The Lush Life of a Rudy Appointee

Flush from his landslide re-election, Giuliani was rewarding his allies, and Ray Harding had proved to be his most valuable political ally. The senior Harding not only helped forge electoral and city policies but also screened potential administration job candidates. He also used his law firm to lobby city commissioners, a practice that had made him wealthy under Giuliani.

The Housing Development Corporation was a perfect spot for Russell—one of those out-of-the-way places where it is hard to foul up too badly. The agency generates its own budget from fees charged to developers who are seeking city-authorized, tax-exempt bond financing for their development projects. In bureaucrat-ese, HDC is "off-line," meaning no one, neither the city or state comptrollers, nor the City Council has direct oversight or regulatory authority.

It is, in short, the perfect municipal hideaway.

And the newly released records show Russell Harding took his appointment there as a gold-plated ticket to the high life.

From the Bellagio to a bagel: no expense was too great or too small. Harding's petty cash receipt for his morning bagel.

He was clearly thrilled to be the boss. One of his very first expenditures was to buy a brand-new official city badge to carry. He hired his friend Cusack, with whom he had worked at the city's Economic Development Corporation. He also gave himself and top executives new corporate credit cards with Diners Club, a practice rarely in use at city agencies. He had the agency acquire a new fleet of cars, including a Ford Windstar, a Chevy Tahoe, and a Mercury Grand Marquis complete with lights and siren. The siren wailed nonstop whenever Harding was chauffeured around town, agency employees said.

"The siren, yeah, we used it to beat traffic," said one of Harding's city drivers, Herminio Torres. "It was cool. I personally liked using it."

But Harding was in the fastest lane when he traveled outside the city. Records show Harding and Cusack, traveling together, logged more than 30 lengthy trips, visiting Vancouver, Seattle, Portland, Toronto, Palm Springs, Dallas, Chicago, Tampa, Denver, Las Vegas, Charleston, Los Angeles, San Diego, and Miami—often returning to favorites for a second stay.

They listed the business purpose of the trips as attendance at housing finance and technology conferences. But they rarely stayed at the hotels where the conferences were held, and according to others who attended, they were usually absent from the proceedings.

Instead, the expenses show that they ran up huge car rental bills and dining tabs as they sampled local fare.

The pair's travel tabs dwarf even those of most private, corporate executives. A survey of 200 private corporations conducted in 2000 by a management consulting firm found that the average three-day domestic business trip cost $970, while international trips of seven days averaged $3455.

Harding and Cusack also logged expenses way beyond those of other city officials. When former police commissioner Howard Safir was criticized for taking 10 separate out-of-town trips in 1999, his total expenses were $9100, almost half of which was paid by a private company.

To pay for their travel and entertainment, Harding and Cusack bypassed their agency's own written expense guidelines. HDC rules mandate that lodging costs at conferences are to be at the set conference rate. Airfare is to be "the most economical." Meals, both on the road and at home, are not to exceed "reasonable and customary" costs. Exceptions can be granted by the president, however, the rules state, and Harding and Cusack appear to have had a full-time waiver.

Their most exotic fling came in November 1999 when they flew to an international housing conference in Hong Kong. They put up at the Royal Garden there for $2000 in a four-day stay, and spent $1000 on meals. They stopped off in San Francisco on the way back, staying at a small luxury hotel called the Monaco, running a tab of $4000 over four days and dining at a nearby French spot, Restaurant Lulu, where one dinner came to $400.

Last year, records show, Harding and Cusack were on the road almost constantly. For a Washington, D.C., visit in March, they spent $2800 at the Four Seasons in Georgetown, where rooms start at $390 a night.

In April, they jetted to San Diego, saying they would attend a meeting of the National Association of Local Housing Finance Agencies. It was an apparently last-minute decision; tickets were booked just two days before departure and cost $2437 apiece, as much as the first-class rate. They checked into the Hotel del Coronado, considered the city's most luxurious—and expensive—retreat, where the bill ran to $5300. They spent another $280 on a rental car and almost $1000 on dining.

In May, there was a short, $2500 jaunt to Tampa. In July, Harding went to the Snow Flake Inn in Stowe, Vermont, for a housing meeting, spending $2200. The same month, records show he made quick visits to Houston and Las Vegas.

In October, Harding and Cusack flew to Los Angeles for a "technology" conference. They stayed at the Casa del Mar in Santa Monica (cost: $5780), and dined at Spago, Hollywood's most crucial see-and-be-seen spot (tab: $390). Harding also asked to be reimbursed for $751 charged to his personal Visa credit card—which he rarely used for business purposes—for the cost of two visits to "Aqua" in Santa Monica, describing them as "conference dinner expenses." But a search shows no restaurant by that name in Santa Monica, only a plush spa overlooking the Pacific Ocean that offers "exquisite pampering" with massages and aromatherapies—and doesn't take Diners Club. The L.A. trip cost $11,725.