Co-Chairs Kathleen Rice Milton Williams, Jr.

William Fitzpatrick

.tworgov. Commission to Investigate Public Corruption

Chief Counsel Kelly Donovan Chief of Investigations E. Danya Perry

November 6, 2013 Karl Sleight, Esq. Harris Beach, PLLC 677 Broadway, Suite 1101 Albany, New York 12207 Re: Subpoena Duces Tecum to Harris Beach, PLLC ("Harris Beach")

Dear Mr. Sleight: The Commission to Investigate Public Corruption ("Commission") has received your letter request, dated November 1, 2013, asking that the Commission withdraw its subpoena duces tecum directed to Harris Beach. As described in detail below, the subpoena is a classically proper exercise of the Commission's authority and will not be withdrawn. The Commission sincerely hopes that you will join those firms that have complied with the Commission's inquiry and hopes that, together, we can avoid mutually burdensome litigation. To that end, and in light of your arguments that the subpoena is overbroad, vague, burdensome, and seeks documents not in existence or not within your control, the Commission will consider any specific requests to define and narrow the scope of the subpoena without interfering with the Commission's lawful inquiry. The Commission already has agreed to extend the original return date of the subpoena. We now expect that by November 12 (a week prior to the subpoena's extended return date) , you will make specific and reasonable suggestions to narrow particular subpoena requests and propose a production and a timeline consistent with those suggestions. I. The Subpoena Is Procedurally Proper

By Executive Order No. 106, Governor Cuomo empowered the Commission to conduct inquiries under Executive Law 6 & 63(8). Those sections specifically include the power to subpoena witnesses in order to compel testimony and produce documents. Without offering any specifics, Harris Beach argues that the subpoena somehow fails to comply with the processes set forth in the Executive Order. Contrary to Harris Beach's suggestion, nothing in the Executive Law or the Executive Order requires that the Commission adopt particular procedures before exercising subpoena authority under 6 and 63(8). While Paragraph V of the Executive Order authorizes the Co-Chairpersons of the Commission to adopt "such procedures and rules as they believe necessary to govern the exercise [its] powers and authority . .," that paragraph does not purport to limit the Commission's
Special Counsel: Robert Morgenthau; Special Advisors: Joseph D'Amico, Raymond Kelly, Barbara Bartoletti. Commissioners: Patrick Barrett, Richard Briffault, Daniel Castleman, Derek Champagne, Eric Corngold, Kathleen Hogan, Nancy Hoppock, Seymour James, David Javdan, Robert Johnson, David R. Jones, Lance Liebman, Joanne Mahoney, Gerald Mollen, Makau Mutua, Benito Romano, Frank Sedita HT, P. David Soares, Kristy Sprague, Betty Weinberg Ellerin, Peter Zimroth, Thomas P. Zugibe.

Karl Sleight, Esq. November 6, 2013 Page 2 authority; it is a simply a grant of authority to the Co-Chairpersons. In any event, an executive order could not limit the authority of the Commission acting as a designee of the Attorney General under Executive Law 63(8). See Matter of De Brkzi, 303 N.Y. 206, 213 (1951) (executive order requesting that the Attorney General appoint members of the New York State Crime Commission under 63(8) did not deprive Attorney General of discretion required by that section). Although the Commission is not obliged to adopt procedures to govern the exercise of its powers, certain statutory provisions govern the conduct of the Commission. For example, Executive Law 5 63(8) provides that it shall be a misdemeanor "to disclose to any person other than the governor or the attorney-general the name of any witness examined or any information obtained upon such inquiry." In addition, the Commission's inquiry is governed by 5 73 of the Civil Rights Law, which creates a "Code of fair procedure for investigating agencies." These rules are sufficient to protect the interests of any witness required to provide testimony or information to the Commission. In addition to the overriding principles of Executive Law 63(8) and the Civil Rights Law, the Executive Order requires that each subpoena have the unanimous support of the three CoChairpersons. The subpoena to Harris Beach was issued consistent with all applicable requirements.

II.

The Subpoena Seeks Materials Squarely Relevant to the Commission's Lawful Inquiry

Again without any support, Harris Beach asserts simply that the subpoena "fails to provide a legal, legitimate basis." Yet, the subpoena was issued under the Commission's lawful authority and falls neatly within its mandate. The Commission is tasked with "examining compliance by organizations and other persons engaged in lobbying and other attempts to influence public policies or elections" and is further directed to "investigate weaknesses in existing laws, regulations and procedures relating to addressing public corruption, conflicts of interest, and ethics in State Government." Executive Order No. 106, II(b) and (c); also Executive Law 6 (authority to "examine and investigate the management and affairs of any . . . board); id. 63(8) (authority to "inquire into matters concerning . . . public justice"). In furtherance of its mandate, the Commission may subpoena any documents that bear a "reasonable relation to the subject matter under investigation and to the public purpose to be achieved." N.Y. Republican State COMM. v. N.Y.S. Conttn'n on Gov't Integrity, 138 Misc.2d 790, 796 (Sup. Ct., N.Y. County 1988), ard 140 A.D.2d 1014 (1st Dep't 1988) (upholding housekeeping account subpoena issued by Feerick Commission exercising authority under Executive Law 55 6 and 63 (8)).21 The Commission's subpoena power is limited only by "relevance and materiality." Carl Andrews & Assoc., Inc. v. Office of the Inspector General, 85 A.D.3d 633 (1st Dep't 2011), lv denied, 18 N.Y.3d 805. Thus, a motion to quash will be granted only "'where the futility of the process to uncover anything legitimate is inevitable or obvious' or where the information sought is 'utterly irrelevant to any proper inquiry."' Anheuser-Busch, Inc., 71 N.Y.2d at 331-32 (quoting Matter of Edge Ho Holding Co., 256 N.Y. 374, 382 (1931) and Matter of La Belle Creole Int'l, 10 N.Y.2d at 196); see also
21 This is the same broad subpoena authority generally possessed by the Attorney General. E.g., La Belle Creole Inn v. Attorney General, 10 N.Y.2d 192, 196 (1961) (subpoena authority under section 63(12)); Anbexcer-Busch, Inc. v. Abrams, 71 N.Y.2d 327 (1988) (subpoena authority under the Martin Act).

Karl Sleight, Esq. November 6, 2013 Page 3 N.Y. Republican State Comm., 138 Misc.2d at 796-97. And in assessing whether the Commission's subpoena seeks information relevant to a proper inquiry, the. Commission is entitled to a presumption that it is acting in good faith. Hogan, 67 A.D.3d at 1146 (citing Anheuser-Bush, Inc., 71 N.Y.2d at 332, Matter of La Belle Creole Int7, 10 N.Y.2d at 196, and Carlise v. Bennett, 268 N.Y. 212, 217-18 (1935)). The subpoena issued to Harris Beach seeks information that is clearly relevant and material to its proper inquiry into the "conflicts of interesta and ethics in State Government" and the recommendation of possible reforms to such laws. New York law prohibits members of the Legislature from receiving compensation relative to their official duties involving legislation and other government proceedings. Public Officers Law 73-2. New York law provides further that a member of the Legislature should not engage in activity "which is in substantial conflict with the proper discharge of his duties in the public interest." Public Officers Law 74-2. A review of 2012 financial disclosures indicates that average household incomes of legislators are significantly higher than those of the state's general population. See, e.g., Common Cause/NY and the New York Public Interest Research Group, Analysis of New York State Legislators' Personal Financial Interests (September 2013).22 Accordingly, the Commission may properly inquire as to the nature of relationships between legislators and their employers in determining whether problematic conflicts of interest exist and/or whether recommendations should be made to strengthen ethics rules that may be contrary to the public trust. III. The Subpoena Does Not Seek Privileged or Confidential Materials Contrary to Harris Beach's argument, the subpoena does not seek attorney-client privileged or confidential communications between Harris Beach and the firm's clients. New York courts have uniformly held that communications regarding 'the identity of a client and information about fees paid by the client' are not generally protected under the privilege." In the Matter of Nassau County Grand jug Subpoena v. Doe Law Firm, 4 N.Y.3d 665, 669 (2005) (citing Matter of Priest v. Hennessy, 51 N.Y.2d 62, 69 (1980); see also Matter of Claydon, 103 A.D.3d 1051, 1053 (2013) (finding that the identities of clients and fee arrangements are not protected confidential communications). Here, the Commission's subpoena seeks "Documents and Communications" relating to professional services provided to Harris Beach by Michael Nozzolio, as well as records concerning Michael Nozzolio's compensation by Harris Beach. Such "Documents and Communications" include, inter alia, retainer agreements, engagement letters, billable hour reports, a list of clients represented by Michael Nozzolio and a "general description" of services provided by Michael Nozzolio to such clients.23 New York courts have consistently held that documents of this nature do not trigger the attorneyclient privilege. See, e.g., Matter of Nassau County Grand Jug Subpoena v. Doe Law Firm, 4 N.Y.3d at 669; Matter of Priest, 51 N.Y.2d at 65 (holding that "fee arrangements between a client and attorney do not ordinarily constitute a confidential communication and, thus, are not privileged in the usual case"). Finally, the Commission seeks documents that plainly ao not concern Harris Beach's clients, including data relating to campaign finance activity by Harris Beach and its members and specific

22

23 Subpoena

Available at http://nypirg.org/pubs/goodgov/CCNY_NYPIRG_Ethics_Analysis-2.pdf at 7.

Karl Sleight, Esq. November 6, 2013 Page 4 documents relating to employment contracts and compensation. These documents should be readily produced without objection or delay. IV. Conclusion

Accordingly, the Commission declines to withdraw its request for materials relevant to the lawful inquiry described above. However, as stated, because Harris Beach has made various arguments relating to the scope of the subpoena, the Commission is willing to discuss specific and reasonable suggestions for refining or narrowing those requests. We request that Harris Beach make such specific and reasonable suggestions by November 12, 2013.

Sincerely,

K y D -van C 'ef Co sel