Rudy Vs. George

Their new battle is more about the conservative party than the schools

Wilson, who was so closely aligned with Atanasio he refused to criticize his fellow trustee when asked by the Voice after last week's SCA board meeting, said in June that he thought the Zhao "incident is being overblown."

When Atanasio assailed Spence for raising the issue of Gary Marrone's hiring, Wilson declared: "There is no reason to have an investigation of the employees of this agency, any more than it is necessary to conduct an investigation of the employees of the Board of Education." Wilson also rejected Spence's request that "the General Counsel write an opinion, as quickly as possible, as to whether Marrone was hired in violation of the agency's nepotism policy."

Wilson's alliance with Atanasio may well have been a by-product of Giuliani's increasingly friendly ties with Mike Long. The Voice has learned that early in 1997— just months after Wilson took over at the SCA— Long met with the mayor at Gracie Mansion and worked out an understanding with him. Having run candidates against Giuliani in 1989 and 1993, Long agreed to leave his ballot line blank in 1997, the first time the party had ever not endorsed a candidate for mayor. Long reportedly sought no quid pro quo for this favor, but a friendly relationship between Giuliani and the Bay Ridge liquor store owner developed in the aftermath of that peace meeting.

The fly in the ointment became the Zhao probe that Giuliani authorized at a time when no one knew the trail would lead to a nest of Long associates (the Voice exposed these ties in "Patronage Outrage," May 5, 1998). The report was so potentially troubling to Giuliani's political relationships that its release was delayed for weeks while City Hall reviewed it. Sources involved say that interviews ended in September— well before the governor's November reelection— and that the report was bogged down in fact-checking and polishing for the next three months. A footnote says that the last SCA response was received on October 31, almost two months before Giuliani finally approved its December 16 release.

Incredibly, the night before the DOI press conference, Giuliani and top aides Crystine Lategano, Randy Levine, Joe Lhota, and Rudy Washington attended a Conservative Party "thank you" event at Turtle Bay, a bar in the 50s owned by Long's sons. Atanasio was there, too. A Giuliani aide called Long a few days before the event and asked if it was okay if they came— the first time the mayor has attended a Conservative function. The report's release, which had been tentatively set to precede the party, was put off.

Mike Long is now in a classic tail-wagging-the-dog political position. His party will nominate a candidate for the Moynihan seat next spring, many months before any Republican primary. He has made it abundantly clear— and he has a record for meaning what he says— that no candidate for any major office can expect to have both his and Ray Harding's lines. Unlike Harding, Long actually believes there's an ideological difference between the Conservative and Liberal parties.

Unlike all three of his potential GOP opponents— Westchester D.A. Jeanine Pirro, Congressman Rick Lazio, and Nassau County Executive Tom Gulotta— Giuliani has never been endorsed by the Conservatives. Yet no Republican has won statewide without the Conservatives since 1974, when the last Republican/Liberal, Jacob Javits, was reelected to the senate.

There are those in Giuliani's inner circle who believe it's time the mayor cut Harding loose to pursue a relationship with the Conservatives. Rudy and his minions also hope Long doesn't mean what he says. But if Giuliani gets a Senate primary, a spring designation on the Liberal line could be a detriment in a September race against a Republican already endorsed by the Conservatives. The only use Giuliani can make of Harding's party is as a source of millions in soft-money contributions, outside the $1000-a-head limits of federal law.

Chuck Schumer used two federal accounts set up by Harding— one called Win NY and the other a Liberal Party PAC— to buy $1.7 million in commercials in the 1998 senate race, a classic end run around the limits. Most donors contributed the maximum $5000 to those committees and Joe Mercurio, a Liberal Party consultant, told the Voice he'd "be amazed if Rudy didn't do the same." Though Giuliani could direct his soft-money donors to the Conservatives, just as Schumer's camp did with the Liberals, many of Rudy's regular givers might hesitate before dumping gobs of cash into the coffers of an antichoice, antigay, pro-gun party.

Long is not irretrievably upset with the mayor about the DOI report, according to sources close to the party leader. It contains no conclusory language about Atanasio and, in a stunning break with DOI procedure, he was never put under oath, though five witnesses contradicted his version of events. The report was released on the scheduled day of an impeachment vote, while bombs were dropping on Iraq. And until Pataki announced the Moreland Commission, Giuliani refused to say anything publicly about Atanasio, making tepid references since.

An unpaid SCA trustee, Atanasio makes his living as an underwriter in charge of Bear Stearns's New York bond business and Giuliani participated in the 1996 decision to elevate Bear to a senior management position on billions in city bonds. Atanasio had retained Long as a consultant at his previous investment banking firm, but Long says he's not on Bear's payroll. Ironically, Harding's law firm is representing Bear in the ongoing criminal probe being conducted by Manhattan D.A. Robert Morgenthau as well as other matters.

If the Atanasio storm blows over, and Pataki cools off, Long and Giuliani may yet do business, and the deal they cut may shape the senate race and state politics for years.

Research assistance: Coco McPherson, Soo-Min Oh, Ron Zapata

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