Even though aides say they're taking out reference to the Martin Act, Cuomo's consolidation of financial regulation agencies could still give the governor broad new powers.
Nick Confessore explains:
Experts said Mr. Cuomo’s proposal would transform the existing Insurance and Banking Departments from traditional regulatory agencies focused largely on compliance and rule-making into an unprecedented amalgam of regulator, prosecutor and judge. It could have the effect of transforming the superintendent of the new agency into a second “sheriff of Wall Street,” forcing Mr. Schneiderman, a fellow Democrat with whom Mr. Cuomo has clashed in the past, to compete for high-profile cases.
Danny Kanner, a spokesman for Mr. Schneiderman, declined to comment on the powers envisioned in the legislation. But in a statement, Mr. Kanner said, “The attorney general supports the concept of merging these departments for the purpose of consolidation, and looks forward to continued discussions with the governor’s office on other details of the proposal, as well as other reforms to state government.”
The legislation does not formally strip any powers from the attorney general. But while Mr. Cuomo has described the merger in part as a way to save money, his executive budget anticipates that the operations of the new agency would cost about $6 million more than its three predecessors in its first year of operation. (Aides said that merger had since been “rescored,” in budget parlance, and was now expected to result in year-to-year savings.) At the same time, Mr. Cuomo’s budget reduces the budget of the office of the attorney general by roughly 10 percent.
Historically, the attorney general and the Banking and Insurance Departments have shared a creative tension. The agencies focused on day-to-day compliance, while the attorney general’s prosecutors, under Mr. Spitzer and Mr. Cuomo, opened up large-scale cases — often against powerful firms and interests — with an eye toward tackling systemic problems, whether those were corruption among research analysts or conflicts of interest in the student loan industry.