The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity” (Part I)

(Mayor Bloomberg above listening to public testimony about the term limits extension bill he signed immediately afterward.) Mayor Bloomberg has set a new record. The New York Times reports that Mr. Bloomberg “can now claim to be No. 1" in that he is “the leading individual living donor in the United States, according to a list released online on Monday by The Chronicle of Philanthropy.” He did this by giving, in 2008, $235 million to “1,200 organizations promoting arts, education and health care.” (See: At $235 Million, Bloomberg Was Biggest Giver in U.S., by David W. Chen, January 26, 2009.) Sounds pretty wonderful? Not really. Not if you relate it to Mr. Bloomberg’s political ambitions and perhaps let the Times article’s penultimate paragraph sink in. We all know what penultimate paragraph status means: By convention that is reserved for the contrarian point of view not held worthy enough of being the article’s summary last word. In this case, the Times penultimate paragraph reads:

Mr. Bloomberg generated controversy a few months ago when he asked some of the local groups that rely on his private donations to publicly support his bid for a third term in office. But administration officials say that Mr. Bloomberg separates his philanthropy from his job as mayor, and that the organizations that endorsed his third-term endeavor have worked with the city for years.

Well, we think that the Times “buried the lead” and that the penultimate paragraph is the major story here. Just as the subject of Bloomberg’s abuse of charities for political purposes has been the main subject of several Times stories, this should have been both the lead and the concluding capper buttoning the article. For more on this see: Monday, October 20, 2008, “Charity?” We Begin to Groan. To the Times city staff: We have heard that you have recently been “emboldened” but we think this article could have taken a bolder look at things. David Chen, who wrote the above paragraph, co-authored the key Times front page story on the Mayor’s abuse of charities to promote the extension of term limits: Bloomberg Enlists His Charities in Bid to Stay, by Michael Barbaro and David W. Chen, by Michael Barbaro and David W. Chen, October 17, 2008. The follow-up article was by-lined just by Mr. Chen’s coauthor of that original piece: Criticism of Bloomberg Over Nonprofits’ Support, by Michael Barbaro, October 19, 2008. Political Goosebumps? Bloomberg’s Aspirations The first thing to notice about Bloomberg’s $235 million in contributions in 2008 is that the figure represents a significant bump up in Mr. Bloomberg’s “giving” exactly coincident with Mr. Bloomberg’s launching of his campaign for a third term that included, as a necessary prerequisite, the stealthily launched campaign to overturn term limits, the finale of which involved ramming the extension through the City Council on an accelerated basis at the last minute. Mr. Bloomberg’s “charitable” contributions have escalated each year since 1997. Escalations seem to have been, at times, proportionate to the emergence of his political ambitions. Looking back, public discussion of the idea that he might run for mayor was goes back to 1998. (See: Coming of Age At Bloomberg L.P., by Felicity Barringer and Geraldine Fabrikant, March 21, 1999.) Although the new $235 million Bloomberg contributions for 2008 was itself a big bump-up ($30 million/14%) from the preceding year, it was not as big as, and should be considered in conjunction with the bigger bump-up ($39.7 million/24%) that occurred the immediately preceding year, which conjoined with Mr. Bloomberg’s 2007 angling for a possible presidential run (or an appointment as vice presidential running mate). (See: New York magazine’s His American Dream, The Bloomberg-for-president scenario starts with the mayor’s growing sense of himself as a man of destiny. Throw in the country’s disgust with the two parties, add a half-a-billion bucks, and you’ve got yourself a race, by John Heilemann Published Dec 4, 2006 and Forbes’ President Mike? David A. Andelman, 12.15.07.) Together the 2007 and 2008 bumps that take Bloomberg’s “giving” up from $165.3 million in 2006 come to a $69.7 million, or a 42% increase aligning themselves with pursuit of these two political ambitions. Bloomberg “Giving” 1997-2008 Below in chart form is information about Bloomberg’s level of giving and the years of associated Bloomberg political campaigns.

$26.6 million:- Bloomberg’s charitable gifts in 1997 (when he distributed to 433 groups). Handouts have increased every year since - Press mentions of Bloomberg philanthropy begin this year $45 million:- Bloomberg’s charitable gifts in 1998 - Year Bloomberg started talking publicly about running for mayor $47 million:- Bloomberg’s charitable gifts in 1999 $100.5 million:- Bloomberg’s charitable gifts in 2000 (579 organizations)- Year before first mayoral election campaign $122.5 million:- Bloomberg’s charitable gifts in 2001 (540 groups) Was elected mayor in November $130.9 million:- Bloomberg’s charitable gifts in 2002 (655 groups) Became mayor $135.6 million:- Bloomberg’s charitable gifts in 2003 (653 groups) $138/139.9 million*:- Bloomberg’s charitable gifts in 2004 (843 groups) $143.9 million:- Bloomberg’s charitable gifts in 2005 (987 groups)- Second campaign for mayor in connection with the 2005 election $165.3 million:- Bloomberg’s charitable gifts in 2006. (1,077 groups) $205 million:- Bloomberg’s charitable gifts in 2007.- The year he started to run for President.- The year he left the Republican party $235 million:- Bloomberg’s charitable gifts in 2008 (1,221 recipient groups)- The year that Bloomberg started running for his third term as mayor and overthrew the city’s term limits restrictions.

* (difference between Times and Chronicle of Philanthropy figures) (Figures available from:

∙ the Chronicle of Philanthropy ∙ Mayor's $weet Charity, by David Seifman, January 27, 2009 ∙ Bloomberg’s Gifts to Charity Exceeded $165 Million in 2006, by Diane Cardwell, September 17, 2007 ∙ Nearly 1,000 Groups Gain From Bloomberg’s Largess, by Sewell Chan, October 18, 2006 ∙ 2003 tax year? For Bloomberg, 'Rich' Is Just Too Weak an Adjective, By Leslie Eaton, July 3, 2004. ∙ In 2002, Bloomberg Lost a Bit (for Him) and Gave a Lot, by David Johnston (Correction: David Cay Johnston), June 14, 2003

Running For Mayor Looking at the above information, the next thing that should be obvious is that while increases in contributions were sometimes relatively gradual, the consecutive years of 2000 and 2001 reflected big bump-ups. Those were the two years which preceded Bloomberg’s first run for mayor. The combined $75.5 million increase of those years represent a 160% increase over the $47 million figure for 1999. Articles about “Charitable Giving” That Preceded “Running for Mayor” Bloomberg’s “giving” began to be prominently highlighted in a series of articles about philanthropic giving corresponding in time to when his quest to become mayor began. Bloomberg’s quest was public information as of 1998. Bloomberg participated as an interviewee in several of these articles, including one, the theme of which, was the value of giving conspicuously. (See: Lone Rangers Of Charity Are Losing Their Masks, By Geraldine Fabrikant and Shelby White, February 2, 1997, Why Do We Donate? It's Personal, by Susan Jacoby, December 9, 1997, It's All in Who You Know (and Who They Know), by Shelby White, November 18, 1998 and Neighbors Give Central Park a Wealthy Glow, By Blaine Harden, November 22, 1999.) Similar articles about Bloombergian “giving” do not seem to have appeared before this time. The first of the above articles, the one about giving conspicuously, Lone Rangers Of Charity Are Losing Their Masks, is coauthored by a Times writer, Geraldine Fabrikant, who two years later coauthored an laudatory article on Bloomberg that favorably brought up his his potential run for mayor: “Last year, his profile rose as rumors began circulating that he might enter politics -- perhaps with a run for Mayor of New York. He neither encourages nor discourages that notion.” (See: Coming of Age At Bloomberg L.P., by Felicity Barringer and Geraldine Fabrikant, March 21, 1999.) The same article mentions political ambitions and philanthropy in the same sentence: “ . .Mr. Bloomberg has withdrawn slightly, devoting more time to philanthropy and nurturing gossip about possible political ambitions.” In the 1997-1999 articles that were more specifically about charity we learn, as mentioned, that Mr. Bloomberg adopted a public relations postion promoting the idea that philanthropy should be conspicuous (Lone Rangers Of Charity Are Losing Their Masks). We find out that he likes to brag about his denotations to Central Park (Neighbors Give Central Park a Wealthy Glow). As might be expected in an article entitled “ Why Do We Donate? It's Personal” Bloomberg says he doesn’t give in order to receive but a qualification thereupon ensues (emphasis supplied):

''I didn't give because I expected to get anything back,'' Mr. Bloomberg wrote in straight-faced fashion, referring to a $55 million donation to his alma mater, the Johns Hopkins University. ''I gave because it's a great school and I felt I owed them.''

He then confessed cheerfully that the donation had generated ''great publicity for my company and the university, yielding rewards in terms of new business and accelerated fund gathering (I was also chairman of the Johns Hopkins capital campaign) that I couldn't have anticipated.''

The article “It's All in Who You Know (and Who They Know)” seems to verify that, as of 1998, Bloomberg was new upon the scene. Categorizing donors for the nature of their importance, it puts Bloomberg in the“Big Bucks” category, describing him thus: (emphasis supplied)

Michael Bloomberg. The head of Bloomberg Financial Markets. He gives away his own money, which is considerable, and his company's money (most of which is his money, too, although Merrill Lynch owns 20 percent). He is becoming ubiquitous on the charity circuit; he was co-chairman of two benefits on the same evening last month.

While Bloomberg’s giving seems to proportionately relate to his political goals, it is not necessarily proportionate to his wealth. It seems that giving up managerial control of your company (ostensibly), accepting a new job (mayor) at a salary of $1 per year and giving away money can be very beneficial to one’s wealth. Ten years ago Bloomberg began talking about being mayor and he has actually been mayor for the past 7 years. During that time his wealth has multiplied many times over, by about a factor of 10. Ten years ago, in 1999, when Bloomberg was publicly toying with the idea of being mayor his net worth was reportedly $2 billion (See: Coming of Age At Bloomberg L.P.). While in office and receiving a nominal $1 a year salary he has become the richest resident of New York and the eighth richest American with an estimated wealth of $20 billion according to Forbes. In comparison, according to the same Forbes 2008 list, Donald Trump is reported to be dawdling along with a mere $3 billion net worth. (See: Bloomberg Shoots Up List Of Richest; Greenberg Off, by Jay Akasie, Special to the Sun September 18, 2008.) Figures about Bloomberg’s Phenomenally Growing Wealth: As Mayor He Became the Richest New Yorker The figures for Mr. Bloomberg’s increases in wealth are perhaps just a little bit fuzzy, mainly with respect to recent very substantial increases, and it also looks as if there may have been some misinformation that retroactively inflated statements of Bloomberg’s wealth pertaining to the time he first took office (which would make recent increases in his wealth while in office seem less dramatic). Just months before the Forbes 2008 list was out, Bloomberg was putting his substantially increased wealth in a lower ballpark: $16.2 billion. (See: July 17, 2008, Bloomberg Stays Modest on His $16.2 Billion Worth, by Austin Bogues.) The Wall Street Journal was willing to quibble with the Forbes’ list estimation of Bloomberg’s wealth, speculating that Bloomberg may have paid a premium on the acquisition of Bloomberg stock from Merrill Lynch. (See: September 22, 2008, Why Mike Bloomberg Is (or Isn’t) Worth $20 Billion, Mayor Mike has soared to the No. 8 spot on the Forbes list of richest Americans.) The interesting political events of 2008 ought to provide fertile ground to speculate about how Bloomberg was valuing any “premium” he might have paid on acquiring all of the Bloomberg stock. The New York Times has recently referred to Bloomberg’s wealth as being north of the $20 billion figure: “upward of $20 billion, according to the latest unofficial estimates of the value of the financial data and news business he founded.” (See: Rich as Mayor Is, New Yorkers Feel He Cares, by Sam Roberts, August 6, 2008.) Running For Mayor: A Retroactive Pumping of Wealth Figure? When the New York Times reported on the substantial increases in Bloombergian wealth since he took office, it reported that “When Mr. Bloomberg first ran for mayor in 2001, his net worth was estimated at $5 billion.” (See: For Bloomberg, Another $10 Billion or So Doesn’t Count for Much, by Sam Roberts, July 18, 2008) That information may be inaccurate and conflicts with other reporting of his wealth at that time. Generally, Bloomberg’s wealth was reported as being less than $5 billion until Forbes reported that it reached that figure in 2004. According to Forbes, Bloomberg’s wealth was $4 billion in 2000 and 2001 when Bloomberg was first running for mayor. The Times reported in 2001 that there was inadequate information “for assessing his real worth” (Bloomberg Discloses He's Rich, But He's Frugal With the Details, by Dean E. Murphy and Eric Lipton, July 14, 2001) and in 2002 and 2004 reported that Bloomberg’s wealth had been estimated at $4 billion (Mayor's Report Gives Hazy Peek At His Finances, by Diana B. Henriques, June 8, 2002 and If Only for a Night, Wall St. Fallen Idol Is One of the Boys, by Landon Thomas Jr., February 6, 2004) Once upon a Time: a “Hovering” For benchmarking purpose it is worth noting that while Bloomberg’s wealth has overall been shooting up dramatically there was an extended period in the middle of his tenure as mayor that his reported wealth hovered close to a $5 billion figure. Increases to his wealth accelerated again into his second term as mayor (217% in 2007). It can, of course, be speculated that some of this “hovering” was attributable to underestimations of the increases in his wealth for some of these years; for instance, maybe it wasn’t true that there was no increase in Bloomberg’s wealth between 2000 and 2001 when Forbes 400 reported $4 billion in wealth reported for both years. Forbes Figures on Bloomberg Wealth Escalation The most reliably constant gauge of his wealth over the years are the annual figures published by Forbes in September of each year:

1996 - $1 billion 1997 - $1.3 billion 1998 - $2 billion 1999- $2.5 billion 2000- $4 billion 2001- $4 billion 2002- $4.8 billion 2003- $4.9 Billion 2004- $5 Billion 2005- $5.1 Billion 2006- $5.3 Billion 2007- $11.5 billion 2008- $20 billion

Bloomberg Could Have Been a Contender But For . . . It is interesting to note that, for all this prosperous ten-folding of wealth, the New York Times in July of 2004 was given information based upon which it reported (emphasis supplied):

Serving as mayor has been costly for Mr. Bloomberg, who was ordered by the city's conflict of interest board to sell all his stocks in 2002. He has not revealed how much of a bath he took on the sales, except that it was in category G ($500,000 or more).

(See: 2003 tax year? For Bloomberg, 'Rich' Is Just Too Weak an Adjective, By Leslie Eaton, July 3, 2004.) Numbers in Perspective It is worthwhile to put some of these huge numbers in perspective. Perspective: Level of Positive Gift vs. Negative Cost Isn’t 2008's Bloombergian $235 million in “giving” bound to be a net positive to the city even if it were concluded that he might not be the best mayor or the best person to entrust with so much political power? Hardly. As large as the $235 million figure is, it is neck and neck with just a fraction of some of the damage Mr. Bloomberg can do: Look at just one project involving a slew of city give-aways. It has already been documented that the mayor’s focus was misplaced in the Yankee Stadium financing: The mayor wanted to procure a luxury suite complete with food irrespective of the public cost of the trade-offs that were being made. (See: Wednesday, December 3, 2008, Mayor’s Focus on City Planning Matters: Some Quantified Analysis.) More recently, however, new figures have come to light about what it will actually cost to replace the public parks that Bloomberg sacrificed to put up the stadium. The costs are ballooning and were apparently understated just as community representatives had originally said. The latest replacement estimate is almost $195 million, more than double 2004's $96 million figure which was based on “conceptual designs.” (Report Cites Unexplained Costs of New Parks in the Bronx, by Ralph Blumenthal, January 27, 2009.) So compare the mayor’s $235 million in “giving”to the $195 million it will cost to restore parks to the community and you get an idea of the scale of the damage Bloomberg can cause with his sell-outs of the public interest. And that is just a faction of the cost of just one project. The projects may not all be moving along briskly, but Bloomberg has a slew of projects where he is proposing to sell the public out in various ways. (To add the insult of delay to financial injury, the city is procrastinating on replacing the Yankee Stadium parks. See: Sports of The Times, Tear Down Stadium and Build Up the Bronx, by Harvey Araton, January 24, 2009.) Perspective: Level of Influence Yes, Bloomberg’s contributions may go up when the political stakes are high and yes, they are up to $235 million now, but how much influence can that possible involve? Answer: A lot. It is reported that Bloomberg plans to directly spend $80 to $100 million on his next campaign for mayor. (See: Mayor Plans an $80 Million Campaign, by David W. Chen and Raymond Hernandez, October 9, 2008.) His 2009 “charitable” contributions can be expected to go up and are likely to go up substantially given that it is a campaign year. Given that Mr. Bloomberg does not draw a line at using his charity for political influence it is easy to look at this as upwards of $335 million in campaign spending ($100 + $235 +?). (The figures for Bloomberg’s last mayoral election would have come to a total of $228 million, $84 million in direct spending plus $144 million in “charity.” Bloomberg’s direct campaign expenditures to win the 2001 campaign were $74 million.) Consider also that expenditures (or “contributions”) in preceding years should probably be thrown into the total. These kinds of totals stack up impressively against the $750 million record-smashing overall amount raised by the Obama presidential campaign this year. (See: Obama Campaign Shatters Fundraising Records, by Peter Overby and Renee Montagne.) The difference, of course, is that the Obama campaign set a new model for effective grass-roots fund raising with more campaign donors than ever before. In the case of the Bloomberg campaign the money all comes from the single individual who is the city’s wealthiest resident. Putting the $335+? million amount in perspective another way, the Times editorial page has implored the mayor to be restricted, like other candidates accepting public campaign funding, and wants him to spend no more than $12.2 million. It proposes:

Like other candidates in the system, the mayor would be limited to spending $6.1 million for a contested primary and another $6.1 million for the general election.

(See: Mayor Bloomberg’s Opportunity, November 9, 2008) The Times points out how this would save everybody money, particularly the public, and it moralistically exhorts:

The presidential election did serious, perhaps mortal harm to the national public financing system. Mr. Bloomberg can help New York set a better example.

We already commented on the futility of the Times effort to so implore better conduct from the Mayor (Saturday, November 15, 2008, The Mayor, The Times’ Timing, and a Proper Ordering) but we have to point out, that such futility is additionally compounded if the Times doesn’t recognize that $235+ million in “charitable” spending by Bloomberg pretty much washes away the $12.2 million in spending to which the Times conceives that Mr. Bloomberg and his opponents might respectively limit themselves. Perspective: It Can’t Be Any Worse; Doesn’t the Level of Financial Influence End Here? Ahem. Do things end with Bloomberg just controlling his own contributions? No. As mayor, Bloomberg controls more money resources and influence. We pointed out in Self-Congratulation “Befalls” a Man Who Would Know No Limits (Wednesday, October 15, 2008), that Bloomberg as mayor, controls and uses for his all-too-personal goals, resources such as the City Hall-based Mayor’s Fund and federal 9/11 disaster recovery money. There is also the question of how he leverages the funds he directs to achieve his personal goals even further by collecting remittances from those receiving discretionary spending from the city in a questionable intermingled fashion. This then becomes difficult to distinguish from acts that should likely be considered illegal. (See: Wednesday, October 22, 2008, Are the Atlantic Yards Land Grab and City Official Fraud Being Used to Finance Bloomberg’s Bid for Billionaire Term Limit Exceptionalism?) Wayne Barrett’s recent Village Voice piece (Bloomberg Maneuvers to Crown a Kennedy: Who's Caroline's daddy? January 13th 2009) makes the case that the school system and other city resources were politically exploited by the Bloomberg administration to promote Caroline Kennedy’s appointment to the Senate:

In fact, the best argument now against renewing the state law that granted Bloomberg control over the school system, which expires in 2009, is the wholesale political exploitation of the Department of Education by Bloomberg to advance Kennedy's candidacy, including the crafting of a fable of a résumé. While the mayor doggedly maintains at press conferences that he favors no Senate candidate, his consigliere, Deputy Mayor Kevin Sheekey—who shamelessly intends to draw his $196,574 public salary in 2009 even as he continues to act as the mayor's chief political adviser—has been tightrope-walking ethics laws to promote Kennedy's candidacy right out of his City Hall office, hosting meetings and dialing up backers in apparent violation of Conflict of Interest Board Rule 1-13, which bars the use of city resources "for non-City purposes," as well as "the performance of private activities" on city time. (It's also a charter violation for Bloomberg to "request any subordinate public servant to engage in a political campaign.") With Sheekey, Schools Chancellor Joel Klein, and Bloomberg's consultant, Isay, driving the Kennedy candidacy, Bloomberg's public professions of neutrality are a contemptuous joke.

Muddied Waters; Self-Referential and Self-Reverential Cycles Because of the mayor’s now truly vast and increasing wealth we are perpetually encountering self-referential cycles reiterating and reinforcing the power and prestige of a single man. This situation is more dire because Bloomberg doesn’t respect boundaries. He allows for very muddy situations to exist where the net net is that he directs his power and prestige to reinforce the personal goals of more power and prestige. This is part of what we wrote, about in October, in Self-Congratulation “Befalls” a Man Who Would Know No Limits. There we noted that when the Mayor chose to have the city’s Doris C. Freedman Award go to the controversial and ultimately destructive New York City Waterfalls art project, he was, when you lifted the veils, essentially making an award to his own personal pet project. In November the Times was making similar observations about how the city’s Mayor’s Award was being handed out. It was going unmentioned that the city award was frequently being given to groups that were also being personally supported by the mayor. (See: Some Award Winners Share Trait: Bloomberg’s Charity, By Michael Barbaro, November 10, 2008) Here again, the term limits hearing and the testimony in support of the mayor’s desire for a third term comes up. Bloomberg directed huge amounts of resources (including millions of public and City Hall-controlled money to the Waterfalls; Susan Freedman, the president of the Public Art Fund, the recipient of the Waterfalls millions, then testified for her benefactor without mentioning the extent to which he had `benefactored’ her. (Tuesday, October 21, 2008, Time to Report on the Best City Council Hearing Testimony.) Similarly, observing that “the blurring of Mr. Bloomberg’s philanthropy and his role as mayor. . became a flash point during the recent term limits debate.” the Times pointed out that:

One of the people who testified in favor of the mayor’s proposal during the hearings was Virginia P. Louloudes, executive director of the Alliance of Resident Theaters, who accepted an award on Monday on behalf of her group. In an interview, Ms. Louloudes said she was “happy to testify” and did not feel obligated by the mayor’s donations. Yet even some who receive the mayor’s private money said it can be hard at times to distinguish his official actions from his private charitable giving. “It does end up blurring,” said Melanie Cohn, the executive director of the Council on the Arts and Humanities for Staten Island, which has received about $500,000 from Mr. Bloomberg since he took office in 2002, and won a Mayor’s Award in 2006. “It muddies the water a bit.”

With Muddied Waters, Do Bloombergian Business and Bloombergian Government Remain Separate? With the waters being so muddy and such mind-boggling amounts of money being involved, does the public need to be concerned that Bloomberg business and the business of government will stay safely separate? Does the public need to worry that Bloomberg’s many-fold increase in wealth during his years as mayor might be attributable, in part, to any imperfect separation of the two? Does the public need to be concerned about the poor financial leadership of the Bloomberg administration being rooted in the conflicts we face? (See: Saturday, October 25, 2008, More Discredit of Bloomberg as Qualified Financial Crisis Leader.) There is certainly reason for significant concern. Noticing New York is concerned foremost with proper and appropriate development of New York, which we believe should be based on an appreciation of what New York is and what it should be. We see the world of real estate as fraught with possibilities for serious and detrimental conflicts of interest. Likewise, the world of Wall Street, bonds and public subsidy that integrally supports big real estate development. Obviously, Bloomberg’s business is very intertwined with the fortunes of client Wall Street firms. How separate are the worlds of big mega-deal city administration-assisted real estate development and the Bloomberg private-wealth businesses that are growing so fast? Perhaps the first and best clue would be how responsibilities divide up when Bloomberg puts his senior confidants in charge of these worlds. It turns out that at the very top of the Bloomberg administration there is a troubling lack of separation and all sorts of problems with conflicts. Let’s talk about two of Bloomberg’s top administration officials, two deputy mayors with key city real estate development responsibilities, Daniel Doctoroff and Patricia Harris. The latter, Ms. Harris, is also key when it comes to Bloomberg’s charities, both dispensing them and collecting charitable donations from New York developers who are receiving city largess. Of course, Bloomberg’s own conflicts deserve further discussion too. Conflicts of Interests Rumination Will Require a Long Part II Because the discussion about how uncomfortably unseparate these worlds are will take some time, we will address them in a separate Part II of this article, devoted to examining the conflicts of interest at the top level of the Bloomberg administration. (Click here for Part II.)