By Albert Samaha
By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
It's all true. Different skill sets for different jobs. But there have also been some glimpses during Cuomo's three-year stint in office that offer a decent clue at how he might handle things as the state's chief executive.
One of them was Cuomo's seemingly obscure battle to force the country's largest investment firms to assist customers who had been badly misled about something called auction-rate securities. Former deputy AG Eric Corngold said that he was skeptical at first: "My attitude was that this was some esoteric kind of investment that only rich people make. I said, 'I'm not sure we should get involved in this.' "
Like most of the deputies Cuomo hired, Corngold was a former federal prosecutor and had never met the attorney general before. "At the first meeting of the senior people, I remember him saying, 'You know, none of you really know me. I don't really know you. I don't even know who you voted for in the election.' I raised my hand and said, 'Primary or general?' "
One of Cuomo's first demands was that top aides join him on sojourns across the state to hear what was on people's minds. Whole days were spent in Utica, Niagara, and Rochester listening to mostly humdrum gripes. But among the complaints was that of a couple who had lost their kid's college kitty after their broker persuaded them to put it into auction-rate securities. They'd been told the securities were just as liquid as savings accounts, and paid more interest. But the liquidity dried up when the auction-rate market collapsed in February 2008. "They said, 'Now we can't get our money out and our kid can't go to college,' " recalls Corngold. Another woman said she had had to un-retire after putting her retirement money into the now-frozen securities.
Cuomo launched his probe in early summer 2008. By December, the office had deals with such titans as Citigroup, UBS, JP Morgan, and Goldman Sachs to unfreeze some $50 billion in investor assets. It was the largest return ever of investor funds. Some $600 million was collected in fines, $125 million of it to New York.
The negotiations revolved around highly technical legal issues, but Corngold says Cuomo was a hands-on participant at a table crowded with megawatt lawyers defending their most valuable clients. "He wasn't the guy sitting in his office waiting for the results. He was a tremendous and brilliant negotiator. I have learned the world from him about how those deals get done."
That's one checkmark in the correct box on the list of what it takes to be governor. Another is old-fashioned gumption. Among the many charges that the attorney general has led with his sword pointed at the enemy, the biggest and most notorious is the sprawling criminal probe into the startling corruption Cuomo's team found at the state pension fund under the watch of former comptroller Alan Hevesi.
So far, five people have pled guilty to paying kickbacks to grease their way into hundreds of millions of dollars in pension investment deals. None are small fry. In December, Cuomo won a guilty plea from a Los Angeles–based financial magnate named Elliott Broidy, a former national finance chairman for the Republican Party who held fundraising soirees at his Bel Air mansion for his pal George W. Bush.
Locally, the best-known name to take a collar in the ongoing investigation has been Ray Harding, the aging walrus who for decades was the chain-smoking mastermind behind the Liberal Party. If ever there was a time for the old-boy network to cash in its political favors, this should have been it. But despite the long relationship between Harding and the Cuomos, it didn't happen.
Over the years, Mario Cuomo and Harding had many duels. But the father stayed on the party's ballot line, and Harding was a Cuomo strategist as late as Mario Cuomo's losing race to Pataki in 1994. When Andrew Cuomo ran for governor in 2002, Harding gladly gave the son the Liberal endorsement. This proved to be his last hurrah: When Cuomo dropped out of the race, the Liberal Party lost its ballot line by failing to snare the required 50,000-vote minimum.
His political career sunk, Harding turned for help to Hevesi, his other statewide candidate. Under the tutelage of Hank Morris, Hevesi's political guru, Harding became a "placement agent," a kind of marriage broker between pension funds and investors. Not that he did any real work. Harding admitted in court that his $800,000 in fees was the product of a series of shams.
The attorney general announced Harding's guilty plea in one of his phone-ins in October. The state's pension funds, he said, had been "looted to reward a political boss." Thanks to either politeness or a lack of institutional memory, nobody asked Cuomo whether he had thought of Harding as a "political boss" back when he was running on his Liberal Party line for the state's highest office.
The bottom line here is that it's refreshing to see a potential governor pull no punches in dealing with a crooked ex-ally. On the other hand, it's a little chilling to hear someone denounce his one-time political sponsor as a "boss," without even a tip of the hat to his own past history.