By Albert Samaha
By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
Going-away parties are a tradition at government agencies. Walk down the corridors of any city office and there are notices announcing farewell events for departing colleagues. Fellow employees show their regard by shelling out $25, $40, or even $50 apiece to raise a glass and buy a gift for longtime co-workers.
That wasn't the style, however, at the city's Housing Development Corporation, a small city agency with a big budget where Russell Harding, son of the leader of the state's Liberal Party, ruled as president from 1998 until earlier this year.
When the chairman of his board of directors decided to leave government to work for an investment bank in the summer of 2000, Harding threw a lavish $22,000 farewell partyand had the city pick up the tab.
(photo: NYC Housing Development Corp.)
The outgoing chairman, Richard Roberts, had served in his post for only three years when he received the royal send-off. He never actually worked at HDC at all, only serving as chairman of its seven-member board by virtue of his position as commissioner of the city's Department of Housing Preservation and Development, a job he held from 1997 until July 2000.
But as chairman, Roberts was the closest thing to a boss that Harding had, and the corporation president appears to have been eager to please him. Records show Harding provided Roberts with a corporate credit card and a Ford Explorer sports utility vehicle purchased specifically for Roberts's use.
And when Roberts announced he was leaving to work for the investment firm Goldman Sachs, Harding pulled out all the stops, renting the posh American Park restaurant in Battery Park, a city concessionaire offering fine dining and wine.
"Go for the amazing view, stay for the delicious seafood at this Battery Park gem with sleek decor and a wonderful patio," commented Zagat's survey that year about the restaurant.
Harding's credit card records show that he sampled the fare at American Park, enjoying a $200 business lunch on July 11, just two days before putting down a $1000 deposit for the party. Invitations were mailed directing invitees to RSVP to Roberts's office at the housing department by July 26, just five days before a second payment was made to the restaurant.
Harding's agreement with the restaurant for the event on August 4, 2000, called for a decor of ivory linen and an open bar, with bartenders pouring from premium brands. The restaurant charged $72 per guest with an estimated crowd of 250. And there were guests galore. Then-mayor Giuliani showed up, as did "just about everyone in city government," as one guest recalled, along with scores of housing developers, bond attorneys, and bankers.
As a going-away gift Harding presented Roberts with a top-of-the-line, $525 handheld computer. There was no personal generosity involved, however. Using his corporate credit card, Harding purchased the computer from an online vendor and billed it to the agency, records show.
Three days later, Harding's friend and senior vice president, Luke Cusack, went to settle up with the restaurant. The total tabwith gratuities, an extra bartender, and someone to check coats (even though it was August)came to $21,818. Payment was made in two checks, drawn directly against the agency's general operating budget.
The Voicereported this month that Harding and Cusack spent more than $250,000 on a jet-setting travel and dining spree during the three and a half years that Harding headed the agency. Acknowledging wrongdoing, Harding repaid more than $52,000 after the Voice's inquiries. But just how much more of the agency's money Harding spent is still being evaluated by analysts from the city's Department of Investigation who are poring over agency records, interviewing staff members, and have even downloaded the hard drives of Harding's and Cusack's office computers. The Roberts farewell party was not included in the Voice's earlier tabulation of expenses because it was not listed in the records released to the paper earlier this month after an 18-month effort to obtain them.
The extravagant event amazed many at the 110-person agency, few of whose staffers were invited to the affair. A copy of the contract was obtained by the Voicefrom sources outside the agency.
Roberts, who had previously served as a City Hall adviser to Giuliani from 1994 to 1997, was appointed chairman of the city's Health and Hospitals Corporation in February 2001 by Giuliani. Mayor Bloomberg renamed him to that post earlier this year. Asked about the party, Roberts said he was unaware of any specifics about who arranged it or paid for it and declined to comment on any other aspect of his dealings with Harding, citing the ongoing investigation.
Roberts also declined to respond to an assertion made last week on NY1 by Ray Harding, Russell Harding's politically influential father, that Roberts had personally recommended his son for the HDC position. Several sources, including former Giuliani aides, said Roberts had nothing to do with the recommendation.
Current and former HDC staffers said that after Roberts left office, his official silver Explorer SUV sat largely unused, in garage space rented by the agency on John Street, around the corner from HDC's Williams Street offices. Motor vehicle records show that in February 2001, Harding sold the car to Israel LaSalle, one of several drivers he employed. According to others at the agency, LaSalle paid $10,000well below its approximately $15,000 resale value.
"This is being investigated by DOI, and I have no comment," said LaSalle.
HDC board members questioned last week said most of their attention was focused on housing and bond deals, and that they received no details of Harding's expenditures, approving only a total annual operating budget for the agency.
Throughout Harding's tenure, one of those charged with overseeing his agency was his brother, Robert, another longtime Giuliani aide. As city budget director from 1998 until 2000, Robert Harding served as a member of HDC's board. In March 2000, he was promoted to the post of deputy mayor for economic development and finance, where he had direct supervisory responsibility for the HDC. But in one of the paradoxes of the evolving scandal, several friends of Robert Harding's said the two brothers have been estranged for years, and rarely speak. During Robert Harding's term on the HDC board, staffers said, he infrequently attended board meetings when Russell Harding was present.
Robert Harding, now a lobbyist with the firm of Greenberg Traurig, did not return messages.
Last Wednesday, at their first official meeting since the revelations about Russell Harding's expenses, four of the board's seven members sat down in leather-covered Keilhauer ergonomic chairs and gathered around an immense, 40-foot-long gleaming wood conference table, just some of the expensive furnishings acquired under Harding's reign.
"I have a responsibility and I intend to discharge it," said Moerdler, adding later that he was "unimpressed by any DOI investigation going back 50 years in terms of how you best fix the agency."
Behind the boardroom, separated by a well-equipped office pantry, was Harding's now empty office. It is a spacious, windowed room with a large bookcase and cabinet of bird's-eye maple framing a long desk upon which two remote-control devices sit. They were for automatically opening and closing the office doors, explained a staffer, clicking the remote as a wood door closed silently at the other end of the room.
Related Stories by Tom Robbins:
"The Lush Life of a Rudy Appointee: How a Politically Tied Aide Spent a Quarter of a Million Dollars on Food, Fun, and Travel"