The Private Lives of Russell Harding

The Feds Enter the Picture

The confusing language may just have been Russell Harding's bragging to someone who says he knew nothing about the issues.

"I really must admit I don't understand half of what you just said," responded Sawyers, "but I guess it makes sense."

"LOL," typed Harding, using the cyber-ese for "laugh out loud." "Trust me Fred . . . it makes perfect sense for the line of work my dad is in . . . as well as with my job . . . we all help the mayor and he helps us."

At the time of the chat, Raymond Harding's law firm had only recently ceased representing BAA USA Inc., a British firm that had been selected by the Giuliani administration for a long-term contract to take over management of the city's airports. The contract was the first step in Giuliani's long cherished, but unsuccessful goal of removing the Port Authority from its control of both Kennedy and LaGuardia airports.

BAA is the owner of Heathrow Airport, Britain's largest, and is a leader in airport privatization efforts worldwide. The firm quickly beat out three other competitors for the consulting contract, but then faltered during negotiations with the City Council.

A BAA representative said the decision to hire Raymond Harding's law firm, Fischbein Badillo Wagner Harding, was made soon after the company began competing for the contract in late 1999. The company hired other prominent representatives as well, including former first deputy mayor Peter Powers and the public relations firm Rubenstein Associates.

"When we came to the New York marketplace we wanted some solid advisers who could cover the waterfront," said company spokesman Dennis Roseboro. "Fischbein Badillo was obviously a good firm and understood the process."

According to two people who helped advise the company, Ray Harding was instrumental in the effort and presided over the advisers' strategy meetings.

But an April 2001 story by Newsdayreporter Mohamad Bazzi disclosed the company's powerful ties to City Hall and BAA quickly dropped Fischbein Badillo and Powers. "The project was in a new stage and everyone agreed it was in our best interest to sever our relationship with Fischbein Badillo and Powers, given their political activities," said Roseboro.

A former Giuliani official said the impetus came from an embarrassed City Hall. "Someone had to drop a dime to tell them this wasn't a good idea," said the official.

Giuliani has always acknowledged the political debt he owes Raymond Harding, whose Liberal Party backing gave the ex-prosecutor his margin of victory over David Dinkins in 1993. At his 1997 re-election, Giuliani publicly hailed Ray Harding as "a genius." Harding also profited from the relationship. He launched a thriving lobbying operation on behalf of firms doing business with the administration.

Giuliani has always defended his dealings with Ray Harding as proper, but he has yet to comment on the revelations concerning Russell Harding, whom he appointed to his post in 1998 even though he lacked a college degree and experience in housing finance. Sunny Mindel, spokeswoman for Giuliani's new consulting firm, Giuliani Partners, said the former mayor had no comment.

Shargel again challenged the authenticity of the chats. "Russell never discussed this with him. And everything about BAA was publicly available in Newsday."

A spokeswoman for the city's Economic Development Corporation, which selected BAA, said the contract was never executed and no payments made. She said no one at the agency was aware of law enforcement interest in the matter.

The Harding investigation continues to consume the Housing Development Corporation, however. On May 31, four members of the corporation's board of directors unanimously approved the hiring of a law firm, Debevoise & Plimpton, to represent the corporation, as the retainer agreement states, "in connection with investigations relating to the conduct of certain of the company's former executives." Leading the law firm's efforts is Bruce Yannett, a former federal prosecutor who worked for the Iran-Contra independent prosecutor.

After approving Debevoise's retainer, the directors went into executive session to discuss the probe. They were behind closed doors for over 75 minutes—longer than any meeting they'd held during Harding's presidency.


Related Stories by Tom Robbins:

"The Lush Life of a Rudy Appointee"

"More Lush Life of a Rudy Appointee"

"Party Harding"

"Harding's Hustle: Bonuses, Bargains, and Strip Clubs at the Housing Development Corporation"

"Low-Class Act: Russell Harding on Blacks, the Poor, and the Clintons"

"Bonus Baby: A Hefty Something Extra in Russell Harding's Last Paycheck"

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