THE PEOPLE &C., APPELLANT, v. MANFRED
OHRENSTEIN, HOWARD BABBUSH, FRANCIS SANZILLO AND JOSEPH
IN THE MATTER OF MANFRED OHRENSTEIN, ET AL., RESPONDENTS-
APPELLANTS, v. HONORABLE ROBERT M. MORGENTHAU, DISTRICT
ATTORNEY, &C., ET AL., APPELLANTS-RESPONDENTS.
77 N.Y.2d 38, 565 N.E.2d 493, 563 N.Y.S.2d 744 (1990).
November 27, 1990
1 No. 181
This opinion is uncorrected and subject to revision before publication in the New York Reports.
Robert M. Morgenthau, DA, NY County (Michael G. Cherkasky, Mark Dwyer, Daniel J.
Castleman, Joseph J. Dawson of counsel) for Appellant and Appellants-
Jack S. Hoffinger, Leon B. Polsky, Mark W. Geisler, NY City, for Manfred Ohrenstein; James Pascarella, Mineola, for Howard Babush; Barry Bohrer, NY City, for Francis Sanzillo; Martin B. Adelman, NY City, for Joseph Montalto, for Respondents and Respondents-appellants.
Edward N. Costikyan, Steven E. Landers, Robert Ernst, NY City for NYS Assembly; Paul J. Curran, Thomas F. Ford, NY City, for NYS Senate; Arthur Eisenberg, Michael A. Simon, for NY Civil Liberties Union; amici curiae.
The primary question on this appeal is whether the Minority Leader of the State Senate may be prosecuted criminally for having assigned employees of his Senate staff, largely during the year 1986, to work on political campaigns for members of his party seeking election or reelection to the Senate. The case also presents the question whether defendants may be prosecuted criminally for having placed on the Senate payroll, during that same period, "no-show" employees -- persons who did no work and were not expected to do anything to earn their salaries.
The trial court dismissed hundreds of counts relating to the use of Senate staff employees in political campaigns, and the Appellate Division precluded the prosecutor from proceeding on the remaining counts in that category. However, both courts sustained the counts relating to the "no-show" employees. The prosecutor and the defendants have cross appealed. We now affirm, emphasizing that we are not dealing here with a civil action to enjoin the expenditure of funds or to recover funds already expended. Nor do we condone the challenged expenditures. Our focus is solely on whether defendants' acts subjected them to criminal prosecution under the circumstances of this case.
I. The Facts
The facts are thoroughly set forth in the opinions of the courts below and need only be summarized briefly here.
The defendant Manfred Ohrenstein is a Democratic Senator and the Minority Leader of the State Senate. The indictment alleges that in 1986 he conspired with his chief of staff, defendant Francis Sanzillo, and Senator Howard Babbush to use Senate employees from their staffs in seven campaigns for the Senate in which the incumbents were considered vulnerable. In two of the campaigns Democratic Senators were seeking reelection; in the others Democratic candidates challenged Republican incumbents.
Defendant Joseph Montalto, who was attempting to regain his Senate seat, was allegedly one of the beneficiaries of this plan and actively sought the assistance. Senator Babbush allegedly contributed one campaign worker from his staff, but most of the employees involved were supplied by Senator Ohrenstein from his staff or commissions containing his appointees. The trial court found that these employees fell into three categories. Some were regular legislative aides who were temporarily assigned to work on the campaigns (Category 1). Others were hired for the campaigns and retained afterwards (Category 2) or let go when the campaigns were over (Category 3). These employees received regular salaries biweekly from the Senate payroll. In each instance the Senator or his designee certified that the employee was on the Senate staff and had performed "proper duties" during the relevant period. If the campaign efforts had been wholly successful, it is likely that the Democrats would have obtained a majority in the Senate and that Senator Ohrenstein would have become the Majority Leader. But the efforts did not succeed entirely; in all seven of the targeted campaigns the incumbents, including the two Democratic incumbents, were reelected.
In 1988, the defendants and others were indicted by a Manhattan Grand Jury. The indictment contains 665 counts charging the defendants, individually or in various combinations, with felonies and misdemeanors generally related to theft allegedly committed between 1981 and 1986. The bulk of the charges concern the use of Senate staff in political campaigns and most of these charges relate to the 1986 election. The defendants were also charged with placing four persons on the payroll who performed no services of any kind. It is alleged that the defendants knew that these employees did nothing and, in fact, had no duties but that the Senators or their designees nevertheless certified that the employees had performed "proper duties."
The defendants moved to dismiss the entire indictment on a variety of grounds. They argued that Senators and Senate employees may legitimately engage in political activities and that no statute, rule or regulation declared it an improper practice or a crime for a Senator to use staff members in political campaigns. Alternatively, they contended that they were denied due process because the law did not provide fair notice that the acts were prohibited. They claimed legislative immunity under the speech or debate clause of the State Constitution, and further urged that the attempt by the prosecutor to define or limit the proper duties of legislative assistants constituted an unconstitutional intrusion by the executive branch of government into the Legislature's affairs in violation of the separation of powers doctrine. They also contended that there were defects in the Grand Jury proceeding and asserted other grounds for dismissal.
The trial court granted the motion in part. The court dismissed all those counts relating to Senate employees who participated in political campaigns but who also performed other assignments while on the Senate payroll (Categories 1 and 2). The court held that prosecution of these counts was prohibited by the separation of powers doctrine and the legislative immunity provided by the State Constitution. But the court denied the motion with respect to those counts alleging that certain Senate aides worked exclusively on political campaigns (Category 3), as well as those counts relating to the "no-show" employees.
The prosecutor appealed to the Appellate Division with respect to the dismissed counts. The defendant applied to the Appellate Division to prohibit trial of the counts which had not been dismissed, claiming primarily that the indictment constituted an unwarranted intrusion by the executive into legislative affairs and that legislative immunity was applicable.
The Appellate Division affirmed on the prosecutor's appeal. On the defendant's prohibition application the court concluded that prosecution of the remaining counts relating to the campaign workers (Category 3) was also precluded by separation of powers concerns and legislative immunity. The court additionally found that the law did not give the defendants fair warning that this was criminally prohibited as is required by due process. Finally, the Appellate Division agreed with the trial court that the prosecution could proceed on the counts relating to the "no-show" employees. As noted, both sides have appealed to our Court.
II. The Campaign Worker Counts
On the prosecutor's appeal to our Court, it is urged that all counts relating to use of staff employees by these defendants for campaign work should be restored and that there is no constitutional impediment to prosecution. However, there is a threshold question as to whether the acts alleged were subject to criminal prosecution. We have concluded that they were not and therefore find it unnecessary to reach the constitutional questions with respect to these counts.
The indictment charges the defendants with violating various generic sections of the Penal Law dealing with theft, but all of the charges relating to the campaign workers rest on a single prosecutorial premise: political campaign activities were not a "proper duty" of a legislative staff member. Based on this premise the defendants are charged with filing false instruments (PL 175.35) for certifying that members of the staff active in political campaigns performed "proper duties," and are further charged with committing larceny by false pretenses (PL former 155.35, 155.40) for inducing the state to pay the salaries in reliance on the allegedly false statements. The defendants are also charged with theft of services (PL 165.15) on the theory that legislative employees assigned to campaign work have been diverted from their "proper duties". Counts charging the defendants with engaging in a conspiracy (PL 105.05) and a scheme to defraud the government (PL 195.20) rest on the same premise.
It is important to emphasize that we are not dealing here with broad policy and ethics questions concerning the propriety of permitting state employees generally to participate in political campaign activities. This case focuses narrowly on alleged criminal activities of legislative employees who are unique in several respects because of the nature of the Legislature's function.
Under the State Constitution, the Legislature alone has the power to authorize expenditures from the state treasury, and to "regulate and fix the wages or salaries and the hours of work or labor * * * of persons employed by the state" (NY Const, art XIII, § 14). The Legislative Law delegates to the Minority Leader the power to "appoint such employees to assist him in the performance of his duties as may be authorized and provided for in the legislative appropriation bill" (§ 6) and to determine their tenure (§ 8) and salaries (§ 10). Similar powers are delegated with respect to commissions (§ 9). However, there is no statute fixing the hours of work for such employees or defining the duties of legislative aides or the duties of the Minority Leader they are hired to assist. And at the times relevant here, there was no rule or regulation concerning these matters. The Legislature is not always in session, and when it is in session, legislators and their staffs often work late into the night and through holidays and weekends until the Legislature's work is done. They were not required to account for their time and received no additional compensation or formal compensatory time allowances for overtime. Legislative staff members worked when they were needed and were often given free time when they were not needed, at the discretion of the particular legislator.
The appropriation bill that authorized the salaries in this case limited the amount of money available but did not otherwise limit the legislator's powers with respect to the allocation of staff time or function. It provided simply that the funds were to be used for "personal service of employees and for temporary and expert services of legislative and program operations * * * [and] of standing committees."
Thus the statutes permitted the individual legislator to appoint staff members, to determine the terms and conditions of their employment and to assign duties and the hours of work as the legislator deemed necessary to fulfill the broad range of legislative duties. Despite this extensive grant of authority, the prosecutor urges that a Senator's power to assign duties to legislative assistants should be limited to governmental activities and should not include purely political ones. Although this distinction may be relevant to other state employees, the line between political and governmental activities is not so easily drawn in cases dealing with legislators and their assistants.
The Legislature is the "political" branch of government. All of its members are elected every two years and all legislation is the product of political activity both inside and outside the Legislature. Indeed, by statute the State Legislature itself is structured along party lines with the majority and minority parties in both houses organized behind elected party leaders. As noted, the Minority Leader is expressly authorized to appoint persons to assist him with his duties, and annual appropriations specifically authorize the expenditure of state funds to compensate these employees and enable the party leaders to carry out that party's "program operations." In addition to political activities formally recognized at law, there are additional functions which a legislator performs to gain support in the community, such as distributing newsletters and meeting constituents. Although these activities may be fairly characterized as political, as opposed to governmental, they are considered an inherent part of the job of an elected representative and thus perfectly legitimate acts for a legislator or legislative assistant to perform (Hutchinson v Proxmire, 443 US 111). Indeed, the prosecutor does not suggest that every legislator who uses state facilities or personnel for any type of political activity should be indicted for misuse of government funds. As the People make clear in their brief, for example: "The People recognize that some 'political' activities of legislators and their aides do fall into an uncertain or 'gray' area." Conduct is not illegal "merely because legislative employees worked on election campaigns." It has "never been [the People's] position that legislative aides are prohibited from engaging in political campaign activity." Thus the prosecutor's objection to the defendants' use of Senate staff for the campaigns is not based on the fact that it is a political activity but on the belief that it is too political.
The question for us to decide is not whether the defendants' conduct would be permitted today or should be allowed in the future. Our only concern is whether the defendants' conduct was prohibited, so as to subject them to criminal prosecution, when they engaged in these activities during and prior to 1986. Although prior to 1987 some felt that the use of staff employees in political campaigns should be prohibited or subject to limitations, it is apparent that for many years that was not the prevailing view.
In 1945, a Joint Legislative Committee recommended that legislative staff employees not be included with other state employees in the Civil Service system. The study notes that: "Under our theory of government where party programs have been the basis for legislation, it might hamstring a legislator to surround him with employees unsympathetic to his point of view or to whom party strategy cannot be confided * * * [furthermore] civil service employees would not be free to participate in the political activity generally required of a legislator" (Interim Report of NYS Joint Comm. on Legislative Methods, Practices, Procedures and Expenditures, 1945 NY Legis Doc No. 35, at pp. 31, 32). In subsequent years, as the Appellate Division noted, critics and concerned legislators recommended curtailing the practice or suggested imposing restrictions or "guidelines" regulating the use of legislative staff members in political campaigns (153 AD2d 342, 362-363). But it was not until 1987 that the Legislature placed any restrictions on the practice.
In that year the Legislature created a commission to study the subject and adopted interim guidelines reaffirming the right of legislative employees to participate in political campaigns, provided that did not interfere with legislative duties, which for the first time was defined to include specified activities excluding political campaigns (Concurrent Resolution No. 812). Later in the year Governor Cuomo signed the Ethics in Government Act, establishing a legislative ethics committee to review such matters (L 1987, ch 813) and adopted the New York State Governmental Accountability, Audit and Internal Control Act (L 1987, ch 814), which required the Senate to adopt procedures regulating its personnel and their salaries.
Thus prior to 1987, when the activities at issue here occurred, the Legislature was aware of the fact that its members were using staff employees in political campaigns perhaps excessively, and nevertheless chose to place no restrictions on the practice. Although it is arguable that the defendants' conduct might have exceeded the custom in some respects, the controlling factor for the purposes of a criminal prosecution is that there was no law which, either expressly or as interpreted by the courts, declared the acts to be criminal. Moreover, it cannot fairly be said that the Legislature otherwise forbade the conduct so that it could serve as a predicate for a conviction under general Penal Law provisions.
The prosecutor urges that the matter does not end here. He contends that the defendants' conduct is prohibited by article 7, § 8 of the State Constitution, which prohibits the use of state moneys for "private undertakings" and which has been construed by some authorities to include partisan causes (see, e.g., Stern v Kramarsky, 84 Misc 2d 447). In other words, the prosecutor's position is that if prior to 1987 the Legislature did not actually prohibit the defendants' use of Senate staff in political campaigns, it nevertheless must be deemed to have done so because the Constitution would not permit the Legislature to expend state moneys in this manner or authorize others to do so.
The cases on which the prosecutor relies deal with state agencies which sought to use agency facilities and personnel to advance a partisan point of view (Stern v Kramarsky, supra; cf. Phillips v Maurer, 67 NY2d 672 [school board use of district facilities to advocate affirmative vote on proposition not permitted by Education Law]). They did not deal with legislative use of state resources for political activities, which even the prosecutor concedes is permissible to some extent. The prosecutor recognizes the need for a legislator or someone in the legislator's office to respond to constituent inquiries, as well as the need to have staff members take some part in a legislator's reelection campaign which may incidentally involve some use of state facilities. He argues, however, that exclusive or extensive use of legislative personnel for election campaigns is prohibited by the Constitution, although he concedes that this provision would not preclude the Legislature from authorizing public funding for political campaigns but urges that it would have to be done impartially to avoid being treated as a "private undertaking."
These arguments are far removed from the type of analysis appropriate to a criminal prosecution and need not be resolved here. Notably, although this provision has been a part of the State Constitution for well over a century, and the courts have frequently been called upon to construe it, this is the first time that it has been suggested that a violation, if it be that, should serve as a predicate for criminal prosecution.[n *] A review of the section and its history shows that it was never intended to be used in this manner.
The section was added to the State Constitution in 1846 and, as originally adopted, it simply prohibited the state from giving or lending its credit to private enterprises. This was intended to curtail "the practice of subsidizing internal transportation improvements," such as canals and railroads, which in the early part of the 19th century "seemed very much in the public interest" but which produced a fiscal crisis for the state government when these companies failed during the depression of 1837-1842. (Wein v State, 39 NY2d 136, 143). Although this prohibited the state from issuing bonds to finance such enterprises, it did not prohibit the giving or loaning of state moneys for such purposes. Because this practice was "liable to the same abuses" (People v Westchester County National Bank, 231 NY2d 465, 474), the Constitution was amended in 1874 to provide: "Neither the credit nor the money of the state shall be given or loaned to or in aid of any private corporation or association or private undertaking" (former art 8, § 9). In 1938, at the close of the Great Depression during which many municipal governments had turned to the state for financial backing, the Constitution was again amended to prohibit the lending or giving of the state's credit to public corporations as well as private ones (see, Wein v State, supra).
We have noted that the purpose of all of these efforts was "to prevent improvidence * * * [in order] to safeguard the credit of the state" (People v Westchester County National Bank, supra, p. 474); the section was not aimed at preventing or punishing larceny. Many of the acts declared improvident are arguably in the public interest and beneficent or at least not the kind of conduct generally considered criminal (see, e.g., People v Westchester County National Bank, supra [declaring invalid bonds used to raise money to pay bonuses for veterans of World War I]; Fox v Mohawk Humane Society, 165 NY 517 [use of license fees by humane society unconstitutional]; Farrington v State, 248 NY 112 [private bill compensating employee for wrongful discharge invalid]). The primary goal of the section is to prevent or invalidate legislation which is fiscally unwise and, therefore, most of the "violators" will be legislators or citizens who vote for such propositions (see, e.g., People v Westchester County National Bank, supra [bond proposition approved by voters]).
Obviously there was no intent to indict those who vote for a bill which violates the constitutional prohibition or to have that act serve as a predicate for an attempted larceny prosecution. Similarly, those who spend money consistent with an appropriation should not be held criminally responsible if the expenditure is later found to violate this section of the Constitution. The constitutional prohibition limits the power of the Legislature to appropriate, but it does not create a hidden limitation in every appropriation so that any expenditure which is facially valid, but constitutionally prohibited, can be deemed an unauthorized expenditure and therefore a predicate for a criminal prosecution. That would elevate and convert an ordinary fiscal responsibility measure into an extraordinary penal one and distort the purposes of the constitutional prohibition.
The dissent agrees that all the charges relating to the use of Senate staff in political campaigns should be dismissed, except those dealing with employees hired for the campaigns and released afterward (Category 3). Dismissal of those charges, the dissenter contends, will permit the Legislature to determine how state funds should be spent without any oversight by the courts. However, it should be emphasized that in this case we have not been called upon to decide whether what occurred here should be civilly enjoined in the future or whether the money spent in the past may be recovered as an unauthorized expenditure of state funds. All we have before us is a criminal indictment and we hold only that the defendants cannot be held criminally liable for their use of Senate staff in these campaigns under the practice that existed prior to 1987.
Nor are we saying, as the dissent suggests, that such conduct would be permitted today or that it can continue in the future with impunity unless the Legislature adopts a statute specifically prohibiting it. The statutes dealing generically with theft provide a basis for prosecution in cases where government employers use state employees for activities which are prohibited or are not within the employees' duties as defined by statute, rule or regulation. The point we are making in this case is that at the time the defendants acted, their conduct was not prohibited in any manner; nor could they have known that they were subject to criminal prosecution for their acts; there was no statute, nor was there any rule or regulation defining the duties of legislative assistants or limiting the nature or extent of their permissible political activities. In a criminal prosecution where these defendants are charged with engaging in activities prohibited by law, the absence of any such legal prohibition is fatal to the prosecution.
Our holding is a narrow one based on circumstances which no longer exist. As indicated, the Legislature, acting as employer, has now adopted a joint resolution which defines some of the duties of legislative assistants and imposes limitations on a legislator's use of such assistants. Additionally, the Legislature has adopted statutes requiring such staff members and their employers to make a more extensive account of their activities and has also created a panel to further study the matter and make additional recommendations. The joint resolution specifically addresses the dissenter's concerns and prohibits legislators in the future from hiring staff assistants solely to work in political campaigns. We cannot decide future cases not before us; but in response to the dissent it is only fair to note that those who engage in such conduct in the future will not be able to make the arguments that we find determinative here in the event they are criminally prosecuted.
III. The "No-Show" Counts
On the defendants' appeal they urge that the Appellate Division erred in holding that prosecution of the counts relating to the "no-show" employees is not prohibited by the speech or debate clause of the State Constitution or the separation of powers doctrine. We agree with the Appellate Division.
The theory underlying these counts is that the defendants filed false instruments when they certified on the payroll records that these employees performed "proper duties," and committed larceny when they induced the state to rely on the false statements. Here there is no question as to what "proper duties" include, because no matter how they are defined, they must at least include the performance of some services, of some type, at some time. Here it is alleged that these employees did nothing, that the defendants knew this and that the defendants also knew that they had no duties. These allegations are sufficient to sustain these criminal counts (PL 155.30, 155.35, 175.35).
This should also dispose of the defendants' argument that the indictment and prosecution constitutes an unwarranted intrusion into the affairs of the Legislature in violation of the separation of powers concept because it will permit the executive and the courts to determine what are proper duties for legislative staff. No such inquiry is necessary in this case if, as alleged, these staff members did nothing and were not expected to perform any duties.
Finally, the defendants urge that the prosecution violates legislative immunity because it will permit inquiry into a legislator's acts, particularly with respect to why a particular person was appointed to the staff and how the person performed.
The State Constitution provides: "For any speech or debate in either house of the legislature, the members shall not be questioned in any other place" (NY Const. art III, § 11). We have not previously considered the scope of the immunity granted by this section, but it appears that it was intended to provide at least as much protection as the immunity granted by the comparable provision of the Federal Constitution (New York State Constitutional Convention Committee, Problems Relating to Legislative Organization and Powers, 57 ). The Supreme Court has held that the speech or debate clause confers immunity on members of Congress for legislative acts but does not extend to everything a legislator does which is somehow related to his role even though the act is lawful and generally expected of a legislator (Hutchinson v Proxmire, supra).
Legislative acts have been defined as those which are an integral part of the legislative process, and have been held to include votes and speeches on the floor of the house as well as the underlying motivations for these activities (Hutchinson v Proxmire, supra; United States v Johnson, 383 US 169; United States v Brewster, 408 US 501). The immunity also extends to committee meetings and hearings which do not occur on the floor of the house and may be asserted by a legislator on behalf of staff members (Doe v McMillan, 412 US 306; Gravel v United States, 408 US 606). However, it does not extend to acts which a legislator performs to secure support in the community or to insure reelection, such as giving speeches in the community, issuing newsletters and press releases, or arranging for the publications of books (Hutchinson v Proxmire, supra; Gravel v United States, supra). In addition, no immunity attaches to an agreement to accept a bribe or the acceptance of an unlawful gratuity, even though the conduct relates to a vote or other legislative act which is entitled to immunity, so long as the prosecution is not based on the legislative act or the motives underlying it (United States v Brewster, supra). It also appears that the immunity may apply to some personnel decisions relating to the hiring and firing of certain employees of the Legislature but the scope of the immunity here is uncertain (Davis v Passman, 442 US 228).
Historically the speech or debate clause serves to preserve the integrity of the Legislature by preventing other branches of government from interfering with legislators in the performance of their duties. But no matter how far the immunity may extend under the State Constitution, it cannot be said that it was intended to provide a sanctuary for legislators who would defraud the state by knowingly placing on its payroll employees who were never intended to do anything but receive state moneys. The defendants raise other issues with respect to the immunity doctrine, but they anticipate the type of proof which the prosecutor may seek to introduce at trial and should first be resolved there.
Accordingly, the order of the Appellate Division should be affirmed and the judgment of the Appellate Division should be affirmed without costs.
F O O T N O T E
*This case deals only with campaigning for individuals, but the prosecutor's novel theory of criminality based on this section of the Constitution would have far-reaching implications in other contexts. It can be argued, as the dissent does here, that "campaigning, whether for a cause or a candidate, is a private activity" and that whenever public officials have "authorized payment of public funds for [such] private purposes their conduct fell squarely within the scope of the Penal Law provisions proscribing larcenous acts" (Dissenting opinion, pp 7 and 14). Under the broad rule proposed, any high public official who uses state informational services to urge the voters to adopt a proposition, such as a bond issue, would not only violate this section of the Constitution, as some lower courts have held, but would also be at risk of criminal prosecution.
SIMONS, J. (dissenting in part):
I agree with the majority that the counts of the indictment founded on defendants' use of their regular employees for political activities in addition to legislative duties must be dismissed (categories 1 and 2). I also agree that the counts of the indictment charging defendants with certifying the salary of four "no-shows", persons placed on the legislative payroll who performed no duties, should stand (category 4) (see, Opn, Part III, p 16). I disagree, however, with the dismissal of the charges alleging that defendants unlawfully authorized payment from State funds to persons whose only duties consisted of working for Democratic senatorial candidates during the election campaign (category 3) (see, Opn, Part II, p 5). Certifying their payment from State funds was criminal and the counts alleging defendants did so should be reinstated.
I would have thought the use of public funds to finance the election campaigns of the candidates of one party and defeat candidates of the opposition was so clearly unlawful that it was not worth discussion. Any other view devalues the democratic process by leaving incumbent legislators free to perpetuate themselves in office at government expense. The majority concludes otherwise, however, reasoning that partisan political activities are "proper duties" of a legislative employee. Once this premise is accepted, it follows easily that employees may be hired to engage in a broad range of purely political activities and be paid for it by the State because they are doing no more than fulfilling their public duties. The Legislature may restrict such political activities, the majority holds, but since it had not done so in 1986, defendants' conduct was not criminal and the charges involving employees in categories 1, 2 and 3 must be dismissed.
I know of no authority, and the majority cites none, which would support such reasoning. Political activities are private, not public, matters and the use of public funds to pay employees hired for private purposes is unlawful. Thus, the question is not whether the Legislature has ever restricted the power of its members to hire campaign workers at State expense or criminalized such conduct. It has never had the power to authorize such employment.
Accordingly, I dissent from that part of the majority opinion dismissing the counts involving campaign only workers, and would reinstate them.
It is important to note at the outset that although Part II of the majority's opinion is entitled "The Campaign Worker Counts", it deals with three categories of employees. This dissent questions only dismissal of the counts relating to 18 employees; those hired to work in Democratic campaign organizations during the 1986 election campaign and promptly discharged after the election was over. The majority believe that their assignments, like the political assignments of the regular employees in categories 1 and 2, fell in the "gray area" which separates proper public duties from improper political activities (Opn, p 9). The work they performed, however, served no public purpose. On the contrary, everything they did was political. Thus, a determination that defendants were guilty of criminal conduct for certifying their payment from State funds does not involve intrusion by the Court into matters of legislative discretion (see, Saxton v Carey, 44 NY2d 545, 549; Gottlieb v Duryea, 38 NY2d 634, affd 30 NY2d 807, cert denied 409 US 1008; see also, Gilligan v Morgan, 413 US 1, 10). It involves no more than a determination of whether political activities are a part of a legislator's public duties which may be paid for from public funds.
It is the prosecutor's theory that defendants engaged in a scheme to hire employees at public expense to further the fortunes of the Democratic Party in the State Senate and the power of defendant Ohrenstein, the minority leader. He contends that defendants Ohrenstein and Babbush placed employees on their senatorial payrolls or the payrolls of various legislative commissions and directed the State to pay their salaries from funds contained in the appropriation for legislative and commission staff, falsely certifying that each campaign worker was a Senate employee who had performed "the proper duties" of an assigned position.[n 1] Thus, the prosecutor presented evidence to the Grand Jury that the employees in question did no work for defendants Ohrenstein or Babbush or the legislative commissions which paid them but instead were assigned to Democratic Senators seeking re-election or Democratic candidates seeking to oust incumbent Republican Senators. Defendant Ohrenstein selected which candidates would receive the support provided by these State-paid campaign workers, favoring two incumbent Senators seeking re-election, and five candidates seeking either to regain seats previously lost or attempting to become Senators for the first time.
The employees performed a wide range of political duties. For example, one was assigned as an employee of the Commission for Water Resources and Needs for Long Island at a salary of $500 per week but acted as the campaign manager for one of the candidates. She was not even aware that she was assigned to a commission until terminated after the election. Another worked as a "gofer" for one of the candidates and was paid $1,400 from funds allocated to the Commission on Rural Resources. One appointee, listed on defendant Ohrenstein's payroll as a Senate "research analyst", received a total of $10,000 from the State for checking the biographical backgrounds of two Republican incumbents. Others were hired as publicists, campaign coordinators, poll takers or in similar jobs at comparable salaries. As Supreme Court observed, the activities of the employees were "blatantly political" (see, 139 Misc 2d 909, 922).[n 2]
As a result of these activities, defendants are charged with (1) second and third degree grand larceny (Penal Law §§ 155.40, 155.35), (2) offering false instruments for filing in the first degree by falsely certifying that the various appointees had performed "proper" legislative duties with the intent to defraud the State thereby (Penal Law § 175.35) and; (3) conspiring to defraud the State (Penal Law § 105.05).
The statutes in question, like penal laws generally, do not proscribe specific practices or methods but rather focus on whether the conduct causing the injury was blameworthy. The essence of the larceny charges against defendants is that they used State funds knowing the use was unauthorized, i.e., that the funds could not be used for the private purpose of campaign activity. The defendants' claim, accepted by the Appellate Division and the majority in this Court, is that the charges cannot stand because no provision in the Penal Law defines this conduct as criminal. There is no statute proscribing payments of State funds to "no shows" either, but doing so is a crime (see, e.g., People v Riccio, 91 AD2d 693; People v Hochberg, 87 Misc 2d 1024, affd 62 AD2d 239, mot for lv to app denied, 44 NY2d 953). The myriad ways in which the improper use of governmental funds may be accomplished precludes such specificity and the majority, by sustaining the counts in the indictment involving "no shows", recognize as much (see, Opn, pp 14-15).
The majority asserts a specific statute is required in this case, however, because political activities are an inherent part of a legislator's public duties. They hold that unless the Legislature proscribes the use of legislative aides for political purposes the practice is proper. The presence or absence of a statute prohibiting the specific conduct is irrelevant. As New York and every other jurisdiction which has addressed the issue has found, partisan political activities are private, not public functions, and the use of public funds for such purposes is improper (Phillips v Maurer, 67 NY2d 672, 673-674; Stern v Kramarsky, 84 Misc 2d 447, 451-452; see, 1981 Op St Compt 25, No. 81-25; 1980 Op St Compt 209, No. 80-762; 1980 Op St Compt 117, No. 80-411; and see, NY Const, art 7, § 8; see also, Stanson v Mott, 17 Cal 3rd 206, 551 P2d 1; Anderson v City of Boston, 376 Mass 178, 380 NE2d 628; Burt v Blumenauer, 299 Or 55, 699 P2d 168; Commonwealth v Brownmiller, 141 Pa Super 107, 14 A2d 907). The rule is stated in Fair Political Practices Comm'n v Suitt (90 Cal App 3d 125, 130, 153 Cal Reptr 311): "The use of state employees by a legislator's campaign committee to solicit contributions, plan campaign strategy, coordinate volunteers, and prepare the campaign budget, all at state expense, is in no way a proper part of a legislator's official functions; that is not to be questioned."
Some of these authorities relate to the use of public funds by State agencies to support propositions rather than candidates but the logic of applying them to legislative election campaigns is inescapable. Campaigning, whether for a cause or a candidate, is a private activity. The government has no interest in paying for partisan activity to obtain a particular election result. Political parties, by definition, represent only a portion of the public and their purpose is to advance the views of the group they represent. It is not possible, therefore, to render a service to the public or perform "proper duties" of the Legislature by working solely to elect the candidates of a particular party or to increase the power and influence of a particular political leader. Such work has no reasonable connection with serving the public. As one commentator has noted, these principles are just "common sense" (see, Note, Use of Congressional Staff in Election Campaigning, 82 Col L Rev 998, 1023-1024).
The necessity for the rule is apparent when viewed from a broader perspective also. Elections are the central event in any democratic society. If they are to fulfill their function, two aspects must be preserved: (1) voters must have an effective voice in choosing their representatives and (2) candidates, whether incumbents or challengers, must have a reasonably equal chance at success (see, Emerson, The System of Freedom of Expression, 699 ). Permitting the Legislature, which has access to the biggest campaign war chest of all, the public treasury, to use public funds solely for campaign purposes in an attempt to dominate elections, threatens the basic integrity of the democratic process and implicates important constitutional concepts of government neutrality and fair dealing. Manifestly, the expenditure of State funds constitutes State action. Thus, using State funds to promote the election of some candidates and to defeat others involves no less than government control of expression and the denial of equal protection of the laws (see, e.g., Buckley v Valeo, 424 US 1, 98, n. 133, supra; Shakman v Democratic Organization of Cook County, 435 F2d 267, 270 [7th Cir.], cert denied 402 US 909; Citizens to Protect Pub. Funds v Board of Education, 13 NJ 172 [Brennan, J.]; Anderson v City of Boston, 376 Mass 178, 191, n. 14, supra; Note, Use of Congressional Staff in Election Campaigning, 82 Colum L Rev 998, 1012-1013).[n 3] In sum, there are no policy considerations in favor of holding political campaign activities part of the official and proper duties of legislative officeholders and, more importantly, there are compelling reasons for not doing so.
The majority, in holding that political activities are part of a legislator's public duties, has failed to distinguish between the many legitimate representational activities performed by legislative staff, e.g., distributing newsletters and answering constituent inquiries, and those purely political activities in question here directed at securing re-election.[n 4] There is a world of difference between paying a staffer performing proper and legitimate duties to handle constituent concerns, however, and paying an employee from funds appropriated for the Commission on Water Resources to be the campaign manager for a Democratic candidate seeking to oust a Senate incumbent. The former is perfectly proper; the latter most certainly is not. We have noted the distinction (see, Phillips v Maurer, 67 NY2d at 673-674, supra), as have several other courts (see, Hoellen v Annunzio, 468 F2d 522 [7th Cir.], cert denied 412 US 953; Bellardino v Murphy, 364 F Supp 1223, 1224 [S.D.N.Y.]; Rising v Brown, 313 F Supp 824, 826-827 [C.D. Cal.]). Indeed, the Legislature itself recognized the distinction when it adopted Concurrent Resolution 812-87. It provided that official duties of legislative employees may include "representational activities, such as constituent casework, preparation of news releases and newsletters to constituents, public appearances and other responsibilities which are not political campaign activity" (see, Resolution 812-87, adopted April 9, 1987, at 2, para 3, 4 [emphasis added]). It is also significant that the Resolution addressed the problem which divides this Court and prohibited legislators from hiring employees "to engage solely in political campaign activity" (see, id. § 2).
The majority in support of its position that staffing Democratic Headquarters and campaign organizations at public expense is in the "gray area" between legitimate representational activity and purely political activity, cites the prosecutor's acknowledgment that sometimes differentiation between the two is difficult. The prosecutor did not concede that the work performed by the campaign only employees were proper in this case, however. He contended that the activities of employees in all three categories covered by the indictment were not "even near" the gray area (Reply Br, p 2). He can hardly be faulted for his position when the Legislature has agreed with it (see, Resolution 812-87, supra). Defendants' actions, he maintained, "fit squarely within the black and white realm of larceny and fraud" (Reply Br, p 2). It is difficult to disagree with that assessment when workers in category 3 did only political work, many were on commission, not Senate payrolls, and most worked to elect five private citizens seeking office, who could not be performing public duties of a representational nature for legislators.
If the State had given conflicting interpretations of the propriety of hiring campaign workers at public expense, defendants could reasonably contend that they acted in good faith and that the authorities cited should not serve as a predicate for conviction under the general Penal Law provisions. But neither the New York courts nor the State's agencies have ever authorized this conduct. Quite the contrary, they have uniformly condemned the use of public funds for political purposes (see, Phillips v Maurer, supra; Stern v Kramarsky, supra; and various Opinions of the State Comptroller, supra, p 6).
Moreover, defendants knew the law on the subject for they had researched the issue themselves. In 1982 and 1983 defendant Ohrenstein and his Chief Counsel conducted an investigation of the use of public funds for campaign activities, they subsequently scheduled the topic for discussion at the Minority Conference Steering Committee meeting, and in 1984, two years before the events covered in this indictment, defendant Ohrenstein retained a law professor to thoroughly research the question. The Professor issued a 26-page opinion which discussed the Penal Law provisions at issue and analyzed most of the same judicial authorities relied on in this dissent. He concluded that the use of legislative employees for campaign purposes could be illegal. More importantly, he carefully distinguished between staffers who performed legislative functions but devoted part of their time to political activities and employees hired solely for campaign purpose, noting that while permanent staffers might justifiably use free time for political activities, the employment of persons at public expense solely for campaign work would present grave questions under the Penal Law sections relating to larceny, offering false instruments for filing and theft of services.[n 5] Instead of heeding their lawyer's warnings or inquiring of State agencies about the propriety of their intended conduct, however, defendants chose to hire people at public expense to staff these Senate campaigns.
Defendants also claim that in hiring campaign only workers they acted in a good faith belief their conduct was proper but the prosecutor introduced substantial evidence indicating otherwise. Perhaps most telling are the payrolls themselves. Had defendants genuinely believed that campaigning was a proper public duty, they would have identified the employees listed on the payroll certifications as "campaign workers", not as "research assistants", "legislative aides", etc. Moreover, had they believed their conduct proper, there would have been no need for the efforts revealed in the Grand Jury testimony to conceal the payments from the public. There was evidence, for example, that one candidate had two "campaign managers", one figurehead whose name was disclosed to the press and a counterpart not publicly acknowledged but paid by the State; that several "farmed out" staffers were instructed to avoid the media or to use pseudonyms when dealing with reporters so that they would not be recognized; that campaign workers paid from public funds left campaign headquarters at the first sign of a reporter to avoid disclosure and that message boards at campaign headquarters were altered to avoid reporters recognizing names. These actions bespeak guilty knowledge, not a good faith belief by defendants that their conduct was permissible under the law.
Based on this authority, the counts of the indictment charging crimes committed by the use of legislative and commission payrolls to pay those employed for campaign only duties come within existing provisions of the Penal Law and the evidence before the Grand Jury is sufficient to sustain them.
Defendants authorized payment of public funds for private purposes and thus their conduct fell squarely within the scope of provisions proscribing larcenous acts. Larceny is a crime against the rightful owner of property. It is complete when the owner's possession is disturbed by one intending to convert the property to his or her own use either permanently or for an unreasonable period of time (see generally, 2 LaFave & Scott, Substantive Criminal Law § 8.5). In this case, defendants' right to use public funds was limited by the appropriation authorizing them to pay legislative employees for performing "proper duties." The funds were trust funds and had to be used for authorized public purposes. If defendants certified payment of funds for purposes beyond the authorization, they abused their trust, converting the property to their own use in violation of the larceny statute (see, People v Riccio, supra; People v Hochberg, supra; People v Page, 182 Misc 253; see also, Penal Law § 155.05[a]).
The charge of Offering a False Instrument for Filing was supported by evidence before the Grand Jury that defendants knowingly presented an instrument containing false information to a public office or servant, "with intent to defraud" the State (see, e.g., People v Chaitin, 94 AD2d 705, affirmed 61 NY2d 683; see also, Penal Law § 175.35). By submitting payrolls containing the names of campaign only workers and describing them as legislative or commission employees, defendants affirmed information that was false on two grounds. It was false because the employees were not working in the commissions or positions specified and it was false because they were not performing the "proper duties" of the "position specified" in the payroll but instead were working solely on political campaigns.
There is no need to consider defendants constitutional defenses. This prosecution does not violate the Speech or Debate protections of our Constitution for the conduct alleged has not the remotest connection to any legislative function (NY Const, art 3, § 1; see, U.S. v Brewster, 408 US 501, 510-513). Nor does prosecution of the charges involving the campaign only workers violate separation of powers or political question principles (see, Gottlieb v Duryea, 38 AD2d 634, affd 30 NY2d 807, cert denied 409 US 1008, supra). Defendants had no power to hire workers for campaign purposes at public expense. The majority's concerns, therefore, that the courts or executive branches will encroach on legislative power or interfere with the exercise of legislative discretion are not implicated in these charges. The determination that their conduct was illegal involves no more intrusion into legislative activities than finding it criminal to pay "no show" workers.
Legislators are trustees of the public treasury. They may appropriate and spend State funds to the extent authorized, but if they do so to benefit themselves or others personally, they commit a crime. The majority, noting that legislators are authorized by constitutional and statutory provisions to retain staff for the performance of their public duties, maintain that it is the Legislature's function to determine the scope of this "extensive grant of authority". Inasmuch as it had not enacted a statute in 1986 prohibiting members from hiring employees to perform solely political functions, defendants may not now be held criminally liable. In the majority's opinion, the Legislature's notion of propriety is the "prevailing view". The Legislature having failed to criminalize defendants' conduct, the courts have no role in the matter now even if "excess[es]" occurred (Opn, pp 9-12).
To allay concern over the breadth of this extraordinary power, the majority contends that defendants' conduct cannot be repeated in the future because the Legislature prohibited it in 1987. To the extent that the 1987 legislation addresses the issues before us, it is irrelevant. The Legislature does not have the power to authorize the use of funds for private purposes and it is a matter of no legal consequence, therefore, that it has restricted the exercise of power it does not possess.[n 6] The majority's assertion that defendants' conduct cannot be repeated notwithstanding, its concession that the Legislature possesses the authority to finance purely political campaign activities at State expense and its broad view of the Legislature's power over its employees virtually assures that similar conduct will occur in the future. Only the bounds of human ingenuity will limit it.
Accordingly, I dissent and would reinstate the counts relating to the 18 employees who worked only on campaigns.[n 7]
F O O T N O T E S
1. The payroll certification contained on the payroll form stated:
"This is to certify that the persons named in the payroll listed above are employed by the New York State Senate in the position specified and have actually performed the proper duties of the position for the period described. I further authorize the mailing of checks to employees listed under Mailing Authorization. I affirm that the employees listed are assigned to me and that this payroll certification is correct" (see, 2 NYCRR 3.12).
2. The facts are set forth more fully in the dissenting opinion at the Appellate Division (People v Ohrenstein, 153 AD2d 342, 376 [Sullivan, J., dissenting]) and the opinion of Justice Rothwax (139 Misc 2d 909).
3. These principles do not render legislation for the public financing of political campaigns unlawful. It is only the partisan use of the public treasury which is prohibited. Public financing of election campaigns has been upheld because the legislation authorizing it was evenhanded in administration and not partisan in effect (see, Buckley v Valeo, 424 US 1, 91-96). No such legislation authorized the activities in question here, however, and clearly none could have done so.
4. The majority cites Hutchinson v Proxmire (443 US 111) for the proposition that political campaign activities are considered an inherent part of an elected official's job and "thus perfectly legitimate acts for a legislator or legislative assistant to perform" (Majority Opn, p 10). I have no disagreement with the majority over the right of legislators or their legitimate employees to engage in campaign activities on their own time. That is far from saying, however, that campaign activities may be paid for at public expense. The Hutchinson decision certainly is not authority for that proposition. In Hutchinson the Court held that speech or debate immunity did not apply to the act of a legislator informing the public of his views alone, holding it was "not a part of the legislative function or the deliberations that make up the legislative process." Thus, there can be no serious contention that Supreme Court directly or indirectly approved the use of government funds to employ persons exclusively to perform political campaign activities of a candidate or held it a proper public purpose.
Similarly, the majority's suggestion that the 1945 recommendation of the Joint Legislative Committee authorized paying campaign workers from State funds is erroneous (see, Opn, p 9). The Report recognized that employees who have properly performed legislative duties may also engage in political activities. It does not recognize, however, that the legislative payroll may be used to pay persons who do nothing other than political campaign work.
5. That view was hardly novel. In 1982, Assembly Speaker Stanley Fink noted the potential for misuse of public funds for election purposes and proposed that the Legislature adopt rules governing the use of legislative employees in election campaigns. In 1985 the District Attorney of Kings County also investigated the use of public funds for political purposes. Inasmuch as the inquiry concerned political activities of staff also performing legislative functions, in contrast to the campaign only employees considered here, she declined to prosecute. Noting the serious problems involved with such expenditures, however, she urged the Legislature to establish appropriate standards for the future. Neither proposal was acted upon.
6. Resolution 812 was adopted in April 1987, slightly less than a month before the prosecutor began presenting these charges to the Grand Jury. Even assuming the majority's premise that the Legislature alone has the power to determine the propriety of this conduct, the Resolution does not do so. It called for the formation of a Blue Ribbon Commission to investigate and report on the use of public employees for political purposes and established "Interim Guidelines" until permanent standards could be adopted. In the meantime, the employment of legislative staff was a matter of discretion with individual legislators, subject to the provisions noted above (infra, pp 10-11). A concurrent Resolution of the Legislature does not have the force of law, however, and it is not clear how it could criminalize conduct that the majority believe was lawful before the Resolution was passed. At best, this Resolution provides notice to the legislators. The majority do not decide this case on notice grounds, however (Opn, p 19, n 3) and as demonstrated above, the legislators had notice without the Resolution.
The Ethics in Government Act (L 1987, ch 813) established a broad system of financial reporting for certain public employees and restricted various outside employment and associations and The New York State Government Accountability, Audit and Internal Control Act (L 1987, ch 814) established certain accounting and reporting procedures. Neither statute addresses the use of public employees for private purposes.
7. The counts of the Indictment charging Defrauding the Government (#577) and Theft of Services (#578-583) should be dismissed, however, because they involve employees who had performed legitimate duties of the Legislature and the Conspiracy Count (#1) should be modified to include solely the acts relating to the campaign only workers.
* * * * * * * * * * * * * * * * *
People v. Ohrenstein
Order affirmed. Opinion by Chief Judge Wachtler. Judges Kaye, Alexander, Titone, Hancock and Bellacosa concur. Judge Simons dissents in part and votes to modify in an opinion.
Matter of Ohrenstein
Judgment affirmed, without costs. Opinion by Chief Judge Wachtler. Judges Kaye, Alexander, Titone, Hancock and Bellacosa concur. Judge Simons dissents in part and votes to modify in an opinion.