UPDATED W/ WEBINAR: Common Cause/NY Releases Two JCOPE Decisions Re: Lhota

NEW YORK, NY (06/28/2018) (readMedia)-- Today, Common Cause/NY released two JCOPE decisions related to Joe Lhota's conflicts of interest at the Metropolitan Transportation Agency (MTA).

"JCOPE has completely ceded its authority, and it's clear that only Joe Lhota has oversight over Joe Lhota. The MTA must hire an independent, outside auditor immediately to investigate Lhota's conflicts of interest. New Yorkers deserve a Chairman of the MTA who is one hundred percent committed to fixing our broken infrastructure and working only one job with the people of New York as his boss – not three," said Susan Lerner, Executive Director of Common Cause/NY.

You can view the webinar here.

JCOPE vs. Lhota

In June of last year, Governor Cuomo appointed Mr. Lhota to be the Chairman and CEO of the MTA. The Senate quickly confirmed him via Skype late at night in the last days of the legislative session.

Two months later in August, JCOPE issued a private opinion to Mr. Lhota establishing that he was in fact a state employee subject to Public Officers Law 73 and the "Code of Ethics" in Public Officers Law 74, and therefore disqualified from holding another job. It also clearly stated that he could not engage in lobbying activities and is required to get approval from JCOPE before engaging in any outside activity that generates more than $5,000 in compensation annually.

On September 25th, Lhota responded to JCOPE with an opposing interpretation, claiming that he was not an MTA employee because he is the Chairman – not the CEO – and therefore paid per diem. He also alleged that the day-to-day management role of the Chairman had been eliminated and that his job would be strictly strategic. However, a May 23rd New York Times story reported that ten employees report directly to Lhota and he holds two daily conference calls and weekly meetings.

In the same letter, Lhota added that he would also execute a bilateral recusal to avoid any conflicts of interest between his job as the Senior Vice President and Vice Dean, Chief of Staff at NYU Langone Health. The MTA recusal document requires Lhota to recuse himself when any and all matters that come before the MTA involve NYU and its affiliates, including NYU Langone Health and any and all matters that may come before NYU which involve the MTA and its affiliates.

Three days later, JCOPE blindly accepted Mr. Lhota's interpretation and gave him the greenlight, saying "upon reviewing your letter, assuming the facts therein are true so that the Metropolitan Transportation Authority has acted within its legal authority in so structuring your position as Chairman, and you are now being remunerated and treated as a per diem member of the MTA Board and not as an employee of the MTA, you would not be considered a 'state officer or employee' for purposes of Public Officers Law Section 73 and not be subject to its strictures."

MSG vs. Lhota

Almost three months later in December 2017, Lhota picked up an additional board position at the Madison Square Garden Company which will pay him at least $150k annually. He has served on the board of MSG Networks, earning similar compensation, since 2016. Between the two, he earns over $300k in additional compensation. Madison Square Garden, and its other projects, rely heavily on public transportation; any potential Penn Station rehab would require Madison Square Garden compensation. Since becoming Chairman of the MTA, Lhota has participated in two subway station renovation discussions that serve the Garden.

While Lhota claims there is bilateral recusal for the MTA and NYU Langone, he has never referenced a similar one for Madison Square Garden Company and MSG Networks and the MTA.

Recommendations

The Public Officers Law, which has not been changed since Lhota's appointment, is clear:

"Notwithstanding any provision of law to the contrary, the chairman shall be the chief executive officer of the authority and shall be responsible for the discharge of the executive and administrative functions and powers of the authority."

Common Cause/NY is demanding the MTA board hire an independent, outside auditor to fully explore and disclose his conflicts of interest, as well as change the public officers' law to clarify a fiduciary obligation on the part of the Chairman and CEO to prioritize the public interest above any private interest.

Documents attached:

• JCOPE (Joint Commission on Public Ethics) decision stating that Lhota is an employee of the state and subject to the Public Officer's Law
• Lhota's rebuttal to JCOPE.
• JCOPE email accepting Mr. Lhota's interpretation without question.
• NYU Langone letter to Lhota on meeting his obligations to NYU
• MTA recusal memorandum.

Background:

In November, Common Cause/NY sent a letter demanding that the New York State Authorities Budget Office (ABO) investigate MTA Board Member and CEO Joseph Lhota for conflicts of interest. Common Cause/NY is still waiting for a reply.