Scandal Forces Candidates to Confront Issue of Corruption

A corruption scandal is rippling through the New York City Mayor's race. A day after federal prosecutors indicted six people for conspiring to place Democratic State Senator Malcolm Smith on the Republican ballot for mayor, candidates in the current field are working to distance themselves from from the lurid tales of money and politics that prosecutors laid out.

For those candidates who are running on a change platform, the scandal is an opportunity to score points. For those already in positions of power, there are nuanced defenses being made.

City Council Speaker Christine Quinn, the frontrunner among the Democrats mounting a mayor bid, was forced to address the often problematic issue of member item budget allocations. As part of the charges unveiled Tuesday, City Councilman Dan Halloran is accused of attempting to divert $80,000 to a nonprofit for a no-show that would, in turn, funnel it to a sham consulting firm.  But Quinn said he never would have gotten away with that.

While City Council Speaker Christine Quinn called the allegations against Halloran "outrageous" she defended member items. She said her office inherited a system that was bad -- based solely on the honor system. Now after a series of reforms, she said it's based on more stringent verification. Nonprofits have to prove their legitimacy. The Mayor's office of contracts, the council, and the agencies have to approve that the nonprofit can perform the services the money would fund.

Quinn pointed to comments from Dick Dadey, the head of good government group Citizens' Union, which said reforms her office instituted would have likely prevented Halloran from pulling off this scam.

"That is a gold standard seal of approval for what we have done and I am very proud of what we've done," said Quinn.

She said itemized spending has worked well to fund important local organizations that depend on City Council funds, "It's the tightest system you'll find in any legislative body in the country."

But just minutes later, Public Advocate Bill De Blasio was on the steps of City Hall arguing that Quinn's reforms haven't ended the corruption.

"Until we ban member items, it's just not been enough," argued De Blasio who said City Council should replace the member item practice with what he calls a merit-based system, or one that gives spending choices to groups of local residents, which some districts have tried on a smaller scale.

Comptroller John Liu, who's been embroiled in a fundraising scandal of his own, released a brief statement Tuesday morning calling the news, "shocking."

"When there is suspicion that taxpayers' money is being abused, investigations should be carried out quickly and thoroughly," Liu said. The trial of members of his campaign staff related to a straw donor scheme is scheduled to resume this month.

Republican mayoral candidate Joe Lhota says the arrests of local Republican leaders yesterday, including two who had endorsed his bid for mayor, demands more ethics reform in Albany and New York City.

"There needs to be a change here," Lhota said, offering a good government critique that also dings Quinn at the same time. "Transparency on all financial items. Whether it's in government or in the process of campaigning, on what agreements are made between the members of council and the organizations they're giving money to. The taxpayers of New York shouldn't be finding out about the actions of various elected officials through the prism of a US Attorney."

Lhota says he can't undo the endorsements of Bronx GOP Chairman Jay Savino and Councilman Dan Halloran -- but they will have nothing more to do his campaign.

Another Republican candidate, John Catsimatidis, says he is still investigating new policy proposals, according to campaign spokesman Rob Ryan. Vincent Tabone, the vice chairman of the Queens Republican Party, had been on the staff of both Catsimatidis' campaign and his business, Red Apple Group. Catsimatidis terminated Tabone on Tuesday after the charges were unsealed, and his campaign said he knew about the investigation and has cooperated with federal authorities.

Meanwhile, Governor Andrew Cuomo, who ran on ethics reform and cleaning up Albany, has not called for any new initiatives. He signed an ethics package in his first year in Albany, and defended the progress in Albany over the last few years. Speaking to reporters at a stop in Oswego on Wednesday, Cuomo described this latest corruption bust as personal failings of a few bad actors -- not a failure of the system.

"I think it's inarguable that the government is working better than it's worked in many, many years," Governor Cuomo said, though he admitted this probably wouldn't be the last corruption scandal in the state. "People do stupid things, frankly. People do illegal things. People in power abuse power. That's part of the human condition," Cuomo said. "We do everything we can do to try to stop it, to try to prevent it. To have a system that punishes it and penalizes it, which we do have."