Grassroots Groups Continue to Mount Pressure against "The Committee to Save New York" with Report

NEW YORK, NY (02/25/2011)(readMedia)-- Public Accountability Initiative released a report today that examines the ways in which big money interests behind the Committee to Save New York contribute to and exacerbate the budget problems facing New York State. Entitled

"The Committee to Scam New York: How the Committee to Save New York's Big Business Elites Dodge Taxes, Score Handouts, Get Bailed Out, and Still Want More,"

and released in conjunction with the New Deal for New York campaign, the report shows that big businesses associated with the Committee are some of New York State's top recipients of government bailouts, subsidies, and tax breaks. A partial rollback of government aid to these large, ultra-profitable corporations and wealthy individuals would close New York State's budget gap.

Kevin Connor, the co-director of the Public Accountability Initiative and the primary author of the report, said "The report shows what the Committee is really looking to save: the billions of dollars in corporate handouts that line their pockets each year at everyone else's expense. I'm happy that CVH and VOCAL, who have been doing important work protesting the Committee and Governor's austerity proposals, teamed up with PAI to release and distribute this report."

The report (Executive Summary available here) focuses on the three major business lobbies behind the formation of the Committee, as reported in the press: the Partnership for New York City, the Real Estate Board of New York, and the Business Council of New York State. Though other business associations and one labor group are represented on the Committee's board, their roles appear to be more peripheral.

Among the report's major findings is that businesses and individuals associated with the Committee appear to be engaging in and facilitating significant amounts of tax dodging. Findings include:

• At least 1,705 offshore subsidiaries incorporated in tax havens;

• The Committee's honorary chair, Felix Rohatyn, is employed at Lazard, the first major Wall Street bank to incorporate in an offshore tax haven (Bermuda);

• Several businesses associated with the Committee are either specializing in facilitating tax avoidance by wealthy individuals and corporations or have been fined for doing so, including Deutsche Bank and UBS; and,

• The Cayman Islands is the businesses' favorite tax haven, with 430 corporate subsidiaries incorporated there, while Morgan Stanley alone has more than 300 sheltered entities.

Beyond the tax dodging, other key findings of the report include

• 13 financial firms linked to the Committee to Save New York received $149 billion in federal bailout funds (TARP) during the 2008 financial crisis, or roughly enough to fund New York State's entire public school system for three years.

• Businesses linked to the Committee have been approved for roughly $2 billion in state and local subsidies in the form of tax breaks, infrastructure spending, and other outlays.

• Individuals associated with the Committee will save millions in personal income taxes if the state's tax on high-income earners is not extended.

Additionally, large corporate conglomerates and financial firms associated with the Committee are chief beneficiaries of the state's lenient tax regime for big businesses. Since state tax returns are not publicly available, it is impossible to determine the level of aid to specific corporations, but the lump sum amounts are available:

• $14.5 billion in automatic refunds of the stock transfer tax last year, and $210 billion since 1981, when the tax was fully refunded to financial firms for the first time.

• Over $5 billion in annual "business tax expenditures" in the form of tax breaks that are largely oriented towards big businesses.

Furthermore, businesses and individuals backing the Committee wield enormous influence over state and federal government, through positions on government boards and campaign contributions:

• Individuals and corporations linked to the Committee made $7.3 million in campaign contributions statewide during the last election cycle.

• Governor Cuomo received $1.8 million in campaign contributions from individuals and corporations linked to the Committee.

• Individuals linked to the Committee hold positions at many powerful state and federal government bodies, including the Federal Reserve Bank of New York and Empire State Development Corporation.

"This shouldn't be allowed to happen in America," said Ketny Jean-Francois, co-chair of the Board of Directors of Community Voices Heard. "This is not a third world country where the special interests get to buy the government and create laws solely for their own benefit. Our state government shouldn't be for sale. Rules and laws should be made in the interests of all the people of New York, not just the privileged few."

"This report shines a light on how the rich have the upper hand on New York's State budget," Rich Puchalski, Executive Director of Syracuse United Neighbors.

"It's clear the big money and big corporations affiliated with the Committee to Save New York are getting what they paid for when it comes to Governor Cuomo's agenda for New York," said Wanda Hernandez, a VOCAL leader and Board member. "This report shows that the special interests in Governor Cuomo's corner are ripping off our state, and their tax breaks would only grow under his budget. Instead of cheering them on, Governor Cuomo should be asking them to pay their fair share so we can get our state moving forward again. Just because these corporate interests are big campaign donors shouldn't mean their voices matter more than other New Yorkers or they don't have to follow the law."

Following in New York State's proud tradition as a "laboratory of democracy," the New Deal for New York campaign will build upon the state's history as an incubator of policies that have gone on to transform living standards for the entire nation by creating a new partnership between New Yorkers and their state government to provide transformational, long-term investment in the communities where we work, live and worship. Member organizations include the Board of Directors of Alliance of Communities Transforming Syracuse, Community Voices Heard (Newburgh, Poughkeepsie, NYC, Yonkers), People United for Sustainable Housing (Buffalo), Syracuse United Neighbors, Voices of Community Activists and Leaders (Albany, NYC, Westchester), and VOICE (Erie County).

Some of the groups that released the report alongside PAI have been actively demonstrating against the austerity proposals Governor Cuomo has been advancing, including through demonstrations outside his State of the State speech and a recent $15,000/person fundraiser at Top of the Rock, as well as questioning the relationship between the Governor and the organized affluent driving The Committee to Save New York, through protesting at the Real Estate Board of New York's annual gala at a posh Midtown hotel and requesting the State Commission on Public Integrity investigate the relationship.

-- 30 --

Posted Friday February 25, 2011 at 10:03 am by New York Stimulus Alliance
Last Updated Friday February 25, 2011 at 10:06 am