By Alex Distefano
By Scott Snowden
By Anna Merlan
By Steve Almond
By Jena Ardell
By Jon Campbell
By Alan Scherstuhl
By Tessa Stuart
William Thompson, the ex-Board of Education president and investment banker who's running for city comptroller, celebrates his 'real world financial expertise' in his campaign literature, contending that he 'spent years underwriting billions of dollars in municipal and state bonds' as a senior vice president for a Wall Street firm. But a 'Voice' investigation has revealed that Thompson broke a half a dozen securities regulations over his vaunted eight-and-a-half-year banking career, raising doubts about his qualifications for the city's second most important elected post.
In fact, Thompson, who held only political staff jobs before getting a $135,000-a-year banking position in 1993, is today operating with a suspended securities license. He had no license whatsoever from January 1993 to December 1995, while he was vice president at George K. Baum & Co.the period that he illegally participated in most of the bond deals described in his literature. Since magically appearing as a banker-without-background nearly a decade ago, Thompson has missed seven key securities test dates, repeatedly jeopardizing his ability to do business.
In addition to these questionable practices, the 48-year-old self-described "financial consultant" is currently employed by a firm, the Liati Group, that is headed by Michael Geffrard, a former first deputy city comptroller who was forced to resign in 1995 after a scandal. Geffrard was the target of a probe by the city's Department of Investigation, which recommended his prosecution to federal authorities, according to sources close to the case. He was never indicted.
The son of a powerful Brooklyn judge, Thompson was the youngest deputy borough president in city history through the '80s and, prior to his resignation this March, was widely regarded as an astute and genial Board of Ed president. These new issuesincluding the fact that he filed his taxes late in four of the last five years and had to pay by installment three timesmay shake up the otherwise desultory race between him and City Councilman Herb Berman. The picture that emerges from this Voiceinvestigation is of a candidate so sloppy in his personal and professional life that he may not be up to the task of running the city's multibillion-dollar books.
In a two-and-a-half-hour interview with the Voice,Thompson attempted to limit his role with the Colorado-based Baum company, insisting he was "not an underwriter" and "not a broker." Though he conceded that he "was representing the company's merits to city and state officials," he suggested that he might not have had to obtain a license to do so.
This half-hearted assertion is belied by the clear mandates of the National Association of Securities Dealers, which requires that "an associated person of a broker/dealer who effects or is involved in effecting securities transactions" must pass the test, specifying the inclusion of anyone who "participated in the solicitation" of business. It is also implicitly disputed by Joe Bosch, a Baum vice president who worked at Thompson's side and remains his friend, but says, "In the capacity I functioned in and the capacity he functioned in, he needed a license. I don't know how soon he would have had to obtain that license."
Finally, it is countered by the fact that Baum registered Thompson as a General Securities representative when he was hired and signed him up for the six-hour licensing exam six times during that three-year period, forfeiting a $200 fee each time he failed to take it.
However, Bob Dalton, the Baum executive in Colorado who hired Thompson and still praises him, contends that "while it would have been nice if Bill had a license," the company had a system that permitted him to work without one. Saying that Thompson functioned as part of "a team with Bosch," Dalton insisted that any unlicensed Baum employee working in Thompson's capacity had to have "a registered person with them at any meetings." Of course, Dalton's imaginative explanation might have been prompted by the fact that it was as improper for Baum to retain Thompson so long without a license as it was for Thompson to work without one.
Asked if anyone else in the company's history had gone without one for almost three years, Dalton said that Baum had employed others who'd "taken a year or more to get a license." Dalton acknowledged that he could not cite any NASD rule that permitted this "team" approach and confirmed that the company had scheduled Thompson for tests time and again.
Thompson, who has championed tough new testing standards for third- to eighth-graders, failed to take the Series 7 exam for a GS representative license on June 5, 1993, June 1, 1994, October 31, 1994, April 21, 1995, and September 20, 1995. He finally passed the exam on December 7, 1995, with a score of 76, six points above the passing grade.
Thompson mysteriously left Baum five months after finally getting a license, and now he will not answer questions about the firm's reaction to his testing shortcomings, saying only that his departure was by "mutual" agreement. He attributed his missed tests to "not having enough time."
In addition to working at Baum, Thompson was a member of the Board of Education (which entitled him to a $20,000 stipend) through most of this period, though never its president. Board officials say he was an occasional visitor at 110 Livingston prior to his July 9, 1996, elevation to president, and was there almost daily afterward. Ironically, Thompson was quoted in news stories as saying he gave up his banking job to devote himself full-time to the board presidency, but he left Baum more than two months before his surprise, Rudy Giuliani-engineered, election by the board majority.