The New York Times

By Michael Cooper

30 November 2006

ALBANY - The state lobbying commission has found that John Faso, the Republican candidate for governor this year, did not violate lobbying laws when he worked on legislation to let the state sell its stock in a health insurance company.

Mr. Faso, who became a lawyer and a lobbyist after stepping down from the State Legislature in 2002, was hired in 2005 by a little-known state entity called the Public Asset Fund to help it sell off its shares of stock in a health company. In that capacity, he worked with the governor’s office to draft legislation to allow the stock sale to move forward, but he did not register his activities with the state’s lobbying commission.

Some Democrats said that they believed Mr. Faso should have registered, because they believed that the fund was a public benefit corporation, which means that its attempts to influence legislation count as lobbying. Mr. Faso said that he believed the fund was essentially a state agency, which means no registration was needed.

“After due consideration, the commission has determined that there was no violation of the lobbying law,” David Grandeau, the executive director of the commission, wrote in a Nov. 22 letter to Mr. Faso.

“Whether the fund is a state agency or a public benefit corporation is not free from doubt,” Mr. Grandeau’s letter continued. “On balance, it appears to be closest to a state agency. In reaching our conclusion to close the inquiry, the commission also gave weight to the fact that you have registered as a lobbyist on other occasions and that there was no indication that you were acting other than in good faith in believing that registration was not required in this instance.”

After Mr. Faso was hired by the fund, he said that his work there involved no lobbying. “This work involves no lobbying of state government,” he wrote in a letter published by The New York Post in February. “Instead, it consists of rendering corporate advice and guidance to the fund’s board.”

The commission began its inquiry after The New York Times reported that Mr. Faso’s billing records showed that he played a key role working with the governor’s office to obtain the passage of legislation sought by the fund’s board. The law took away the state comptroller’s oversight in the hiring of underwriters and lawyers to handle the stock sale.