"Neither the office of the attorney general nor the comptroller's office, agencies with knowledge of the settlement agreement and the secret payout, raised any objection to inclusion of such a confidentiality clause, " the report stated.

WSJ: DA: NY lawmaker conduct 'alarming' not criminal

That settlement had input from staff from the attorney general's office and the comptroller's office, although Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli, both Democrats, said they never knew of the issue or three drafts of the settlement that were circulated to lawyers in their offices.

WSJ: NY ethics panel acts in Lopez sex harassment case