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How the Nation's Most Dysfunctional State Government Blocked Medical Marijuana (And Campaign Finance Reform)

A contest between political factions produced disaster where progress should have happened.

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The result is a system where much legislation is “one-house bills” with no hope of succeeding in the other chamber. The Assembly regularly passes bills to let New York City strengthen its rent control laws. The Senate, meanwhile, this year passed the “Public Assistance Integrity Act,” which would prohibit welfare recipients from using their cash cards to buy tobacco, alcoholic beverages, or lottery tickets. These people should not be permitted to spend their taxpayer-supplied money on lap dances, said a Skelos press release.

If anything gets done, it’s either by spectacular arm-twisting by the governor (as he did with same-sex marriage last year) or, most commonly, by last-minute negotiations among the “three men in a room”: the governor, the Senate majority leader, and Assembly Speaker Sheldon Silver. What they agree on gets crammed into omnibus bills nicknamed “One Big Uglies” and voted on in wee-hour marathons before the session closes.

The system is impressively corrupt. Three of the four Democrats who switched parties in 2009 are now in prison. Longtime Senate Majority Leader Joseph Bruno resigned in 2008 with a felony indictment looming; his conviction was overturned in 2011, but he was reindicted last year. Malcolm Smith of Queens, one of the five members of the Independent Democratic Conference, was arrested in April on bribery charges. Assemblymember Nelson Castro, indicted for perjury in 2009, wore a wire for most of his four years in office. He resigned in April after getting another Bronx Democrat, Assemblymember Eric Stevenson, charged with taking $10,000 from adult daycare center owners to introduce a bill to bar their competitors from opening similar facilities.

The larger-scale corruption is legal. The real estate business forms the biggest bloc of contributors to state political campaigns. In 2010, one leading lobbyist boasted, landlords “basically emptied our piggybanks” to help the Republicans retake the Senate. They benefit from a loophole in state campaign finance laws: Corporations are not allowed to contribute more than $5,000 to a candidate, but landlords often set up limited liability companies for different pieces of property—and each LLC can donate the maximum. Billionaire landlord Leonard Litwin gave almost $2 million in 2012, including $500,000 to Gov. Cuomo. He once gave Malcolm Smith $40,000 in a year when he was running unopposed.

In return, the industry wants tax breaks and either weakening rent controls or blocking attempts to strengthen them. (A 1971 state law bars New York City, which has had a chronic housing shortage since World War II, from passing rent regulations stricter than the state’s.) In January, the legislature approved a One Big Ugly omnibus housing bill that carved out tax exemptions for five luxury buildings under construction in Manhattan. That means that the owners of two $90 million penthouses across the street from Carnegie Hall will get $2.4 million in tax breaks intended to subsidize the construction of affordable housing. The bill’s bipartisan sponsors, Sen. Martin Golden of Brooklyn (R-Brooklyn) and Assemblymember Keith Wright (D-Harlem), both claimed they had no idea how that provision ever got in. But four of the developers involved gave more than $440,000 to state campaigns last year, and about $675,000 in 2010.

“That’s why we don’t have campaign finance reform,” says Krueger. “Pay to play is at the bottom of a lot of legislation.”

Gov. Cuomo's Shadow

Over this looms the figure of Gov. Andrew Cuomo. It would not take an Edward Snowden or Bradley Manning to reveal that he has presidential ambitions. He appears to be positioning himself as a “Bloomberg Democrat,” liberal on social issues but “fiscally responsible” in a way that pleases the plutocrats of Wall Street and real estate. His two biggest priorities since he took office in 2011 have been legalizing same-sex marriage and cutting state workers’ pensions.

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