Jeb & George


Libby Pataki, the governor’s wife, is part owner of a canker-ridden parcel of citrus groves in southeast Florida that state and local officials are negotiating to purchase at three times the price the Pataki-tied company paid for it in 2000. Jeb Bush’s administration has already cleared the way for the acquisition by giving the parcel a top ranking in the Florida Forever preservation program, even though it does not meet the pristine wetlands standard ordinarily applied to state-financed purchases.

Sources indicate that the Pataki land, which is located along the border of Martin and Palm Beach counties, will go for roughly the same as the $10,113 per acre Florida officials agreed to spend on a neighboring parcel with pristine wetlands. Mrs. Pataki and her partners could collect $14.4 million compared with the $4.4 million they paid for it before the canker was discovered. A bacterial disease that leaves cork-like lesions on fruit and leaves, the canker swept through a reported 150 acres of the groves last fall, forcing the removal of thousands of trees.

An agreed-upon price for the Pataki land will go before a state board on November 14, a week after both governors are presumably reelected, The purchase will be financed as a 50-50 state and local split, with Governor Bush ultimately having to personally approve the voluntary acquisition. Mrs. Pataki’s earnings on the sale may well be the largest windfall in the complicated maze of real estate dealings involving the family over the last decade or so. They were over a million dollars in debt when George Pataki took office in 1995.

Though Mrs. Pataki had no income when her husband was elected, she has become a big breadwinner in the family, earning $200,000 in 2001 from a variety of consulting jobs (he reported $204,500). One of the largest is with Premier Heart, a Long Island-based medical technology start-up that has paid her $285,000 since November 1998 to aid in marketing a sophisticated electrocardiogram. The mysterious company, whose Web site once said the marketing strategy was aimed exclusively at developing a network in “five hospitals in the New York metropolitan area,” is owned by Richard Hayden, who is also a principal in the Florida company, Old Blue LLC, that bought the groves.

Reached at his Oregon home, Hayden told the Voice that he went to Yale University and Columbia Law School with the governor and has been a friend for decades, but refused to say if it was he who had invited Mrs. Pataki to join Old Blue, a term of affection for Yale. Financial disclosure statements indicate that Mrs. Pataki acquired an 8 percent interest in the company, which was incorporated on December 20, 1999, using Hayden’s million-dollar, five-bedroom, four-and-a-half bath house in Ocean Ridge, Florida, as its mailing address. The only other partner is Vanessa Yuan, who lives on West 66th Street in Manhattan and declined to answer any questions. Hayden, who is married to Ying Lee Hayden, refused to say if he was related to Yuan.

Hayden said he and Mrs. Pataki were “passive investors,” and were “not really involved” in the ongoing negotiations with Florida officials. Asked if The Stuart/Port St. Lucie News was correct in reporting that his firm approached local officials about buying the 1430-acre plot, after canker hit their groves last year, Hayden said, “That’s not my understanding.” He refused to elaborate. Describing himself simply as an Oregon attorney for 23 years, Hayden refused to say if Premier Heart was “in any way benefiting” from his ties to Pataki, including the recent decision by New York Empire BlueCross BlueShield to cover patients “with diagnostic indications” detected by the company’s experimental Cardiotron.

The same day that Old Blue LLC was incorporated in Florida, another company, New Orange LLC, was also formed, including three major local developers: Shannon Ginn, John Bills, and Charles Martyn. The three had long been the principals of Sunrise Citrus Groves Inc., which leased the then thriving orange and grapefruit groves near Cypress Creek. Seven days later, Old Blue and New Orange became partners in Sunrise Boys LLC, which bought the groves on January 3, 2000. The only one of the three Florida partners reached by the Voice, John Bills, rebuffed questions about why they didn’t just buy the groves themselves, though he said he was “aware that Rick brought in the governor’s wife,” a reference to Hayden.

The Sunrise property was bypassed for preservation designation in late 2000, largely because it did not contain pristine wetlands, according to Patrick Hayes, a leader of the Loxahatchee River Coalition. Though Hayes and other environmental leaders there favor the acquisition of the parcel, and its possible use as a storm-water reservoir, he is upset that officials made the purchase of the neighboring wetlands property contingent on closing a deal with the Pataki partners.

“The groves are definitely a secondary consideration,” said Hayes. “I don’t know why the state chose to make them a linchpin piece and make the very critical acquisition of the wetlands contingent on the groves. I just don’t know how this piece got to be such a prominent fixture.” Hayes led a 400-mile trip by activists to Tallahassee this spring to push for the Florida Forever ranking, but he says the purchase of the wetlands property is a “life or death” matter for the river, while he doesn’t “really care what happens to those groves.” The state usually “considers groves a liability,” Hayes says, adding that “under normal circumstances, it would not want to buy a wetland disturbed by them.” The only explanation state officials offered was that an easement issue affecting the adjoining property necessitated the acquisition of Sunrise, an unlikely argument if Sunrise’s owners weren’t anxious to sell.

Martin County’s water quality chief, Gary Roderick, wrote a memo that implicitly made much the same point as Hayes. After the unanimous June vote of the state’s Acquisition and Restoration Council to list the two parcels on the “A” list for purchase, Roderick said that the southernmost 2580-acre sections of the project—which are owned by Indiantown Realty Partners—”contain the historic flowway of Cypress Creek and the bulk of the environmentally sensitive portion of the tract.” The northern sections owned by Sunrise, Roderick concluded, include only “the groves and minor wetlands.”

The Jupiter Courier described a similar dichotomy when its reporter accompanied state and local officials on a daylong swamp buggy tour of the parcels in April. The paper contrasted “the Old World climbing vine and exotic species” on the southern side with “the lack of pristine land on the grove,” which, it said, was occupied by three-foot alligators “lurking near drainage ditches” and hawks hanging in the sky. Pataki partner “Punch” Martyn, who led the tour of their site, declared: “I haven’t heard a price, but I’m a willing seller.” Officials offered only $3444 an acre for the wetlands in 1999.

Sunrise bought the parcel from Indiantown Realty, which is principally owned by James Moran, a Maryland businessman who has given $92,300 to Jeb Bush and the state party in the last two years. Moran’s company bought 5900 acres in September 1999 from WCI Communities, a development firm owned by Al Hoffman, the chairman of the state party’s finance committee and top Jeb Bush backer. Indiantown, which still owns the wetland portion of the site, sold the groves to Sunrise barely three months after acquiring them.

While county officials declined to specify the expected price, Hayes said he’s been told that Sunrise “will get about the same per acre” as was paid for the Moran property. Sunrise partners Bills and Hayden refused to comment on the price as well, with Bills denying that canker prompted the decision to sell. “You know everything’s always for sale,” said Bills, indicating it was a matter of price.

School for Hypocrisy

George Pataki did a 180-degree turn on the controversial appellate division decision upholding the state’s school-aid funding formula, going from being “pleased” with it to condemning the eighth-grade standard for success it set for city schools. His verbal conversion won the endorsement of Randi Weingarten, the teachers union president more concerned about salary aid than school aid. But it did not involve any formal retreat from the state’s insistence on opposing the suit, which was brought years ago by the Campaign for Fiscal Equity (CFE), a coalition of education groups challenging the historically discriminatory funding formula. Pataki decided to appeal a lower court loss in the case and continues to defend the formula at the Court of Appeals, which will hear it next year.

CFE and state officials have opened negotiations on a possible settlement, and one of the governor’s representatives in the room is none other than Martin Bienstock, the state attorney who was the prime architect of the defense of the formula. It was Bienstock whose aggressive arguments so outraged then chancellor Harold Levy that Levy walked out of the courtroom in the middle of Bienstock’s final summation at the trial, before Supreme Court Judge Leland DeGrasse. When Bienstock made that speech in 2000, he was working for the attorney general. He was first hired by Republican AG Dennis Vacco, who assigned him to the case before leaving office at the end of 1998.

Ironically, Bienstock left the AG’s office eight months after his appearance before DeGrasse to take a $15,000 raise and go to work as assistant counsel to the governor, advising him on education matters. The very arguments the governor now spurns originated with Bienstock, who contended before DeGrasse that “the minimal constitutional standard” for education “is crucial because it sets a bar that keeps the judiciary from interfering.” Bienstock said that the evidence in the case showed that “not only is the money there, but that the NYC public school system, warts and all, does provide a sound basic education,” which means its students grow up “capable of voting and serving on a jury.”

Bienstock claimed that salary increases for teachers “had no positive effect, none, on student performance,” and argued that “pouring a lot of money into schools may not be the best way of addressing issues of poverty,” citing prenatal care as a possible preferred approach.

All three of the judges who signed on to the majority opinion were either appointed or promoted by Pataki, including Utica judge John Buckley, who is reportedly under consideration to become the next presiding justice in Manhattan’s First Department. Buckley is one of four appellate judges in the two departments based in the city who is having many of his personal expenses regularly reimbursed by the state. The governor’s insistence on appointing upstate Republicans to vacancies downstate—a peculiarly Pataki phenomenon—has led to the expenditure of $284,861 since 1999, with Buckley running up the biggest bills, a total of $140,927 between April 1999 and August 2002.

Not surprisingly, a traveling judge like Buckley also has rather transient views about matters very material to life in NYC. In addition to joining the CFE majority, Buckley was one of the majority that decided in 2000 to move the Amadou Diallo case to Albany, where the charged cops were predictably acquitted. He also was the only judge to be part of the majority in the two highly politicized, 3-to-2, election law cases this year. He voted to allow Bronx state senator Pedro Espada, who sits and votes with the Republicans in Albany, to run as a Democrat, and then voted to knock the Democratic nominee in the same race, Reuben Diaz, off the ballot. Both decisions were reversed by the Court of Appeals unanimously.

The most expensive of our visiting justices, Buckley’s vouchers indicate he is reimbursed for $3066 a month in rental costs, and has been paid by allotment for as many as 27 breakfasts and 27 dinners a month. His colleague from Poughkeepsie, George Marlow, also assigned to the First Department by Pataki, joined Buckley in the outrageous Espada decision. Marlow’s expenses total $56,123 since he was assigned in May 2001. Two upstate associate justices assigned by Pataki to the second department in Brooklyn, judges Nancy Smith and Sandra Townes, have run up $87,811 in expenses. The four-judge total is the state’s price tag for Pataki’s preference for partisan appointments.

Appellate judges are required by law to be elected Supreme Court judges and, until Pataki changed the rules by executive order in 1997, they had to be approved by a screening panel appointed by him and other state officials that sits in each of state’s four departments. Pataki changed it so that an upstate panel could clear candidates for a downstate department, prompted, no doubt, by the scarcity of elected GOP judges in the city. That’s allowed him to pack the premier downstate departments with upstate partisans.

Asked if he appointed downstate Democrats to vacancies in heavily Republican upstate, or shifted assignments anywhere for party reasons, former governor Mario Cuomo said he didn’t, pointing to the GOP majority he named to the Court of Appeals. In fact, the last upstate judge assigned to the First Department before Pataki was in 1975. The judge’s party affiliation was unclear.

Row H For McCall

The Voice has decided for reasons unknown not to make an endorsement in this year’s gubernatorial election. I and Tom Robbins urge readers to vote for Carl McCall on the Working Families Party line. He is an able and decent public servant, and 50,000 votes on that line is crucial to maintaining a progressive party on New York’s ballot.

I have been on Governor Pataki’s case for weeks here, but I have a confession to make. On a hunch last Friday, I rode out to Cold Spring in Westchester to find out if Pataki, like his counterpart McCall, had ever tried to get a job for one of his children. I noted from the governor’s disclosure forms that 19-year-old Ted had worked in the summer of 2000 for a landscaping-masonry contractor called Gregorio & Gregorio, located a few miles from the family’s Garrison home. Since the listed address for the company turned out to be its owner’s empty home, I roamed Route 9 until I found it. The company was a portable shed off the highway with no sign. All that stood by it was a pile of heavy stone and Mario Gregorio, who spoke with a heavy Italian accent. Yes, he said, “the father asked me to give him a job.”

What did the kid do?

“He carried and broke stone. His father wanted him to do hard work. I taught him how to mix cement. He never missed a day.”

Have you ever done any state work?

“I leave that to the big boys. I don’t want to bother with the paperwork.”

Why did the father ask you?

“I’ve known him all my life. I used to buy flowers at the Pataki family farm.”

That’s George Pataki the person, as opposed to George Pataki the politician. He leaves this kind of endearing tale in his wake all the time. People around him truly like him. It only makes more anomalous the painful distance between these two sides of his life. How can a man of real values in his personal life run a government so dissolute? I wrote a book about a “City for Sale” once, but I have never known a government more for sale than Pataki’s.

It helps none of us if he is personally admirable at times, so long as he loans his government to the D’Amatos and the Garganos and the O’Maras, who contaminate a state. The ethics of the gang around this governor is the reason it is so important that we vote it out next Tuesday, November 5.

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