By Jared Chausow
By Katie Toth
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By Jon Campbell
By Jon Campbell
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With a history this checkered, it's surprising that Thompson makes so much of it when citing his credentials for a job that demands a focus on just the sort of detail he seems to blithely ignore. His claim that he did billions in bonds is pure hyperbolesince Joe Bosch, the Baum official who worked closely with Thompson during the only period that he did bond work, said the firm was getting only $30 million to $40 million in city orders per bond issue. While not contesting Bosch's estimate, Thompson insisted that "if you're part of a $2 billion deal and you took out $200,000 in bonds, you were still involved in a $2 billion deal." Nobody in the industry, Thompson said, "pieces out the parts," an implicit truth-in-advertising warning that makes all his candidate claims dubious.
Thompson's two and a half years on the Liati board and his current GS registration with Liati are a disquieting indication of his close ties to Liati CEO Michael Geffrard, who might well become an influential player in city financial circles again should Thompson win. Thompson acknowledged that he "brought Michael to Baum" in 1995, shortly after Geffrard was forced out of office by Comptroller Alan Hevesi. Thompson said he invited Geffrard to use a desk at Baum's World Trade Center office and persuaded Baum to give him a small consulting contract "to review our sales desk."
Hevesi's counsel conducted an investigation of Voice allegations that Geffrard had illegally obtained an insider price and bank mortgage on a westside apartment, and found, according to sources familiar with the report, that he had "falsified" key documents to make this highly favorable personal deal. News accounts indicated that Hevesi's report was sent to the Department of Investigation, which was conducting its own probe. Hevesi would not confirm or deny at the time that he'd asked Geffrard to quit, but the investigation and the resignation were simultaneous events.
Thompson says he "knew Hevesi did an internal investigation," but he was untroubled by it when he reached out to Geffrard because he believes "Michael is an honest, good guy." During his Voice interview, Thompson retroactively used the fact that DOI never issued any public findings against Geffrardit rarely doesas a justification for bringing him to Baum long before DOI closed its probe.
While the agency responded to a Voice Freedom of Information request by claiming that no closing memo on the Geffrard case exists, two sources involved in the probe say it went on until at least July 1996. DOI officials then met with a top assistant in the United States Attorney's office to urge that a case be broughtfocusing on the bank loan and other allegations. But federal prosecutors, who had already interviewed some witnesses themselves, decided against it.
As detailed in a 1996 Voice story, DOI examined Geffrard's ties to two controversial city financial contractorsone of which, P.G. Corbin, was terminated by Hevesi after a DOI report. The other was an investment firm headed by Calvin Grigsby, who was indicted twice by federal prosecutors in Miami, but won both cases.
Geffrard remained at Baum, using its offices, fax, phones, and secretaries roughly three days a week, until approximately 1997, according to a source at the company. That's when he formed Liati.
Thompson says he got to know Geffrard in 1993, when Geffrard was director of public finance in the Dinkins administration. Thompson's first sales effort after joining Baum was to get the firm, which had just opened its New York office, designated as a co-manager of city bonds. That was a decision that Geffrard would participate in making.
After delivering a voluminous proposal to Geffrard by pushcart, Thompson and Bosch, who were Baum's only two public finance reps in New York, succeeded. When Geffrard moved on in 1994 to his key post in Hevesi's office, making underwriter decisions jointly with the Giuliani administration, Baum was again named a bond co-manager.
Thompson's colleagues on the five-member Liati board include David Dinkins and former deputy mayor Barry Sullivan. Located in a largely empty office at 17 State Street, Liati has been described as "a water boutique" by Geffrard, who claimed at a February conference that they were doing water supply privatization and financing deals, mostly in New Jersey.
Despite being on Liati's board for two and a half years and a current employee, Thompson drew a blank on what the company is doing, aside from a reference to a contract with the New Jersey Sports Exposition Authority. Geffrard ducked Voice questions.
Research assistance: Brian Bernbaum, Shonna Carter, Anna Lemond, Anna Levine-Gronningsater
High-Priced Consulting for a Low-Service HMO by Wayne Barrett