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

His fingerprints are all over the recent economic collapse

In November 1998, two weeks after Patrick Moynihan announced that he wouldn't seek re-election to the Senate in 2000, Trepeta wrote Lazio a four-page memo assessing a race Lazio was already planning. The memo assessed Lazio's possible opponents, even including Nassau Republican boss Joe Mondello, who Trepeta said, "represents the old way of doing things, represents failure," as well as then Clinton Health and Human Services Secretary Donna Shalala, a celebrated New Yorker who is now the president of the University of Miami. "Too homely, too short, too liberal," Trepeta wrote. John Kennedy Jr. was only "cute (allegedly)." He is John Kennedy, Trepeta deadpanned, "but he is no John Kennedy." Peter King, the Suffolk Republican still in the House, was viewed as "too extreme, single issue guy, abrasive, good mayor of Dublin, not right for New York."

Trepeta also dealt with Lazio's then and current opponents, Clinton and Cuomo. His reaction to Clinton turned out to be all Lazio would say in 2000: "New Yorkers deserve a real New Yorker in the Senate." And his take on Cuomo may well turn out to be the Lazio message more than a decade later: "Liberal like his father, but not as smart. Do we want to go back to the old days (black-and-white pictures of Mario, headlines of job losses, high taxes, unemployment, pictures of homeless people, make him his father). He has got to have other negatives." Trepeta, who had been Lazio's counsel in New York for three years when he wrote the memo, tells the Voice that "he must have been saying that about Cuomo for a long time" before he wrote it.

This sophomoric contempt carried over to Trepeta's assessment of the issues in the campaign. Job creation? "Tax cuts work. Pork also works." Environment? "Though I personally believe most cancer and disease is caused by genetics and lifestyle, most people believe the mistreatment of the environment is the cause. Do not hesitate to make the connection." Crime? "An anti-gang initiative would be good fodder." Education? "There is no point in trying to turn the tide on this issue. It may be better to say a lot and do no further harm."

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

Trepeta now works at the nation's largest trade association, the National Association of Realtors, a group that lobbied Lazio relentlessly when he chaired the House housing subcommittee. Its current $20-million-a-year lobbying operation also includes another Lazio veteran, Joseph Ventrone, who is vice president for regulatory affairs and, according to Trepeta, hired him at NAR. Ventrone, Trepeta, and Horne have given $3,650 combined to the current Lazio campaign. Ehrlich's firm has been one of NAR's outside consultants. Ed Gillespie, the Bush head of the Republican National Committee and a frequent contact on Lazio's congressional logs, is a leading outside lobbyist for the association. Lazio, who collected $34,000 in contributions from the NAR while in Congress, championed many of their issues.

Lazio pushed then HUD Secretary Cuomo, for example, to issue a rulemaking legalizing yield-spread premiums, the bonuses lenders paid brokers who steered borrowers to higher-end mortgages. NAR was at the forefront of the effort to protect the sucker-punch payments, which rose with the interest rates brokers persuaded unwitting borrowers to accept. Mixed decisions on more than 150 class-action lawsuits threatened the scheme, which one judge branded "kickbacks," so Lazio supported legislative efforts to stop the suits and put language in the HUD appropriations setting a deadline for Cuomo to issue a rulemaking. He finally did, declaring the payments legal for the first time. Since these premiums were attached to 90 percent of the subprime mortgages, and saddled vulnerable borrowers with debt that drove the foreclosure rate, they have subsequently been seen as a significant factor in the meltdown.

Lazio's key housing committee chairmanship positioned him to lead the way on homeownership legislation, depicted at the time as a boon to minorities and others chasing the American dream. But his logs confirm that the homebuilders, subprime mortgage bankers, brokers, and other interests that were feasting off this bipartisan ratcheting up of the market, as well as the JPMorgans and others that were making billons securitizing these mortgages, were the core constituencies backing these bills for him. His appointment diaries are laden with meetings with the most predatory of these lenders.

Yet he still trumpets his housing committee "achievements."

It is really all he has.

His candidacy is a postcard from another era, and the monuments in the photos on the cards are all in ruins. He can't charm his way around his obsolescence, or his obsequiousness. There are crusading candidates who are said to be running against history. In Lazio's case, it's history that's colliding with him. At a moment when even the SEC's disgraced chief from the Bush era concedes that voluntary regulation did not work, Lazio reminds us of those who never thought the rules were lax enough.

He has surely never looked at himself in the mirror he left behind at Vassar. As his black hair grays, in the midst of what may be his last run, even he would see the difference between the idealism of the kid that graduated from there in 1980 and the cynicism of the congressman whose records his alma mater now owns. His archive is not just the legacy of a lackey; it is the prelude to America's nightmare.

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