MTA Chair Denied Working For State When Warned About $2M NYU Job

NEW YORK, NY — The Metropolitan Transportation Authority's chairman convinced a state ethics watchdog that he could keep his lucrative outside job because he wasn't an "employee" of the agency, documents released Thursday show.

But a good-government group still has serious concerns about potential conflicts between Joe Lhota's position at the helm of the beleaguered transit authority and his additional work for NYU Langone Health and the Madison Square Garden Company.

"The entire situation really raises more questions than answers," said Susan Lerner, the executive director of Common Cause New York.

Lerner called for the MTA Board to have an independent auditor review Lhota's potential conflicts of interest and take action if they are shown to exist.

Common Cause released a package of records Thursday related to Lhota's jobs, including his correspondence with Seth H. Agata, the executive director of the state's Joint Commission on Public Ethics, or JCOPE.

Lhota shared the documents, on which Politico New York first reported, with Common Cause after it complained last fall to the State Authorities Budget Office about his lobbying activity, Lerner said.

Gov. Andrew Cuomo appointed Lhota as MTA chairman in June of last year. Agata warned Lhota in an August 2017 letter that because he was legally considered a state employee, he'd need the commission's approval to hold his senior position at NYU Langone, for which he was reportedly paid more than $2 million last year. State law also bars him from lobbying on the health care network's behalf, Agata wrote.

Previous MTA chairs have also served as the agency's chief executive officer, as state law dictates. Lhota has argued that he can hand over his executive and administrative duties to others while overseeing the operation as chairman.

"The law clearly allows the Chairman to delegate the day-to-day operations of the authority which is exactly what happened in this case," MTA spokesman Jon Weinstein said in a statement.

In a September 2017 response to Agata, Lhota argued he was not an employee but a "per-diem" member or director of the MTA because he'd delegated his executive duties to other senior MTA officials.

The distinction exempted him from approval of his job at NYU Langone and restrictions on lobbying, he wrote. He also pledged to recuse himself from MTA matters related to NYU Langone and vice versa.

"Based on the organizational actions described above, my primary responsibilities are not the day-to-day management of the MTA, but instead are strategic and advisory," Lhota wrote on Sept. 25. "Accordingly, I do not believe that I am an employee of the MTA.

Agata cleared Lhota for the gig in an email three days later, agreeing with the argument in his response "assuming the facts therein are true."

The fact that Agata merely took Lhota at his word created a situation in which "Joe Lhota himself decides if Joe Lhota has a conflict of interest," Lerner said. "That is clearly not the spirit or the letter of our Public Officers Law."

The NYU Langone position is just one of several Lhota has reportedly held while working to patch up New York City's transit system. He's also served since December on the board of directors for the Madison Square Garden Company, which owns the arena sitting atop Penn Station and plans to develop another at Belmont Park on Long Island.

It's uncertain whether JCOPE explicitly cleared Lhota for the Madison Square Garden gig, Lerner said, but there's no sign that he formally recused himself from MTA issues dealing with the company.

The position raises even bigger ethics concerns because the company is a major player in discussions about renovating Penn Station, on which it relies to serve its arena, Lerner said. The company has also argued that it needs better public transport service to Belmont Park to serve the forthcoming New York Islanders arena there, she said.

In a statement, JCOPE spokesman Walter McClure said the MTA determined Lhota was a per-diem board member and not an actual employee. He is still subject to the code of ethics spelled out in the state Public Officers Law, McClure said.

"The Code of Ethics broadly prohibits conflicts of interest and provides penalties if certain sections are violated," McClure said, declining to comment on any other guidance it's given Lhota or the MTA.

Lhota's outside work has drawn scrutiny despite his reported assertions that he balances his other jobs with his MTA responsibilities.

Lerner said state law should explicitly require that the MTA's top job be a full-time position.

"Nothing less than the public interest demands a full-time MTA chairman and CEO without any conflicts of interest, without any other demands on his or her time," she said.

(Lead image: MTA Chairman Joe Lhota speaks at an MTA event in March 2018. Photo from Metropolitan Transportation Authority / Patrick Cashin)