TESTIMONY BEFORE THE
CHARTER REVISION COMMISSION

May 28, 2003

Good evening, Honorary Chairwoman Tsang, Chairman Macchiarola, and members of the Charter Revision Commission. Thank you for the opportunity to testify today.
I would like to discuss two areas of concern under review by the Commission: first, the proposal to eliminate electoral primaries, and second, procurement reform.
As I testified when the proposal was initially raised last year, I am opposed to the elimination of primaries and the adoption of a non-partisan election system.
Non-partisan elections would not serve the goal of strengthening the democratic process. Instead, such a measure would be likely to have the opposite effect.
After years of working to create a level playing field, non-partisan elections would take us backwards, making the ballot more confusing for voters, and stacking the deck in favor of certain candidates over others.

And what would we stand to gain? Proponents of non-partisan elections paint a picture of greater involvement by voters, and a wider field of candidates. But in reality, the purported benefits of restructuring the current voting system are based on several misleading claims.
First, critics of the current system characterize the involvement of political parties as uniformly negative, claiming that it limits choices for voters in primaries. This is a false premise.

Voters who participate in primaries have chosen to align themselves with a political party. They have done so for a reason: political parties reflect core values and beliefs that people would like to see represented in their government.
Party labels provide instant information to voters about which candidates share their values. They help voters make decisions. They represent a useful tool of democracy.
And, clearly, New Yorkers do not feel limited by their party affiliations. An overwhelming majority of them are registered Democrats, but in the last three general elections, they have elected a Republican to serve as Mayor.

So, the recent political history of our own city flies in the face of the anti-partisan argument.
Second, proponents of non-partisan elections claim that eliminating primaries would somehow increase voter turnout. The facts, however, do not support this claim.
Research on this subject does not offer convincing empirical evidence that non-partisan elections would increase voter participation. Instead, studies of shifting patterns in different municipalities suggest that there are always a variety of factors affecting voter turnout. Some suggest an upswing in participation, and some indicate that the non-partisan elections actually reduce voter turnout.

Ultimately, the sales pitch for non-partisan elections does not sound all that convincing. The potential for negative consequences, however, is quite clear.

A non-partisan election system would favor people who can use their personal fortunes to buy name recognition through personally-funded television and radio spots. We would have a system that favors candidates with money, making elections a millionaires' and billionaires' game.

While moneyed candidates can presently overshadow less well-funded opponents, the elimination of partisan primaries would put them at an even stronger advantage. Narrowing the field of potential candidates to wealthy people who can fund their own campaigns is not what most of us would consider to be opening the doors of electoral opportunity.

Furthermore, abolishing primaries for some elected offices, while others stand, would create widespread confusion among voters. It just does not make sense for voters to have the opportunity to vote in primaries for federal and state positions, but not for city positions.
Some have suggested that non-partisan elections could even help resolve problems with the election system for judgeships. In point of fact, a change in the city election system would have no impact on the State-structured process for electing judges.

By eliminating primaries, we would be removing important signposts that guide voters, and discouraging candidates from seeking office. This should not be our goal.
Instead, we should be developing new ways of opening doors in the electoral process, for voters and candidates alike. We should explore measures that actually work, and measures that make sense for the unique nature of our city.

We already have some in place. Term limits, for one, have created opportunities for new candidates throughout the city, at every level of government.

The Campaign Finance System and its matching public funding have also helped level the playing field, and opened doors to candidates regardless of their economic position. I myself stand here today as a citywide elected official thanks in part to public funds and campaign finance laws.

These measures are working. They are part of an overall trend in New York City towards greater diversity among elected leaders and greater participation by minority voters.
And we see the signs everywhere. Out of the 51 members of the City Council, 25 are people of color. Voters in the Bronx have elected a Latino leader to serve as their Borough President, and African-Americans serve in that position in the boroughs of Queens and Manhattan. In the last election, Queens voters chose an Asian-American candidate to represent them in the City Council, marking the first time in our city's history that an Asian-American has been elected to public office.

Every year, we see the diversity of New York City communities reflected in our elected leaders to a greater degree. We should be taking measures to bolster this trend, not seeking to reverse it.

Finally, on a more technical note, I question the need to address this Charter Revision issue at all.

The power to amend the City Charter is an important and serious one. It should be exercised to correct structural problems in the operation of our government or used in the event of an electoral crisis.

\But this issue is far from a crisis. There has been no outcry for the elimination of our present primary system - not from the public, not the press, not from our city's diverse and respected civic organizations.

Furthermore, in this time of tremendous fiscal challenge, I question the use of public funds to explore matters such as this that have been repeatedly examined.

In the end, I think that it is an issue of common sense. Let us preserve the electoral reforms we have won, while finding effective new ways of increasing participation in the democratic process.

Now, I would like to turn to the subject of procurement reform.
The procurement process is sometimes seen as only an operational and bureaucratic exercise. But in point of fact, the decisions that take place as the City reviews and issues contracts directly affect our quality of life. Sound, efficient procurement practices are important tools in the delivery of vital services to people, communities, and businesses.

The Charter provides for a system of checks and balances between the Mayor's office and the Comptroller's office in the review and approval of city contracts. The system is meant to safeguard the integrity of the bidding process and the awarding of contracts.
The current system does provide some important controls toward that end. But there are some critical flaws in the system.

I would like to emphasize that my office enjoys a good working relationship with the current administration in the review of contracts, and my observations on this subject are not specific to any individual elected official or administration.

In fact, my staff has been working with the Mayor's Office of Contracts to develop administrative improvements to the contract system.

I also joined with the City Council leadership in forming a Joint Advisory Committee on Procurement Reform to address the need for better procurement procedures.

The group, which included leaders from the not-for-profit and for-profit communities, identified a series of ways that the City can easily improve access to information and how contracts are processed. Our recommendations include specific technology improvements and measures such as the inclusion of milestone tracking statistics in the Mayor's Management report to help identify contract delays.

I look forward to continuing this type of effort, and I remain committed to improving the procurement process through administrative measures and legislative recommendations.
However, I am aware that some of the problems are structural, and as such, require an institutional solution that is best addressed at the Charter level.
Today, I would like to address three primary areas of concern.
First, the current Charter authorizes the Comptroller's office to reject contracts in three instances:

• If funds have not been allocated in the City budget for the contract,
• If the Mayor's office fails to certify that the proper contracting process has been followed, or;
• If the vendor has been debarred by the City.

The Charter, however, should explicitly recognize the Comptroller's authority to take action in other cases when there are specific reasons for protecting the City from a particular vendor or contract.

Second, the Comptroller's ability to object to a contract is limited to corruption, and is overridable by the Mayor.

Third, the Procurement Policy Board, which is comprised of three mayoral appointees and two Comptroller appointees, holds the authority to determine which documents must be submitted for the registration of City contracts.

Currently, the documentation required by the Procurement Policy Board does not include vital information such as the bid itself or the Request for Proposals, or even the bid or proposal submitted by the winning vendor.

This greatly limits the ability of the Comptroller's office to review contracts effectively.
Historically, there have been numerous instances of problem contracts being certified and approved by the Administration before they are filed with the Comptroller's office. Contracts are routinely submitted for registration without important documentation. Contracts involving vendors with significant, documented performance and integrity problems can proceed through the system, and there is little that the Comptroller's office can do to prevent them from being approved.

For example, in 1999, the Comptroller's Office requested that the Administration for Children's Services (ACS) provide performance evaluations of foster care contractors whose contract extensions or renewals had been submitted for registration. The request was made following a number of serious instances of abuse and mismanagement in the foster care system.

The Comptroller's office was seeking to ensure that contracts with
poor-performing foster care providers would not be renewed without appropriate safeguards in place.

However, ACS initially refused to provide the evaluations, arguing that the Charter and Procurement Policy Board rules did not require their submission. The agency also argued that the Comptroller's office had no authority to refuse to register unsatisfactory contractors.
When the documents were finally made available, they revealed numerous problems involving the people and organizations entrusted by the City to care for one of the city's most fragile populations.

Without the perseverance of the Comptroller's office, the problems would not have come to light. The fact that the Comptroller's staff had to fight to gain access to the documents is simply unacceptable.

In September of 2000, the Comptroller's office objected to the awarding of a $176 million contract for a homeless shelter. The basis for the objection was the fact that the contract involved a building that had been vacant for years and then changed hands just 3 months before the City announced its intent to solicit applications, raising concerns about possible corruption.

Further inquiry revealed that the purchaser of the property had previously pleaded guilty to conspiring to rig bids in connection with foreclosed properties being sold at auction. This individual had sold the vacant building to the firm being awarded the shelter contract at a profit of approximately $1 million.

The Comptroller's office objected to this highly improper situation. The Mayor overrode that objection, on the grounds that the City was not directly contracting with the convicted felon.
Common sense says that this was a contract that should not have been registered. Common sense says that the situation ran the risk of creating a dangerous precedent.
But common sense could not prevail. The Comptroller's office was forced to register the contract because of the current language in the Charter.

More recently, a human service contractor failed to disclose fully an investigation in its VENDEX filings concerning a Grand Jury investigation. In addition, my staff found that its program performance in each of the last four years was less than satisfactory.
However, the City was prepared to renew the vendor's contract. The agency argued that the Comptroller's office had no right under the Charter to question its decision to renew the contract, or to refuse to register the contract.

How can we prevent such situations from recurring? We need to put better controls in place.
The system of checks and balances at the State level offers a strong model. The State Comptroller's office has wider criteria to question contracts, protecting the State from many of the common problems with contracts.

Additionally, the State Comptroller has the right to request full documentation regarding contracts.

I recommend that the City Charter be amended to give the City Comptroller's office greater power to request documentation and reject contracts, similar to the controls in place at the State level.

The people of New York City would be best served by a system of review that better safeguards the integrity of the contract process.

Finally, I have a few recommendations regarding other aspects of the procurement process that I would like to submit for the Commission's consideration.

Currently, under the Administrative Code, the Comptroller's office and the Mayor's office hold joint responsibility for setting policy regarding the VENDEX system. This shared responsibility provides important check and balance protection, and should not be modified through a Charter change.

Second, VENDEX disclosure forms provide vital information and serve as an effective filter to discourage problem vendors. As I mentioned, my office is working with the Mayor's Office of Contracts to streamline the process, and we recently revised the forms for the first time in 11 years.

The system, however, should remain intact, and does not require change at the Charter level.

Finally, I would like to respond to recent testimony by the Commissioner of the Department of Citywide Administrative Services regarding the review process for intergovernmental contracts.

I understand that Commissioner Hirst recommended that such contracts, which involve City purchases from New York State contracts, be exempt from the Comptroller's registration review process. Commissioner Hirst further testified that these contracts should not require oversight, as they have already been subject to competition at the state level.

Unfortunately, my office has found that, in practice, this is not the case. In the majority of intergovernmental contracts reviewed by my office, the contractors had only been pre-qualified to bid in an abbreviated contract process known as a "mini-bid."

My office found that many City agencies were using state contracts to purchase hundreds of millions of dollars worth of goods and services, mainly related to information technology, without following the state procedures, and with little or no City oversight.
Although my office has now established a satisfactory protocol with the Mayor's office, I am concerned that the Charter revision effort not result in the adoption of exemptions that would make appropriate competition and proper review difficult to achieve in the future.

I call on the Commission to preserve the measures in the City Charter that allow the Comptroller's office to ensure that intergovernmental contracts are cost effective and competitively procured, as required by the City Charter and State contracting regulations.
Thank you, once again, for the opportunity to testify today.