People's Champion? Rick Lazio Is a Wall Street Creature

His fingerprints are all over the recent economic collapse

People's Champion? Rick Lazio Is a Wall Street Creature
Photos by Emily Peet-Lukas and AP

A decade ago, Rick Lazio lost to Hillary Clinton in the nation's most expensive and most watched Senate race ever, and then promptly disappeared.

Apparently convinced that his political career was finished, the former Long Island congressman decided in 2005 to donate a political lifetime's worth of documents to Vassar College, his alma mater.


AP Images
Lazio worked hard to pass the toxic 
law named after Phil Gramm.
AP Images
Lazio worked hard to pass the toxic law named after Phil Gramm.


Additional reporting by Cat Contiguglia, Sara Gates, Alana Horowitz, Bill Kline, Simon McCormack

Lazio is now back in the game, the assumed front-runner for the Republican/Conservative nomination to take on Andrew Cuomo to become New York's next governor this November.

And right when the 52-year-old Lazio needs to reintroduce himself and craft an image as the people's champion, there's 58 cubic feet of his own private schedules, phone logs, and internal memos in Poughkeepsie that detail quite well what kind of man he really is.

Take the time to go through the 170 boxes and 1,500 file folders covering the entirety of Lazio's 16-year public life, and what comes through like sunshine is what a loyal servant to Wall Street Lazio was, a patsy for profit.

As Lazio saw it, his job in the House was to feed and care for the industry symbolized by the 7,000-pound bull sculpture at Bowling Green park that embodies hard-charging Wall Street. It's a mission he excelled at, spelled out all too clearly, for example, in the stunning similarities between the memos faxed to him by lobbyists for the Street and the legislation he subsequently favored.

In return for his service, Lazio, though a junior member of the House, collected more in financial service contributions than any other Republican member, and after his 12-point loss to Clinton in the Senate race of 2000, was showered again with millions in salaries and bonuses at two glamour jobs concocted for him by the players who figured they still owed him.

After Lazio's 1993 to 2001 term in the House, and eight subsequent years on the Street, these allies of avarice are now his shadow running mates in a gubernatorial campaign oddly premised on stoking the anger that he, and his donors and employers, fomented together.

When Rick Lazio settled in as an executive vice president at JPMorgan Chase in late 2004, he had already told reporters that he'd "never say never," but was unlikely to seek public office again. So he turned over his papers to Vassar, beginning with his days in the Suffolk County District Attorney's office in 1985. Financed by a donor whose identity Vassar will not reveal, the college hired the Winthrop Group, the same private archivist that sanitized Rudy Giuliani's files in 2001. The archivists went through the files in 2005 and 2006, before they were made publicly available in the basement of Vassar's library. Lazio's congressional staff had already examined them before closing up shop in Washington.

What's left, though, is not just a window into the public life of New York's possible next governor, but a unique record of how Congress sold itself in the boom days to those with the biggest bags of campaign cash and the lobbyists hogging both lanes of the inside track—at great ultimate cost to the country. It apparently never occurred to Lazio, sitting behind JPMorgan mahogany, that yesterday's claim to fame might be today's shame.

It doesn't take much digging through the archive to find that Lewis Ranieri was Rick Lazio's finance chair for the race against Clinton; the campaign bragged about it then.

News clippings say Ranieri raised millions for Lazio "from contractors, developers, real estate brokers, mortgage lenders and bankers around the country." Ranieri was "credited with revamping the home-loan business in America" in those heady days.

Now Ranieri is on Time magazine's list of the 25 people to blame for the financial crisis. The inventor of mortgage-backed securities, which proved to be neither secure nor backed, Ranieri now tells Fortune: "I do feel guilty. I wasn't out to invent the biggest floating craps game of all time, but that's what happened." When he got the securitization scam going in the 1980s, Ranieri promoted greed as eloquently as he now sells contrition. "We made more money than all the rest of Wall Street combined," he gloated.

The Lazio logs from his congressional days reveal that the then 300-pound Ranieri, who has since seen a bank he chaired go bankrupt and lost 85 pounds, was frequently breakfasting, lunching, and dining with Lazio, and often leaving messages for him. The contacts go back to at least 1996, and sometimes the calls from Ranieri came at the most intriguing moments, like the day that incumbent Democratic Senator Patrick Moynihan said he wasn't seeking re-election, vacating the seat Lazio coveted.

Ranieri personally accounted—between himself, his companies, and his wife—for $226,750 to Lazio's campaigns in the old days, and another $30,000 as recently as last summer, making him one of Lazio's top donors even now. Ranieri's name doesn't appear on the current finance committee, much less as its chair; then again, the headline-wary Lazio can no longer raise in a year what he used to generate in a week—at least when salesman Ranieri could peddle his Island friend's magnetic public power.

Ranieri is not the only golden-boy-gone-bad to make an appearance on Lazio's schedule. In November 1997, the congressman's Banking Committee perch earned him an invite for an hour-and-a-half tour of Bernie Madoff's headquarters at 885 Third Avenue, just a few months after Peter Madoff sent a campaign check for $500. The Madoffs were hardly known as political donors, but Lazio got four contributions, totaling $2,500, perhaps with promises of much more to come.

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