By Alex Distefano
By Scott Snowden
By Anna Merlan
By Steve Almond
By Jena Ardell
By Jon Campbell
By Alan Scherstuhl
By Tessa Stuart
April 16, 2002
On January 16, with just two weeks to go until his last day on the job, Russell Harding, president of the New York City Housing Development Corporationa small but powerful city agencypicked up the phone and called the corporation's travel agent.
"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"
"Harding's Conflict of Interest: After Pledging to Steer Clear of Dad's Law Firm, Son Aided a Client"
"Scandal Repair: As Harding Probe Continues, Cleanup Costs Grow"
Unlike other departing aides to the administration of former mayor Rudy Giuliani who may have been planning post-employment vacations, Harding ordered the bill sent to his agency for payment. That same day, the travel agent faxed an invoice for the trips to HDC, where an official vendor-payment request was immediately prepared. Six days later, on January 22, Senior Vice President Luke Cusack, a close friend who was hired for his job by Harding, signed off on it. A check for the full amount was promptly issued and the invoice stamped "Paid."
Harding, the son of one of the state's most powerful political figures, Liberal Party boss Ray Harding, resigned as scheduled on February 1. But records released in the wake of his departure show the planned Southeast Asia trip was just the cap on a virtual nonstop, three-and-a-half-year spending spree during which Harding and Cusack traveled literally around the world at city expense.
Records show that after Harding was appointed by Giuliani in 1998, he and Cusack racked up more than $250,000 in travel, dining, and entertainment expensesranging from $1000 dinners at the Four Seasons to a Hong Kong junket. Even Harding's morning bagels, purchased for $1.25 each, were charged to the agency.
The records also show that Harding dipped into the agency's pocket to shower presents on at least one friend who hadn't the remotest connection to city affairs, at the same time bragging about his ability to file personal expensesincluding gambling debtswith the agency as business costs.
Those expenses are now being pored over by the city's Department of Investigation, a probe that was set in motion after new agency officials examined the records in order to comply with several long-standing VoiceFreedom of Information requests.
Alerted by agency insiders that Harding was spending freely, the Voicefirst filed to obtain the expenses in October 2000. But Harding produced just a handful of records and claimed the rest had been lost in an office move.
Following Harding's departure in February, however, the Voicere-filed its requests. New HDC president Charles Brass, a Michael Bloomberg appointee, located the records and turned them over. He also immediately fired Cusack, who had remained at the agency, alerted the investigations agency, and ordered Harding's Southeast Asia tickets canceled.
Harding, 37, has refused to discuss his conduct. Irwin Rochman, a criminal attorney hired to represent him, said Harding "decided not to discuss the matter."
Citing the ongoing investigation, HDC president Brass declined to address most questions. A spokeswoman, agency assistant counsel Melissa Barkan, said that Cusack had been informed that "his services were no longer required. Beyond that it is inappropriate to comment."
Cusack also declined comment. "I'm just not going to talk about it," he said.
Rudy Giuliani quietly promoted Russell Harding to the HDC post, at a salary of $111,000, in June 1998. The Daily Newsreported it, pointing out that Harding had never finished college and had no financial background for running an agency that puts together multimillion-dollar bond deals to build city housing.
At a City Hall press conference, Giuliani was instantly defensive. It didn't matter that Harding had no experience in the field, he said. And it mattered less that his father was Ray Harding, Giuliani's chief political adviser, a man he'd publicly embraced and hailed as "a genius" a few months earlier at his re-election victory rally.
"Russell Harding has done an excellent job for this administration," he said. "This new job is something that he will do I'm sure with exceptional skill and ability. I don't hire people because of their father and I don't hold anybody's father against them either.
"What I do is," continued the mayor, warming to his argument, "I try to be fair and have the most talented people I can find in this administration. The reason this administration has been more successful than any administration of the last 30 or 40 years is that we have more talented people than those administrations had," he said.
Then he threw one last jab at the press corps before him. "I knew when I switched him to this position that you would all criticize me. But sometimes I enjoy it. Particularly when I think you're wrong and I'm right."
The mayor knew he was on fairly safe ground at the time. Russell Harding had worked in Giuliani's campaigns and held two prior lower-level posts in the administration. After dropping out of Clark University in 1986, he had worked as an aide to former senator Alfonse D'Amato and later won a series of public relations jobs with his father's help. Unlike his brother Robert, who was considered a rising star in the Giuliani administration (and ultimately served as a deputy mayor), Russell was generally rated merely competent.
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.