Skelos employed at LI law firm that's secured millions in state grants for clients, records show

ALBANY -- Senate Majority Leader Dean Skelos works for a Long Island law firm with a lobbying arm that has landed millions of dollars in state grants and contracts, a review of hundreds of state records shows.

While state legislators are allowed to have outside jobs, the nexus between the governmental actions in Albany and the private practice of law is the focus of proposals by Gov. Andrew M. Cuomo to restrict the dual roles. He proposes to require disclosure of all income as well as the specific services provided for it, identify any connection with state business, and prohibit work tied to pending legislation.

A review by Newsday of hundreds of campaign finance, ethics and lobbying records and state contracts involving Skelos, the law firm, Ruskin Moscou Faltischek in Uniondale, and the lobbyist, Empire Government Strategies, shows the intersection of public and private transactions, which good-government watchdogs say creates the potential for conflicts of interest and is exacerbated by New York's porous ethics laws.

"If you know what you're doing, you don't have to go over the line," said Blair Horner, legislative director of the New York Public Interest Research Group, speaking generally of Albany. "You can do very well personally as well as politically and still work within the parameters of the sandbox."

"I don't think there is inherently a problem of a legislator working for a law firm that has a lobbying arm, as long as it's open," said Randall D. Eliason, former head of a public corruption unit in the District of Columbia. "The politicians and the firms themselves have to be extremely careful . . . to avoid even an appearance of conflicts and impropriety."

A boost in earnings

Skelos, 67, makes as much as $250,000 a year for his part-time work "of counsel" at Ruskin Moscou, according to his financial disclosure forms. In addition, he makes a $120,000 state salary, which includes his leadership stipend. In Albany, the Rockville Centre Republican is one of the "three men in a room" -- with the governor and Assembly speaker -- who negotiate major legislation and the spending of billions of dollars of taxpayer money behind closed doors.

Skelos is the only lawyer on Ruskin Moscou's website who doesn't list a specialty. There's no detail on what he does to earn his outside income or how he specifically avoids potential conflicts of interest. A Skelos spokesman also has declined to discuss it. The law firm represents major real estate, health care and corporate interests in New York City and on Long Island.

Former Assemb. Arthur "Jerry" Kremer, 79, is a partner in Ruskin Moscou and chairman of its government affairs department. Kremer also lobbies Albany under his own small firm, Empire Government Strategies, a registered lobbyist, which the law firm describes as its "government relations arm." Those clients include real estate, health care and corporate interests, as well as towns and school districts in Skelos' Nassau County district.

Real estate is one area in which legal clients and state legislation can overlap. For example, former Assembly Speaker Sheldon Silver has been charged in a corruption scheme that in part involves what federal authorities said was a powerful real estate developer.

NBC New York reported in January that a federal prosecutor was looking at Skelos' income from his law firm and taking a specific look at real estate clients. Skelos criticized the report as thinly sourced and told Newsday the next day that neither he nor his attorneys had been contacted by the federal authorities.

Real estate clients at the Ruskin law firm have included The DeMatteis Organizations, a major development firm. The company and its former CEO have contributed $3,800 to Skelos' campaigns. When CEO Frederick DeMatteis died in 2001, Kremer called him "a mentor."

Last month, protesters marched on Skelos' district office to oppose his legislative priority of renewing a tax abatement program created decades ago to encourage affordable housing units in Manhattan. The program has been criticized as being used to secure millions of dollars in tax breaks for luxury real estate developers.

The Real Estate Board of New York, one of the biggest campaign donors to Skelos and his Senate Republican Campaign Committee, is leading the efforts to get Albany to renew the law this year. Since 2008, the Real Estate Board's political action committee has contributed $26,750 to Skelos and more than $305,000 to the Senate Republican Campaign Committee.

A spokeswoman for the law firm didn't respond to a request for comment.

Blurred lines

State ethics law prohibits public officials from engaging in any business or activity in which they have a direct or indirect financial interest that would "give reasonable basis for the impression that any person can improperly influence him." The law says officials should pursue "conduct which will not raise suspicion among the public."

But those lines blur when applied to legislators, who are legally part-time employees. They are allowed to take outside jobs to augment their $79,500 base pay, before leadership stipends and per diem expense payments.

Skelos and Kremer said they make sure their work poses no conflict. "My policy -- all the years -- was I don't deal with Dean," Kremer told Newsday. "I do not. It's off-limits."

Instead, Kremer said, he lobbies other senators, including those in Skelos' Republican conference, and Assembly members. His lobbying pitch says he benefits from "lifetime friendships" that make "the doors of government swing wide open" for his team. Last year, he said Empire Government Strategies landed $3.5 million in state and city grants for clients, while it defeated $200 million worth of "anti-business legislation."

"There is a wall," said Skelos' spokesman, Scott Reif. "He doesn't have anything to do with that. There is a total wall. They don't discuss it . . . anything relevant."

"The problem," said Eliason, former head of a public corruption unit in the District of Columbia, speaking generally, "is the backdoor stuff, the secret stuff." Eliason said the Skelos-Kremer-Ruskin situation appears to be "a concern, at a minimum, of an appearance of impropriety."

He said, however, that such dealings may not break any specific laws, but voters and taxpayers won't know for sure because of the lack of transparency. "There are a lot of things in politics that can smell bad or look sleazy but aren't criminal," Eliason said.

Colleague Kremer

Kremer's clients have included the towns of North Hempstead and Brookhaven, the Hempstead Union Free School District, the Great Neck Water Pollution Control District and Three Village school district. Lobbying reports show his typical $5,000-per-month fee yielded millions in state grants.

His private-sector clients included Canon USA, which won a $100 million state tax break in Suffolk County. Another client, Summit Security, secured millions of dollars in security contracts with public colleges and hospitals.

Exactly what Kremer did for his clients and with whom he met isn't clear from his lobbying filings with the state's Joint Commission on Public Ethics. In many of his filings, such as the one for Jetro Cash-and-Carry, a wholesale grocer that was seeking a tax break, Kremer wrote: "Assist in establishing relationships with key government officials to help Jetro gain access to economic benefits." Jetro received some energy-related tax breaks from the state.

Other filings by Kremer, which meet state disclosure requirements, said he would lobby on "real estate issues" without specifics, and that the person or agency he would lobby was the "administrative, executive and legislative branches of government." As for what specific bills, rules or contracts on which he was working, his filing states: "Lobbyist states that info is unknown at time of registration."

Client records showed more. One client, Jacobson Realty of West Hempstead, reported that Kremer worked on a bill that would have protected small farms by providing a tax break in the Town of Hempstead. The Assembly bill memo states the measure was needed to help protect open farmland in Hempstead from development. The bill didn't make it to the Senate floor.

Kremer has also lobbied for some of the biggest commercial and residential developers in New York City and on Long Island, records show. Many, such as Chasanoff Properties of Jericho, have contributed thousands to Skelos and the Senate Republicans.

One of Kremer's biggest private-sector clients is Caithness Long Island II. Its parent company has a $1.7 billion contract with the Long Island Power Authority.

LIPA, a state authority, had been a client of Ruskin Moscou. Skelos makes appointments to the LIPA board. One of the most recent was Jeffrey Greenfield, the operator of an insurance agency in Skelos' district.

Ruskin Moscou also is representing Caithness Energy, the parent company of Caithness Long Island, before the state Public Service Commission, according to a Feb. 25 letter to the utility regulator on the law firm's letterhead. The letter states that Caithness is questioning the three-year electrical rate plan proposed by LIPA and PSEG Long Island. The law firm didn't respond to requests for comment on the letter.

Earlier this month, NYPIRG, saying "you can't serve two masters," called for a strict limit of outside income to the 15 percent additional income allowed for members of Congress and a ban on working for law and financial planning clients who, under law, must be the top priority.