Links to Avoid: Unnecessary Temptation, Unnecessary Subsidies

(Enlarged portion of New York Times image in article about arrest of Ray Harding.)

By the end of this article we will be talking about the evils of unwarranted public subsidies and their abuse by top government officials. But first . . .

A Teaser?

What is the name of those little teaser headlines that appear, lines separating them from the rest of the text, in the middle of the newspaper or magazine story in which they appear? They are not subheads, not sidebars, not “pull quotes.”

Ah, but why worry? What’s in a name anyway? A rose by another name! . . . (. . .and all that) Let’s just call what we described a `teaser subhead.’ There is a `teaser subhead’ in a New York Times article (print edition only) which currently has us interested:

A boss is linked to the sort of corruption his old party once fought.

The article in question?- - Ex-Leader’s Indictment Further Weakens Liberal Party, by Sam Roberts, April 19, 2009. The story is about the recent indictment of Raymond B. Harding, the former Liberal Party leader in the broadening Hevesi pay-to-play investigations scandal. See also: Ex-Chairman of New York Liberal Party Indicted, by Danny Hakim, April 15, 2009.

A Party in Name Only

These days people are wondering whether the Liberal Party is a party “in name only.” That brings us right back to the slippery question we started with: “What’s in a name?” Things will be what they are, but names can be misleading if things drift away from the names by which they are known.

A Tempting Drift Diagnosis

We offer a diagnosis of the source of political drift: We think that what most often separates a political party from its name and principles is the pull of temptation. The temptation in the comptrollers’s scandal is that the structures allowed one man to control too much money and there was a lack of transparency to boot. It was just too easy to skim. That’s why reforms called for in the wake of the Hevesi scandal envision a board at the state level rather than having single individuals be responsible for investments. (By the way, we note that this important reform was not amongst the reforms proposed by the State Comptroller, the Governor and the State Superintendent of Insurance, in December 2007 per state press release proclaiming that the pension fund had been brought “up to modern standards”: GOVERNOR AND COMPTROLLER PROPOSE PENSION FUND REFORMS- Changes Will Create New Ethics Standards and Increase Transparency.) We suggest that as an indicator of earnestness, people watch to see which reformers call for pension investment decisions to be reposed in a newly formulated board and which reformers call for less than that.

Forging a Link: Describing Another Temptation

We’d like to forge a link here and wend our way to talking about another temptation in politics: Discretionary subsidies. Ray Harding’s arrest couldn’t help but make us think of the criminal prosecution of his son, Russell Harding, who once held a political position under Mayor Rudy Giuliani. Russell Harding was put in charge of the New York City Housing Development Corporation by Giuliani. In that position he oversaw the flow of huge amounts of subsidy and was invested with a fair amount of discretion that could tilt the balance with respect to the financial value of that flow for recipients. Russell Harding was ultimately sentenced to more than five years in prison for embezzlement (and possession of child pornography). It was excellently covered in articles by Tom Robbins in the Village Voice. (See- Features: The Private Lives of Russell Harding, The Feds Enter the Picture, Tom Robbins, Tuesday, June 11th 2002. as well as the “related stories” at the site.)

The sad tale of the younger Harding’s looting of the city agency for personal expenses obviously involves cumulative infractions significant enough for Harding to have wound up in jail but it also involved small pettiness like Harding’s having the agency pay for his morning bagels.

Eliminate Unnecessary Subsidies to Eliminate Political Drift

We have another prescription to eliminate temptations that lead to political drift: Eliminate unnecessary subsidies. Even though subsidies are proliferating in our society that does not mean they are necessary, and unnecessary subsidies engender political drift. They are hard to police and in pursuit of their tempting allure, Democrats cease to act like Democrats and Republicans and Conservatives cease to act like Republicans and Conservatives.

Atlantic Yards Example: Public Rolled With the Drift of Role Reversals

Consider, for example, the case of the highly unnecessary Atlantic Yards that is proposed to be massively subsidized almost beyond belief. For starters, the project will never deliver its ostensible benefits which are little but Orwellian fictions. In championing this project, Republican’s like former Governor Pataki or former Senate Leader Joe Bruno become proponents of excessively large government and an extraordinary level of government intervention in the private sector. Conversely, Democrats, like former governor Eliot Spitzer, become proponents of specially aiding a wealthy real estate developer and sports team owner like Bruce Ratner at the expense of the general New York populace. Voila! What better example could you have of political drift?

Unencumbered by a fixed party label, Bloomberg alone is not subject to such criticism since, names aside, he seems to be fixedly devoted to only one thing. He is regularly on the side of an oligarchic big government that aids the privileged.

Prosecutorial Drift . . .

Speaking of drift, the Russell Harding story also tells the tale, if it is to be believed, of a former prosecutor (Giuliani) behaving like a criminal. We suggest giving belief a try even if the story is told by convicted felon Russell Harding himself Last September a story came out when Mr. Harding started blogging. The story regards Harding's role in getting Judith Nathan, the girlfriend and future wife of the then “still-married Giuliani, an Upper East Side apartment at below-market rent.” If it is true, it provides a good example of how unmanageable these kinds of public subsidies can be and a good argument for eliminating or strictly limiting them. (See Atlantic Yards Report: Saturday, September 27, 2008, In tale of Giuliani influence, insight into the flexibility in size of affordable housing units.)

We won’t repeat the Atlantic Yards Report story above at length but it is a piece well worth revisiting that highlights highly problematic concerns and offers:

. . . insight into how much flexibility the city allows regarding the size of apartments designated as affordable housing.

Even if the Judith Nathan below-market apartment procuring part of the story is not true or provable, Atlantic Yards Report’s analysis of the problematic “flexibility” described by Harding in his blog is real and incontrovertible.

Awkward Toleration?

Did the alleged Judith Nathan impropriety occur as described? Part of the overall Russell Harding HDC story is that Harding’s other improprieties at HDC were known and not halted or publicly revealed by colleagues and other professionals at the agency. Without being on the inside, it is hard to say for sure who perceived exactly what wrongs occurred and who was fighting those wrongs in what ways. But what was done to stop Harding is significant; this is the kind of thing that affects careers. One wonders what those professionals believed would ultimately become public. And who knows which of those professionals may, for instance, have been doing a public service by feeding information to prosecutors or Tom Robbins at the Village Voice?

Why wasn’t Russell Harding outed sooner? We offer the explanation that he was perceived as being supported from the top no matter what was his misconduct.

Analogy Offered: Another Mayoral Administration (Bloomberg’s), Another Unnecessary Subsidy (for the Yankees), Another City Agency (Taxation and Finance) in Moral Drift

We cannot help but analogize. The HDC situation under Giuliani’s Russell Harding seems like the current situation of New York City Finance Department under Commissioner Martha E. Stark. The Finance Department is beset at the top simultaneously with nepotism scandals and with a (bigger) scandal involving manipulation of real property assessments in order to specially benefit the Yankees with financing (something that was desired by Bloomberg) at the expense of the public. (We mentioned above Bloomberg’s penchant for oligarchy delivering goodies to the rich.)

We have already asked whether Bloomberg’s reliance on Commissioner Stark to deliver an inflated property assessment for Yankee Stadium’s benefit engendered the culture gone awry in the City Finance Department:

. . . By the same token, we can see how if Commissioner Stark was a little bit lax in the nepotism department she might have problems enforcing rules against her top deputy engaging in a little bit of the same. . .

Beyond this, there is something else: Did Ms. Stark and Ms Ottley-Brown, by virtue of executing the Yankee Stadium maneuvers, feel that they had insurance for a little bit of the inside privilege that was swashing about? After all, the IRS and the U.S. taxpayers were being raided for millions.

(See: Sunday, April 19, 2009, Keeping up with Bloomberg and Friends: Stark New Scandals and Is it True WSJ Readers Don’t Commit Murder?)

Doesn’t this sound a great deal like Russell Harding under Giuliani?

Top-Down Moral: Avoid the Drift

The moral here is that when there is toleration or endorsement of subsidy abuse that comes from the top and the resulting haze of political drift takes over, you can readily get a culture of corruption that permeates down.

It is all linked. One things leads to another. Our prescription for a cure? Avoid all unnecessary subsidies: Our politicians are not mature or responsible enough to handle them and our technocratic professional class can’t be counted upon to keep us safe from their abuse.

Keeping up with Bloomberg and Friends: Stark New Scandals and Is it True WSJ Readers Don’t Commit Murder?

(Bloomberg, above, at February press conference resisting answering questions about how the extraordinary level of his campaign spending is triggering the expenditure of more taxpayer dollars.)

We can’t keep up with the Bloomberg updates. . . but we will give it one heck of try!

It wasn’t very long ago, (February 2, 2009) we did what we considered a fairly comprehensive two-parter about why we, as New Yorkers, ought to have some pretty significant concerns about the Bloomberg administration, Bloomberg’s wealth and what it is doing to the city. (The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity”). It quickly became necessary to provide a comprehensive update. That required another two-parter to cover just the recently surfacing evidence of how much reason for concern we have. (Sunday, April 12, 2009, Bloomberg Update: Fire and Ice.)

That was barely a week and now it seems it is already time to provide still another update. We are thinking that we better post quickly if we don’t want to wind up with another two-parter. (Just when we thought we were done, Bloomberg in his inimitable Bloombergian way pulls us back in with more fascinating fodder. ) Oh well, here we go. . .

The Wall Street Journal Class: No Culpa (Maxima Non-Culpa)

The New York Times printed an extraordinary pair of stories. It seems that if you are a friend of Mayor Michael R. Bloomberg’s then, as a presumed reader of the Wall Street Journal, Bloomberg assures the rest of us that you are not the sort that commits murder or can be held responsible for destroying the economy. In medieval Europe the Church used to sell “indulgences” to the rich, absolving them from any sins they might have committed. Well, in modern day New York, Bloomberg has cut out the middleman- now the rich can get their indulgences straight from New York City’s very richest resident.

(See the Times two stories: How Bloomberg Knows Who’s Not a Killer, -Killers Don’t Read Wall Street Journal, Bloomberg Says- by Michael Barbaro, April 13, 2009 and Much Vilified, Financial Titans Find a Friend in Bloomberg, by David W. Chen, April 13, 2009.)

From the Times story on Bloomberg saying that readers of the Wall Street Journal don’t commit murder:

During a television interview about gun control on Monday, Mr. Bloomberg suggested that the titans of American capitalism who subscribe to the newspaper are simply not the homicidal kind.

“I don’t know how to break this to you,” he told CNN’s Wolf Blitzer, “but people that go out and murder people don’t read The Wall Street Journal.”

The pithy article goes on to provide as its conclusion a convincing contradicting list of Wall Streeters who have, in fact, committed murder.

The other Times article begins with another list of “vilified” Wall Streeters, titans like Dick (Richard S.) Fuld Jr., the former chief executive of Lehman Brothers, whom Bloomberg has vouched for. Bloomberg, famously quoted now for his “we love the rich people,” remark and his various defenses of the privileges of the Wall Street rich defends people like Fuld who have, in essence, been murdering the economy. For a good account of Fuld’s role in helping to set up the subprime crisis we suggest you watch Frontline’s Inside the Meltdown (February 17, 2009).

Mr. Bloomberg on Mr. Fuld, from the Times article:

“There’s Lehman Brothers, who I feel very sorry for,” he said during a news conference. “Dick Fuld, I’ve known for 40 years, who’s a competent guy, and people are criticizing him. They didn’t criticize him when things were going well for an awful lot of years.”

The Times article does a thorough job in talking about what it refers to as Mr. Bloomberg’s “chameleon-like politics” but the gist of the extended article is:

Mr. Bloomberg has emerged as perhaps the foremost defender of the financial industry in the political world, while other elected leaders seize on the populist anger over the economy and executive compensation.

Near the end of the article it offers an interesting observation preceded by a mistake:

No one would ever accuse Mr. Bloomberg, who is drawing a token salary of $1 a year, of pursuing public office for personal gain. But Eduardo Castell, who is managing City Comptroller William C. Thompson Jr.’s mayoral campaign, noted that Mr. Bloomberg had an extra incentive, perhaps, to cheer on the financial services industry, since the fortunes of his own company, Bloomberg L.P., hinge in part on other companies’ staying healthy and subscribing to the firm’s financial data terminals.

The mistake is pretty much obvious from the observation offered: “No one would ever accuse Mr. Bloomberg, who is drawing a token salary of $1 a year, of pursuing public office for personal gain.” We think there are many who would “accuse Mr. Bloomberg . . . of pursuing public office for personal gain” precisely because “the fortunes of his own company, Bloomberg L.P., hinge in part on other companies’ staying healthy and subscribing to the firm’s financial data terminals.” Our prior articles have pointed out how frighteningly intertwined the health of Bloomberg’s company is with what Mr. Bloomberg does as mayor. And we have to wonder about how the skyrocketing of Mr. Bloomberg’s wealth coincided with his involvement in politics.

The Madoff Economy Point of View

For a point of view contrary to Mr. Bloomberg’s respecting how the conduct of those in the Wall Street oligarchy has been bad for the nation’s economic health, listen to the recent Terry Gross Fresh Air segment, (April 15, 2009), Fighting America's 'Financial Oligarchy.' In it you can hear
Former International Monetary Fund chief economist Simon Johnson predict an inevitable showdown between Wall Street and our federal government if the government properly insists upon representing the public. Mr. Johnson thinks the “U.S. suffers from "financial oligarchies" — government officials and elite members of the financial sector that run the country like a profit-seeking company” and “explains that the close connections between government officials and financial leaders are a major part of the U.S.'s economic problems.” From the program’s website page on the segment:

"We face at least two major, interrelated problems," Johnson writes. "The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support."

* * * *

Unless the U.S. breaks up its financial oligarchy, Johnson warns that America could face a crisis that "could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big."

This just in on Simon Johnson: Atlantic Yards Report has a post today observing how quotes from Mr. Johnson’s article in the May issue of The Atlantic, headlined The Quiet Coup, adapt to superbly discribe the fix Bloomberg and cohorts have gotten us into with Atlantic Yards:

Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. . . .

* * * *

Enormous companies teeter on the brink of default, and the local banks that have lent to them collapse. Yesterday’s “public-private partnerships” are relabeled “crony capitalism.”

See Mr. Oder’s analysis and the more extended Simon Johnson quotes he extracted at: From “public-private partnerships” to “crony capitalism" (Sunday, April 19, 2009).

For more thinking about the fallacy of trusting Bloomberg’s recommendations to trust those on Wall Street who have been responsible for what New York Times columnist and economic Nobel Prize winner Paul Krugman has dubbed the “Madoff Economy” see our: Run, Mike, Run With What You Made Off With (Monday, December 22, 2008). Mr. Krugman writings frequently provide trenchant academic analysis of the pitfalls of “crony capitalism.”

Stark III, Reporting Who’s In The Ball Park

In our last update, we were writing about the ethics problems of New York City Finance Commissioner Martha E. Stark. Ms. Stark ought to be most famous for the role she had in coming up with the bizarrely inflated real estate tax assessment figures that were used to issue more tax-exempt bonds for Yankee Stadium than should actually be permitted (under the IRS loophole theory being used by the Bloomberg administration). She apparently did this at the behest of the mayor (or someone at the pinnacle of his administration representing him) and it remains to be seen whether someone is ultimately going to be charged with illegal acts as a result.

That is what Ms. Stark should be most famous for. When last we wrote her notoriety was predicated on two recent ethics scandals. First Ms. Stark was forced to resign from a “moonlighting” position on a real estate company’s board. Then it turned out that her chief deputy was improperly paying her spouse for work based on time sheets certifying work he was not present to perform. . . .

. . Now it turns out Ms. Stark is involved in her third new scandal surfacing in a relatively short period of time. This scandal gets us back into the ball park of our original Yankee Stadium discussion. Interestingly, as Norman Oder’s Atlantic Yards Report has already pointed out, most of our New York press is missing the most significant aspect of the story. The press is not only missing the most significant aspect of this incredible story, they are not even in the “right ball park.” They are not reporting about the broadening story about the squirrely manipulation of the Yankee Stadium property tax assessments. Hold onto your hats for this one and proceed to the next paragraph! (See: Tuesday, April 14, 2009, The latest cloud over Finance Commissioner Stark: a romance with the (former) assistant in the middle of the Yankee Stadium controversy.)


Ms. Stark’s third scandal involves hiring and/or remunerating a number of family members or extended family members. What is drawing the most press attention is the escalating salary she paid to her lover, Dara Ottley-Brown. (The superb visual of these pay increases at the side cribbed from Atlantic yards Report is, ironically, originally from Bloomberg, LP.) Here is what is truly astounding and the part of the story that only Atlantic Yards Report is covering: Ms Stark’s lover, Ms. Ottley-Brown was very much involved as a key player at the center of events when the real property tax assessments were being manipulated. When this was first reported (but not Ms. Ottley-Brown’s recently discovered concurrent personal relationship to Ms. Stark) by Daily News columnist Juan Gonzalez he was calling for an investigation. ("That's why it's time for some prosecutor to step in, subpoena every document and figure out if the Bloomberg administration manipulated land assessments for the Yankees.") Talk about being in the “right ball park!”

How integrally was the Tax Commissioner’s lover involved in the questionable activities? The Daily News story about what has been referred to as the “smoking gun” tells itself quite nicely if you just refer to the paragraphs that talk about Ms. Ottley-Brown (the non-Ottley-Brown paragraphs are bracketed):

The e-mails show that City Attorney Joseph Gunn notified Stark's former assistant commissioner, Dara Ottley-Brown, on July 15, 2005, that "the Yankees have an interest in seeing that the assessed valuation will be high enough to generate as much PILOT for tax-exempt debt as is lawful and appropriate."

[They also show Stark's staff met at least three times with the Yankees and other city officials to discuss the department's assessment method.]

On March 21, 2006, a few weeks before City Council's vote on the Yankees project, Maurice Kellman, the city's chief assessor, sent Ottley-Brown the stadium assessment report. It estimated the value of the land under the stadium at $26.8 million.

[Finance Department spokesman Sam Miller said Tuesday that a "senior assessment team" decided Kellman's estimate was too low compared with the construction cost of the new stadium.]

After a series of frantic phone calls and e-mails on March 21 and 22 between a half-dozen city officials and the Yankees, Ottley-Brown ordered Kellman to produce a new report.

(See: E-mails reveal how city went to bat for Yankee to inflate value of stadium land, Tuesday, by Juan Gonzalez, December 16th 2008.)

Lawyering Up (With the “Mastro”) After Stark III

We have previously wondered what individuals might be lawyering up “to represent them in any prosecutorial proceedings such as those called for by the Daily News article.” (See: Saturday, December 20, 2008, Legal Notice! A Hearing May or May not Be held! (It Depends, Call Us!)

According to the Times, Ms. Stark’s attorney handling question about Ms. Ottley-Brown, (or at least one of the layers speaking for her) is former Deputy Mayor (under Guiliani) Randy Mastro. That is an interesting choice in that Mr. Mastro, with the law firm of Gibson, Dunn & Crutchor, has been involved in legally challenging the term limits extension, fighting alongside attorney (and candidate for Public Advocate) Norman Siegel. His firm profile mentions that he also: “recently led the litigation effort to defeat the City's controversial West Side Stadium project, among other high-profile matters.” Mr. Mastro’s name has been mentioned as a possible candidate to replace retiring District Attorney Robert Morgenthau.

We wonder in what capacities Ms. Stark may have hired personal attorneys. Gibson, Dunn & Crutchor does have a white collar defense practice, but Mr. Mastro is not listed as practicing in that area though he is a litigator and was once a federal prosecutor in the Southern District of New York so he should be considered to have qualifications in that area. His firm profile starts out saying: “Randy M. Mastro is Co-Chair of the Firm's Litigation Practice and Crisis Management Groups.” Mr. Mastro should also know his way around investigations of illegal quid-pro-quo exchanges in return for the manipulation of government subsidies: His firm profile says that “he served as Associate Counsel on the Independent Counsel investigation of HUD Secretary Samuel Pierce.” (Though Mr. Mastro’s time with the investigation was limited the investigation is distinguished, among other things for its length.) Mr. Mastro’s client list includes impressive names plus one that always catches our eye: Forest City Ratner.

Commissioner Stark may, of course, may have more than one lawyer. We do not know who, if anyone, might be giving legal advice at this time to Dara Ottley-Brown. Nor do we know who else may be hiring personal counsel.

Stark III, Who’s Out? Is That the Ball Game?

Others have told us that they are wondering whether Commissioner Stark will continue in her job for very long: A sort of “three Stark-Scandals and you’re out” approach. We ourselves are not so sure Ms. Stark won’t continue in office.

One thing we have found ourselves wondering about is the way that all the Martha Stark scandals have piled out into the news in succession. It is impossible to say exactly what happened or why, but our experience tells us that, generally speaking, when there is an investigation of a scandal such as there was with the challenged time certifications of Ms. Stark’s deputy for her spouse, administrative steps are usually taken to make sure those in charge up the ladder know the lay of the land before the boom is lowered. Things are done like talking to coworkers and checking where the bodies are buried and what skeletons are in what closets, etc. Therefore, one can predict that there would be pretty good information available before the first move is made.

We notice that the first thing that happened was that Ms. Stark was forced to resign from the board of the real estate company of which she was director. That would have cut off a financial lifeline for her. We also wonder about the details of how that postion was obtained in the first place. Apparently the Bloomberg administration did know about it since she obtained approval from the city’s Law Department. Did the Law Department issue an approval without others in the administration knowing? Without communication? And was the discrepancy in how many board meetings a year were expected or materialized really so significant: the approved “three or four meetings a year” vs. perhaps “sixteen?”

We notice how the next two scandals dribbled out, Chinese water torture style, not the way you would expect an administration to manage things by choice. First the real estate board matter. Next, out came the investigation respecting Ms. Stark’s top deputy engaging in some questionable/objectionable nepotism. Then finally, out comes Ms. Stark’s own nepotism scandal. Overall, it looks like things had gotten out of hand in her department; people were feeling too comfortable about helping themselves to their own little pieces of the action. Word must have been getting around.

Now a very strange state of affairs has been created: two of the people now in the public eye by virtue of this scandal, a Commissioner and her lover as another public official working for her, were integrally involved in setting real property assessment values for the Yankee Stadium land, something that almost all informed individuals probably think was manipulated. Does this create something of a standoff? Whatever the story, things are very strange indeed!

We don’t want to be overly harsh about what Commissioner Stark did, except for the Yankee Stadium land valuation. The last time we wrote about these emerging scandals we noted:

The Bloomberg administration’s treatment of Ms. Stark, requiring her to resign from the real estate company’s board may seem disproportionate in light of everything else that goes on in the Bloomberg administration . . .

Though we don’t think what Ms. Stark was doing was right or that there is an innocent explanation for it, we want to keep perspective. Ms. Stark may well have believed or rationalized that Ms. Ottley-Brown and members of the extended family she hired were competent valuable employees who were not overpaid. That doesn’t make it right, but we must point out that living by these rules is probably tougher for Ms. Stark than the rules Mr. Bloomberg is expected to live by.

To be entirely fair to Commissioner Stark we must mention Diana Taylor. Ms. Taylor is, to put it variously, the companion, parade-partner escort of Mr. Bloomberg or unofficial first lady. She was also the former New York State Superintendent of Banks appointed by Governor Pataki in 2003. According to the Times: “When Mr. Pataki appointed her to the banking position, there were rumblings that it was a political move prompted by her Bloomberg connection” (The Mayor's Lady, Her Own Woman, One and the Same, by Diane Cardwell, February 12, 2006). Governor Spitzer, who came next, found another position for Ms. Taylor: chairperson of the Hudson River Park Trust’s board of directors. It was speculated that Spitzer did this as a favor to Bloomberg because Spitzer was trying to manage weakening relationships after Troopergate: (See: August 15 - 25, 2007, Diana Taylor tapped to head the Hudson River Park Trust, By Lincoln Anderson.)

It is not that Ms. Taylor isn’t professionally qualified, and these appointments, even if they are in whole or in part because of Mr. Bloomberg, are not strictly nepotism in the direct sense that Ms. Stark’s escalating the pay of her lover can be considered such. (We like Hudson River Park.) But you cannot deny the intermingling of the professional position and how it is likely obtained with relationships and politics. It is hard to forget such intermingling when recalling the story of Ms. Taylor’s near ascendancy to Chief Executive Officer of the FDIC (“Federal Deposit Insurance Corporation”). That promotion was coming from George W. Bush in early 2006. We remember, of course, Bloomberg had stumped for Bush in late 2004, including going to extremes in terms of stage-managing things here in New York during the Republican Convention. Pursuit of the FDIC position for Taylor is one instance where Bloomberg’s influence didn’t prevail but worked in reverse: The nomination was shot down by the National Rifle Association because of Bloomberg’s New York City style anti-gun stance.

Ms. Stark’s salary boosts to Ms. Ottley-Brown are direct and lack checks and balances, but the point is that Bloomberg has the extraordinary influence to accomplish much the same result indirectly. Does it redound to Mr. Bloomberg’s benefit politically, financially or in terms of dealing with real estate developers to have Ms. Taylor in such positions? It would be hard to believe that it does not work to Mr. Bloomberg’s advantage in many ways.

Compare this as well: There was a nepotism situation benefitting relatives of Ms. Stark’s top deputy and, similarly, we previously noted that family members of Bloomberg’s top deputy, Patricia Harris, are benefitting from Bloomberg administration appointments:

Ms. Harris’ husband, Mark D. Lebow, is a lawyer with Lebow & Sokolow LLP whose practice areas include real estate. Bloomberg appointed him to the board of the Metropolitan Transportation Authority and Ms. Harris’ stepson also works for the Bloomberg administration.

We see distinctions but isn’t it just possible that Ms. Stark, didn’t see the difference between what she was doing and what Bloomberg was readily able to accomplish through his greater influence? She no doubt knew that Bloomberg was not considered to be breaking the rules.

A Piece of the Action When Awash in “Black Money”

Frontline did another documentary recently, Black Money, about illegal international bribery. One thing that becomes clear watching that documentary is that in situations awash with illegal cash floating around it seems as if almost everyone feels entitled to take a little bit of it for themselves. By the same token, we can see how if Commissioner Stark was a little bit lax in the nepotism department she might have problems enforcing rules against her top deputy engaging in a little bit of the same. Taking this one step further we understand how Ms. Stark herself might not have believed there was a serious qualitative difference between what she was doing and the way that Bloomberg was managing to benefit his own companion through his public position and influence. And there was also the way that his top deputy’s family members were benefitting.

Beyond this, there is something else: Did Ms. Stark and Ms Ottley-Brown, by virtue of executing the Yankee Stadium maneuvers, feel that they had insurance for a little bit of the inside privilege that was swashing about? After all, the IRS and the U.S. taxpayers were being raided for millions.

Moral relativism creates such headaches!

Updates Parked in the Strangest Places: Political Privilege for a Bloombergian “Former Government Official” in the Private Sector

Here is a bit of oddness that indicates how government officer/employee-style perks are handed out to those who, even though they are off in the private sector, are somehow still viewed as being part of a bigger interconnected family of individuals involved in an exchange-of-favors game. Go to Atlantic Yards Report’s story: How Rudy Giuliani gave Bruce Ratner and Jim Stuckey parking permits, Saturday, (April 18, 2009). It tells of how, in December 1988, the Guiliani administration was handing out city parking privileges (for 1989) to special selected political supporters who were not government officials.

Atlantic Yards Report’s story is mainly about how two such specially benefitted nongovernment -officials, "Democrats for Giuliani" developer Bruce Ratner and Forest City Ratner executive Jim Stuckey. Each of these individuals were obviously key private sector protagonists in the massive subsidy collection endeavor known as Atlantic Yards. Rather than describe these individuals as political supporters or campaign contributors the Guiliani administration memo obscures their cozy status by referring to them as “FORMER GOVERNMENT OFFICIALS.” Right, former government officials who are being treated as if they are still part of an inside club entitled to special privileges! Bruce Ratner served as city Consumer Affairs Commissioner. Out in the “private sector” Ratner hired Jim Stuckey, who had served as head of the Public Development Corporation. (Stucky’s government experience equipped him to abuse and pervert eminent domain practices to go after special windfall benefits for Ratner at Atlantic Yards.)

Here is the Bloombergian part of the story not pointed out by Atlantic Yards Report: Also on the list of “FORMER GOVERNMENT OFFICIALS” treated to these special high-level privileges was Bloomberg LP’s Patti Harris (picture above) who had worked for the Koch administration. (See the image supplied by Atlantic Yards Report where we have added one extra circle around Ms. Harris name. Click to enlarge.) At the time Ms. Harris, working in the private sector for Bloomberg, was overseeing its Philanthropy, Public Relations, and Governmental Affairs divisions. It is ironic that Ms. Harris, who apparently knew about and got in on this high-level special benefit (and felt entitled to it!) is, as we have already noted in other pieces, one of Mayor Bloomberg’s chief political gatekeepers when it comes to handing out Bloombergian benefits, both from his privately controlled charities and also what issues from City Hall. Yes, Ms. Harris is the one who calls up recipients of Bloomberg’s private “charity” to make them uncomfortable when they contribute to Bloomberg’s political opposition. (See: Tuesday, February 3, 2009, The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity” (Part II) and Sunday, April 12, 2009, Bloomberg Update: Fire and Ice.)

The Hevesi Pay-to-Play Pension Fund Investment Scandal: How Now, Mr. Bloomberg?

Another update concerns a rather big emerging scandal involving the intersection of Wall Street and government. Are we surprised or not that Bloomberg’s name came up in this ever-expanding Hevesi play-to-pay investment scandal? Consider how that factors into concerns about quid pro quoing in the Bloomberg administration.

According to inside sources, documents in the investigation say that Steven Rattner, co-founder of the Quadrangle Group, the prominent private equity firm, arranged for his investment firm to pay $1.1 million to obtain New York State pension business. Right now, Mr. Rattner is receiving a lot of focus because he is, as the New Times puts it: “The man leading the Obama administration’s efforts to restructure the auto industry.” In other words, he was selected as Obama’s new “car czar.” We focus here on the fact that Rattner’s Quadrangle Asset Management (focused on investing in media and communications companies) is the firm named “to manage the personal and family foundation assets of New York City Mayor Michael Bloomberg.” Rattner is apparently a former Times reporter, so watching what kind of coverage this gets from the Times will be interesting.

This brings us back to where we started: Bloomberg is once more offering praise for a Wall Street guy for his “competence.” According to Crains and other sources:

New York Mayor Michael Bloomberg considers Mr. Rattner a friend and praised him earlier this month as a "phenomenally competent guy." The billionaire mayor's investments are handled by Quadrangle Asset Management, which is part of the Quadrangle Group.

NPR’s Report (and others) adds more Bloombergian praise:

"He's very philanthropic, he's been a great New Yorker," Bloomberg said on April 2.

(See: Obama auto adviser embroiled in pay to play probe, from The Associated Press.)

According to multiple reports, Crains and NPR included, Bloomberg’s personal relationship with Rattner was very close, close enough so that he conferred with Rattner about the Obama position:

Bloomberg said he and Mr. Rattner had discussed whether Mr. Rattner should take on the Obama administration job.

"We did have conversations about whether he should do it," Mr. Bloomberg said. The mayor, who was a businessman before he entered politics, said he warned Mr. Rattner there was a lot to think about before going into public service, including "the disclosure issues."

(See: April 17, 2009, White House stands by auto adviser Rattner President Obama’s press secretary says administration was aware of allegations that former private-equity executive paid more than $1 million to secure business with New York’s employee pension fund.)

The integrity of relationship of individuals handling Mr. Bloomberg’s personal and foundation assets is very important because Bloomberg is officially supposed to be subject to restrictions on the way that his private funds are invested and what he is allowed to know or have communicated to him about them. (See: Ruling Allows Wider Investment Options for Bloomberg and His Foundation, by Ray Rivera, December 27, 2007.)

The current set of restrictions are a new, more relaxed set of restrictions, As we wrote before:

The new Conflicts of Interest Board requirements were new because they were requirements that were being relaxed from what was previously required. At the same time, long into Bloomberg’’s second term, it was being reported that Bloomberg had not complied with requirements to avoid conflicts that the Conflicts of Interest Board imposed upon him at the beginning of his first term.

And we wrote about the new requirements:

Specifically this was spelled out as the arrangements with which the mayor (Ms. Harris too?) was theoretically expected to comply:

Under the arrangement, the mayor will select one or more investment firms to oversee his personal and charitable foundation’s investment strategies, and then recuse himself from any city business involving those firms.

The firms will then choose managers who will carry out the investment decisions, but their identities will not be shared with the mayor, the board said.

* * * *

. . . the mayor could advise the investment firms about categories of investments and could hire or fire managers based on reports about their performance. But the mayor must receive no information about the specific holdings in his or the foundation’s accounts, and must not know the identities of the managers, the board said.

We asked before whether this was only meant to sound good to the public. In that vein we must now ask whether Mr. Rattner’s integrity, when he handles Mr. Bloomberg’s investments, is up to such rigorous standards. If people like Rattner can’t be trusted in this regard it could provide a contributing explanation for Bloomberg’s amazing skyrocketing wealth.

Hevesi Investigation Continues Heavily

The investigation, which the Times describes as “sprawling,” is being conducted by both Attorney General Andrew M. Cuomo’s office and then the Securities and Exchange Commission:

In 2007, Attorney General Andrew M. Cuomo’s office and then the Securities and Exchange Commission took over the inquiry, which has ballooned into a sprawling investigation involving some of the most prominent players in New York’s political and financial worlds.

Hundreds of investment firms have been subpoenaed. Three people have been criminally charged and another has pleaded guilty to a felony. And the scandal has grabbed the attention of Wall Street, as members of the investment establishment’s top tier now face scrutiny.

Whatever confidence is currently being expressed, we are still in suspense about where the investigation will lead:

Mr. Cuomo emphasized this week that more developments were to come. “We do expect additional charges because we have other cases that are being worked up as we speak,” he said. “The investigation is continuing.”

(See: In State Pension Inquiry, a Scandal Snowballs, by Danny Hakim and Mary Williams Walsh, April 17, 2009.)

If more aspects of the investigation concerning Mr. Bloomberg surface, dynamics could prove quite interesting as Mr. Cuomo and Mr. Bloomberg could be running against each other for governor in 2010, even if Bloomberg wins the mayoralty in 2009. (In terms of political step-ups, Bloomberg might also be take his defense of Wall Street show on the road with another run for the presidency, taking on Obama, whom he did not support, in the 2012 race.)

BTW: We have previously made the point (in the context of inspector generals for Atlantic Yards) that when multiple prosecutorial agencies are involved, investigations are often more vigorous. (See: Wednesday, April 15, 2009, Permission to Speak Frankly: How We Know More and Less From Breakfast Interviews With Marisa Lago.)

The Bloombergain Endorsement Juggernaut: Will the Unwary Be Besmirched?

We will conclude this set of updates with the latest on Mr. Bloomberg’s continuing accumulation of endorsements which we think he is garnering from the unperspicacious. Newark mayor Cory Booker has endorsed Bloomberg. (See: Newark Mayor Cory Booker agrees to endorse N.Y.C. Mayor Michael Bloomberg for re-election, by The Star-Ledger Continuous News Desk, April 17, 2009.) Booker, the mayor of New Jersey’s largest city, is a rising star, and until we hear something that convinces us otherwise we are quite impressed by him. Still, it is a symptom of current misalignments that Mr. Booker is endorsing Bloomberg at this juncture without having to wonder whether doing so will ultimately besmirch his own name. The New York Times print edition ran the story of Booker’s endorsement (also mentioning the prior day’s endorsement by Jerramiah T. Healy, the mayor of Jersey City) in the middle of a sea of surrounding print covering a story they gave much more attention to: Bloomberg’s insensitive treatment of a disabled journalist at a press conference. (See: April 17, 2009, Backing for Bloomberg, From Newark, by David W. Chen and A Bloomberg Apology (Sort Of) Is Accepted (Sort Of), by Julie Bosman, April 17, 2009.)

This kind of coverage (click image below to enlarge) doesn’t look auspicious for Mr. Booker or for future endorsers of Mr. Bloomberg. Bloomberg buyers beware! If you wonder more will emerge, just note: All of the above represent just one week’s worth of reported updates about Mr. Bloomberg.

Bloomberg Update: Fire and Ice (Part II)

This is Part II of an article (click here for Part I) consolidating recent updates about Mayor Michael Bloomberg’s abuse of his increased wealth and contributions to charities for political purposes and how the campaign for mayor is therefore progressing.

We left off in Part I describing Mr. Bloomberg campaign to remind nonprofits of the ways in which they may be beholden to him, describes how Bloomberg is vastly outspending opponents and his unchecked dedication to eliminating opponents and we also noted how updates respecting Mr. Bloomberg’s wealth that seem to have gone unnoticed by the press.

In Part II we will be providing updates about conflicts of interest and qui pro quo-ing concerns with respect to the Bloomberg administration and prices everyone should be concerned that the city will have to pay.

Update on Bloomberg’s Qui Pro Quo-ing: Bloomberg Turns to Blagojevich's Ex-Deputy

As we have written before, Bloomberg has always employed his vast PR resources to perpetuate the manufactured myth of his munificence, the idea that he is not interested in the staggering wealth he keeps accreting from the private business in which he still participates while being mayor and that he is not interested in power. In fact, he seems more than a little preoccupied with both and that gives rise to substantial concerns about the kind of qui pro quo-ing in which he uses his vast resources to engage. For more background on this we refer you again to our comprehensive earlier article: The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity.” (Monday, February 2, 2009). For something shorter and more focused see: Are the Atlantic Yards Land Grab and City Official Fraud Being Used to Finance Bloomberg’s Bid for Billionaire Term Limit Exceptionalism? (Wednesday, October 22, 2008).

For the most recent update on how hot and heavy the quid pro quo concerns are with respect to the Bloomberg administration consider this. Wayne Barrett came out with an important new Village Voice article in March relating to concerns about politicians that quid pro quo. (See: Bloomberg Turns Over His Next Campaign to Blagojevich's Ex-Deputy, by Wayne Barrett, March 10th 2009.)

In December Mike Bloomberg named Bradley Tusk to run his re-election campaign. Tusk's main credentials were four years as indicted Illinois Governor Ron Blagojevich's top aide. Bloomberg has guts because at the time Tusk was hired word was already out about Blagojevich: Barrett points out Blagojevich “had been arrested just three days earlier.”

Who is Bradley Tusk? According to Barrett:

The Chicago Sun-Times compared Tusk to Karl Rove, the Tribune called him "the center of gravity," Crain's said he was "as inside as you can get," and Republican State Senator Kirk Dillard called him a "junkyard dog protector of the governor" with "immense power and influence."

What kind of things did Bradley Tusk do for Blagojevich?

. . . . the Voice has obtained a copy of his June 22, 2006, interview with the state's Auditor General, William Holland, which establishes his culpability for a flu vaccine program that the state itself conceded, when sued by an unpaid vendor, was illegal.

* * * *
. . . the impeachment report formally charged Blagojevich with running two Tusk-conceived-and-directed programs—the flu vaccine and the importation of Canadian drugs—that "violated" numerous federal and state laws and, in the case of the importation effort, "exposed" participants "to federal criminal sanctions." The report names Tusk, concluding that the vaccine program, which it said was executed in "utter disregard" of the law, "implicates the highest-ranking officials in the Governor's Office, including the Deputy Governor."

Apparently subpoenaing Tusk winds up being critically intertwined with, and important to, ongoing investigations, both the one being conducted by U.S. Attorney Patrick Fitzgerald and the impeachment inquiry. This is not because Tusk is offering help to the investigation.

One certainly would like to hope (how credibly?) that Blagojevich-style government can be kept from happening here in New York and one would like to hope that Bloomberg’s hiring of Tusk is not an attempt to graft refinements of the Chicago/Illinois style on top of our already questionable New York ways. The New York Times recent front page story about the Blagojevich Indictment makes clear how much qui pro quo-ing was going on in the Blagojevich administration. (See: Blagojevich Indictment Lays Out ‘Enterprise’ of Corruption ...Print Headline: Blagojevich Indictment Lays Out Broad ‘Enterprise’ of Corruption, By Monica Davey and Susan Saulny, April 2, 2009.)

Rod R. Blagojevich, the ousted governor of Illinois, used his chance to fill the Senate seat vacated by Barack Obama as one more money-making plan in a vast racketeering scheme, federal prosecutors said Thursday, an operation they portrayed as the “Blagojevich Enterprise.”

In a 19-count indictment, prosecutors said the “primary purpose of the Blagojevich Enterprise was to exercise and preserve power over the government of the State of Illinois for the financial and political benefit of” Mr. Blagojevich, his family and his friends.

* * * *

The indictment lays out a broad pattern of corruption spanning from before Mr. Blagojevich was elected governor in 2002 to the day of his arrest, Dec. 9. He used his official position, the indictment suggested, to seek financial gain in nearly every element of government work, from picking members of state commissions to signing legislation.

Mr. Blagojevich sought a return on deals to give money to a hospital, to approve legislation helpful to racetrack owners, to pick a particular candidate to fill the Senate seat and, according to the indictment, from a United States representative who was pressing for a $2 million grant for a publicly supported school.

And the Times described how dispensation of government benefit was used to leverage political support. In 2006 when then Congressman Rahm Emanuel:

. . . was making inquiries about the status of state grant money intended for the school, Mr. Blagojevich sent a message that a brother of the representative (apparently, officials said, Ari Emanuel, an agent in Hollywood) needed to have a fund-raiser for Mr. Blagojevich, the indictment says. Mr. Blagojevich told an employee not to release the grant money, already in the state’s budget, until the governor gave further notice. According to the indictment, the fund-raiser never occurred.

Barrett’s story reports denials by the Bloomberg administration that Tusk was involved in the activities for which Blagojevich was indicted though the denials preceded release to the public of important information which, in retrospect, make one wonder even more. By contrast, Barrett provides a detailed and intricate account of Tusk’s apparent involvement in such Blagojevich interactions, including situations where Tusk, on behalf of Blagojevich, was interacting with the Bloomberg administration, including on the aforementioned flu vaccine matter and public awards of corporate sponsorships to beverage companies. (Bloomberg’s contract with Snapple gets an interesting, if possibly innocuous, passing mention.) Clearly the public was short-changed by Blagojevich. We must refer you to the Barrett article to make up your own mind on the full extent of Mr. Tusk’s involvement.

BTW: The Times has reported very little about Mr. Tusk. It will be interesting to see if it continues to ignore the Tusk story. But the Times has reported that Tusk and Deputy Mayor Patricia Harris are apparently hanging out together. (See: March 30, 2009, Odds and Ends From a Weekend on the Trail, by Michael Barbaro.)

For an interesting take on what the Blagojevich and Bloomberg administrations have in common in terms of manipulating media and editorial coverage by exercising control through the owners of city newspapers, we refer to an interesting Atlantic Yards Report article (Wednesday, December 10, 2008, The Illinois governor pressured the Chicago Tribune; in New York, the mayor & Ratner have had much less trouble). That article incorporates some other choice quotes from an earlier Wayne Barrett article on Bloomberg. Coincidently, Blagojevich, like Bloomberg, also had a Chief of Staff by the last name of “Harris.” You can read about the dirty work this other Harris was assigned to do when (Blagojevich’s) Harris was directed to tell the Chicago Tribune owner and a Chicago Tribune representative that state financial assistance would be withheld unless members of the Chicago Tribune’s editorial board were fired, with the goal being for Blagojevich to get “editorial support” he was after. The Blagojevich instructions to be conveyed through Harris:

. . . fire all those [expletive] people, get ‘em the [expletive] out of there and get us some editorial support.

Gosh and Golly! A Bloomberg Administration Ethics Scandal: Why Does It Matter?

Having previously covered at length the serious large-scale conflicts of interest directly involving the mayor and his very top aides, we thought it was interesting when, just recently, the press covered a new Bloomberg administration ethics scandal involving New York City Finance Commissioner Martha E. Stark. Keeping things in perspective, Ms. Stark is, relatively speaking, a much lower level Bloomberg administration official. The story, involving a relatively small amount of money was also, by comparison, a small potatoes story.

Commissioner Stark got attention and had to resign from the board of a national real estate company because of the conflict of interest it presented. The conflict of interest was coyly referred to as a “distraction” by Ms. Stark. (See: City Finance Official Resigns Seat on a Developer’s Board, Citing Publicity, by Ralph Blumenthal and Jo Craven McGinty, March 15, 2009.)

Ms. Stark, whose annual salary is $190,000, was “paid her fees by the firm totaling more than $134,000 in 2006 and 2007.” According to the Times, Stark was on the board of the Tarragon Corporation and said:

. . . she had obtained official approval to serve as a director of the Tarragon Corporation, a publicly traded company with nearly 15,000 condominiums and town houses planned or under construction around the country, although none in New York City. But Mayor Michael R. Bloomberg said he first learned of the arrangement this weekend, when it was reported by The New York Post, and questioned whether his administration was appropriately informed.

Ms. Stark issued a written statement:

. . . announcing her resignation from the board: “Although it was cleared by the city’s Law Department and the Conflict of Interest Board prior to my agreeing to serve as a board member for Tarragon Corporation, and all income was fully and accurately reported to the appropriate oversight agencies, I do not want this issue to become a distraction from the work we do at the Department of Finance.”

Admittedly, being paid more than your public salary by a private company has its disquieting aspects and the story indicates that Ms Stark obtained her approval from the city Law Department with some information that did not, in fact, pan out to be exactly true: She informed the Law Department she would be partaking in “three or four meetings a year” rather than what turned out to be perhaps sixteen.

We have to wonder at the way that Ms. Stark was being made an example by an administration where far more serious conflicts of interests exist right at the top with the mayor. Ms. Stark apparently never had an actual conflict of interest and was never put to the test with a situation where she might have needed to recuse herself. If you refer to our prior article, Bloomberg has been presented with situations where he knew he was supposed to recuse himself and didn’t. In those situations the sums of money in play were truly appreciable and worthy of press attention.
In the case of Ms. Stark it was a question of receiving $134,000 for being one member on the board of a company that reportedly didn’t do business with the city. In the case of Mayor Bloomberg it is a question of owning and being involved in the operations of a company that has increased his personal wealth while mayor from perhaps $2 to $20 billion. As the Times put it, that company transacts business with “virtually every major financial institution in the city.” (The Roles Blur for the Mayor and the Mogul, By Serge F. Kovaleski and Ray Rivera, December 8, 2007.)

Ms. Stark, who was once proposed as a candidate for State Comptroller by Governor Spitzer has, however, been involved in other situations where her conduct has been questioned. In one case it was a question of what she let a top aide get away with and several thousand dollars were in issue. In another, concerning Yankee Stadium, it was a question of what she was enlisted to do at the probable behest of the mayor; involving multiple millions of dollars of benefit handed out by the Bloomberg administration.

We’ll start with the small stuff: Days after the story of Ms. Stark having to resign from the board of the real estate company, information surfaced that city investigators had warned Ms. Stark that the husband of her first deputy commissioner had, as a senior parking ticket judge, falsely billed “for office hours when he was not present.” (See: Parking Judge to Be Reassigned After Conflict-of-Interest Allegation, by Ralph Blumenthal and Jo Craven McGinty, March 17, 2009.) In essence, the parking judge was being supervised by his senior official wife.

Of all Ms. Stark’s conduct, the most significant questionable and perhaps illegal conduct involves something else: her participation in apparently manipulating an inflated real property assessment to support the issuance of tax-exempt bonds for Yankee Stadium. Ironically, this has received less coverage. For thorough coverage see Atlantic Yards Report. (Thursday, March 19, 2009, Under fire, Finance Commissioner Stark gives up moonlighting job; won't talk about conflict-of-interest situation and Saturday, October 25, 2008, Testy Kucinich presses city officials on “gaming” Yankee Stadium assessment; big disagreement over “smoking gun”.) See also our own: Does Questionable Assertion of Attorney-client Privilege Point to Yankee Stadium Bond Taxability? (Saturday, November 8, 2008).

The Bloomberg administration’s treatment of Ms. Stark, requiring her to resign from the real estate company’s board may seem disproportionate in light of everything else that goes on in the Bloomberg administration but it has its considered tactical advantages. In a shorthand fashion it telegraphs to the public that the administration is ethical, notwithstanding that this may only be serving as a distraction from the more serious issues of conduct in the administration. It is like the magician’s tactic of distracting with superfluousness the audience’s attention away from that which the magician does not want the audience to see.

It is likely that the decision to have Ms. Stark resign was made when administration officials guessed or gleaned that the investigation of her senior deputy supervising the time certifications of her own spouse was going to become public. They may have feared that one thing would lead to another as it so often does: This was then like creating a firebreak ahead of a brush fire. The Bloomberg administration would also appreciate that a small scale anecdote the public can readily understand is often more potent than more obscure issues that might be related. Consider, for instance, the AIG bonuses (understandable) vs AIG’s unnecessary 100% payout to banks like Goldman Sachs and Barclays (more important).* (See: Monday, March 30, 2009
Former AIG Executive’s Whereabouts: Quick Note on Scandal Follow-up Questions We Hope Are Being Asked.)

(* Note: For a quick read relevant to Bloomberg and the AIG bonuses see: Mayor Turns Suddenly Shy About Money, April 10, 2009 wherein Jim Dwyer pints out that Bloomberg, a key George W. Bush supporter, and one of very few Obama non-supporters, was in favor keeping AIG taxpayer-financed bonus information secret while at the same time in favor of inquisitioning New Yorkers who protested against the invasion of Iraq about their political beliefs and who they voted for in past elections.)

Silent Spring: A City Laid Waste, Its Earth Sown With Salt


We have a convenient symbolic update with which to wrap this all up. This brings us to the latest reporting by the Brooklyn Paper about a special Bloomberg pet project, The New York Waterfalls. We are not the only ones who think the New York Waterfalls are symbolic of Bloomberg. When Forbes, in September, reported the peak Bloomberg’s personal net wealth figure of $20 billion Forbes pasted into its report an image of Bloomberg standing in front of his Waterfalls. In a way, as we will explain momentarily, the subject of the Waterfalls will bring Noticing New York full circle in examining Mr. Bloomberg and his abuse of charities.

Last week the Brooklyn Paper ran an update on what it has referred to as the “killer waterfalls.” (See: Silent spring at the River Cafe thanks to Waterfalls project, By Aisha Gawad, April 1, 2009.)

As the paper noted, Olafur Eliasson’s “arborcidal artwork,” “New York City Waterfalls” appears to have inflicted “a lingering wound.”

One of the four salt-water-spewing behemoths from Eliasson’s public arts project
was situated directly under the Brooklyn side of the bridge. And on most days
over the course of the three-month, $15-million public art project, a brackish
mist lashed the River Cafe’s beloved trees.

All summer long, trees not only at the restaurant, but also near other Eliasson “waterfalls” along the Brooklyn Heights Promenade and on Governors Island, showed severe damage.

(Image from Brooklyn Paper story.)

With the arrival of spring, the paper is reporting that the damage may be permanent despite the fact that:

When the project’s taps were finally tightened, tree experts hoped that the
foliage would bounce back. But it has been a silent spring, so far, at the River
Cafe.

We commented on the Brooklyn Paper’s website (and the same appeared as a letter to the editor in the print edition- click image to enlarge) that this story should have made a least some reference to Mayor Michael Bloomberg who masterminded the Waterfalls as a pet project, including diverting $2 million in 9/11 disaster recovery money for its funding. He led and directed almost all the $15.5 million in funding for it and then gave his pet project a (self-congratulatory) city award notwithstanding the damage it did.

It was probably because of Bloomberg’s involvement that there wasn’t an environmental impact statement or assessment ahead of time sufficient to identify the damage that was likely.

In addition to the diverted disaster recovery money, funding came from Bloomberg’s private “charity”and from a City Hall “charity” Bloomberg controls by being mayor and then from a long list of mostly real estate industry interests like Atlantic Yards developer Forest City Ratner who benefit terrifically from discretionary decisions made by the Bloomberg administration.

The kicker is that the recipient of all this money, Susan Freedman, president of the Public Art Fund, appeared to testify in support of the Bloomberg-proposed special extension of term limits.
(Image above from our "Befalls" piece.)

We are coming full circle here because it was the Waterfalls that first got us thinking about Bloomberg’s abuse of charities. We put our initial thoughts into the article: Self-Congratulation “Befalls” a Man Who Would Know No Limits (Wednesday, October 15, 2008).

Immediately thereafter, in a front page article about Bloomberg’s abuse of charities for political purposes, the New York Times reported on testimony by Susan Freedman, president of the Public Art Fund, in support of the Bloomberg-proposed special extension of term limits. The Brooklyn Paper also had previously run important stories about the abuse of charities for political purposes. We followed up with more thoughts. (See: For more about how all these stories interweave see: Monday, October 20, 2008 “Charity?” We Begin to Groan.)

Bloomberg as Salt of the Earth

Salting of the earth to prevent crops from growing was something once done to an enemy’s land so that the enemy might be totally vanquished. In modern times it often used as a metaphor to connote excess by the victoriously powerful. The symbol now recasts itself. The salted barren earth Bloomberg’s self-important pet project has left behind seems a fitting symbol of the Bloomberg administration’s stripping of the public realm. We have, of course, mentioned before the many holes in the urban fabric the Bloomberg administration is creating, like Atlantic Yards and Coney Island. Bloomberg is so often distracted by the grand scheme that leaves the city poorer in the end. Not many days ago we were talking with a knowledgeable, involved real estate professional about the Queens West delays that ensued from the Bloomberg administration’s preoccupation with its 2012 Olympic bid. Without that distraction, Queens West might be much further along than it is now and perhaps a better project. And speaking of that Olympics bid, thank heavens that Bloomberg’s West Side stadium never happened.

The West Side stadium never happened, but a third term for Bloomberg will be an opportunity for more serious mischief and mayhem across the city. We are not likely to escape unscathed. For a litany of what selling off of the public realm consists of see: Un-funny Valentines Arriving Late: Your Community Interests at Heart (Monday, February 23, 2009). That litany though is probably far from complete.

Let there be no secret then that we believe that the city desperately needs a change in administration. The only problem is that with the totally absurd wealth Bloomberg has at his disposal whether he will ever allow the natural process by which that change ought to come about.