Monday, December 18, 2006

Three Men In A Room

Those of us who live in New York state sometimes complain that the state is run by "three men in a room" -- the governor (currently George Pataki), the Senate majority leader (Joseph Bruno), and the Assembly Speaker (Sheldon Silver). An article on the front page of the Metro Section of today’s New York Times, entitled "Fate of Project in Brooklyn Hinges on Nod of One Man," highlights one reason for this phenomenon. The article reports that Speaker Silver could single-handedly shut down a redevelopment project for the Atlantic Yards in Brooklyn. No matter that the project has undoubtedly already been through all manner of administrative review; as the Times aptly puts it, "Sheldon Silver could always just say no."

What the Times is talking about is the fact that in New York, certain projects undertaken by certain public benefit corporations require the unanimous approval of a body called the Public Authorities Control Board ("PACB"), whose three voting members are Silver, Bruno and Pataki. As the Times reports, it was in this capacity that Silver and Bruno were able (somewhat famously) to block a proposal last year that would have resulted in the development of a new stadium on Manhattan’s west side. Similarly, it is this power that could enable Silver to block the Atlantic Yards project. This sort of thing happens -- or is threatened -- with some frequency in New York.

If it sounds strange that any one of these three individuals can stop a project that has already been reviewed and approved by all of the agencies and other bodies charged with reviewing every substantive issue it raises, that’s because the source of this power is something loosely akin to an urban myth. Under the applicable statute, the PACB actually has the authority only to confirm that there are sufficient funds committed to finance the acquisition and construction of the project. The PACB’s statutory authority does not "technically" permit it to disapprove a project based on any factor other than an absence of funding sources.* The reason for this review is historical: the PACB was created in response to a fiscal crisis in the 1970s, when (among other things) there was no across-the-board check to make sure that state agencies weren’t spending money they did not have (and, apparently, they were). This is, of course, a salutary purpose.

But somehow, over the years, the three voting members of the PACB began to exercise their authority to block projects that they did not like on the merits. And somehow, over the years, we have come to accept this. In light of the requirement that the PACB act unanimously -- which may have made sense in connection with the board’s original statutory purpose -- this tacit expansion of authority gives each these three individuals an extraordinary political trump card.

Unfortunately, as near as I can tell, although we grumble about this no one has yet challenged it in any meaningful sense. Hence we find ourselves governed by "three men in a room."

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*The only exception of which I am aware relates to the Long Island Power Authority -- the statute that regulates that body specifies that certain of its projects must first be reviewed by the PACB for financial feasibility and other factors. But in all other cases, the PACB is not charged with making any such determinations. Indeed, on at least one occasion Pataki himself vetoed legislation that would have expressly given the PACB the authority to review certain projects on the merits, stating: "I am particularly troubled by the broad policy-making role that the legislation confers upon the PACB. By requiring the PACB to determine whether an alternative use is an ‘appropriate’ one, the bill goes far beyond the PACB’s traditional role of opining on the fiscal soundness of the State and its public authorities." (N.Y. Bill Jacket, 1996 S.B. 6923, Governor’s veto message).