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State needs to put safeguards in place to control use of secretive slush fund

It is indisputable that Buffalo has benefited from a largely secret funding mechanism that elected officials can use virtually at their discretion. Its existence helped deflate a crisis at the SolarCity project last month.

But being useful isn’t the same as being appropriate, and this slush fund is indisputably not that. The use of these funds needs to be curtailed, and their targets subjected to the normal processes of democratic government.

The problem is as obvious as the felony conviction of former Assembly Speaker Sheldon Silver, who used one of those governmental cookie jars to benefit a person who steered business to his law firm. That attracted the attention of U.S. Attorney Preet Bharara, whose office tried and convicted Silver, previously one of the state’s most powerful politicians.

And that, of course, is the problem. Gov. Andrew M. Cuomo made what looks like appropriate use of the funds to compensate SolarCity contractors who hadn’t been paid and who walked off the job. But how the money is used is plainly related to the ethics and honorability of the user. These unguarded pots of money are an invitation to corruption. Indeed, to the extent that they are meant to allow leaders to circumvent normal rules, they are evidence of unwholesome intent.

The Cuomo administration defends the fund, observing that not all costs are knowable at the start of a budget year. The cash flow problem at SolarCity is an example.

“It is imperative that the state have flexibility to react to needs that emerge during the fiscal year, such as this situation,” said Morris Peters, a Cuomo budget division spokesman.

“We used a fund that provides for such flexibility for transformative economic development projects that was enacted in last year’s budget. This project met all legal requirements to use the fund, and after a rigorous agency grant diligence process, funds were released and the problem was solved,” Peters said.

The money – which is borrowed and for which taxpayers cough up interest – was funneled through the state Dormitory Authority and finally to the unpaid workers. It was clearly important for them to be paid, but the mechanism isn’t always the pristine one that the administration says. Somehow, Silver was able to get his hands on it for the purpose of enriching himself.

It is clearly true that government needs the ability to respond to unforeseen circumstances. But it is also clear, based on research by the Empire Center for Public Policy, a conservative research group, that not all uses of the fund – formally known as the State and Municipal Facilities Program, or SAM for short – fall into that category.

The center has compiled a list of projects funded by SAM on its website. Among the projects that have been financed through the special fund are playgrounds, private hotel renovations, zoo exhibits, emergency vehicles in Rochester, $2.5 million for sidewalk and other work in Lackawanna, renovation of basketball and handball courts at a park in Manhattan, a pedestrian bridge over the Erie Canal and a performing arts center at Hobart and William Smith Colleges.

Were these all unforeseen, offering no other choice but to make use of this fund? Given New York’s long history of taking shortcuts in democratic processes, it seems desperately unlikely.

If Albany truly needs this kind of fund, then it needs to be more closely monitored, perhaps requiring the approval of the state comptroller before it can be used, or some other formal action.

Democracy can be slow and messy – it’s built to be slow and messy – and there may be times to speed it up. But the process still needs to be transparent. This one isn’t.