Argued January 12, 1978
Decided March 29, 1978
Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department, HAROLD J. HUGHES, J.
Louis J. Lefkowitz, Attorney-General (Michael F. Colligan, Ruth Kessler Toch, Peter M. Fishbein, Richard C. Seltzer and Ettie Ward of counsel), for appellants.
Chief Judge BREITEL.
Defendants, the Governor and the State Board of Public Disclosure, appeal from the Appellate Division's unanimous affirmance of an order granting summary judgment to plaintiffs, State employees, and declaring the Governor's Executive Order No. 10.1 (9 N.Y.CRR 3.10) unconstitutional. The disputed order purports to require a wide range of State employees within the executive branch to file multidetailed personal financial statements with the Board of Public Disclosure, and to abstain from various political and business activities.
The issue is whether under the State Constitution the Governor may, by executive order, without benefit of authorizing legislation, mandate on State employees, many not subject to removal by the Governor, the filing of financial disclosure statements, and the abstention from activities not prohibited by statute. Not at issue is the wisdom of requiring such statements and prohibiting the proscribed activities, or the hardly doubted power to impose such requirements by appropriate legislation.
There should be an affirmance. Neither in the Constitution nor in the statutes is there express or implied authority for the Governor to exact of State employees compliance with the requirements of Executive Order No. 10.1. Nor does the Governor's order merely implement existing legislation relating to conflicts of interest. The order reaches beyond that, and assumes the power of the Legislature to set State policy in an area of concededly increasing public concern.
The executive order was promulgated by the Governor on October 22, 1976. Paragraph II, which requires annual filing of a financial disclosure statement, prohibits service in political party office, and regulates outside employment and activity, applies to the following employees: (1) employees of the executive department and other State departments and agencies headed by gubernatorial appointees or nominees (a) whose annual State salary is at least $30,000; or (b) who hold nonsecretarial, nonclerical positions classified as managerial or confidential; and (2) members of the governing bodies of State entities, if the member is appointed or nominated by the Governor and receives more than $15,000 per year in compensation from the State. Paragraph III, which also requires filing of a financial disclosure statement, but does not contain the same prohibitions on outside activity, applies to members of governing bodies of State entities, if the member is appointed by the Governor and receives State compensation which amounts to no more than $15,000. The State Board of Public Disclosure, first established by the Governor in Executive Order No. 10 (9 N.Y.CRR 3.10), an earlier more limited attempt to regulate potential conflicts of interest, was continued to administer the new executive order.
The complete order is set forth in an appendix.
The agencies purportedly covered by the executive order are not confined to the executive department, a department that is but one of many in the executive branch. It also extends to other State departments and many so-called independent agencies, such as public authorities, over which the Governor had no general control or powers of supervision or operation.
On November 1, 1976, the State board directed covered employees to complete financial disclosure statements and return them to the board by December 1. This action was brought by covered employees to have the order declared unconstitutional and to enjoin its enforcement. Special Term granted the requested relief, and a unanimous Appellate Division affirmed.
Not at issue is the constitutionality of a statute requiring financial disclosure by public employees and officers. It was implied, necessarily, that a statute to that effect would be valid in Evans v Carey ( 40 N.Y.2d 1008, affg 53 A.D.2d 109; see, also, Hunter v City of New York, 44 N.Y.2d 708, decided simultaneously with this case, affg on opn at 58 A.D.2d 136). In Evans, however, although, as here, an executive order was involved, no contention was made that a statute, rather than an executive order, was necessary to compel the desired financial disclosure or prohibit the described activities. Plaintiffs in Evans instead argued that financial disclosure could not be required of public employees at all.
In Hunter v City of New York ( 58 A.D.2d 136, 140-141, affd 44 N.Y.2d 708, supra), Mr. Justice BIRNS provides a framework for evaluating contentions that financial disclosure requirements intrude on an asserted right of privacy. The issue is actually one of due process of law, since privacy is but a subcategory of liberty, which may not be denied without due process. The test, then, is whether there has been "`protection of the individual against arbitrary action'" (58 A.D.2d, p 141, quoting Ohio Bell Tel. Co. v Commission, 301 U.S. 292, 302 [CARDOZO, J.]). This issue of privacy, if that it be deemed, was and is determined by the Evans case and the Hunter case, decided simultaneously with this.
The executive power of the State, vested in the Governor, is broad (see N Y Const, art IV, §§ 1, 3; Executive Law, arts 2, 3). In his capacity to oversee, even beyond his responsibility to operate, the Governor may investigate the management and affairs of any department, board, bureau, or commission of the State (Executive Law, § 6). This investigatory power, which includes the power to subpoena witnesses, as well as to require the production of books and papers, and which authorizes the Governor to delegate the investigatory function to persons appointed by him for that purpose, permits the Governor to exercise considerable vigilance, but not necessarily direction, in protecting against conflicts of interest. The Constitution and statutes thus recognize explicitly the need for and the power in the Governor to oversee, but again not necessarily to direct, the administration of the various entities in the executive branch.
The Governor may also direct the Attorney-General to inquire into matters "concerning the public peace, public safety and public justice" (Executive Law, § 63, subd 8). Implementation of this power is illustrated by Governor Dewey's creation in 1951 of the New York State Crime Commission to investigate the relationship between organized crime and State government (see Matter of Di Brizzi [Proskauer], 303 N.Y. 206, 211-216).
There are, however, limits to the breadth of executive power. The State Constitution provides for a distribution of powers among the three branches of government (see N Y Const, art III, § 1; art IV, § 1; art VI). This distribution avoids excessive concentration of power in any one branch or in any one person. Where power is delegated to one person, the power is always guided and limited by standards. In fact, even the Legislature is powerless to delegate the legislative function unless it provides adequate standards (Packer Coll. Inst. v University of State of N Y, 298 N.Y. 184, 189). Without such standards there is no government of law, but only government by men left to set their own standards, with resultant authoritarian possibilities.
Defendants cite numerous instances, reaching far back into the State's history, in which the Governor has acted by "executive order", although not usually so denominated. But, until 1950, none of those orders had any rule-making component. They were emergency measures later submitted to the Legislature for ratification, actions taken pursuant to an unchallenged constitutional or statutory power of the Governor, or proclamations without significant legal effect. (See, e.g., 3 Lincoln, Messages from the Governor, pp 38-40 [proclamation calling Legislature into Extraordinary Session].) After 1950, there were a number of different types of orders which were seemingly cast in a rule-making mold, but were repetitive of existing legislation as to standards and implemented the enforcement of those standards by voluntary arrangements, directions for co-ordination, or the interposition of mediatory bodies (see, e.g., Executive Order Establishing Code of Fair Practices, 1960 Public Papers of Governor Nelson A. Rockefeller, p 1130; Executive Order for Resolution of Employee Complaints, 1950 Public Papers of Governor Thomas E. Dewey, p 613). Assuming they were valid, as they undoubtedly were in large measure, the order in this case goes beyond any of them.
It is true that in this State the executive has the power to enforce legislation and is accorded great flexibility in determining the methods of enforcement (see N Y Const, art IV, § 3). But he may not, as was recently said of the Mayor of the City of New York, "go beyond stated legislative policy and prescribe a remedial device not embraced by the policy" (Matter of Broidrick v Lindsay, 39 N.Y.2d 641, 645-646). And, as noted in the Broidrick case, decided unanimously by this court, the flexibility allowed the executive in designing an enforcement mechanism depends upon the nature of the problem to be solved (id., p 646). Where it would be practicable for the Legislature itself to set precise standards, the executive's flexibility is and should be quite limited.
Defendants seek to justify the executive order as an implementation of section 74 of the Public Officers Law. That statute, called a code of ethics for State officers and employees, provides guidelines designed to eliminate substantial conflicts of interest between State duties and private interests. Together with section 73 of the Public Officers Law, which, as opposed to guidelines, contains absolute rules and proscriptions, section 74 constitutes the legislative policy of the State in the conflict of interest area.
Crucial is the contrast between sections 73 and 74, enacted together in 1954 (L 1954, chs 695, 696). In section 73 the Legislature enacted a blanket prohibition of conduct by State employees thought to be detrimental to State interests. The prohibited conduct and the employees to which each prohibition applies are carefully described. In addition, subdivision 6 of the statute mandates public disclosure of a circumscribed category of investments by certain State employees and officers. Thus, in section 73 the Legislature demonstrated its ability and readiness to proscribe specified transactions peculiarly vulnerable to conflicts of interest, transactions in "definable areas on which there should be no disagreement" (Governor's Memorandum on Approval, 1954 Public Papers of Governor Thomas E. Dewey, pp 304, 305).
Section 74 is a different type of statute. Designed to cover "areas where distinctions are close, and the differences between right and wrong not always easily ascertainable, [it] establish[es] broad standards of conduct, leaving to advisory committees the process of developing a body of rules and precedents on the basis of continuing experience and trial and error" (id.).
As Mr. Justice HAROLD J. HUGHES succinctly stated at Special Term in holding the executive order invalid, first quoting from the declaration of legislative intent accompanying enactment of section 74 (L 1954, ch 696, § 1), "`Government is and should be representative of all the people who elect it, and some conflict of interest is inherent in any representative form of government. Some conflicts of material interests which are improper for public officials may be prohibited by legislation. Others may arise in so many different forms and under such a variety of circumstances, that it would be unwise and unjust to proscribe them by statute with inflexible and penal sanctions which would limit public service to the very wealthy or the very poor. For matters of such complexity and close distinctions, the legislature finds that a code of ethics is desirable to set forth for the guidance of state officers and employees the general standards of conduct to be reasonably expected of them' * * * [t]he inflexible proscriptions of the Executive Order are clearly at variance with this declaration of legislative intent" (Rapp v Carey, 88 Misc.2d 428, 431). In short, this order is not an implementation of section 74; it is a nullification of it — a nullification, however benevolent in purpose, without benefit of legislative action.
The challenged order presumes to prohibit service in political party office by all State employees covered by paragraph II, not just by the small group of officials of high rank named in subdivision 8 of section 73 of the Public Officers Law. The order, again without any apparent statutory authority, would also prohibit, except on permission of the Board of Public Disclosure, all types of privately compensated employment by State employees. That the dual loyalties engendered by this dual employment may rightly be condemned is not the issue. The crux of the matter is the determination by the Legislature, implicit in its enactment of the code of ethics, that the existence of conflicts in these areas is to be determined on a case-by-case basis, not by use of blanket prohibitions.
None of this is to say that the Governor may not require that his appointees, serving at his will, abstain from transactions or business associations that potentially conflict with State duties. The Governor is, of course, free to regulate the business activities of employees serving at his pleasure. The same cannot be said, however, of employees who have civil service tenure, or even gubernatorial appointees who serve for fixed terms. These employees may not be removable except for cause, and are thus not subject to summary dismissal by the Governor. The challenged executive order exceeds the Governor's power of appointment and reaches employees who could be neither directly appointed nor summarily dismissed by the Governor. As to these employees, the Governor is without power to impose the strictures contained in the executive order.
The restriction on political activities is particularly troublesome. While the restriction on the merits would be supported by many or even most, it involves a broad question of policy, hardly resolvable by other than the representatively elected lawmaking branch of government, the Legislature.
The out-of-State cases relied upon by defendants are not on point. True, in Illinois State Employees Assn. v Walker ( 57 Ill.2d 512, cert den sub nom. Troopers Lodge No. 41 v Walker, 419 U.S. 1058), the Illinois Supreme Court upheld the Governor's power to issue an executive order requiring financial disclosure statements. But that holding rested squarely on the Illinois Constitution which provided that all "holders of state offices and all members of a Commission or Board created by this Constitution shall file a verified statement of their economic interests, as provided by law" (Ill Const, art XIII, § 2, quoted in 57 Ill. 2d, p 518). No similar provision may be found in the Constitution or statutes of this State.
Shapp v Butera (22 Pa Commw Ct 229) involved the status under the Pennsylvania "Right to Know Act" of financial disclosure statements filed pursuant to an executive order issued by the Governor. The Commonwealth Court of Pennsylvania, in concluding that the statements filed were not subject to public examination, inspection, and copying, noted that "[t]he financial statements requested by the Governor had no more legal effect than a request by the Governor to have birthday greetings sent to him" (id., p 237). By contrast, the present executive order was designed to be mandatory, not merely an invitation to voluntary compliance.
In Opinion of Justices (___ N.H. ___, 360 A.2d 116) the New Hampshire Supreme Court sustained a resolution adopted by the Governor and council to the extent that the resolution stated a policy prohibiting employment of elective officials in the executive branch, but struck down provisions restricting the right of elective officials to do business with the State. The court concluded "[h]owever desirable comprehensive legislation in the area of conflict of interest may be, the enactment of such legislation is the prerogative and responsibility of the legislature and not of the executive" (___ N.H. ___, ___, 360 A.2d, p 122).
The sister State cases, therefore, present problems different from the ones created by the instant executive order. Moreover, they do not and could not bear significantly on the issue in this case, arising as it does under this State's particular constitutional and statutory provisions. The sister State cases are useful principally to show how other States have reacted to the use of executive orders in the conflict of interest area, and as such, they are either inconclusive, or largely supportive of the general principles here discussed.
The crux of the case is the principle that the Governor has only those powers delegated to him by the Constitution and the statutes. On the principle, there is general agreement (see, e.g., Shapp v Butera, 22 Pa Commw Ct 229, supra; Opinion of Justices, ___ N.H. ___, 360 A.2d 116, 122, supra; cf. Illinois State Employees Assn. v Walker, 57 Ill.2d 512, 518, supra). There should be no less agreement on application of the principle to the facts of this case. On no reasonable reading of the Constitution, the Executive Law, or the relevant provisions of the Public Officers Law can the Governor's exercise of legislative power, exemplified in the executive order, be sustained.
Under our system of distribution of powers with checks and balances, the purposes of the executive order however desirable, may be achieved only through proper means. No single branch of government may assume a power, especially if assumption of that power might erode the genius of that system. The erosion need not be great. "Rather should we be alive to the imperceptible but gradual increase in the assumption of power properly belonging to another department" (People v Tremaine, 252 N.Y. 27, 57 [concurring opn per CRANE, J.]).
Finally, it is quite significant that in the Hunter case (supra) in which this court has sustained, in large part, the validity of the local law, the City Council of the City of New York enacted, as a legislative matter, the financial disclosure requirements imposed on city employees. The Governor's objective may be achieved by obtaining the requisite legislation. Critical, however, is that any difficulty or even impossibility of obtaining legislation through the constitutionally prescribed mechanisms may not be made a source of executive lawmaking power where none otherwise exists.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
I respectfully dissent. The power and position of the Governor of the State of New York should not be thwarted by a declaration that his order is unconstitutional and invalid — either as a matter of law or State policy. Executive power of the State is vested constitutionally in the Governor and by statute he is authorized at any time to examine and investigate the management and affairs of any department, board, bureau or commission of the State. The Governor was empowered within this framework, therefore, to issue the order requiring applicable officers and employees of the State to file financial statements, the exercise of this power being consistent with and in implementation of the State code of ethics. Far from nullifying and completely counteracting the force and effectiveness of the code of ethics, the order in this respect would implement its provisions and thus breathe life into the legislative scheme. When acting in the exercise of his executive powers, as in this respect, the Governor of the State should be immune from judicial interference (Gaynor v Rockefeller, 21 A.D.2d 92, 98, affd 15 N.Y.2d 120).
As a matter of law, as head of the executive department, the Governor is authorized to regulate the activities of those officers and employees functioning wholly within that department. From the standpoint of policy alone, it would be anomalous indeed to hold the Governor responsible for the faithful execution of the laws, if at the same time he is refused control over the human agencies whom he must necessarily employ for that purpose.
Executive Order No. 10.1 represents an attempt by the Governor to provide a framework pursuant to which he might ascertain whether certain State officers and employees (hereafter referred to as "employees") are abiding by high ethical standards required of them in the performance of their duties. That order, to the extent that it is grounded on powers conferred expressly or by necessary implication either by the Constitution or by statute, thereby voicing the will of the people or the Legislature, should be upheld and enforced.
Briefly, Executive Order No. 10.1 (9 N.Y.CRR 3.10) establishes rules and regulations with respect to conflicts of interest and ethical standards for certain high-level State employees to be administered, but not enforced, by the Board of Public Disclosure (Board). A broad prophylactic device, the order: requires covered employees to file a detailed financial disclosure statement with the Board; prohibits these employees from holding any office in a political organization or from serving as a member of a political party committee or the national committee of a political party; and, subject to such exceptions as the Board may make, prohibits covered employees from holding any public office or engaging in any outside employment for which direct or indirect compensation is received. Upon finding a conflict of interest or breach of ethical standards, the Board must communicate this to the Governor, who may take appropriate action in accordance with the law.
Being bound by this court's determination that the financial disclosure portion of the order is substantively constitutional (Evans v Carey, 40 N.Y.2d 1008), plaintiffs instituted this action for a declaration that the order is unconstitutional in that it is an executive usurpation of power residing wholly within the legislative domain and, hence, is violative of the separation of powers doctrine. Both Special Term and the Appellate Division found the order an unconstitutional exercise of legislative power by the Governor, inasmuch as it expands and extends existing legislation relating to conflicts of interest and ethical standards for State employees (Public Officers Law, §§ 73, 74). For the reasons which follow, the order of the Appellate Division should be modified to provide: (1) that Executive Order No. 10.1 is valid and enforceable in toto with respect to State employees whose functions are wholly within the executive department; and (2) that the portion of the order pertaining to financial disclosure is similarly valid and enforceable with respect to all other covered State employees.
I — Executive Department Officers and Employees
As chief executive officer of the State, the Governor functions in a dual capacity. His primary responsibilities, as delineated in the Constitution, include the power to make recommendations to the Legislature, the duty to approve or veto legislative enactments and the requirement that he "take care that the laws are faithfully executed" (NY Const, art IV, §§ 3, 7). Although an equal partner with the legislative and judicial branches of the government, the Governor, as head of the executive department, bears sole responsibility with respect to the oversight and internal functioning of that department (NY Const, art IV, § 1; Executive Law, § 30). In acting upon that responsibility, the Governor may promulgate any rules and regulations he determines are necessary to ensure the efficient operation of the executive department (Opinion of Justices, ___ N.H. ___, 360 A.2d 116; cf. Myers v United States, 272 U.S. 52).
Thus, by virtue of the authority vested in him as chief of the executive department of the State government, the Governor possesses both the power and the duty to regulate the eligibility for employment and the conditions to be met for continued employment of persons within that department (Exchange Nat. Bank of Chicago v Abramson, 295 F. Supp. 87, 92; Opinion of Justices, ___ NH, at p ___, 360 A.2d, p 121, supra). So long as the Governor confines the scope of the order to employees wholly within the executive department (see Executive Law, § 31) and the scope of the order is not violative of any specific constitutional proscriptions (Evans v Carey, 40 N.Y.2d 1008, supra; cf. Powell v McCormack, 395 U.S. 486), neither the legislative nor judicial branches are free to interfere, "it being a basic part of the organic law that each department should be free from interference, in the discharge of its own functions and peculiar duties, by either of the others" (Matter of Gottlieb v Duryea, 38 A.D.2d 634, 635, affd 30 N.Y.2d 807, cert den 409 U.S. 1008; see, also, Matter of Davies, 168 N.Y. 89, 101-102; People ex rel. Burby v Howland, 155 N.Y. 270, 282).
Thus, insofar as Executive Order No. 10.1 regulates the activities of State employees whose duties are confined wholly within the executive department, its promulgation represents an exercise of the Governor's ancillary powers to effectuate the proper workings of that department. The Governor has not only the right to ascertain whether conflicts of interest or unethical behavior exist in his department, he has an affirmative duty to assure that none of his subordinates responsible for execution of executive duties are tainted by outside interests which would undermine his responsibility to "take care that the laws are faithfully executed" (NY Const, art IV, § 3). Should the Governor fail in this duty, he may be impeached. Apart from impeachment, the electorate may refuse to grant him another term of office. The Governor's reputation and honor are unmistakably intertwined with the ability to do those things that his constitutional duties require. His control over those subordinates he must employ should not be circumscribed by the judiciary under the guise of a separation of powers inquiry.
II — Financial Disclosure by Covered Officers and Employees
Whereas the power of the Governor to promulgate Executive Order No. 10.1 with respect to employees in the executive department arises from his position as head of that department of government, a different analysis is necessary with respect to application of the order to nonexecutive employees. Ours is a system in which governmental powers are distributed among three branches — the executive, legislative and judicial. This separation of governmental powers, however, does not inflexibly ordain that the functions of each branch of government be kept wholly and entirely separate and distinct; rather "[t]he true meaning is, that the whole power of one of these departments should not be exercised by the same hands which possess the whole power of either of the other departments" (Story's Constitution [5th ed], p 393; see, also, Madison, The Federalist, No. XLVII, p 268). The validity of Executive Order No. 10.1, then, is dependent upon a showing that it was promulgated to effectuate the provisions of the Constitution or an act of the Legislature (see Matter of Broidrick v Lindsay, 39 N.Y.2d 641, 646; Matter of Di Brizzi [Proskauer], 303 N.Y. 206, 216). Absent this afore-mentioned showing of purpose, the act of the Governor would be tantamount to legislation by executive fiat, a clear violation of the separation of powers doctrine (see, e.g., People ex rel. Ingenito v Warden, 267 App. Div. 295, 299-300, affd 293 N.Y. 803).
It is therefore necessary to examine the statutory scheme evidenced by the prohibition against conflicts of interest (Public Officers Law, § 73) and the code of ethics (Public Officers Law, § 74) in order to ascertain whether Executive Order No. 10.1 does in fact usurp legislative prerogatives. Section 73 of the Public Officers Law, forbidding certain enumerated conflicts of interest, was enacted in recognition of an express desire to guarantee that the governmental process not be subverted by official corruption and inefficiency, as well as the necessity of the "maintenance in public affairs of moral and ethical standards which are worthy and warrant the confidence of the people" (Message from Governor Dewey to the Legislature, Jan. 6, 1951). At the same time, it was recognized that it would be nothing less than a Sisyphean task for the Legislature to identify and proscribe all conflicts of interest in the myriad settings in which they might arise (cf. Fritz v Gorton, 83 Wn.2d 275, app dsmd 417 U.S. 902), thus necessitating the establishment of a code of ethical standards for all State employees in the performance of their duties (Public Officers Law, § 74).
Accordingly, in a preamble to the code of ethics the Legislature recognized that because improper conflicts "may arise in so many different forms and under such a variety of circumstances", that it was not only impractical but "unwise and unjust to proscribe them by statute with inflexible and penal sanctions" and that "[f]or matters of such complexity and close distinctions, the legislature finds a code of ethics is desirable to set forth for the guidance of state officers and employees the general standards of conduct to be reasonably expected of them" (L 1954, ch 696, § 1). Of necessity, then, the code of ethics is couched in broad, general terms. Thus, subdivision 3 of section 74 of the Public Officers Law provides that no State employee: (a) "should accept other employment which will impair his independence of judgment in the exercise of his official duties"; (e) "should engage in any transaction as representative or agent of the state with any business entity in which he has a direct or indirect financial interest that might reasonably tend to conflict with the proper discharge of his official duties"; (g) "should abstain from making personal investments in enterprises which he has reason to believe may be directly involved in decisions to be made by him or which will otherwise create substantial conflict between his duty in the public interest and the private interest"; and that (i) "No officer or employee of a state agency employed on a full-time basis nor any firm or association of which such an officer or employee is a member nor corporation a substantial portion of the stock of which is owned or controlled directly or indirectly by such officer or employee, should sell goods or services to any person, firm, corporation or association which is licensed or whose rates are fixed by the state agency in which such officer or employee serves or is employed."
Although the code of ethics does make provision for the discipline of a State employee in violation of its proscriptions (Public Officers Law, § 74, subd 4), it would be folly to place reliance on the individuals subject to its coverage to determine the limits of their proper conduct and to reveal the circumstances in which their own improprieties may exist. Hence, in order to make the code a viable one and to accomplish the legislative purpose, executive action is not only proper; it is of manifest necessity. It is in precisely this context that we so recently stated: "Where it is impracticable for the legislative body to fix specific standards for enforcement without destroying the flexibility necessary to meet the variety of circumstances likely to be encountered in carrying out the legislative will, broad flexibility in determining the proper methods of enforcement will be sustained" (Matter of Broidrick v Lindsay, 39 N.Y.2d 641, 646, supra).
Concededly, there is no express provision in the code of ethics empowering the Governor to require disclosure of the financial interests of those State employees subject to Executive Order No. 10.1. On the other hand of course, there is no language in the code which would lead to the conclusion that the Legislature intended to exclusively occupy the field of governmental ethics. Indeed, the Legislature explicitly recognized that it was necessary that the code be implemented in a manner consistent with its purpose. It is in such a context that executive enforcement of a general legislative statement is proper (St. Nicholas Cathedral v Kedroff, 302 N.Y. 1, 31). Here, the disclosure sought by the Governor is consistent with the policies underlying the ethics legislation and should be upheld (see Illinois State Employees Assn. v Walker, 57 Ill.2d 512, cert den sub nom. Troopers Lodge No. 41 v Walker, 419 U.S. 1058; Shapp v Butera, 22 Pa Commw Ct 229). In short, there is no going "beyond stated legislative policy", but rather adherence to it (see Matter of Broidrick v Lindsay, 39 N.Y.2d 641, 645-646, supra).
The Governor's authority to order financial disclosure of State employees by means of Executive Order No. 10.1 is fully supported by section 6 of the Executive Law, which empowers the Governor "either in person or by one or more persons appointed by him for that purpose, to examine and investigate the management and affairs of any department, board, bureau or commission of the state." This power to investigate whether State agencies are operating efficiently is coexistent with the power to ascertain whether State employees are performing their duties free from corruption or conflicts of interest in discharge of the Governor's duty to "take care that the laws are faithfully executed" (see 1915 Opns Atty Gen 353, 354). Moreover, it is essential that the Governor obtain the information sought by Executive Order No. 10.1 so that if there are defects in the present code of ethics which affect the "condition of the state" (NY Const, art IV, § 3), the Governor might communicate them to the Legislature together with appropriate recommendations for their elimination (Matter of Di Brizzi [Proskauer], 303 N.Y. 206, 216, supra; see, also, Matter of Sigety v Hynes, 38 N.Y.2d 260, cert den 425 U.S. 974).
In sum, Executive Order No. 10.1, in requiring a statement of financial disclosure of nonexecutive State employees is a proper vehicle for implementation of the broad legislative policy evidenced in sections 73 and 74 of the Public Officers Law which have the salutary purpose of eliminating corruption and conflicts of interest in State government. Here, the Governor has not encroached upon legislative prerogatives; rather, he has merely supplied the ingredients required to fill in the interstices of the statutes by fashioning a discovery device necessarily absent from the statutory scheme. In such an instance, "[t]he exigencies of government have made it necessary to relax a merely doctrinaire adherence to a principle so flexible and practical, so largely a matter of sensible approximation, as that of the separation of powers" (Matter of Richardson, 247 N.Y. 401, 410 [CARDOZO, J.]).
While separation of powers is one of the principal features of our Constitution, it is the plain duty of that branch of government which is called upon to interpret the laws of this State to avoid slavish formalisms which serve only to ossify the executive without any corresponding benefit. Clearly, the function of making the laws is peculiar to the Legislature. But that is not to say that whenever the Legislature speaks on a particular subject, that subject is perforce removed from the scope of executive power. Rather, the answer is that there are some fields that are peculiar to the legislative branch, some peculiar to the executive, and others common to both. The duty of fixing the moral tone of State government and of ensuring that public servants conform their official conduct to those standards is a responsibility shared coextensively by all branches.
It is beyond cavil that the office of the Governor was deliberately fashioned as one necessarily imbued with power and independence. It is equally obvious that the framers of our Constitution did not intend to create an office in which an autocratic incumbent might arrogate any power unto himself at any time. But neither was it intended that the Governor be an automaton, constitutionally impotent to exercise the powers bestowed upon him — this being especially important at a time when, due to the events of recent years, the people demand that their public servants be free from even the barest trace of the taint of impropriety. Here, the Legislature has provided merely the bare framework within which the Governor may accomplish this task. Executive action, insofar as validly supplied by Executive Order No. 10.1, is necessary to complete it and adapt it to present day realities.
The Constitution does not denominate the Governor as merely an agent of the Legislature; nor does it ennoble him as the powerless titular head of the State. Rather the Governor is the agent of the people of the State of New York, deriving his power from them and directly responsible to them. Taken collectively, the provisions in the Constitution, providing that the Governor shall take care that the laws are faithfully executed and that the executive power shall be vested in the Governor, conclusively demonstrate that his is the office to which the people look for integrity in State government. The fact that the Legislature has perfunctorily addressed the subject does not of necessity preclude further executive action. Indeed, that the Legislature has recognized that conflicts of interest by those in State government should be avoided and that these conflicts arise in myriad settings indicates that it is incumbent that the Governor take steps to combat these conflicts and the attendant official corruption they might engender. There is no cause to fear executive tyranny so long as the laws are being faithfully executed. Certainly there is no basis for fear of executive usurpation of legislative prerogatives when the Governor acts, as he did in this case, to further the workings of a program which the Legislature itself recognized as incapable of statutory completion.
I would reverse the order of the Appellate Division and hold the challenged executive order constitutional in its entirety.
The Governor of the State of New York derives his power from the State Constitution, which declares that "[t]he executive power shall be vested in the governor" (NY Const, art IV, § 1), and that "[h]e shall expedite all such measures as may be resolved upon by the Legislature, and shall take care that the laws are faithfully executed" (NY Const, art IV, § 3). Not only do these constitutional mandates vest broad powers in the Chief Executive, but they also charge him with far-reaching responsibilities to effectuate the laws enacted by the Legislature. (Matter of Broidrick v Lindsay, 39 N.Y.2d 641.) Performance of so demanding a task would indeed be impossible if executive power were not commensurate with executive responsibility. Although broad, the powers of the executive are, of course, not unbounded; the Legislature alone is constitutionally empowered to enact law (NY Const, art III, § 1), and while the Governor is forbidden to trespass into the legislative sphere, where the Legislature has spoken he is mandated to implement its will.
Executive Order No. 10.1 is not an executive incursion into the legislative realm, for it finds ample support in a legislative predicate — the code of ethics. (Public Officers Law, § 74.) In broad but clear language, the code prescribes ethical standards for officers and employees of all State agencies. "No officer or employee of a state agency * * * should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest." (Public Officers Law, § 74, subd 2.) This statute announces the policy of the State, to prevent even the slightest taint of a conflict of interest from infecting any governmental agency. No qualification attaches to this policy; its scope is not limited to one branch of government or one sort of activity. It is rather a sweeping pronouncement that ethics in government must be scrupulously promoted and preserved. Executive Order No. 10.1 is unquestionably consistent with this policy. All of its provisions — the requirement of financial disclosure, the proscriptions against holding positions in political organizations and engaging in private employment for compensation or holding other public office or employment unless authorized by the Board of Public Disclosure — implement the statutorily mandated policy of the State. In helping to assure that the legislative purpose will be achieved, the challenged executive order, rather than an unconstitutional arrogation of power, is a constitutional discharge of executive responsibility.
Since the executive order owes its validity to its legislative underpinning, the continued existence of supportive legislation is imperative to the continued validity of the order. The Legislature's exclusive lawmaking powers, however, are in no way circumscribed by this or any other executive action. Should the Legislature adopt further measures relating to ethics in government, the executive order would have to be measured against those enactments. Only so long as the order implements the will of the Legislature, as expressed by statutes, will it remain valid.
Judges GABRIELLI, JONES and WACHTLER concur with Chief Judge BREITEL; Judge COOKE dissents in part and votes to modify in a separate opinion; Judge JASEN dissents and votes to reverse in another opinion; Judge FUCHSBERG taking no part.
Executive Order No. 10.1
I. The Board of Public Disclosure established by my Executive Order No. 10, dated May 22, 1975, is hereby continued, as set forth in Paragraph III thereof. In all other respects, the provisions of Executive Order No. 10 are hereby revoked.
II. Any officer or employee of the Executive Department or of any other State department, division, board, commission, council, authority, public benefit corporation or agency, the head of which is appointed or nominated by the Governor, whose State salary is $30,000 per year or more, or who holds a non-secretarial or non-clerical position which has been classified as managerial or confidential pursuant to Section 201.7(a) of the Civil Service Law (or the equivalent thereof as determined by the Board), shall, upon the filing of an oath of office and annually on July first thereafter, file with the Board a Financial Disclosure Statement in the form prescribed by the Board, including a sworn statement of assets and liabilities, and income sources.
Any member of the governing body of any State board, commission, council, authority, public benefit corporation, or similar entity, appointed or nominated by the Governor, who receives compensation from the State, the amount of which exceeds $15,000 per year shall, upon the filing of an oath of office and annually on July first thereafter, file with the Board a Financial Disclosure Statement in the form prescribed by the Board, including a sworn statement of assets and liabilities, and income sources.
No such person shall serve as an officer of any political party or political organization, or serve as a member of any political party committee, including political party district leader (however designated), or member of a political party's National Committee.
No such person shall engage in any activity which interferes or is in conflict with the proper and effective discharge of such person's official duties, as determined by the Board.
Except upon a specific determination by the Board that any such activity will not interfere or conflict with the proper and effective discharge of any such person's official duties, no such person shall:
— Hold any other public office or public employment for which compensation, direct or indirect, is received;
— Expend time or otherwise engage in any private employment, profession, business or other activity from which compensation, direct or indirect, is derived;
— Serve as director or officer of any profit making corporation or institution.
The Board may allow such activity only upon written application, and after a specific finding that such activity does not violate the intent of this Order and in no way interferes or conflicts with the proper and effective discharge of the official duties of the person making the request. In reaching its determination, the Board shall also apply the provisions of Sections 73 and 74 of the Public Officers Law. The Board shall make a determination in each such case, which shall be final. The determination of the Board in every such case shall be filed for public inspection with the Department of State in Albany. The Board shall promulgate rules governing the procedure by which such application will be considered.
The Board is hereby empowered to make such determinations with respect to defined categories of activities or defined categories of persons, which shall be applicable to all such persons.
III. Any member of the governing body of any State board, commission, council, authority, public benefit corporation, or similar entity, appointed or nominated by the Governor, who receives compensation from the State, the amount of which is $15,000 per year or less, shall, upon the filing of an oath of office and annually on July first thereafter, file with the Board a Financial Disclosure Statement, in the form prescribed by the Board.
No such person shall engage in any activity which interferes or is in conflict with the proper and effective discharge of such person's official duties, as determined by the Board.
IV. The Board shall review Financial Disclosure Statements to assure adequate compliance and to evaluate any claims of privacy. The Board shall report to the Governor any conflict of interest or violation of this Order.
Any person required to file a Financial Disclosure Statement may request the Board to delete an item, which may be deleted by the Board only upon a finding that any such item is of a highly personal nature, does not in any way relate to the duties of the position held by such person, and does not create an actual or potential conflict of interest.
The Board shall file Financial Disclosure Statements for public viewing with the Department of State in Albany, and shall establish a procedure, to be implemented by the Secretary of State, by which the Statements may be viewed by the public.
V. The provisions of this Order shall not apply to the members of the governing body of any State board, commission, or council which performs solely advisory functions, as determined by the Board.
VI. Upon request of the Governor, the Board shall review information submitted to the Governor by any prospective appointee, and shall advise the Governor whether any actual or potential conflicts of interest exist.
VII. Any procedure, opinion or determination of the Board in effect on the date of this Order, shall remain in effect, unless modified by action of the Board.
VIII. Every State agency shall develop appropriate disclosure requirement and standards for conflict of interest, for application within the agency. Such requirements and standards shall make specific reference to employees who are not covered by the provisions of this Order. Such requirements and standards shall be submitted to the Board prior to January 15, 1977. The Board shall review these submissions and report to the Governor.
Signed: Hugh L. Carey Dated: October 22, 1976