Bonus Baby

A Hefty Something Extra in Russell Harding's Last Paycheck

In his final days as head of the city's Housing Development Corporation, former Giuliani aide Russell Harding collected a whopping $128,000 extra in pay, records show.

The payment was included in Harding's January 10 paycheck, issued just days before he stepped down after three and a half years at the helm of the agency, which helps finance affordable housing.

It is not clear what the extra payout represents. Corporation officials refused to discuss the issue, citing an ongoing probe of Harding's high-spending conduct by the city's Department of Investigation.

Happy Payday: former HDC President Russell Harding collected $128,000 extra in January.
photo: New York Housing Development
Happy Payday: former HDC President Russell Harding collected $128,000 extra in January.

But sources familiar with the agency said that even though Harding was often away from the office for as much as two weeks at a time, he never filed for vacation or holidays, instead accruing the days as unpaid leave and taking them in a single final payout. Such "lump sum" payments are allowed under city regulations for managerial officers, but usually only longtime veterans have such huge payouts on leaving city service.

When he resigned on February 1, Harding was earning $162,780 as president of the corporation, up from $111,000 when he was first appointed to the post by then mayor Rudy Giuliani in June 1998. But records show that Harding, the son of Giuliani's political mentor, Liberal Party chief Ray Harding, paid himself bonuses totaling over $56,000 in 2000 and 2001 (Voice, "Harding's Hustle," May 14).

Winning approval for the extra payments wouldn't have been difficult. Harding's paycheck requisitions were approved by corporation senior vice president Luke Cusack, a friend who was hired soon after Harding took over the agency in 1998. Cusack was fired in March after a new HDC president, Charles Brass, was appointed. The agency was overseen by a seven-person board of directors composed of city and state appointees, but board members said they were never shown personnel schedules reflecting salaries.

Asked about the payment, Harding's attorney, Gerald Shargel, said, "There will be a day when we respond to all this but it won't be today."

Harding was shifted to HDC by Giuliani in 1998 after serving as an executive vice president for corporate communications at the Economic Development Corporation. He caused a minor stir in that post as well when he implemented a controversial bonus program that rewarded top executives with extra pay of up to $15,000. Prior bonus programs had been spread out among lower- and mid-level employees. In 1997, a year when cops, firefighters, teachers, and other city workers went without any pay hikes, Harding himself collected a $3400 bonus—after working at the agency for only six months.

A college dropout, Harding had no financial background when Giuliani appointed him to head HDC, which handles complex housing bond deals worth tens of millions of dollars. Expense records show that Harding spent much of his tenure jetting around the country and staying at expensive hotels and resorts. Along with Cusack, his top aide, Harding spent an astonishing $250,000 in expenses, which included gifts of a television and a DVD player to someone he met in an online chat room.

Harding also revealed a dark side during his chats with the man who received the gifts, Fred Sawyers of Indianapolis, Indiana. Last week the Voicerevealed that Harding repeatedly referred to blacks and low-income New Yorkers as "trash" and castigated Hillary Clinton—the Liberal Party's candidate for the U.S. Senate in 2000—as a "bitch."

Shargel, a criminal defense attorney retained by Harding, initially called the release of private, online conversations "offensive." But he later denied the quotes attributed to his client, calling them "preposterous."

"My client steadfastly denies saying those things," said Shargel last week, declining to give details.

Several current and former HDC employees, however, said the quotes confirmed their own long-held suspicions of Harding's attitudes and that he often displayed a bias against blacks in hiring, promotions, and raises.

"I wasn't surprised," said Beverly Ratcliffe, a former administrator at the agency who left in December. "In the normal course of business, you could just tell Russell didn't want blacks around." Ratcliffe, who is African American, said that Harding would pointedly not invite her and other blacks to meetings, even when the subject concerned matters they handled directly.

"There were very few black men at HDC, period," she said. "Russell wanted a white person in charge of every department, even if they weren't qualified. Whites were regularly given higher raises and bonuses than people of color. Quite a few whites who didn't have the experience were put in charge of black people who knew much more and had higher degrees."

Another employee voiced similar concerns in a complaint filed with the state's Division of Human Rights in 2000. Tyler Johnson, who was employed as a cash management assistant since 1997, said that he had been denied a promotion because of his race. He also charged that raises were routinely granted to white employees after their first six months of employment but denied to blacks. All decisions on raises were made by Harding, Johnson said.

Johnson said that after he complained of discriminatory treatment, he was fired in July 2000 for sending "e-mails that were not business related." He claimed that Harding ignored similar lapses on the part of managers who were white.

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