ALBANY, N.Y. (AP) — When state officials created New York’s new ethics commission in 2022, they billed it as an independent watchdog to replace an old ethics panel roundly criticized for doing too little to reign in public corruption and self-dealing.
One of the Commission on Ethics and Lobbying in Government's early high-profile actions was to investigate former Gov. Andrew Cuomo over $5 million he had gotten for writing a book about the COVID-19 pandemic.
Years later, the commission is fighting for its own survival after Cuomo’s lawyers persuaded courts that the panel was given unconstitutional enforcement powers. A state lawyer seeking to reverse a lower court ruling argued before New York's top court Tuesday that the commission’s more independent setup is both constitutionally proper and necessary for if to function properly.
The commission has continued to operate as the court case continues. But Rachael Fauss of Reinvent Albany, who listened to arguments with other good-government advocates, said that a ruling against the commission could upend ethics enforcement in New York.
“There would be no watchdog on the beat,” she said. “We’ve had a history of ... corruption scandals in this state, and all the bodies have been ill-equipped to handle them. And if this one — this new body that’s the most independent we’ve had yet — is thrown out, I think it raises a big question about what the Legislature could come up with.”
The commission, known as COELIG, investigates potential ethics and lobbying violations by state officials, employees, lobbyists and their clients. Commission findings involving state lawmakers are referred to the Legislative Ethics Commission for enforcement.
It was created by Gov. Kathy Hochul and lawmakers in 2022 to replace the much-maligned Joint Commission on Public Ethics, or JCOPE. Members of that panel were appointed by the governor and legislative leaders, leading to widespread criticism that commission members had little appetite to hold those officials accountable.
In contrast, COELIG nominations by state officials are reviewed by an independent review committee made up of law school deans. And the governor cannot unilaterally remove commission members.
Cuomo is fighting an attempt by the commission that could force him to forfeit $5 million he got for writing a book about his administration’s efforts during the COVID-19 pandemic. State officials claim Cuomo hadn’t kept a promise not to use any state resources on the book. Cuomo denies those allegations.
A trial court judge ruled in 2023 that the law creating the commission made it too independent from the governor under terms of the state constitution. The judge reasoned that enforcing ethics laws is a power that belongs to the executive branch, yet the governor cannot control ethics commission members, force them to explain their actions or remove them for neglecting their duties.
A mid-level appeals court upheld the judge’s ruling in May.
Cuomo’s attorney, Gregory Dubinsky, told top court judges that the law creating the current ethics panel “imbues this commission with sweeping, mighty law enforcement powers that are quintessential executive powers.”
But lawyers for the state say the commission's setup insulates it from the political branches it watches over.
“We know what happens with an ethics commission when it’s not sufficiently independent. It is unable to do its job, it does not help protect the public trust in government,” said the state's attorney, Dustin Brockner.
Brockner was peppered with sharp questions from judges who signaled doubts about the panel's constitutionality.
Cuomo resigned in August 2021 after the attorney general released the results of an investigation that concluded the then-governor had sexually harassed at least 11 women. Cuomo has denied those allegations. He continues to make public appearances and to speak out on political issues, fueling speculation he might run for New York City mayor or some other office.
Cuomo's exit followed decades of scandals involving New York's elected officials.
Former Gov. Eliot Spitzer resigned in 2008 after being caught up in a prostitution scandal. Ten years later, Attorney General Eric Schneiderman left office after four women he was romantically involved with or had romantic interactions with accused him of physical violence in accounts published by The New Yorker.
Also, past leaders of the state Senate and Assembly have been convicted on corruption charges.
A decision from the top court is expected in the coming months.
The leaders of the ethics commission said in a prepared statement that they were “optimistic that the court will rule in our favor, and confident that if the court, nonetheless, finds any shortcoming in the current statute, it will be quickly rectified by the governor and legislature. ”
FILE - Former New York Gov. Andrew Cuomo testifies before the House Oversight Select Subcommittee's hearing on the Coronavirus Pandemic, on Capitol Hill in Washington, Sept. 10, 2024. (AP Photo/Cliff Owen, File)
NEW YORK (AP) — Wall Street is holding firmer on Wednesday, and U.S. stocks are drifting between small losses and gains a day after strong reports on the economy stirred up worries that inflation and interest rates may remain higher than expected.
The S&P 500 fell 0.2% in afternoon trading following its 1.1% slump the day before. The Dow Jones Industrial Average was down 78 points, or 0.2%, as of 12:21 p.m. Eastern time, and the Nasdaq composite was 0.4% lower.
In the bond market, which has been the bigger focus for Wall Street recently, the moves were also more modest following the last month's charge higher for yields. Higher yields hurt stocks by making it more expensive for companies and households to borrow and by pulling some investors toward bonds and away from stocks.
The increased calm returned to the market after reports on the economy Wednesday weren’t as strong as Tuesday’s. That can counterintuitively help Wall Street because it raises hopes that the Federal Reserve may keep cutting short-term interest rates. Wall Street loves lower rates, which can goose the economy and boost prices for investments.
Fed Governor Christopher Waller said in a speech Wednesday he still expects the central bank to deliver more easing of rates in 2025, pushing back against nascent speculation it may already be done after cutting three times since September.
Waller said he doesn’t expect tariffs that are possibly coming under President-elect Donald Trump to have a “significant or persistent effect” on inflation. And even though inflation has shown stubbornness recently, he still sees it trending downward over the long term.
“If the outlook evolves as I have described here, I will support continuing to cut our policy rate in 2025,” he said. “The pace of those cuts will depend on how much progress we make on inflation, while keeping the labor market from weakening.”
The yield on the two-year Treasury, which tends to closely track expectations for Fed action, fell immediately after Waller’s speech and the release of a couple economic reports. It edged down to 4.28% from 4.29% late Tuesday.
One of the reports suggested U.S. employers outside of the government slowed their hiring in December by more than economists expected. That could offer a hint of what Friday’s more comprehensive jobs report from the Labor Department will show.
That update will likely be the main event for Wall Street this week, particularly after the stock market’s closure on Thursday in observance of a National Day of Mourning for former President Jimmy Carter. The hope is that the jobs report will show enough strength to keep worries of a recession stifled but not so much that it prevents the Fed from cutting rates.
A separate report on Wednesday, meanwhile, said fewer U.S. workers applied for unemployment benefits last week than economists expected. It’s the latest signal that the job market remains remarkably solid.
The yield on the 10-year Treasury, which is the centerpiece of the bond market, held steady at 4.69% from late Tuesday. But it topped 4.70% earlier in the morning and is well above the 4.15% level it was at roughly a month ago. It was below 3.65% in September.
Such increases in rates make it more expensive for companies to borrow, and smaller companies can feel particular pain because of the need for many to borrow to grow. The Russell 2000 index of smaller stocks fell 1.1%.
In the stock market, eBay jumped 9.6% for the biggest gain in the S&P 500 on a collaboration with Meta Platforms where a pilot of select eBay listings will appear on Facebook Marketplace in the United States, Germany, and France..
Cal-Maine Foods climbed 2% after the egg producer reported stronger profit for the latest quarter than analysts expected. CEO Sherman Miller said it sold more dozens of eggs thanks in part to strong demand from the seasonal boost it gets leading into Thanksgiving.
Egg prices climbed late last year as a lingering outbreak of bird flu coincided with the high demand of the holiday baking season.
Delta Air Lines will report its first-quarter results on Friday, with big banks beginning next week to kick off the latest earnings reporting season in earnest.
In stock markets abroad, indexes weakened were mixed across Europe and Asia. South Korea’s Kospi climbed 1.2%, but Hong Kong’s Hang Seng fell 0.9%.
AP Writers Matt Ott and Zimo Zhong contributed.
Traders work on the floor at the New York Stock Exchange in New York, Thursday, Jan. 2, 2025. (AP Photo/Seth Wenig)
Traders work on the floor at the New York Stock Exchange in New York's Financial District Thursday, Jan. 2, 2025. (AP Photo/Seth Wenig)
A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Wednesday, Jan. 8, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
A person looks at an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Jan. 8, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
People stand in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Jan. 8, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
People stand in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Jan. 8, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
