THE "PORK" IN NEW YORK, Thoughts of an older American on Constitutional Government in the USA Options

[Livyjr]

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

Hector Sants, the Chief Executive Officer of the Financial Services Authority of the United Kingdom, spoke to the commission about how his agency, the sole regulator for all financial services in the U.K., is transitioning from rules-based to principles-based regulation.

http://www.ny.gov/governor/press/0118081.html

"British MPs grill watchdog over Northern Rock crisis"

11/12/2007 - 07:01:34

The Financial Services Authority’s role in the Northern Rock crisis will come under fresh scrutiny today when heads of the City of London watchdog appear for a second round of questioning from MPs in the UK.

FSA chairman Callum McCarthy and chief executive Hector Sants will face MPs in the cross party Treasury Select Committee in what is set to be another grilling on Northern Rock and the credit crunch.

The FSA bosses received a mauling in October, which saw the regulator admit that it needed to improve its monitoring after Northern Rock’s high profile troubles.

Mr Sants and Mr McCarthy told MPs that “lessons needed to be learnt”.

The FSA revealed that the mortgage bank had not been due a full risk assessment until three years after its last one, conducted between December 2005 and February 2006, and had been deemed low risk.

Mr Sants added the FSA was reviewing its procedures in response to the fiasco.

But the FSA heads are thought to be in line for a further gruelling session today.

Some members of the Committee are said to believe that the FSA was largely responsible for the regulatory confusion leading up to Northern Rock’s move to call on the Bank of England as lender of last resort.

News of the emergency loan caused retail savers to panic and withdraw funds from Northern Rock in the first run on a UK bank in nearly 150 years.

Also due to appear before the Commons Committee today is Loretta Minghella, chief executive of the Financial Services Compensation Scheme – the scheme charged with protecting savers in the UK.

The scheme came under considerable fire amid the Northern Rock debacle when it was found not to offer savers enough reassurance and was thought to have further fuelled the bank run.

The Government had to step in and guarantee 100% of saver deposits to help ease the queues of savers lining up to withdraw money and the Treasury has since pledged to completely overhaul the scheme.

The FSA chiefs and Ms Minghella are being questioned as part of the Committee’s ongoing inquiry into financial stability and transparency, which is set to go into next year.

Last week, MPs quizzed bosses of investment banks UBS, Goldman Sachs, Citigroup and Deutsche Bank over their role in the credit crunch which led to Northern Rock’s funding woes.

Northern Rock’s accountants PricewaterhouseCoopers were also in the firing line, accused of failing to spot risks within the lender’s funding model.

http://www.breakingnews.ie/business/mheyauauqley/rss2/

This post has been edited by Livyjr: Jan 19 2008, 03:38 PM

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

YES ....

YES ...

THE MORE I STUDY THIS MATTER OF SPITZER'S FINANCIAL SERVICES REGULATION-GUTTING COMMISSION ....

THE MORE CONVINCED I BECOME ....

THAT THIS HECTOR SANTS DUDE FROM ENGLAND ...

IS NOT THE ONE TO HELP US REFORM OUR FINANCIAL SERVICES TRADE DOWN HERE ON WALL STREET ....

NOR IS THE ENGLISH MODEL SOMETHING THAT WE NYS CITIZENS WOULD WANT TO TOUCH WITH A TEN-FOOT POLE ...

BUT HEY ...

ELIOT SPITZER IS FOR IT ....

AND HE IS PROBABLY THE SMARTEST MAN WITH THE BEST MIND IN ALL THE KNOWN WORLD ....

And so ....

http://www.nydailynews.com/blogs/dailypoli...d-ends-168.html

[Livyjr]

THE DAILY MAIL

"Government extends Northern Rock savings guarantee as FSA admits 'lessons must be learned'"

Last updated at 15:34pm on 9th October 2007

A guarantee put in place to protect customers of ailing banking group Northern Rock was extended today to cover all new deposits.

The Treasury said the new agreement would give the company breathing space as it continues to pursue "the full range of its strategic options".

Northern Rock's new guarantee will be paid for with an "appropriate fee" to ensure that it does not receive a commercial advantage.

A Northern Rock spokesperson said: "Accordingly, all retail savings - for both existing and new depositors - remain guaranteed, safe and secure."

Meanwhile the Financial Services Authority (FSA) admitted that "lessons had to be learned" to improve its monitoring following the crisis.

The City regulator told MPs on the Treasury Select Committee that Northern Rock had not been due a full risk assessment until three years after its last one, conducted between December 2005 and February 2006.

While specific issues were addressed with the bank on a more regular basis, chief executive Hector Sants said the FSA was reviewing its procedures in response to the fiasco.

"There are lessons to be learned here, with regard to our supervisory capacity, and I do think we need to look back over our engagement with this particular company," he told the committee.

Mr Sants went on to say that the FSA had predicted Northern Rock - before it ran into credit problems requiring financial support from the Bank of England - to have a "low" probability of getting into trouble.

"In terms of its probability of getting into difficulty, we had it as a low probability, and there's no question of course - the way that events transpired - that that probability analysis was proved to be inaccurate," he said.

"So we have some serious lessons to be learned."

The Treasury Select Committee later disclosed that it would be hauling Northern Rock chiefs before it next Tuesday.

The bank's chairman, Matt Ridley, and chief executive Adam Applegarth will be grilled as part of the committee's ongoing inquiry into financial stability and transparency.

The Treasury said the new Northern Rock guarantee would be extended to all new retail deposits made after September 19, including those made from today.

It added: "These arrangements will cover all retail deposits including future interest payments, movements of funds between accounts and term deposits for the duration of their term."

The arrangements will be complemented by additional facilities through the Bank of England.

Northern said it expected the process relating to the review of its strategic options to be completed by February.

It added that discussions continued with selected parties after it revealed last month that it had received a number of approaches regarding "a variety of potential transactions".

Reports last week said that New York-based private equity firm JC Flowers had raised £15 billion to bid for the bank.

The fund's head, Chris Flowers, is understood to have gained funding commitments from the likes of JP Morgan, Credit Suisse and Wachovia.

U.S. private equity firm Blackstone and its UK rival Apax are also rumoured to be looking at the bank.

Northern Rock said it had appointed banking groups Citi and Merrill Lynch to advise it on the range of options for the future of the company, as well as help with the discussions with interested parties.

The bank's shares continued their recent mini recovery today, climbing 9 per cent to 188.7p following the announcement of the new guarantee.

Its shares were £12.48 in February, but closed on Friday at 158.5p.

Northern Rock suffered the first run on a UK bank in 150 years last month, as the company struggled with soaring borrowing costs in the money markets where the firm raises most of its cash for mortgage lending.

The collapse of the sub-prime mortgage market in the U.S. has led to tighter credit conditions, with banks increasingly reluctant to lend to each other, pushing up the cost of borrowing.

Northern Rock normally relies on the wholesale markets for 75 per cent of its funding, and it was forced to turn to the Bank of England as lender of last resort when these markets dried up.

The bank has never disclosed how much it has borrowed from the Bank of England but analysts speculate it could be as much as £10.9 billion.

They have also predicted profits at the group will slump to a £120 million loss next year, well below the £647 million profit for this year expected by the market before the current crisis began.

http://www.dailymail.co.uk/pages/live/arti...in_page_id=1770

[Livyjr]

"FSA says Investors relied too much on credit ratings"

Tue Dec 11, 2007 5:10pm

LONDON (Reuters) - The financial watchdog told legislators that banks were not "reckless" in the run-up to the credit crisis, but warned some investors had relied too heavily on ratings agencies.

Credit ratings agencies have come under fire in recent months, accused of being too slow in warning about problems in the U.S. subprime mortgage sector and possible repercussions.

However, in a wide-ranging evidence session before parliament's Treasury Committee on Tuesday, the Financial Services Authority's (FSA) top executives said some institutional investors simply failed to do enough of their own research.

"One element of the problem is institutional investors using rating agencies as a shorthand way of measuring liquidity as well as credit (risk)," FSA Chief Executive Hector Sants said, in the watchdog's second appearance before legislators in two months.

"It is vitally important that people understand the limitations of the service that a credit agency delivers."

The instruments, he said, were transparent enough for those who had the "time and expertise" to unpick them.

"People have relied too heavily on the rating agencies rather than doing their own (research)," Callum McCarthy, the FSA's chairman, told the committee.

In a separate hearing last week, leading investment banks acknowledged that some investors in complex structured products were not sophisticated enough to understand what they bought.

Answering questions on Northern Rock, the country's highest-profile casualty in the credit crisis, the FSA confirmed it still expects a trading update from the battered lender this month and dismissed calls to suspend the bank's volatile shares.

The stock was down 5.5 percent in late trade on Tuesday.

Northern Rock said in September -- the day it turned to the Bank of England for cash and triggered a run on deposits -- that it expected a trading update in "early December" before the end of its financial year.

"It would be a pre-close statement, and then a (full) statement after the end of the year," Sants told legislators.

Answering repeated questions over whether the bank would publish a statement by mid-December, he added it would have to update the market in order to fulfil its listing conditions.

Northern Rock is widely expected to publish the statement in the coming days, but the bank declined to comment on Tuesday.

Until its near-collapse in September, Northern Rock was traditionally one of the first banks to update the market.

The period for trading updates typically runs to mid-December.

Northern Rock advisers are auctioning the bank after it was engulfed in a funding crisis in September and has since been forced to borrow 25 billion pounds from the Bank of England.

The FSA has come under fire over its role in the Northern Rock crisis, putting the watchdog through its toughest test since it was set up seven years ago.

McCarthy and Sants confirmed a key discussion paper on the regulation of liquidity was expected this month, with the results of a "forensic" look at its role in the Northern Rock debacle due by next spring.

The FSA has also made changes to the safety net for deposits in banks, and Sants reiterated on Tuesday that a stronger protection scheme could have "been a real help in preventing the retail run" at Northern Rock.

(Reporting by Clara Ferreira-Marques; Editing by David Holmes and Erica Billingham)

http://uk.reuters.com/article/companyOutlo...lBrandChannel=0

[Livyjr]

"British MPs grill watchdog over Northern Rock crisis"

11/12/2007 - 07:01:34

The Financial Services Authority’s role in the Northern Rock crisis will come under fresh scrutiny today when heads of the City of London watchdog appear for a second round of questioning from MPs in the UK.

FSA chairman Callum McCarthy and chief executive Hector Sants will face MPs in the cross party Treasury Select Committee in what is set to be another grilling on Northern Rock and the credit crunch.

The FSA bosses received a mauling in October, which saw the regulator admit that it needed to improve its monitoring after Northern Rock’s high profile troubles.

Mr Sants and Mr McCarthy told MPs that “lessons needed to be learnt”.

The FSA revealed that the mortgage bank had not been due a full risk assessment until three years after its last one, conducted between December 2005 and February 2006, and had been deemed low risk.

Mr Sants added the FSA was reviewing its procedures in response to the fiasco.

Some members of the Committee are said to believe that the FSA was largely responsible for the regulatory confusion leading up to Northern Rock’s move to call on the Bank of England as lender of last resort.

The FSA chiefs and Ms Minghella are being questioned as part of the Committee’s ongoing inquiry into financial stability and transparency, which is set to go into next year.

Last week, MPs quizzed bosses of investment banks UBS, Goldman Sachs, Citigroup and Deutsche Bank over their role in the credit crunch which led to Northern Rock’s funding woes.

Northern Rock’s accountants PricewaterhouseCoopers were also in the firing line, accused of failing to spot risks within the lender’s funding model.

http://www.breakingnews.ie/business/mheyauauqley/rss2/

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

"New York commission urges regulation of financial services to follow 'principles'"

By DAN SEYMOUR, Associated Press

Last updated: 5:53 p.m., Friday, January 18, 2008

NEW YORK -- A commission helping redraft the regulatory framework for New York's finance industry is considering placing greater emphasis on "principles" than on strictly defined rules, Gov. Eliot Spitzer said Friday.

The commission's members include the chief executives of investments banks Goldman Sachs, Morgan Stanley and Merrill Lynch; insurers MetLife and AIG; and the New York Stock Exchange and the Nasdaq.

end quotes

From Wikipedia:

Spitzer sued several investment banks for inflating stock prices, using affiliated brokerage firms to give biased investment advice and "spin" initial public offerings of stock by offering them to CEOs and other influential members of the business community.

In 2002, a settlement of these lawsuits was negotiated by Spitzer, federal regulatory bodies, stock exchanges, and the investment banks and brokerage houses in question.

The result was $1.4 billion in compensation and fines paid by the brokerages and investment banks, NEW RULES and enforcement bodies created to govern stock analysts and IPOs, and the insulation of brokerage firms from pressures by investment banks.

Ten firms paid fines to settle the case:

Bear Stearns,

Credit Suisse First Boston,

Deutsche Bank,

Goldman Sachs,

J.P. Morgan Chase,

Lehman Brothers,

Merrill Lynch,

Morgan Stanley,

Salomon Smith Barney,

UBS Warburg.

http://en.wikipedia.org/wiki/Eliot_Spitzer

Posted by John Galt on January 19, 2008 8:54 AM

http://www.nydailynews.com/blogs/dailypoli...d-ends-168.html

[Livyjr]

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"We must have regulations that promote our essential goals: a healthy, creative competitive market for financial services, access for consumers and businesses to the services they need, and strong, effective consumer protection."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

http://www.ny.gov/governor/press/0118081.html

"PRIVATE ENTITY WITH A PUBLIC PURPOSE: Governance of the New York Stock Exchange - AN OVERVIEW"

The Council of Institutional Investors

©July 2003

BACKGROUND

The New York Stock Exchange (NYSE) is reviewing its own governance.

Enron and other corporate fiascos started a chain of governance dominoes that have, perhaps inevitably, reached the Exchange.

First reformers focused on changing companies themselves, then their professional service providers — accountants and lawyers, then companies’ bankers, and then the various quasi-governmental or self-regulatory bodies that were supposed to be market safety nets.

The sheer number and size of the corporate frauds demonstrated that self-regulatory bodies failed to be good safety nets.

Federal legislation attempted to improve some of these bodies.

Lawyers were given new rules, one accounting body was given more independent funding, and a second was created.

New rules for rating agencies are under consideration.

The New York Stock Exchange could hardly expect to escape re-evaluation in this climate.

Analysts, who are employed by the major investment banks that sit on the Exchange’s board, were shown to be conflicted.

These same investment banks provided services that seemed to enable bad behavior at Enron and elsewhere.

The frauds made the listing standards that the Exchange imposed on companies seem badly out of date.

These facts alone probably would have provoked a review.

But other events, which the Exchange arguably helped bring on itself, seemingly made governance review a certainty.

Another round of allegations of front-running-like behavior at the Exchange, including allegations of insufficient Exchange oversight, surfaced.

Individuals who were on, or had been on, the NYSE board, such as Martha Stewart, Linda Wachner, and Vivendi’s ousted CEO Jean-Marie Messier, suffered negative publicity in ways that threw their suitability as NYSE board members into question.

To top it off, the Exchange announced its intention to select a board candidate, Citigroup’s Sandy Weill, who was deemed by New York attorney general Eliot Spitzer and many investors to be extremely unsuitable.

Thus, it was no surprise that Securities and Exchange Commission (SEC) chairman William Donaldson asked the Exchange to undertake a governance review.

And it began.

The Council of Institutional Investors received a letter dated June 16, 2003, from the NYSE asking for comments as part of this review.

The letter indicated that the Exchange has formed a special committee to review its governance.

This monograph provides some background information on the Exchange and its governance.

It also offers opinions.

It is designed to assist members in formulating their comments to the Exchange.

The Council gave a draft of this monograph to the New York Stock Exchange for review.

It, most helpfully, offered many pages of feedback, some of which is incorporated here.

Since views legitimately differ, the Exchange’s entire response to the Council is posted on the Council’s web site.

When the Council’s board approves a letter to the Exchange on this subject, that letter will be similarly posted.

Self-regulation

The Exchange’s White Paper explains that the Exchange’s self-regulation works because of four factors: its professional staff, its political accountability, its market sensitivity, and its broker dealers’ interdependence.

This interdependence, it explains, means that all broker dealers are likely to be hurt if some of them behave badly—if brokers did not self-police, all
reputations would suffer.

Governance experts are skeptical about these suggestions.

The interdependence of broker dealers, like the interdependence of investment banks, has not provided much protection against bad behavior in the past.

Indeed, one might argue that interdependence makes it easier for poor behavior to go undetected and for unhealthy group dynamics to result.

It is certainly as easy to picture group collusion as group policing.

And there have, indeed, been somewhat regular allegations of improper conduct about these very broker dealers.

Commercial banks are fairly interdependent, and they do not argue that bank regulators are therefore unnecessary.

Looking at Wall Street’s recent record does not offer any reason to believe that interdependence among brokers removes the need for accountability or oversight from those whose money they handle and regulators whose job it is to protect the public.

Just as important, the possibility that broker dealers may have a self-interest in watching each other does not suggest that they have a self interest in protecting investors.

Indeed, they have a collective interest in profiting from investors.

The Exchange’s public purpose is to protect investors—but it is owned and operated by a profession that has its own needs to tend to.

The argument that political oversight justifies self-regulation is puzzling—after all, political oversight is oversight by an external body.

Saying that oversight is important, whether political or of some other type, makes the case against, rather than for self-regulation.

One could debate the merits of political (congressional) oversight, since broker dealers are better able to protect their interests politically than individual investors are, but that is different than a debate over the need for oversight.

It is reasonable to guess that the NYSE, like the Securities Industry Association (SIA), expends considerable energy lobbying in some form or other.

It would be useful for the special committee to insist on full public disclosure of Exchange lobbying expenses and charitable contributions.

The argument that the existence of professional staff justifies self-regulation is equally puzzling.

Presumably, most bodies believe they have professional staffs, but most people are wise enough to recognize that staffs are made up of human beings, and human beings tend to act in their self-interest and are therefore affected by pressures and conflicts of interest.

A body that suggests it can self-regulate because its staff, unlike all others, is immune to conflicts and pressures, is a body that seems to be begging for wiser oversight.

Market sensitivity may have some moderating effect on Exchange governance—after all, if investors lose confidence in corporations due to scandals and frauds, they will stop investing.

But that is a slow and drastic check on the system.

More important, this safeguard creates incentives for minimal standards not optimal ones: Market sensitivity ultimately means the Exchange will do what it needs to protect itself, but not necessarily what it needs to optimally protect investors.

Thus, none of the four reasons the Exchange offers for why it should be self-regulating seems sufficient to reach that conclusion.

The Exchange notes, quite rightly, that “self-regulation is an integral part of the federal statutory scheme for regulation of U.S. financial markets.”

The Exchange adds that self-regulation is just one layer of many for investors, and that the SEC plays an important oversight role.

However, as this monograph notes elsewhere, self-regulation is falling from favor (for example, both at the NASD and in the accounting profession) as its apparent failures have seemingly been highlighted by recent frauds and other disasters.

Thus, this may be the appropriate time for the Exchange’s special committee to revisit this principle in light of the recent changes in analogous regulatory settings.

Finally, the White Paper offers an analogy to democracy as a justification for self-regulation.

It quotes Churchill to the effect that democracies may not be perfect but they are better than anything else that has been tried.

It implies that this is the same conclusion one must draw concerning self-regulation.

But one could easily conclude precisely the opposite.

While experiences with democracy generally do turn out better for citizens than other forms of government, almost every experience with self-regulation in the U.S. has been a big disappointment — protection occurs, but not for the intended constituency.

(See the the Council’s June 2003 editorial on how many self-regulatory, quasi-governmental bodies have failed.)

Saying one is like Jack Kennedy doesn’t make it so, to quote a famous debate.

http://members.cii.org/dcwascii/web.nsf/fi...20Monograph.pdf

[Livyjr]

"State budget deficit grows, Bruno ready to deal"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:43 p.m., Thursday, January 17, 2008

ALBANY -- Officials in Gov. Eliot Spitzer's administration said the state budget proposal on Tuesday will reveal a $4.4 billion deficit, slightly larger than predicted because of tumultuous months on Wall Street and Main Street.

Spitzer budget crafters on Thursday said the current gap between state spending and revenues had been projected at $4.3 billion, a figure that had grown through 2007.

But early economic forecasts also show no recession is expected at this point.

They said early predictors show New York's economy may start to turn around, if slowly, by the end of 2008.

Until then, Wall Street layoffs and losses and a dismal holiday for retailers continues to cut New York's projected tax revenues, said Laura L. Anglin, Spitzer's budget director.

She said revenues from Wall Street's year-end bonuses -- which were expected to grow by 14 percent over last year -- are now expected to be 5 percent less than last year.

State Comptroller Thomas DiNapoli said Thursday that the average bonus declined by nearly 5 percent to an average of $180,420.

And Wall Street bonuses account for about 20 percent of state revenues.

DiNapoli warned of "dark economic clouds rolling in."

The state budget affects New Yorkers in many ways.

The amount of state school aid directly affects local tax bills and student performance.

And state funding is the primary driver in highway and bridge repair as well as efforts to attract and retain employers.

While acknowledging tough times ahead, Senate Republican leader Joseph Bruno said Thursday that he's ready to work with Spitzer, and also to take him on to make sure state spending includes all areas of the state.

"We're going to have a challenging year," Bruno said to his local chamber of commerce, which gave him standing ovations in his first public policy speech since his wife's funeral on Monday.

Bruno said he sees hope for cooperation with the Democratic governor after conflict and scandal between the leaders gridlocked Albany after June.

"Historically, the governor has made very bad judgments in governing because he has favored the politics over governing, and that's what started the whole problem -- the governor wanted to be the only game in town," Bruno said.

But Spitzer and Bruno recently spoke by telephone, the first direct contact in months outside Spitzer's condolences for Bruno's loss.

"We have got to move forward and get things done," Bruno said.

"He says he wants to do it."

"I want to do it."

He told the Albany area chamber of commerce: "I really am in a frame of mind that I just want to be nice."

"I really want to be nice."

Spitzer's 2008-09 budget proposal for the fiscal year beginning April 1 is expected to grow by about 5.3 percent.

Although twice the inflation rate, 5.3 percent is the long-term personal income growth figure the administration uses as a gauge of responsible growth.

The current budget of about $120 billion, with $80 billion of state spending alone, grew by about 8 percent over the year before.

That's less than some previous budgets that grew by around 10 percent a year.

But Spitzer, who has called for billions of dollars in new spending for education, job creation and property tax relief, appears to not be leaving much room for the Legislature to add its spending priorities.

Most years, the Legislature adds about $1 billion to the governor's budget before it's adopted.

Spitzer's budget proposal won't have to use any funds from the state's $1.1 billion "rainy day fund" reserved for a true fiscal crisis and no hiring freeze is being ordered, budget director Anglin said.

[Livyjr]

"State budget deficit grows, Bruno ready to deal"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:43 p.m., Thursday, January 17, 2008

ALBANY -- Officials in Gov. Eliot Spitzer's administration said the state budget proposal on Tuesday will reveal a $4.4 billion deficit, slightly larger than predicted because of tumultuous months on Wall Street and Main Street.

Spitzer budget crafters on Thursday said the current gap between state spending and revenues had been projected at $4.3 billion, a figure that had grown through 2007.

Spitzer's 2008-09 budget proposal for the fiscal year beginning April 1 is expected to grow by about 5.3 percent.

Although twice the inflation rate, 5.3 percent is the long-term personal income growth figure the administration uses as a gauge of responsible growth.

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

AND AS THE "PROFLIGATE SON" ELIOT SPITZER RUNS NEW YORK STATE SPENDING RIGHT ON UP AND OUT OF SIGHT BASED ON THE SPECIOUS ASSUMPTION THAT ALL OF US ARE MAKING AT LEAST 5.3% MORE THIS YEAR THAN WE MADE LAST YEAR ...

WE HAVE A DOSE OF THE REALITY THAT THE "PROFLIGATE SON" AND HIS LACKEY, PAUL FRANCIS CHOOSE TO TOTALLY IGNORE ...

"Gas, food spur inflation jump in 2007"

By MARTIN CRUTSINGER, Associated Press

Last updated: 5:53 p.m., Wednesday, January 16, 2008

Workers' wages failed to keep up with the higher inflation.

Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the fourth decline in the past five years.

The lagging wage gains are cited as a chief reason many workers have growing anxiety about their economic futures.

Posted by John Galt on January 17, 2008 8:24 AM

http://www.nydailynews.com/blogs/dailypoli...r.html#comments

[Livyjr]

"Spitzer to add millions to budget for children's health care"

By VALERIE BAUMAN, Associated Press

Last updated: 4:02 p.m., Thursday, January 17, 2008

ALBANY -- Gov. Eliot Spitzer announced Thursday that he will include $37 million in his budget proposal next week to expand health care coverage to about 70,000 more children.

He made the move despite the Bush administration's refusal to match the expansion with federal funds.

New York is among several states suing the Bush administration over restrictions on health insurance coverage for children.

Spitzer said the federal government would have contributed $19 million if the Bush administration had agreed to help fund expansion of the State Children's Health Insurance Program.

But Spitzer says the additional expense is a moral imperative the state must take on.

"We have now gotten to the point where we believe in the state of New York we should act," Spitzer said.

"And even if Washington is unwilling, unable to understand how critically important it is that we expand this health care to our children, we will do so."

The system would expand health care coverage on a sliding scale to families with incomes between 250 percent and 400 percent of the federal poverty level.

Currently, children in families at 250 percent of the poverty level or below are entitled to coverage, but more than 300,000 eligible children are not enrolled.

The state is trying to find new ways to reach out to those families.

School health centers will make an effort to inform eligible families, and the state Health Department will attempt to make the enrollment process easier.

A family of four at 400 percent of the federal poverty level would make about $82,000 a year, and with the sliding scale would pay a $1,400 annual premium for coverage through the state.

"This is not a handout to those who are not working," Spitzer said.

"This is helping the working middle class, those who are struggling."

The state's Child Health Plus program now covers about 396,000 children.

The lawsuit against the federal Department of Health and Human Services challenges new rules governing the SCHIP.

The states are seeking an injunction against new federal restrictions on eligibility and against what amounts to a limit on covering children from middle-income families who lack health insurance.

The new rules forbid states from providing health care unless a child has been without coverage for a year.

The program covers 6.6 million children nationwide from modest-income families that aren't poor enough to qualify for Medicaid.

Congress passed a bill last year that would add $35 billion to the SCHIP over five years to expand health coverage for children in families that cannot afford to buy private health insurance.

A steep increase in cigarette taxes would pay for it.

President Bush vetoed the bill, arguing it was too costly.

In addition to the lawsuit filed last year by New York, Illinois, Maryland and Washington, the parents of five New York children filed a federal suit Thursday in the Southern District of New York.

They argue that the federal government's decision to reject New York's plan is based on unlawfully adopted federal rules that are inconsistent with the federal SCHIP statute.

The families also argue the administration violated the Administrative Procedures Act, which requires the government to adopt new rules only after public notice and comment.

[Livyjr]

I THINK THAT WE ARE LIVING IN A TIME OF ABSOLUTE MADNESS HERE IN AMERICA AND NEW YORK STATE ....

"State seeks deep sites to hold greenhouse gas - Old natural gas wells could hold key to permanent storage of carbon dioxide"

By BRIAN NEARING, Staff writer, Albany, New York Times Union

First published: Wednesday, January 16, 2008

ALBANY -- The state is joining the hunt for the holy grail of global warming -- a way to reach deep underground to permanently entomb fossil fuel-emitted carbon dioxide, a greenhouse gas that fuels rising temperatures.

This summer, geologists will study old natural gas wells and other subterranean features in the Southern Tier and western New York as potential resting places for pumped-in CO2 from power plants, under a $4 million, three-year program by the state Energy Research and Development Authority and a host of energy companies.

The storage method known as sequestration could give extended life to high-CO2 fuels like coal and oil, whose emissions are worsening global warming.

President Bush has been a powerful advocate for sequestration, which could help the fuel industry avoid potential CO2 emission limits that climate scientists say will be needed to to avoid catastrophic temperature increases.

"This is one of our efforts to mitigate climate change," said authority President and CEO Paul Tonko.

"We are going to scope out areas that might be suitable for this and address some of the geological uncertainties."

Nearly a dozen fossil-fuel-based companies are providing $2.3 million toward the state effort.

They include AES Eastern Energy, which owns coal-fired power plants near Buffalo, Johnson City in Broome County, and Cayuga and Seneca lakes in the Finger Lakes, and Nornew, a company that owns natural gas fields in the Southern Tier.

Tonko said preliminary field studies done last year identified areas with the porous geologic features necessary to hold large amounts of CO2 and prevent it from escaping into the atmosphere.

Field researchers will use seismic equipment to study sandstone, limestone and shale formations in the Southern Tier counties of Broome, Chenango, Cayuga, Steuben, Yates, Schuyler and Tompkins, and also in Erie, Chautauqua and Cattaraugus counties in the western edge of the state, Tonko said.

Geologists from the State Museum also will study storage potential of shale formations.

"Our target will be from 2,500 feet to 10,000 feet underground," said John Martin, a senior project manager with the authority.

Trucks outfitted with seismic frequency collectors and "thumpers" will vibrate the ground and collect reflected sound waves to build a three-dimensional underground map.

Areas of fractured sandstone or limestone -- sometimes mixed with salty water -- have the room needed to hold CO2.

Also, the state is joining the federal Midwest Regional Carbon Sequestration Partnership, one of seven state partnerships supported financially by the U.S. Department of Energy.

Today, the cost of carbon storage appears prohibitively expensive at up to $300 per ton, according to the U.S. Department of Energy.

That would greatly increase the cost of electricity generated by coal, which accounts for half of the nation's electricity.

The government's goal is to reduce that storage cost to less than $10 per ton by 2015.

DOE estimates underground saline formations could store up to 500 billion tons, according to the agency's Web page on the effort.

That's equivalent to 300 years of the U.S. total CO2 emissions of 1.6 billion tons in 2004.

More study needs to be done but the storage method does have risks.

One danger could be the sudden and unintended release of CO2 gases into the atmosphere if an underground storage area were to crack or rupture.

Coal accounts for more than a third of all U.S. fossil-fuel CO2 emissions, according to DOE's Carbon Dioxide Information Analysis Center.

Nearing can be reached at 454-5094 or by e-mail at bnearing@timesunion.com.

[Livyjr]

NEWSDAY

"Gov. Spitzer risks dividing state against itself"

BY MATTHEW CROSSON | Matthew Crosson is president of the Long Island Association, the largest business organization in New York State.

January 14, 2008

On Wednesday, Gov. Eliot Spitzer will deliver the first State of Upstate address, in Buffalo.

The speech is a well-intended attempt to encourage the people upstate as they try to rebuild their faltering economy.

Last week, in his State of the State speech, Spitzer announced a $1-billion upstate revitalization program, a concrete commitment of cash to that rebuilding effort.

There's no doubt that upstate New York needs economic help from Albany.

But there's also no doubt that downstate areas, including Long Island, need that help, too.

Spitzer risks widening the economic and political divide that has long separated upstate and downstate with what now appears to be an imbalanced, two-state approach to economic development.

At first glance, the economic divide between upstate and downstate seems profound.

More than 5,000 vacant homes are now being bulldozed in Buffalo, with another 5,000 soon to follow - 10,000 vacant homes being ground to dust.

Here on Long Island, young people are fleeing because they can't find an affordable place to live.

Could there be a starker contrast?

But the real comparison between economic conditions on Long Island and in upstate New York is more complex and surprising.

Long Island, despite having a gross product that almost equals all upstate metropolitan areas' combined, faces its own impending economic problems.

And it faces them largely without state help.

New York needs a real one-state economic development strategy.

We need a plan that responds to the true economic conditions of each region, in balance with that region's economic output.

We need a plan that integrates upstate and downstate economic development.

We need to promote understanding among upstaters and downstaters of the economic facts that affect us all.

And we all need to understand that we are in the same economic boat, and it's not just the upstate part of the boat that's leaking.

Unfortunately, when Spitzer took office, he divided the Empire State Development Corp. into two parts, because of a campaign promise.

But the divided structure risks promoting political competition for scarce resources.

Instead of inspiring a one-state economic approach, it risks ensuring continued division.

Now, by committing $1 billion exclusively to revitalize upstate New York, and by singling out that area for an unprecedented address focused on solving only its problems, the governor is literally placing a price tag on the upstate-downstate competition - and signaling which region he favors to win.

He's making it fair game for downstate advocates, like me, and our legislative delegations to make our case for that money and to compete in the State Legislature to get it.

Making Long Island's case is not difficult.

For example, according to the Federal Reserve Bank of New York, in 2007 private-sector employment upstate grew at just a 0.5 percent rate.

Long Island's rate of private-sector employment growth through November was also 0.5 percent.

During the 1990s, upstate New York lost 20 percent of its younger residents - exactly the same percentage who moved away from Long Island.

So far in this decade, Long Island's 25- to 44-year-old population has declined by 14.8 percent, compared with 9.4 percent upstate.

In fact, since 2000, Long Island has been losing young residents at a greater rate than any other region in the state, or the nation as a whole.

Long Islanders pay 20 percent more of their household income for property taxes than all other New Yorkers as a group, and the gap is wider when compared to upstate taxpayers alone.

Because of the higher taxes and housing costs, Long Islanders have negative median disposable income; all upstate residents enjoy significantly positive disposable income, even though their average household income is somewhat lower.

Yet Long Island's taxpayers still effectively help subsidize state economic support for upstate New York.

According to the Rochester-based Center for Government Research, as of 2001, that subsidy was $2.7 billion a year.

Now it's certainly much higher.

That's a compelling case for Long Island to share in that $1 billion of state aid, but a case it would be better not to have to make.

A state divided against itself cannot prosper.

Spitzer needs to return balance to New York's economic development investments.

http://www.newsday.com/news/opinion/ny-opc...0,7779182.story

ELIOT SPITZER WOULD HAVE US BELIVE THAT HE IS POSSESSED OF A CRYSTAL BALL ....

HE ALONE KNOWS THE FUTURE ....

SO WE SHOULD GIVE HIM A BILLION DOLLARS TO GAMBLE WITH ....

ON THIS UPSTATE "REVIVAL" PIE-IN-THE-SKY THAT HE IS PEDDLING UP HERE ...

And so ....

"Spitzer details $1 billion plan for upstate revival"

By CAROLYN THOMPSON, Associated Press

Last updated: 5:22 p.m., Wednesday, January 16, 2008

BUFFALO, N.Y. -- Gov. Eliot Spitzer pledged $1 billion Wednesday toward restoring upstate by getting land ready for development, helping universities cash in on research, pushing farmers' goods to market and cleaning up parks.

In New York's first ever "state of upstate" speech, the governor detailed an agenda of programs and investments that he said grew from a year's worth of conversations in communities.

"While I realize that this is a large amount of money in tough fiscal times, I also know that it's at these very moments when investment matters most, when the urgency is so great that we simply cannot afford to wait," Spitzer told an audience of mayors, business leaders and elected officials at Buffalo State College.

The upstate economy has struggled for most of the past two decades against manufacturing and population losses despite gains in service sectors like health care and hospitality and a new focus on high-tech.

The $1 billion Upstate Revitalization Fund to be included in Spitzer's budget next week offers point-by-point solutions to the region's ills -- a dearth of shovel-ready sites, aging infrastructure, high energy costs and lack of broadband access in rural areas.

It also aims to capitalize on the region's strengths, funding business incubator programs at colleges and universities and tapping into nearby Canada for investment.

"It is a strategy that comes from us in the local communities, which is why it's such an exciting strategy," said Buffalo Mayor Byron Brown, whose city is in line for one of four new crime analysis centers and an expansion of the University at Buffalo into the downtown medical campus.

Spitzer will need the support of downstate legislators to make it all happen.

Assembly Speaker Sheldon Silver, a Manhattan Democrat and Spitzer ally, was an early supporter, traveling to Buffalo for what he called "a historic day."

"This is a necessity, investing in our economy is a necessity," the speaker said.

Senate Majority Leader Joseph Bruno, who missed the address because of his wife's death last week, said the governor is right to want to address upstate's ills -- but remained behind the Senate majority's own "Upstate Now" program of tax cuts, capital spending and energy subsidies.

"Upstate Now addresses the real, basic problems that upstate businesses face to help them grow and create new jobs," the Republican said in a statement.

Dan Gundersen, Spitzer's upstate development chief, said the governor's plan is all about fundamentals.

"So often, economic development has been about projects, it's been about the silver bullet, it's been about the scramble for resources," Gundersen said, "and what we are saying, what the governor has said today that is so very different, is that if we focus on the fundamentals and we create those programs that are going to address real needs, then we're going to see change."

How to pay for Spitzer's ambitious program remains a question.

Besides the upstate initiatives and spending he called for Wednesday, Spitzer last week proposed billions more in investments to create jobs and in property tax relief, all in the face of a projected deficit of at least $4.3 billion and declining state and national economies.

"Let's not think that only one year of investment will make a difference," cautioned Andrew Rudnick, president and chief executive of the business-oriented Buffalo Niagara Partnership.

"This needs to be repeated year in and year out for at least as many years as led to our decline."

Spitzer will detail what he promised to be "hard choices" in his budget proposal to the Legislature next week.

As a candidate for governor, Spitzer compared upstate west of Albany to Buffalo as similar to Appalachia.

He used Wednesday's speech to explain to potential downstate detractors his focus on the region.

"The truth is that we will never grow again, we will never prosper again, we will never become a beacon of hope and opportunity again if part of our state is thriving and another part is falling behind," he said.

"So we must come together and channel all of the passion, energy and determination that is within us toward one goal: restoring growth and prosperity to upstate New York."

------

Associated Press Writer Michael Gormley in Albany contributed to this report.

[Livyjr]

"Supreme Court upholds New York's system of choosing trial judges"

By MARK SHERMAN, Associated Press

Last updated: 3:04 p.m., Wednesday, January 16, 2008

WASHINGTON -- The Supreme Court unanimously upheld New York's unique system of choosing trial judges Wednesday, setting aside critics' concerns that political party bosses control the system.

"A political party has a First Amendment right to limit its membership as it wishes and to choose a candidate-selection process that will in its view produce the nominee who best represents its political platform," Justice Antonin Scalia wrote for the court.

In New York, primary voters elect convention delegates who choose candidates for the judgeships.

Once nominated, those candidates run on the general election ballot.

In practice, they frequently have no opposition.

Unsuccessful candidates for judgeships and a watchdog group filed a lawsuit challenging the system.

A federal district judge and the 2nd U.S. Circuit Court of Appeals agreed that it is very difficult for candidates to get on the ballot if they don't have support of the party leaders.

In striking down the system, the two federal courts said judgeship candidates who are not the choice of the party leaders are excluded from elections by an onerous process that violates their First Amendment rights.

The high court on Wednesday reversed the lower courts.

Scalia said there is nothing unconstitutional about the process.

The system's opponents "complain not of the state law, but of the voters' (and their elected delegates') preference for the choices of the party leadership," Scalia said.

He said the state legislature is free to return to a primary if it wishes.

Justice John Paul Stevens chimed in with a brief opinion distinguishing between a constitutional system and wise public policy, resorting to the words of former Justice Thurgood Marshall.

"The Constitution does not prohibit legislatures from enacting stupid laws," Stevens said, quoting Marshall.

New York Assemblywoman Helene Weinstein, the Democratic chair of the Judiciary Committee, said work on legislation to change the system stalled amid the court challenges.

The legislation would create independent panels that would screen political party judicial nominees, Weinstein said.

"The fact that this case was making its way through the courts has held back our ability to take measures to reform the system to make it more transparent and improve public confidence," Weinstein said.

New York City's top lawyer, Michael A. Cardozo, said the city will continue to press for adoption of a constitutional amendment to require the appointment of judges based on merit.

Critics have said the conventions are patronage-driven affairs in which allies of party leaders are rewarded with judgeships and all others are shut out.

The appeals court said that between 1990 and 2002, almost half the state's elections for Supreme Court justice -- trial judges in New York's judiciary -- were uncontested, calling them "little more than ceremony."

The appeals court ordered the state to dispense with the conventions and switch to primary elections until state lawmakers come up with a new plan.

Many legal and civics groups have come out in favor of appointing judges in New York.

The U.S. Supreme Court previously has ruled that states can decide whether to use conventions or primaries to nominate candidates.

States also can choose to have judges appointed rather than elected.

Margarita Lopez Torres became the lead plaintiff in the lawsuit after Democratic leaders in Brooklyn blocked her from getting the party's nomination for a Supreme Court judgeship.

She said the leaders turned against her shortly after her election as a civil court judge when she would not hire people they recommended.

Three years later, Lopez Torres said they offered her a second chance if she would hire a leader's daughter.

She refused.

The state, the Democratic and Republican parties and the elections board joined to ask the high court to reverse the appeals court ruling.

Former New York Mayor Ed Koch was among a diverse group of politicians and legal groups asking the court to uphold the lower court rulings.

"They're the final arbiter, and you have to accept the outcome."

"I just think they made a dreadful mistake."

"The county leaders will now continue to basically assure the appointment to the Supreme Court of their candidates," Koch said.

The state Legislature adopted the nominating conventions 86 years ago.

Lawmakers scrapped direct primaries for New York's Supreme Court justices because of the potentially corrupting influence of having prospective judges raising campaign money.

Other judges in New York are elected through primaries.

The plaintiffs have said the current system leads to cozy relationships among judges, lawyers and politicians.

The case is New York Board of Elections v. Torres, 06-766.

------

Associated Press Writer Richard Richtmyer in Albany, N.Y., contributed to this report.

[Livyjr]

NEW YORK STATE BOARD OF ELECTIONS et al. v. LOPEZ TORRES et al.

certiorari to the united states court of appeals for the second circuit

No. 06-766. Argued October 3, 2007--Decided January 16, 2008

Under New York's current Constitution, State Supreme Court Justices are elected in each of the State's judicial districts.

Since 1921, New York's election law has required parties to select their nominees by a convention composed of delegates elected by party members.

An individual running for delegate must submit a 500-signature petition collected within a specified time.

The convention's nominees appear automatically on the general-election ballot, along with any independent candidates who meet certain statutory requirements.

Respondents filed suit, seeking, inter alia, a declaration that New York's convention system violates the First Amendment rights of challengers running against candidates favored by party leaders and an injunction mandating a direct primary election to select Supreme Court nominees.

The Federal District Court issued a preliminary injunction, pending the enactment of a new state statutory scheme, and the Second Circuit affirmed.

Held: New York's system of choosing party nominees for the State Supreme Court does not violate the First Amendment. Pp. 5-12.

(a) Because a political party has a First Amendment right to limit its membership as it wishes, and to choose a candidate-selection process that will in its view produce the nominee who best represents its political platform, a State's power to prescribe party use of primaries or conventions to select nominees for the general election is not without limits.

California Democratic Party v. Jones, 530 U. S. 567, 577.

However, respondents, who claim their own associational right to join and have influence in the party, are in no position to rely on the right that the First Amendment confers on political parties. Pp. 5-7.

(b) Respondents' contention that New York's electoral system does not assure them a fair chance of prevailing in their parties' candidate-selection process finds no support in this Court's precedents.

Even if Kusper v. Pontikes, 414 U. S. 51, 57, which acknowledged an individual's associational right to vote in a party primary without undue state-imposed impediment, were extended to cover the right to run in a party primary, the New York law's signature and deadline requirements are entirely reasonable.

A State may demand a minimum degree of support for candidate access to a ballot, see Jenness v. Fortson, 403 U. S. 431, 442. P. 7.

© Respondents' real complaint is that the convention process following the delegate election does not give them a realistic chance to secure their party's nomination because the party leadership garners more votes for its delegate slate and effectively determines the nominees.

This says no more than that the party leadership has more widespread support than a candidate not supported by the leadership.

Cases invalidating ballot-access requirements have focused on the requirements themselves, and not on the manner in which political actors function under those requirements.

E.g., Bullock v. Carter, 405 U. S. 134.

Those cases do not establish an individual's constitutional right to have a "fair shot" at winning a party's nomination. Pp. 7-10.

(d) Respondents' argument that the existence of entrenched "one-party rule" in the State's general election demands that the First Amendment be used to impose additional competition in the parties' nominee-selection process is a novel and implausible reading of the First Amendment. Pp. 10-12.

462 F. 3d 161, reversed.

Scalia, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Souter, Thomas, Ginsburg, Breyer, and Alito, JJ., joined.

Stevens, J., filed a concurring opinion, in which Souter, J., joined.

Kennedy, J., filed an opinion concurring in the judgment, in which Breyer, J., joined as to Part II.

[Livyjr]

NEW YORK STATE BOARD OF ELECTIONS, et al., PETITIONERS v. MARGARITA LOPEZ TORRES et al.

on writ of certiorari to the united states court of appeals for the second circuit

[January 16, 2008]

Justice Scalia delivered the opinion of the Court.

The State of New York requires that political parties select their nominees for Supreme Court Justice at a convention of delegates chosen by party members in a primary election.

We consider whether this electoral system violates the First Amendment rights of prospective party candidates.

I

A

The Supreme Court of New York is the State's trial court of general jurisdiction, with an Appellate Division that hears appeals from certain lower courts.

See N. Y. Const., Art. VI, §§7, 8.

Under New York's current Constitution, the State is divided into 12 judicial districts, see Art. VI, §6(a); N. Y. Jud. Law Ann. §140 (West 2005), and Supreme Court Justices are elected to 14-year terms in each such district, see N. Y. Const., Art. VI, §6©.

The New York Legislature has provided for the election of a total of 328 Supreme Court Justices in this fashion.

See N. Y. Jud. Law Ann. §140-a (West Supp. 2007).

Over the years, New York has changed the method by which Supreme Court Justices are selected several times.

Under the New York Constitution of 1821, Art. IV, §7, all judicial officers, except Justices of the Peace, were appointed by the Governor with the consent of the Senate.

See 7 Sources and Documents of the U. S. Constitutions 181, 184 (W. Swindler ed. 1978).

In 1846, New York amended its Constitution to require popular election of the Justices of the Supreme Court (and also the Judges of the New York Court of Appeals).

Id., at 192, 200 (N. Y. Const. of 1846, Art. VI, §12).

In the early years under that regime, the State allowed political parties to choose their own method of selecting the judicial candidates who would bear their endorsements on the general-election ballot.

See, e.g., Report of Joint Committee of Senate and Assembly of New York, Appointed to Investigate Primary and Election Laws of This and Other States, S. Doc. No. 26, pp. 195-219 (1910).

The major parties opted for party conventions, the same method then employed to nominate candidates for other state offices.

Ibid.; see also P. Ray, An Introduction to Political Parties and Practical Politics 94 (1913).

In 1911, the New York Legislature enacted a law requiring political parties to select Supreme Court nominees (and most other nominees who did not run statewide) through direct primary elections.

Act of Oct. 18, 1911, ch. 891, §45(4), 1911 N. Y. Laws 2657, 2682.

The primary system came to be criticized as a "device capable of astute and successful manipulation by professionals," Editorial, The State Convention, N. Y. Times, May 1, 1917, p. 12, and the Republican candidate for Governor in 1920 campaigned against it as "a fraud" that "offered the opportunity for two things, for the demagogue and the man with money," Miller Declares Primary a Fraud, N. Y. Times, Oct. 23, 1920, p. 4.

A law enacted in 1921 required parties to select their candidates for the Supreme Court by a convention composed of delegates elected by party members.

Act of May 2, 1921, ch. 479, §§45(1), 110, 1921 N. Y. Laws 1451, 1454, 1471.

New York retains this system of choosing party nominees for Supreme Court Justice to this day.

Section 6-106 of New York's election law sets forth its basic operation:

"Party nominations for the office of justice of the supreme court shall be made by the judicial district convention."

N. Y. Elec. Law Ann. §6-106 (West 2007).

A "party" is any political organization whose candidate for Governor received 50,000 or more votes in the most recent election. §1-104(3).

In a September "delegate primary," party members elect delegates from each of New York's 150 assembly districts to attend the party's judicial convention for the judicial district in which the assembly district is located.

See N. Y. State Law Ann. §121 (West 2003); N. Y. Elec. Law Ann. §§6-124, 8-100(1)(a) (West 2007).

An individual may run for delegate by submitting to the Board of Elections a designating petition signed by 500 enrolled party members residing in the assembly district, or by five percent of such enrolled members, whichever is less. §§6-136(2)(i), (3).

These signatures must be gathered within a 37-day period preceding the filing deadline, which is approximately two months before the delegate primary.
§§6-134(4), 6-158(1).

The delegates elected in these primaries are uncommitted; the primary ballot does not specify the judicial nominee whom they will support. §7-114.

The nominating conventions take place one to two weeks after the delegate primary. §§6-126, 6-158(5).

Each of the 12 judicial districts has its own convention to nominate the party's Supreme Court candidate or candidates who will run at large in that district in the general election. §§6-124, 6-156.

The general election takes place in November. §8-100(1)©.

The nominees from the party conventions appear automatically on the general-election ballot. §7-104(5).

They may be joined on the general-election ballot by independent candidates and candidates of political organizations that fail to meet the 50,000 vote threshold for "party" status; these candidates gain access to the ballot by submitting timely nominating petitions with (depending on the judicial district) 3,500 or 4,000 signatures from voters in that district or signatures from five percent of the number of votes cast for Governor in that district in the prior election, whichever is less. §§6-138, 6-142(2).

B

Respondent López Torres was elected in 1992 to the civil court for Kings County--a court with more limited jurisdiction than the Supreme Court--having gained the nomination of the Democratic Party through a primary election.

She claims that soon after her election, party leaders began to demand that she make patronage hires, and that her consistent refusal to do so caused the local party to oppose her unsuccessful candidacy at the Supreme Court nominating conventions in 1997, 2002, and 2003.

The following year, López Torres--together with other candidates who had failed to secure the nominations of their parties, voters who claimed to have supported those candidates, and the New York branch of a public-interest organization called Common Cause--brought suit in federal court against the New York Board of Elections, which is responsible for administering and enforcing the New York election law. See §§3-102, 3-104.

They contended that New York's election law burdened the rights of challengers seeking to run against candidates favored by the party leadership, and deprived voters and candidates of their rights to gain access to the ballot and to associate in choosing their party's candidates.

As relevant here, they sought a declaration that New York's convention system for selecting Supreme Court Justices violates their First Amendment rights, and an injunction mandating the establishment of a direct primary election to select party nominees for Supreme Court Justice.

The District Court issued a preliminary injunction granting the relief requested, pending the New York Legislature's enactment of a new statutory scheme. 411 F. Supp. 2d 212, 256 (EDNY 2006).

A unanimous panel of the United States Court of Appeals for the Second Circuit affirmed. 462 F. 3d 161 (2006).

It held that voters and candidates possess a First Amendment right to a "realistic opportunity to participate in [a political party's] nominating process, and to do so free from burdens that are both severe and unnecessary." Id., at 187.

New York's electoral law violated that right because of the quantity of signatures and delegate recruits required to obtain a Supreme Court nomination at a judicial convention, see id., at 197, and because of the apparent reality that party leaders can control delegates, see id., at 198-200.

In the court's view, because "one-party rule" prevailed within New York's judicial districts, a candidate had a constitutional right to gain access to the party's convention, notwithstanding her ability to get on the general-election ballot by petition signatures. Id., at 193-195, 200.

The Second Circuit's holding effectively returned New York to the system of electing Supreme Court Justices that existed before the 1921 amendments to the election law.

We granted certiorari. 549 U. S. ___ (2007).

II

A

A political party has a First Amendment right to limit its membership as it wishes, and to choose a candidate-selection process that will in its view produce the nominee who best represents its political platform.

Democratic Party of United States v. Wisconsin ex rel. La Follette, 450 U. S. 107, 122 (1981); California Democratic Party v. Jones, 530 U. S. 567, 574-575 (2000).

These rights are circumscribed, however, when the State gives the party a role in the election process--as New York has done here by giving certain parties the right to have their candidates appear with party endorsement on the general-election ballot.

Then, for example, the party's racially discriminatory action may become state action that violates the Fifteenth Amendment. See id., at 573.

And then also the State acquires a legitimate governmental interest in assuring the fairness of the party's nominating process, enabling it to prescribe what that process must be. Id., at 572-573.

We have, for example, considered it to be "too plain for argument" that a State may prescribe party use of primaries or conventions to select nominees who appear on the general-election ballot.

American Party of Tex. v. White, 415 U. S. 767, 781 (1974).

That prescriptive power is not without limits.

In Jones, for example, we invalidated on First Amendment grounds California's blanket primary, reasoning that it permitted non-party members to determine the candidate bearing the party's standard in the general election. 530 U. S., at 577.

See also Eu v. San Francisco County Democratic Central Comm., 489 U. S. 214, 224 (1989); Tashjian v. Republican Party of Conn., 479 U. S. 208, 214-217 (1986).

In the present case, however, the party's associational rights are at issue (if at all) only as a shield and not as a sword.

Respondents are in no position to rely on the right that the First Amendment confers on political parties to structure their internal party processes and to select the candidate of the party's choosing.

Indeed, both the Republican and Democratic state parties have intervened from the very early stages of this litigation to defend New York's electoral law.

The weapon wielded by these plaintiffs is their own claimed associational right not only to join, but to have a certain degree of influence in, the party.

They contend that New York's electoral system does not go far enough--does not go as far as the Constitution demands--in assuring that they will have a fair chance of prevailing in their parties' candidate-selection process.

This contention finds no support in our precedents.

We have indeed acknowledged an individual's associational right to vote in a party primary without undue state-imposed impediment.

In Kusper v. Pontikes, 414 U. S. 51, 57 (1973), we invalidated an Illinois law that required a voter wishing to change his party registration so as to vote in the primary of a different party to do so almost two full years before the primary date.

But Kusper does not cast doubt on all state-imposed limitations upon primary voting.

In Rosario v. Rockefeller, 410 U. S. 752 (1973), we upheld a New York State requirement that a voter have enrolled in the party of his choice at least 30 days before the previous general election in order to vote in the next party primary.

In any event, respondents do not claim that they have been excluded from voting in the primary.

Moreover, even if we extended Kusper to cover not only the right to vote in the party primary but also the right to run, the requirements of the New York law (a 500-signature petition collected during a 37-day window in advance of the primary) are entirely reasonable.

Just as States may require persons to demonstrate "a significant modicum of support" before allowing them access to the general-election ballot, lest it become unmanageable, i]Jenness v. Fortson[/i], 403 U. S. 431, 442 (1971), they may similarly demand a minimum degree of support for candidate access to a primary ballot.

The signature requirement here is far from excessive.

See, e.g., Norman v. Reed, 502 U. S. 279, 295 (1992) (approving requirement of 25,000 signatures, or approximately two percent of the electorate); White, supra, at 783 (approving requirement of one percent of the vote cast for Governor in the preceding general election, which was about 22,000 signatures).

Respondents' real complaint is not that they cannot vote in the election for delegates, nor even that they cannot run in that election, but that the convention process that follows the delegate election does not give them a realistic chance to secure the party's nomination.

The party leadership, they say, inevitably garners more votes for its slate of delegates (delegates uncommitted to any judicial nominee) than the unsupported candidate can amass for himself.

And thus the leadership effectively determines the nominees.

But this says nothing more than that the party leadership has more widespread support than a candidate not supported by the leadership.

No New York law compels election of the leadership's slate--or, for that matter, compels the delegates elected on the leadership's slate to vote the way the leadership desires.

And no state law prohibits an unsupported candidate from attending the convention and seeking to persuade the delegates to support her.

Our cases invalidating ballot-access requirements have focused on the requirements themselves, and not on the manner in which political actors function under those requirements.

See, e.g., Bullock v. Carter, 405 U. S. 134 (1972) (Texas statute required exorbitant filing fees); Williams v. Rhodes, 393 U. S. 23 (1968) (Ohio statute required, inter alia, excessive number of petition signatures); Anderson v. Celebrezze, 460 U. S. 780 (1983) (Ohio statute established unreasonably early filing deadline).

Here respondents complain not of the state law, but of the voters' (and their elected delegates') preference for the choices of the party leadership.

To be sure, we have, as described above, permitted States to set their faces against "party bosses" by requiring party-candidate selection through processes more favorable to insurgents, such as primaries.

But to say that the State can require this is a far cry from saying that the Constitution demands it.

None of our cases establishes an individual's constitutional right to have a "fair shot" at winning the party's nomination.

And with good reason.

What constitutes a "fair shot" is a reasonable enough question for legislative judgment, which we will accept so long as it does not too much infringe upon the party's associational rights.

But it is hardly a manageable constitutional question for judges--especially for judges in our legal system, where traditional electoral practice gives no hint of even the existence, much less the content, of a constitutional requirement for a "fair shot" at party nomination.

Party conventions, with their attendant "smoke-filled rooms" and domination by party leaders, have long been an accepted manner of selecting party candidates.

"National party conventions prior to 1972 were generally under the control of state party leaders" who determined the votes of state delegates.

American Presidential Elections: Process, Policy, and Political Change 14 (H. Schantz ed. 1996).

Selection by convention has never been thought unconstitutional, even when the delegates were not selected by primary but by party caucuses. See ibid.

The Second Circuit's judgment finesses the difficulty of saying how much of a shot is a "fair shot" by simply mandating a primary until the New York Legislature acts.

This was, according to the Second Circuit, the New York election law's default manner of party-candidate selection for offices whose manner of selection is not otherwise prescribed.

Petitioners question the propriety of this mandate, but we need not pass upon that here.

Even conceding its propriety, there is good reason to believe that the elected members of the New York Legislature remain opposed to the primary, for the same reasons their predecessors abolished it 86 years ago: because it leaves judicial selection to voters uninformed about judicial qualifications, and places a high premium upon the ability to raise money.

Should the New York Legislature persist in that view, and adopt something different from a primary and closer to the system that the Second Circuit invalidated, the question whether that provides enough of a "fair shot" would be presented.

We are not inclined to open up this new and excitingly unpredictable theater of election jurisprudence.

Selection by convention has been a traditional means of choosing party nominees.

While a State may determine it is not desirable and replace it, it is not unconstitutional.

B

Respondents put forward, as a special factor which gives them a First Amendment right to revision of party processes in the present case, the assertion that party loyalty in New York's judicial districts renders the general-election ballot "uncompetitive."

They argue that the existence of entrenched "one-party rule" demands that the First Amendment be used to impose additional competition in the nominee-selection process of the parties.

(The asserted "one-party rule," we may observe, is that of the Democrats in some judicial districts, and of the Republicans in others. See 411 F. Supp. 2d, at 230.)

This is a novel and implausible reading of the First Amendment.

To begin with, it is hard to understand how the competitiveness of the general election has anything to do with respondents' associational rights in the party's selection process.

It makes no difference to the person who associates with a party and seeks its nomination whether the party is a contender in the general election, an underdog, or the favorite.

Competitiveness may be of interest to the voters in the general election, and to the candidates who choose to run against the dominant party.

But we have held that those interests are well enough protected so long as all candidates have an adequate opportunity to appear on the general-election ballot.

In Jenness we upheld a petition-signature requirement for inclusion on the general-election ballot of five percent of the eligible voters, see 403 U. S., at 442, and in Munro v. Socialist Workers Party, 479 U. S. 189, 199 (1986), we upheld a petition-signature requirement of one percent of the vote in the State's primary.

New York's general-election balloting procedures for Supreme Court Justice easily pass muster under this standard.

Candidates who fail to obtain a major party's nomination via convention can still get on the general-election ballot for the judicial district by providing the requisite number of signatures of voters resident in the district. N. Y. Elec. Law Ann. §6-142(2).

To our knowledge, outside of the Fourteenth and Fifteenth Amendment contexts, see Jones, 530 U. S., at 573, no court has ever made "one-party entrenchment" a basis for interfering with the candidate-selection processes of a party.

(Of course, the lack of one-party entrenchment will not cause free access to the general-election ballot to validate an otherwise unconstitutional restriction upon participation in a party's nominating process. See Bullock, 405 U. S., at 146-147.)

The reason one-party rule is entrenched may be (and usually is) that voters approve of the positions and candidates that the party regularly puts forward.

It is no function of the First Amendment to require revision of those positions or candidates.

The States can, within limits (that is, short of violating the parties' freedom of association), discourage party monopoly--for example, by refusing to show party endorsement on the election ballot.

But the Constitution provides no authority for federal courts to prescribe such a course.

The First Amendment creates an open marketplace where ideas, most especially political ideas, may compete without government interference.

See Abrams v. United States, 250 U. S. 616, 630 (1919) (Holmes, J., dissenting).

It does not call on the federal courts to manage the market by preventing too many buyers from settling upon a single product.

Limiting respondents' court-mandated "fair shot at party endorsement" to situations of one-party entrenchment merely multiplies the impracticable lines courts would be called upon to draw.

It would add to those alluded to earlier the line at which mere party popularity turns into "one-party dominance."

In the case of New York's election system for Supreme Court Justices, that line would have to be drawn separately for each of the 12 judicial districts--and in those districts that are "competitive" the current system would presumably remain valid.

But why limit the remedy to one-party dominance?

Does not the dominance of two parties similarly stifle competing opinions?

Once again, we decline to enter the morass.

*  *  *

New York State has thrice (in 1846, 1911, and 1921) displayed a willingness to reconsider its method of selecting Supreme Court Justices.

If it wishes to return to the primary system that it discarded in 1921, it is free to do so; but the First Amendment does not compel that.

We reverse the Second Circuit's contrary judgment.

It is so ordered.

[Livyjr]

NEW YORK STATE BOARD OF ELECTIONS, et al., PETITIONERS v. MARGARITA LOPEZ TORRES et al.

on writ of certiorari to the united states court of appeals for the second circuit

[January 16, 2008]

Justice Stevens, with whom Justice Souter joins, concurring.

While I join Justice Scalia's cogent resolution of the constitutional issues raised by this case, I think it appropriate to emphasize the distinction between constitutionality and wise policy.

Our holding with respect to the former should not be misread as endorsement of the electoral system under review, or disagreement with the findings of the District Court that describe glaring deficiencies in that system and even lend support to the broader proposition that the very practice of electing judges is unwise.

But as I recall my esteemed former colleague, Thurgood Marshall, remarking on numerous occasions:

"The Constitution does not prohibit legislatures from enacting stupid laws."

[Livyjr]

NEW YORK STATE BOARD OF ELECTIONS, et al., PETITIONERS v. MARGARITA LOPEZ TORRES et al.

on writ of certiorari to the united states court of appeals for the second circuit

[January 16, 2008]

Justice Kennedy, with whom Justice Breyer joins as to Part II, concurring in the judgment.

The Court's analysis, in my view, is correct in important respects; but my own understanding of the controlling principles counsels concurrence in the judgment and the expression of these additional observations.

I

When a state-mandated primary is used to select delegates to conventions or nominees for office, the State is bound not to design its ballot or election processes in ways that impose severe burdens on First Amendment rights of expression and political participation.

See Kusper v. Pontikes, 414 U. S. 51, 57-58 (1973); see also California Democratic Party v. Jones, 530 U. S. 567, 581-582 (2000); cf. Lubin v. Panish, 415 U. S. 709, 716 (1974); Bullock v. Carter, 405 U. S. 134, 144 (1972); Gray v. Sanders, 372 U. S. 368, 380 (1963).

Respondents' objection to New York's scheme of nomination by convention is that it is difficult for those who lack party connections or party backing to be chosen as a delegate or to become a nominee for office.

Were the state-mandated-and-designed nominating convention the sole means to attain access to the general election ballot there would be considerable force, in my view, to respondents' contention that the First Amendment prohibits the State from requiring a delegate selection mechanism with the rigidities and difficulties attendant upon this one.

The system then would be subject to scrutiny from the standpoint of a "reasonably diligent independent candidate," Storer v. Brown, 415 U. S. 724, 742 (1974).

The Second Circuit took this approach. 462 F. 3d 161, 196 (2006).

As the Court is careful to note, however, New York has a second mechanism for placement on the final election ballot. Ante, at 4.

One who seeks to be a Justice of the New York Supreme Court may qualify by a petition process.

The petition must be signed by the lesser of (1) 5 percent of the number of votes last cast for Governor in the judicial district or (2) either 3,500 or 4,000 voters (depending on the district).

This requirement has not been shown to be an unreasonable one, a point respondents appear to concede.

True, the candidate who gains ballot access by petition does not have a party designation; but the candidate is still considered by the voters.

The petition alternative changes the analysis.

Cf. Munro v. Socialist Workers Party, 479 U. S. 189, 199 (1986) ("It can hardly be said that Washington's voters are denied freedom of association because they must channel their expressive activity into a campaign at the primary as opposed to the general election").

This is not to say an alternative route to the general election exempts the delegate primary/nominating convention from all scrutiny.

For instance, the Court in Bullock, after determining that Texas' primary election filing fees were so "patently exclusionary" on the basis of wealth as to invoke strict scrutiny under the Equal Protection Clause, rejected the argument that candidate access to the general election without a fee saved the statute.

405 U. S., at 143-144, 146-147 ("[W]e can hardly accept as reasonable an alternative that requires candidates and voters to abandon their party affiliations in order to avoid the burdens of the filing fees").

But there is a dynamic relationship between, in this case, the convention system and the petition process; higher burdens at one stage are mitigated by lower burdens at the other.

See Burdick v. Takushi, 504 U. S. 428, 448 (1992) (Kennedy, J., dissenting) ("The liberality of a State's ballot access laws is one determinant of the extent of the burden imposed by the write-in ban; it is not, though, an automatic excuse for forbidding all write-in voting"); Persily, Candidates v. Parties: Constitutional Constraints on Primary Ballot Access Laws, 89 Geo. L. J. 2181, 2214-2216 (2001).

And, though the point does not apply here, there are certain injuries (as in Bullock) that are so severe they are unconstitutional no matter how minor the burdens at the other stage.

As the Court recognized in Kusper, moreover, there is an individual right to associate with the political party of one's choice and to have a voice in the selection of that party's candidate for public office. See 414 U. S., at 58.

On the particular facts and circumstances of this case, then, I reach the same conclusion the Court does.

II

It is understandable that the Court refrains from commenting upon the use of elections to select the judges of the State's courts of general jurisdiction, for New York has the authority to make that decision.

This closing observation, however, seems to be in order.

When one considers that elections require candidates to conduct campaigns and to raise funds in a system designed to allow for competition among interest groups and political parties, the persisting question is whether that process is consistent with the perception and the reality of judicial independence and judicial excellence.

The rule of law, which is a foundation of freedom, presupposes a functioning judiciary respected for its independence, its professional attainments, and the absolute probity of its judges.

And it may seem difficult to reconcile these aspirations with elections.

Still, though the Framers did not provide for elections of federal judges, most States have made the opposite choice, at least to some extent.

In light of this longstanding practice and tradition in the States, the appropriate practical response is not to reject judicial elections outright but to find ways to use elections to select judges with the highest qualifications.

A judicial election system presents the opportunity, indeed the civic obligation, for voters and the community as a whole to become engaged in the legal process.

Judicial elections, if fair and open, could be an essential forum for society to discuss and define the attributes of judicial excellence and to find ways to discern those qualities in the candidates.

The organized bar, the legal academy, public advocacy groups, a principled press, and all the other components of functioning democracy must engage in this process.

Even in flawed election systems there emerge brave and honorable judges who exemplify the law's ideals.

But it is unfair to them and to the concept of judicial independence if the State is indifferent to a selection process open to manipulation, criticism, and serious abuse.

Rule of law is secured only by the principled exercise of political will.

If New York statutes for nominating and electing judges do not produce both the perception and the reality of a system committed to the highest ideals of the law, they ought to be changed and to be changed now.

But, as the Court today holds, and for further reasons given in this separate opinion, the present suit does not permit us to invoke the Constitution in order to intervene.

III

With these observations, I concur in the judgment of the Court.

http://caselaw.lp.findlaw.com/cgi-bin/getc...mp;invol=06-766

[Livyjr]

"Spitzer: Focus on NYC infrastructure despite 'vacationing' Senate"

By MICHAEL GORMLEY, Associated Press

Last updated: 2:53 p.m., Tuesday, June 26, 2007

BOLTON LANDING, N.Y. -- Gov. Eliot Spitzer said Tuesday he is turning more of his focus to improving air travel and the subways in New York City, which he promised will remain the world's financial capital despite challenges from London and elsewhere.

After admitting that some of his top legislative goals "fell apart" last week in a fight with the Senate's Republican majority, Spitzer said he'll spend the balance of his first year in office pursuing his vision for the city through the executive branch.

"We are excited beyond words to get back to work," Spitzer said shortly after a meeting with top staff.

"The role of being governor?"

"One small piece of it is dealing with the Legislature."

"The much larger, more important piece is to run the agencies."

"And that's what we're doing."

"New York commission urges regulation of financial services to follow 'principles'"

By DAN SEYMOUR, Associated Press

Last updated: 5:53 p.m., Friday, January 18, 2008

NEW YORK -- A commission helping redraft the regulatory framework for New York's finance industry is considering placing greater emphasis on "principles" than on strictly defined rules, Gov. Eliot Spitzer said Friday.

Regulations based on broad guidelines -- such as "observe proper standards of market conduct," and "maintain adequate financial resources" -- could inject some flexibility into the arcane and Byzantine rules governing the industry now, Spitzer said.

Spitzer established the commission by executive order in May to issue recommendations to the state for regulatory change, aiming for regulations that can keep markets running smoothly and protect investors and consumers.

Composed of more than 40 members including bank executives, lawyers, regulators and consumer advocates, the Commission to Modernize the Regulation of Financial Services held its first meeting Friday at New York University.

A principle-based regulatory framework would more closely resemble that used in London.

Spitzer said such a system would serve as a foundation for interpreting existing laws, and urge regulators to concentrate on outcomes instead of the process.

The commission's members include the chief executives of investments banks Goldman Sachs, Morgan Stanley and Merrill Lynch; insurers MetLife and AIG; and the New York Stock Exchange and the Nasdaq.

EXECUTIVE ORDER

No15: ESTABLISHING THE NEW YORK STATE COMMISSION TO MODERNIZE THE REGULATION OF FINANCIAL SERVICES

WHEREAS, New York is the financial capital of the world, home to a thriving financial services market that serves as an engine for the state economy; and

WHEREAS, the financial services sector generates by far the largest revenues of any other market sector in New York, and employs hundreds of thousands of employees throughout the state; and

WHEREAS, cutting edge technologies, creative solutions and innovative strategies are essential for financial services companies to successfully compete in the marketplace; and

WHEREAS, various financial services companies have alleged that unnecessary, burdensome and inconsistent regulation by multiple state regulators has stunted creativity and growth in many aspects of the financial services sector in New York, resulting in higher business costs and lost opportunities; and

WHEREAS, various consumer advocacy groups have alleged that New York’s regulation of financial services companies is outdated and does not adequately protect consumers; and

WHEREAS, New York’s economic outlook depends in large part on whether it can attract and retain financial services companies and remain the financial capital of the world; and

WHEREAS, global competition to attract and retain financial services companies has never been greater; and

WHEREAS, in order to remain the global leader in the sector, New York must adopt world class financial services regulations that protect consumers, and promote growth and creativity in the industry; and

WHEREAS, a comprehensive review of New York’s financial regulations is necessary to provide the state with critical information essential to improve financial regulation in the state;

NOW, THEREFORE, I, Eliot Spitzer, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and the Laws of the State of New York do hereby order as follows:

1. There is hereby established the New York State Commission to Modernize the Regulation of Financial Services (“Commission”).

2. The Commission shall consist of at least 15 members appointed by the Governor, including:

(a) the Superintendent of Insurance, the Superintendent of Banks, the Secretary of State, the Chairperson of the Consumer Protection Board, and the Attorney General;

(b) the Chairs of the Senate and Assembly Insurance and Banking Committees; and

© at least six additional members appointed by the Governor, including representatives of the insurance, banking and securities industries, other business leaders and consumer groups.

The Superintendent of Insurance shall serve as the Chair of the Commission.

3. A majority of the members of the Commission shall constitute a quorum, and all recommendations of the Commission shall require approval of a majority of the total members of the Commission.

4. The Commission shall conduct a comprehensive review of New York’s financial services statutes, regulations, rules and policies.

The Commission is charged with:

(a) identifying ways in which regulatory powers may be integrated, rationalized, and changed in order to promote economic innovation and protect consumers;

(b) recommending specific changes in statutes and regulations that promote competition and the growth of business, while effectively protecting both consumers and businesses from unfair or unethical practices; and

© ensuring that all statutes and regulations serve a beneficial purpose and do not impose costs higher than any benefits they provide.

5. In undertaking its review, the Commission may request documents, conduct public hearings, hear the testimony of witnesses, and take any other actions it deems necessary to carry out its functions.

6. The Commission shall issue such interim reports of its findings as it deems necessary and appropriate, and shall issue its final report and recommendations on or before June 30, 2008.

G I V E N under my hand and the Privy Seal of the State in the City of Albany this twenty-ninth day of May in the year two thousand seven.

BY THE GOVERNOR

Secretary to the Governor

http://www.ny.gov/governor/executive_order...eorders/15.html

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"We must have regulations that promote our essential goals: a healthy, creative competitive market for financial services, access for consumers and businesses to the services they need, and strong, effective consumer protection."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

Hector Sants, the Chief Executive Officer of the Financial Services Authority of the United Kingdom, spoke to the commission about how his agency, the sole regulator for all financial services in the U.K., is transitioning from rules-based to principles-based regulation.

http://www.ny.gov/governor/press/0118081.html

THE DAILY MAIL

"Government extends Northern Rock savings guarantee as FSA admits 'lessons must be learned'"

Last updated at 15:34pm on 9th October 2007

Meanwhile the Financial Services Authority (FSA) admitted that "lessons had to be learned" to improve its monitoring following the crisis.

The City regulator told MPs on the Treasury Select Committee that Northern Rock had not been due a full risk assessment until three years after its last one, conducted between December 2005 and February 2006.

While specific issues were addressed with the bank on a more regular basis, chief executive Hector Sants said the FSA was reviewing its procedures in response to the fiasco.

"There are lessons to be learned here, with regard to our supervisory capacity, and I do think we need to look back over our engagement with this particular company," he told the committee.

Mr Sants went on to say that the FSA had predicted Northern Rock - before it ran into credit problems requiring financial support from the Bank of England - to have a "low" probability of getting into trouble.

"In terms of its probability of getting into difficulty, we had it as a low probability, and there's no question of course - the way that events transpired - that that probability analysis was proved to be inaccurate," he said.

"So we have some serious lessons to be learned."

Northern Rock suffered the first run on a UK bank in 150 years last month, as the company struggled with soaring borrowing costs in the money markets where the firm raises most of its cash for mortgage lending.

http://www.dailymail.co.uk/pages/live/arti...in_page_id=1770

"FSA says Investors relied too much on credit ratings"

Tue Dec 11, 2007 5:10pm

LONDON (Reuters) - The FSA has come under fire over its role in the Northern Rock crisis, putting the watchdog through its toughest test since it was set up seven years ago.

McCarthy and Sants confirmed a key discussion paper on the regulation of liquidity was expected this month, with the results of a "forensic" look at its role in the Northern Rock debacle due by next spring.

http://uk.reuters.com/article/companyOutlo...lBrandChannel=0

"US recession fears sink global markets"

By CARL FREIRE, Associated Press

Last updated: 6:53 a.m., Monday, January 21, 2008

TOKYO -- Asian and European stock markets plunged Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.

India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.

Investors dumped shares because they were skeptical that an economic stimulus plan President Bush announced Friday would shore up the economy, which has been battered by housing and credit problems.

The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

Concerns about the outlook for the U.S. economy, a major export market for Asian companies, has sent the region's markets sliding in 2008.

Just last Wednesday, the Hang Seng index sank 5.4 percent.

"It's another horrible day," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.

"Today it's because of disappointment that the U.S. stimulus (package) is too little, too late and investors feel it won't help the economy recover."

Japan's benchmark Nikkei 225 index slid 3.9 percent to 13,325.94 points, its lowest close in more than 2 years.

China's Shanghai Composite index plunged 5.1 percent.

The sell-off continued in Europe.

Germany's DAX was down 4.2 percent in morning trading, France's CAC 40 slid 4.7 percent, while Britain's FTSE 100 dropped 3.6 percent.

"People are certainly nervous about a potential recession in the U.S. spilling over to the rest of the world," said David Cohen, Director of Asian Economic Forecasting at Action Economics in Singapore.

"Maybe there's still some wariness about politicians are able to come up with a compromise and act sufficiently quickly" on a stimulus package, Cohen said.

"I think the impact would be marginal anyway."

Investors took cues from the negative reaction to the president's plan on Wall Street on Friday, when the Dow Jones industrial average slid 0.5 percent to 12,099.30, bringing its loss for the year so far to nearly 9 percent.

Traders also have shrugged assurances from Federal Reserve Chairman Ben Bernanke that the U.S. central bank is ready to act aggressively -- which means a likely big interest rate cut later this month -- to help the sagging economy.

Some analysts predict that Asia won't suffer dramatically from a possible U.S. recession because increased trade and investment within Asia has made the region less reliant on the United States than in the past.

Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates, up from 37 percent in 1995.

But on Monday, uncertainty and pessimism reigned.

In Tokyo trading, exporters got hit hard, partly because of the yen's recent strength against the dollar.

Toyota Motor Corp. lost 3.3 percent and Honda Motor Co. sank 3.4 percent.

In Hong Kong, Bank of China dropped 6.39 percent and China Construction Bank slid 7.83 percent.

In Mumbai, India, the benchmark Sensex index fell 1,353 points, or 7.4 percent -- its second-biggest percentage drop ever -- to 17,605.35.

At one point, it was down nearly 11 percent.

The decline hit companies across the board, with power utility Reliance Energy Ltd. falling 16.4 percent.

Major software company Tata Consultancy Services Ltd. slid 7.6 percent

"A gloomy U.S. climate has affected the global markets."

"Even if those markets recover, it will take sometime for the recovery to reach India because today's fall has been so drastic," said Jayant Pai, of the Mumbai investment company IL&FS Ltd.

Still, Pai and others suggested that the declines could lead to a buying opportunity.

"The sell-off today takes us close to the bottom," she said.

Since the start of the year, Japan's Nikkei index has declined 13 percent, while Hong Kong's blue-chip index is down more than 14 percent.

Even China's Shanghai index -- which nearly doubled last year -- has fallen 6.6 percent since the beginning of the year and nearly 20 percent from its all-time closing high on Oct. 16.

------

Associated Press writer Cassie Biggs in Hong Kong, Ramola Talwar Badam in Mumbai and Elaine Kurtenbach in Shanghai contributed to this report.

[Livyjr]

"Spitzer: Focus on NYC infrastructure despite 'vacationing' Senate"

By MICHAEL GORMLEY, Associated Press

Last updated: 2:53 p.m., Tuesday, June 26, 2007

BOLTON LANDING, N.Y. -- Gov. Eliot Spitzer said Tuesday he is turning more of his focus to improving air travel and the subways in New York City, which he promised will remain the world's financial capital despite challenges from London and elsewhere.

"Stock markets plunge worldwide"

By TOBY ANDERSON, Associated Press

Last updated: 12:52 p.m., Monday, January 21, 2008

LONDON -- Stocks fell sharply worldwide Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.

U.S. markets were closed for Martin Luther King Jr. Day, but the downbeat mood from last week's market declines there circled through Europe, Asia and the Americas.

Britain's benchmark FTSE-100 slumped 5.5 percent to 5,578.20, France's CAC-40 Index tumbled 6.8 percent to 4,744.15, and Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.

In Asia, India's benchmark stock index tumbled 7.4 percent, while Hong Kong's blue-chip Hang Seng index plummeted 5.5 percent to 23,818.86, its biggest percentage drop since the Sept. 11, 2001, terror attacks.

Canadian stocks fell as well, with the S&P/TSX composite index on the Toronto Stock Exchange down 4 percent in early afternoon trading.

In Brazil, stocks plunged 6.9 percent on the main index of Sao Paulo's Bovespa exchange.

Investors dumped shares because they were skeptical that an economic stimulus plan President Bush announced Friday would shore up the economy that has been battered by problems in its housing and credit markets.

The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

"We've taken our lead from the Asian markets who have not been impressed by the U.S."

"There's debate if there's going to be a recession in the U.S."

"I don't think there's much chance of that though," said Richard Hunter an analyst at Hargreaves Lansdown Stockbrokers Ltd. in London.

Concerns about the outlook for the U.S. economy, a major export market for Asian companies, has sent the region's markets sliding in 2008.

Just last Wednesday, the Hang Seng index sank 5.4 percent.

"It's another horrible day," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.

"Today it's because of disappointment that the U.S. stimulus (package) is too little, too late and investors feel it won't help the economy recover."

Japan's benchmark Nikkei 225 index slid 3.9 percent to close at 13,325.94 points, its lowest close in more than two years.

China's Shanghai Composite index plunged 5.1 percent, partly on worries about mainland Chinese banks' exposure to risky U.S. mortgage investments.

"People are certainly nervous about a potential recession in the U.S. spilling over to the rest of the world," said David Cohen, Director of Asian Economic Forecasting at Action Economics in Singapore.

"Maybe there's still some wariness about politicians are able to come up with a compromise and act sufficiently quickly" on a stimulus package, Cohen said.

"I think the impact would be marginal anyway."

Investors took cues from the negative reaction to the president's plan on Wall Street on Friday, when the Dow Jones industrial average slid 0.5 percent to 12,099.30, bringing its loss for the year so far to nearly 9 percent.

Traders also have shrugged off assurances from Federal Reserve Chairman Ben Bernanke that the U.S. central bank is ready to act aggressively -- which means a likely big interest rate cut later this month -- to help the sagging economy.

Some analysts predict that Asia won't suffer dramatically from a U.S. recession because increased trade and investment within Asia has made the region less reliant on the United States than in the past.

Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates, up from 37 percent in 1995.

But on Monday, uncertainty and pessimism reigned.

In Tokyo trading, exporters got hit hard, partly because of the yen's recent strength against the dollar.

Toyota Motor Corp. lost 3.3 percent and Honda Motor Co. sank 3.4 percent.

Shares of Bank of China dropped 6.4 percent in Hong Kong after the South China Morning Post newspaper reported that the bank is expected to announce a "significant write-down" in U.S. subprime mortgage securities, citing unidentified sources.

In Shanghai, the bank's stock declined 4.1 percent.

India's the benchmark Sensex index fell 1,353 points, or 7.4 percent -- its second-biggest percentage drop ever -- to 17,605.35 points.

At one point, it was down nearly 11 percent.

The decline hit companies across the board, with power utility Reliance Energy Ltd. falling 16.4 percent.

Major software company Tata Consultancy Services Ltd. slid 7.6 percent

"A gloomy U.S. climate has affected the global markets."

"Even if those markets recover, it will take sometime for the recovery to reach India because today's fall has been so drastic," said Jayant Pai, of the Mumbai investment company IL&FS Ltd.

Still, Pai and others suggested that the declines could lead to a buying opportunity.

"The sell-off today takes us close to the bottom," she said.

Since the start of the year, Japan's Nikkei index has declined 13 percent, while Hong Kong's blue-chip index is down more than 14 percent.

Even China's Shanghai index -- which nearly doubled last year -- has fallen 6.6 percent over the same period and nearly 20 percent from its all-time closing high on Oct. 16.

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Associated Press writers Cassie Biggs in Hong Kong, Ramola Talwar Badam in Mumbai and Elaine Kurtenbach in Shanghai Carl Freire in Tokyo contributed to this report.

[Livyjr]

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

The financial services industry is a bedrock of New York’s economy.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"We must have regulations that promote our essential goals: a healthy, creative competitive market for financial services, access for consumers and businesses to the services they need, and strong, effective consumer protection."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

http://www.ny.gov/governor/press/0118081.html

THE "BEST MINDS" IN THE STATE?

YEAH, RIGHT, ELIOT ....

TELL US ALL ABOUT IT ....

THE "SCAM MASTER" SPEAKETH ....

And so ......

"Asian markets tumble on US worries"

By YURI KAGEYAMA, Associated Press

Last updated: 6:03 a.m., Tuesday, January 22, 2008

TOKYO -- Global stock markets extended their slide for a second day Tuesday, plunging amid fears that a possible U.S. recession will cause a worldwide economic slowdown.

The dramatic declines in Asia and Europe so far this week were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.

Japan's Nikkei 225 index nose-dived 5.7 percent -- its biggest percentage drop in nearly 10 years -- to 12,573.05, a day after falling 3.9 percent.

Australia's benchmark index sank 7.1 percent, the market's steepest one-day slide in nearly 20 years.

Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, finished down 8.7 percent.

In China, the Shanghai Composite index lost 7.2 percent to 4,559.75, its lowest close since August.

Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 percent within minutes of opening.

The Sensex rebounded some later to finish down 4.6 percent.

"There is no reason at all to allow the worries of the Western world to overwhelm us," Chidambaram said.

European markets, which fell sharply Monday, were volatile Tuesday.

By midmorning the U.K.'s FTSE 100 had slipped 1 percent, Germany's DAX dropped 2.9 percent, while France's CAC 40 declined 1.1 percent.

Investors have dumped shares in frenetic trading the last two days on worries that the U.S. economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for exports.

There is also skepticism that American authorities will be able to prevent a recession.

The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.

"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

Oil and gold prices also fell.

Light, sweet crude for February delivery fell to $87.72 a barrel on expectations that slower U.S. growth will lead to less demand for crude.

Spot gold, which usually benefits from market uncertainty, fell to a two-week low of $855.20 per troy ounce.

U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr.

But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. Eastern time.

Dow Jones industrial average futures were down 523 points, or 4.3 percent, to 11,583, while Standard & Poor's 500 futures were down 64.4 points, or 4.8 percent, at 1,260.

Noritsugu Hirakawa, who monitors stock trading at Okasan Securities Co. in Tokyo, said investors were spooked by the drastic falls on Chinese and Indian markets -- the two emerging economies that are viewed as sustaining global growth even as the U.S. economy sputters.

"The end to the slides in Asian stocks is nowhere in sight," he said.

"There is even speculation that China may be exposed to the U.S. subprime mortgage crisis."

Indonesia's benchmark index closed the day down 7.7 percent, Singapore's Straits Times index sank 6 percent and Taiwan's market fell 6.5 percent.

Asian markets have been in a downward spiral for most of January.

Since the start of the year, Japan's Nikkei index has tumbled nearly 18 percent, while the Hang Seng is down a stunning 22 percent.

Even the usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that threats were growing.

"We must take the approach of working together with other nations on this," she said on nationally televised news.

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Associated Press writers Ramola Talwar Badam in Mumbai and Cassie Biggs in Hong Kong contributed to this report.

[Livyjr]

"U.S. stock futures fall sharply"

By TIM PARADIS, Associated Press

Last updated: 8:02 a.m., Tuesday, January 22, 2008

NEW YORK -- Wall Street was expected to plunge at the opening of trading Tuesday, extending its huge losses from last week and taking more cues from heavy selling that has spread throughout the world.

Indicators showed the Dow Jones industrial average was set to fall by more than 500 points when trading begins.

Fears of a recession in the United States that could pull down the global economy as well have infected markets around the world, and those declines further unnerved U.S. investors who were unable to trade Monday, when Wall Street was closed for Martin Luther King Jr. Day.

Dow futures fell 553, or 4.57 percent, to 11,553.

Standard & Poor's 500 index futures fell 67.20, or 5.07 percent, to 1,258.10.

Nasdaq 100 index futures dropped 86.50, or 4.68 percent, to 1,763.00.

In Asia, Japan's Nikkei stock average closed down 5.65 percent -- its biggest percentage drop in nearly a decade.

Hong Kong's Hang Seng index lost 8.65 percent a day after showing its biggest losses since the Sept. 11, 2001, terrorist attacks.

In afternoon trading, Britain's FTSE 100 fell 0.69 percent, Germany's DAX index lost 2.55 percent and, France's CAC-40 fell 1.39 percent.

Some of the more modest moves in major global indexes Tuesday belie the huge drops many saw Monday.

A big question on investors' minds is whether the Federal Reserve, scheduled to meet next week, will make an emergency interest rate cut before then.

Traders outside the U.S. were pondering whether other central banks would step in with interest-rate cuts to help shore up market sentiment.

Last week, each of the major U.S. indexes fell more than 4 percent as investors grew skeptical late in the week that plans by U.S. lawmakers and President Bush to stimulate the U.S. economy will keep the U.S. from tipping into recession.

The plan Bush announced Friday, which requires the OK of Congress, outlines $145 billion in tax relief to help spur consumer spending.

Bond prices rose sharply as investors searched for safety amid the global stock pullback.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.49 percent from 3.63 percent late Friday.

The dollar was mixed against other major currencies.

Corporate news weighed on stocks as well as concerns about the widespread pullback in stocks.

Bank of America Corp. said its fourth-quarter earnings fell sharply amid credit losses and weak investment banking results.

Profits at the bank declined to $268 million, or 5 cents per share, from $5.26 billion, or $1.16 per share, a year earlier.

Meanwhile, Wachovia Corp. said its fourth-quarter earnings fell 98 percent after the bank wrote down $1.7 billion in the value of certain portfolios and set aside $1.5 billion to cover bad loans.

Earnings fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, a year earlier.

There was some good news.

DuPont, one of the 30 stocks that make up the Dow industrials, said its fourth-quarter profits fell 37 percent from a year ago when earnings benefited from one-time items.

Earnings fell to $545 million, or 60 cents per share, from $871 million, or 94 cents per share, in the year-ago period.

But excluding items, results topped Wall Street's expectations amid strength in its international business.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com