MTA chief Lhota left post due to conflict of interest: Report

When former MTA Chairman Joe Lhota left his post in November, Gov. Andrew Cuomo said Lhota had simply completed the task at hand. As it turns out, Lhota had a glaring conflict of interest.   Photo Credit: Jeff Bachner

The former transit authority chairman had been targeted by good government groups over his outside work, including a paid seat on MSG’s board.

When former MTA Chairman Joe Lhota left his post in November, Gov. Andrew Cuomo said Lhota had simply completed the task at hand. As it turns out, Lhota had a glaring conflict of interest.  
When former MTA Chairman Joe Lhota left his post in November, Gov. Andrew Cuomo said Lhota had simply completed the task at hand. As it turns out, Lhota had a glaring conflict of interest.   Photo Credit: Vincent Barone

Gov. Andrew Cuomo and Joseph Lhota kept hidden the real reason the embattled former MTA chairman left the state transit authority last November.

In announcing Lhota’s departure, the governor and chairman issued a joined statement describing that Lhota had accomplished his mission to stabilize subway service — however, Lhota actually stepped down because the state’s ethics watchdog agency determined it would be impossible for him to avoid potential conflicts of interests as he held other posts outside the MTA, according to Lhota’s resignation letter obtained by POLITICO.

Lhota in his letter wrote that the state’s Joint Commission on Public Ethics had informed him that “my outside activities are legally incompatible with my obligations under the state’s Public Officers Law, and … that recusal could not adequately cure or mitigate any potential conflicts in a way that would satisfy the standard set forth in the law.”

While heading the nation’s largest transit authority on a “per diem” basis, Lhota kept his job as the chief of staff at NYU Langone Health. Lhota also took a controversial-and-paid seat on the board of the Madison Square Garden Company, whose arena sits above Penn Station and two subway stations. 

Following Lhota’s departure, Cuomo, who had tapped him to lead the authority in June of the previous year, maintained that Lhota had completed the task at hand. Lhota’s resignation came two days after the governor was reelected. 

The governor’s office did not immediately respond to request for comment.

Leading up to his departure, advocacy and good government groups had been sounding the alarm over the vast potential for conflicts of interest.

“The governor should have known in the first place — and Lhota — that he had a massive conflict of interest incompatible with his job at the MTA,” said John Kaehny, the executive director of Reinvent Albany, which had been a leading voice highlighting the issue.

“It was about as obvious as anything can get, and yet they persisted in trying to gloss their way through it,” Kaehny added.

At one point during Lhota’s tenure, a Cuomo-appointed MTA board member lashed out at another advocate from Reinvent Albany, Rachael Fauss, when she spoke about potential conflicts of interests during an MTA board meeting’s public comment period

The board member, Larry Schwartz, momentarily stopped Fauss from speaking during her allotted time to inform her that “your facts are totally wrong.”

“I have to interrupt here,” Schwartz said. “I really feel that remarks like that are just totally inappropriate. This is not a forum for character assassination. I’ve known this man for 20 years. He’s the most ethical public servant I’ve known and he’s committed his time.”

The vice chairman at the time, Fernando Ferrer, backed Schwartz’s statement. 

Kaehny called the incident “shameless” and said there should be clarifications made so that the leader of the MTA is not allowed to have outside employment.

“Zero reforms have been adopted by the state legislature or the MTA board to make sure another Lhota embarrassment does not happen,” he added.

Vincent Barone