Preventing the Next Sheldon Silver

Sheldon Silver, speaker of the New York State Assembly, was arrested last week on federal corruption charges, sending shock waves through New York’s political circles. He is accused of accepting millions of dollars in disguised bribes for more than a decade. Silver allegedly asked developers with business before the state to spend money on a law firm that, in turn, paid Silver for legal work he never did. He was able to disguise the source of the income for so long because New York, like the vast majority of other states, considers its legislature to be “part time,” freeing up legislators to maintain legitimate outside jobs, as well as their government work.

Such outside payments are ripe for unscrupulous dealings (or, at very least, the appearance of impropriety), and have long been decried by anticorruption forces. Outside payments were a primary focus of Governor Cuomo’s anticorruption Moreland Commission, which the Governor then disbanded under pressure from legislators. Governor Cuomo recently proposed a new commission to look at ways to increase disclosure of outside income and to cap the amount of outside income legislators may receive. While Cuomo’s new proposals would be a good start, they do not go far enough. The time has come to ban outside legal work for state legislators and to compensate them fairly for the full time job the people elected them to do.

Allowing legislators to accept outside employment could at first seem like a good tool to fight corruption. The current base pay in the New York Legislature is $75,000, far less than many legislators could earn in a dozen other fields. By leaving open the path for legitimate outside earnings that are several times their public pay, we might be able to attract more people to run for public office and reduce the incentive for bribery.

Studies have shown that higher pay for public servants reduces the incidence of corruption; the question then becomes whether allowing public servants to make outside money has an effect similar to that of raising their salary, or–as in the case of Sheldon Silver–whether it in fact does the opposite.

New York Times columnist David Brooks has suggested that many in the higher echelons of public service suffer from “status-income disequilibrium” or SID: the power they enjoy at work pushes them into the country’s elite, but their financial status is that of the comparatively paltry upper-middle class. Sufferers of SID could see corruption as merely a way to restore them to their rightful place among the economic elite. Following that logic, it could be a good idea to allow a legitimate path for legislators to bring in hundreds of thousands of dollars in outside income to align their financial portfolios more closely with their position in the political power structure.

But despite this possible advantage, in practice allowing legislators to consider their public work as part-time leaves too many avenues for corruption. The problem cannot be remedied solely by more carefully monitoring of potential conflicts of interest. There will always be some legislators who are incorruptible, and there will always be some who will take opportunities for corruption whenever they believe that they can get away with it. But there is a third group–perhaps the largest group–who will only be corrupt if they can rationalize it morally to themselves. Everyone knows that taking a direct bribe is wrong. But allowing outside income streams creates grey areas. This in turn allows legislators to be corrupt without necessarily suffering the guilt they might feel by taking a direct bribe.

Preet Bharara, the United States Attorney for the Southern District of New York said: “For many years, New Yorkers have asked the question: How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to honestly serve his constituents?” While we may now have an answer in Silver’s case, it’s time to eliminate that question for all legislators and sharply curtail allowable outside income, especially in the legal profession. (Perhaps we should allow some other streams of income; then New York Senator Cecilia Tkaczyk reported earning up to $5,000 from selling wool and yarn produced by the sheep she raises.)

It would, however, be grossly unfair to the legislature to merely strip them of most of their income without accompanying that move with a substantial increase in official legislative pay, another part of Governor Cuomo’s proposal. It is always difficult for a legislature to significantly raise its own pay without taking a political hit (it doesn’t play well in a sound bite to say “we need to pay ourselves more money to do the same work so we can quit out other jobs and not be as tempted to be corrupt”), but it might be the best option to clean up the notorious political cesspool that is the New York state legislature.

5 thoughts on “Preventing the Next Sheldon Silver

  1. Very persuasive analysis. But let me pick up on the point you make in your last paragraph, in order to put a question to you. Suppose it’s just not politically feasible to pass a substantial pay raise for state legislators, such that we’re confronted with two options: continue to allow outside legislators to earn outside income (though perhaps with beefed-up conflict of interest and transparency rules), or prohibit such outside income, even though we know this may have an effect on who is willing to become a state legislator (and might conceivably lead to more corruption — if, for example, some legislator was earning legitimate outside income, without which she might be more tempted to seek out illicit income). I don’t have a strong view on this, but you’ve thought more about this than I have, so I wonder if you (or others out in readerland) have an intuition about which option would be second-best, if we can’t get your ideal combination of stricter rules and higher pay?

    • My initial response to the idea of ‘second best’ cheats a bit by refusing to pick either low total compensation or outside income streams. Instead, I’d opt to recruit a super-wealthy individual to start a fund that would pay out every member of the legislature annually to augment their salaries. (While there would be a public policy reason to ban payments to some members and not others, there is no reason I can currently think of to ban universal payments). I get the idea of positively influencing the behavior of public officials through payments by the private sector from the Mo Ibrahim Prize for Achievement in African Leadership. Adding 100,000 to the salary of each Member would cost $21 million dollars annually; a large but not impossible sum for the likes of George Soros or Mike Bloomberg.

      • Ingenious, but the law professor in me wants to accuse you of fighting the hypothetical (and in this case I think the hypothetical is actually, at least in the short term, the most realistic scenario). Suppose it is simply not possible–from public or private sources–to substantially raise the salaries of state legislatures in the near term. The question is whether, under those conditions, we should continue to allow state legislators to earn substantial outside income (subject only to disclosure and conflict-of-interest requirements), or whether we should more strictly limit or regulate outside employment opportunities.

        My point is not really to force you into choosing one or the other — there’s no clear right answer, and both approaches have drawbacks, as you note in the post. I’m merely underscoring that if we can’t drastically raise salaries, we really do have a hard question here, and I’m not sure how to answer it. Any further thoughts?

        • You are right that I was mostly avoiding the hypothetical because it is really hard to pick a side. If forced to, it depends whether you care more about attracting competence to government or fighting corruption. If the priority is corruption, I would still support eliminating outside income. There really is something to the idea that corruption will soar when people are able to rationalize it. (Silver, for example, is probably thinking about how no one was hurt because he funnelled extra funding to a cancer research center). However, I do worry that such a clampdown would deter a lot of very competent people from entering government in the first place.

          Making the tradeoff today in NY, with the level of corruption we have (and the level of harm that it’s doing) I would prioritize competence and allow external income streams, but my answer could change if corruption levels rose even further.

  2. As a New Yorker, I am particularly discouraged by the revelation of the allegations against Sheldon Silver. But I’m not surprised. Silver is the fifth member of the New York State legislature’s leadership to have been indicted in the past 15 years. Just recently, in 2012, former Senate Majority Leader Pedro Espada Jr. was convicted of embezzling money from his non-profit for personal and political purposes. At the time, Silver, of course, condemned Espada’s actions. The investigation of Mr. Espada was launched by none other than then-Attorney General Andrew Cuomo. And I doubt that he – or many other Albany insiders – are all that surprised at Silver’s antics, either. Yet the New York State government has utterly failed in addressing the problem of public corruption.

    I think your analysis is fascinating, Sarah. But I also think the lack of political feasibility that Matthew highlights is more than a supposition. I’m disappointed to say it but I’m relieved federal prosecutors are handling the case. As earlier posts on this blog have mentioned, though, federal authorities can’t appropriately manage state and local corruption in every instance. I wonder what long-term policy reform will look like, how it will come about, and whether we will be able to trust it.

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