REPORT

The Committee to Save 1% New York

How a Small Group of Big Business Interests and Billionaires are Hijacking New York State’s Public Policy Agenda on Behalf of the One Percent

The Committee to Save New York established itself as one of the state’s most powerful lobbying forces in 2011, spending $12 million on a public relations campaign pushing budget cuts and other policy proposals closely aligned with Governor Andrew Cuomo’s agenda – the fifth most costly one-year lobbying effort ever conducted by a single organization in Albany. The Committee once again embarked on a massive political spending spree in 2012.

  • Click here to read the full report.
  • Despite its power, much remains unknown about the Committee, which declines to disclose its donor list. Recent press reports have identified several donors, including casino gambling interests. These reports have suggested that the organization acted as a front group for these interests as they pushed to legalize casino gambling in New York State. But much of the money behind the Committee remains in the shadows.

    This report takes a closer look at the powerful forces behind the Committee and their playbook for “saving” New York. The Committee’s backers are primarily big business interests, billionaires, and other leading lights of New York State’s “one percent.” They played a key role in crashing New York’s economy through their own style of gambling, won billions in government bailouts, but now insist on “fiscal responsibility” for the rest of the state. Though the Committee frames its agenda as altruistic and public-minded, its backers stand to profit substantially from the policies for which it advocates. These policy payoffs include not just casino gambling legalization, but pension reform, new and continued corporate tax loopholes, and favorable development policies. The report includes the following sections:

    Part 1: Who Rules the Committee? This section takes a closer look at main forces behind the Committee: Committee donors whose names have been reported in the press, as well as three key business associations behind the Committee – the Partnership for New York City, the Real Estate Board of New York, and the Business Council of New York State. Each of these organizations played an early role in organizing the Committee, funding it, and governing it. This section also examines the Cuomo administration’s ties to the Committee. Though the Committee and Cuomo administration once denied coordinating, recent reports in the New York Times have revealed coordination, and the Cuomo administration now claims that “such coordination with elected officials is wholly proper, common, and necessary.”

    Part 2: Speculation and Bailouts. The second section notes that the key forces behind the Committee to Save New York sent the economy into a tailspin in 2008 due to unchecked speculation, then received $167 billion in bailouts from the federal government. One of the largest donors to the Committee, real estate firm Tishman Speyer, also received a bailout from the Federal Reserve Bank of New York. This speculation continues unabated. Committee donor JPMorgan Chase and its CEO, Jamie Dimon, have recently racked up $3 billion in trading losses. According to Capital New York, “the seeds of the pro-Cuomo lobbying giant known as the Committee to Save New York were sewn in 2009” – in a meeting at JPMorgan’s offices.

    Part 3: Policy Payoffs. The third section examines the ways in which the Committee’s support for the Cuomo administration has paid off since its formation in late 2010. The New York Times recently revealed that the Committee had accepted large donations from gambling interests before supporting casino gambling in New York State in late 2011, as Governor Cuomo was shaping his gambling policy proposal. The Committee’s backers stand to benefit from other policies continued, implemented, or proposed during the Cuomo administration, including low tax rates, subsidies, pension reform, and real estate development policies:

  • Pension reform: huge fee payoffs. The “pension reform” proposal backed by the Committee and Cuomo administration in 2012 would have dramatically increased revenue for Wall Street by disaggregating pension funds into private accounts with much higher fees. Wall Street financial firms backing the Committee stand to make 2-10 times more in fees from this system than a defined benefit system, potentially translating into billions in fees.

  • Corporate taxes: billions in new and continued loopholes. The Committee’s anti-tax stance helps protect Committee-linked firms from corporate tax reforms that would close loopholes and raise corporate tax rates. The Cuomo administration’s reluctance to close corporate tax loopholes has translated into billions in lost revenue for the state – and billions in pure profit for Committee-linked companies; the report documents $16 billion in state income tax avoidance by the companies from 2008-2010, on top of $101 billion in federal income tax dodging. One Committee-linked firm, BlackRock, won a new $15 million loophole in this year’s budget.

  • Subsidies: continued unaccountable giveaways. Committee-linked companies continue to benefit from economic development subsidy deals that could be renegotiated or discharged during a period of extreme fiscal hardship for the state. Committee-linked companies have been approved for $2 billion in subsidies over the past twenty years, and some have failed to meet jobs promises associated with these subsidies.
  • Casino gambling: favorable regulations. Committee donors would benefit from the Cuomo administration’s casino gambling policies, including Malaysian casino giant Genting and the New York Gaming Association. As the New York Times reported, the Cuomo administration directed these interests to give to the Committee, and subsequently endorsed a Genting proposal to build a casino and convention center in Queens.
  • Real estate development: new speculation opportunities in Manhattan. Media reports have overlooked one potential payoff from the Genting casino deal, which would involve tearing down the Jacob K. Javits Convention Center and replacing it with private development. New York real estate interests have long wanted Javits to be torn down in order to open up valuable land for private real estate development in midtown Manhattan. Several Committee backers are associated with the Regional Plan Association (RPA) which claims credit for the plan to tear down Javits. Douglas Durst of the Durst Organization, a Committee backer, is affiliated with RPA and has voiced interest in the Javits parcels.
  • ***

    This report serves as an update to “The Committee to Scam New York: How the Committee to Save New York’s Corporate Elites Dodge Taxes, Score Handouts, Get Bailed Out, and Still Want More,” a report released last year in partnership with the New Deal for New York campaign, a coalition of community-based organizations located throughout New York State. This report was produced in partnership with New Yorkers for Fiscal Fairness.

    Data has been updated to reflect personnel changes at each of the organizations and corporations discussed in the report, as well as other changes that have occurred since that report was released in February 2011.

    Click here to read the full report.

    This entry was posted in Reports and tagged , , . Bookmark the permalink.

    3 Responses to The Committee to Save 1% New York

    1. WNYPlanner says:

      This was a great exposé and I for one appreciate the effort to connect the dots…easy, but tedious. Don’t forget to respond to the CSNY’s statement attempting to shoot the messenger http://blog.timesunion.com/capitol/archives/136087/report-claims-csny-just-wanted-money-for-members/#comment-427897

    2. Pingback: The Committee to Frack New York? - Eyes on the Ties

    3. Pingback: The Committee to Frack New York? - damascus citizens for sustainability

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    *


    four − = 0

    You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>