeping this payment secret. In fact, he didn’t: He had to let a third person in on the QT — because he doesn’t control the money.
Yes, the powerful Assembly head can get multibillion-dollar bills passed with a nod, but he can’t write state checks.
This is a key element of first-world institutional accounting. Otherwise, what would keep Silver from, say, approving a $1 million confidential settlement to, say, his cousin?
So Silver has to bring in state Comptroller Tom DiNapoli — or at least his staff. The victimized women got their checks not from Silver but from DiNapoli’s office, written to the women’s lawyers for “legal services.”
Sure, Silver could have tried to keep DiNapoli’s folk in the dark about what the money was for — but the speaker isn’t stupid. He wasn’t willing to risk a criminal charge — approving a payment seen to benefit himself, politically — if someone came sniffing later.
So Silver’s Assembly lawyer, William Collins, dotted his legal i’s — gingerly half-asking, half-telling DiNapoli’s office about the deal.
This is a virtuouso example of cover-your-butt via casual questions and statements. Later on, Silver could have said: Proof that we never thought this was that bad is that we didn’t try to keep it really secret, only secret from the pesky voters.
DiNapoli’s office seems to think its job was to provide private banking services to Silver. Indeed, DiNapoli — the literal gatekeeper of taxpayer money — has no real system in place to vet these types of “settlements,” especially those that involve one elected official protecting another.
Such deals (one hopes, anyway) are unique and should go straight to the top.
In other words, DiNapoli has controls that ensure that the state payment system doesn’t cut a check for $1,000,000 when it should’ve been $100,000. But he doesn’t make sure — or allow the public to make sure — that a person with vast political, managerial and fiscal power isn’t abusing the fiscal part of that power.
That’s explosive when so many of these settlements are confidential, thus not subject to press scrutiny (unless someone snitches).
(By the way, the state has no separate department to review these settlements after they’ve been approved; a branch of DiNapoli’s office handles that auditing task, too.)
The biggest risk here has nothing to do with taxpayer money going to pay for unsolicited sexual attention. Even in Albany, hopefully there’s not enough of that going around to cost billions.
The biggest risk is the state’s $150.3 billion pension fund. Remember, DiNapoli is the sole trustee of that fund. (The city’s pensions funds, and other states’ funds, including California’s ones, have many trustees.)
And the New York fund has contracts worth billions with hedge funds and Wall Street firms. These contracts, too, are secret, as they contain supposedly competitive information the Wall Streeters don’t want outsiders to know.
That means the only behind-the-scenes scrutiny of the state pension fund comes from other elected officials — Silver’s Assembly, the state Senate and the state AG.
But guess what? DiNapoli, as payments controller, has access to their secrets. And they know it.
Checks and balances are working — just not for the public.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.