New York

Harding’s Collateral Damage


Russell Harding arranged a lavish post-employment package for himself as he prepared last year to exit his post as head of the small but wealthy housing agency that Rudy Giuliani had appointed him to oversee. Most of those outlandish perks have been described here earlier: a city-paid trip to southeast Asia, pension and severance bonuses, even a year’s worth of newspaper subscriptions and cable internet connections at his home.

There was also another item that initially eluded officials who took over once Harding was out the door, one that was not included in the documents they provided to the Voice, which had waged an 18-month Freedom of Information battle to obtain Harding’s expense records.

That was a year’s prepaid rent for a storage facility locker near Harding’s Upper East Side apartment. Exactly what Harding kept in his secret stash isn’t known, because by the time city and federal investigators learned of its existence last spring, and obtained a search warrant to examine its contents, it was empty.

The blame for failing to alert investigators earlier to the locker’s existence fell squarely on the shoulders of Chuck Brass, a veteran housing finance expert who had done much of the work to keep the Housing Development Corporation functioning in the years that Harding was jet-setting around the country and who, upon Harding’s departure, was appointed the agency’s new president by Mayor Bloomberg.

In one of his first actions on the job, Brass decided to comply with the records requests that Harding had tried so hard to squelch, first by delaying compliance and then insisting the documents had been lost. Some of the records had been destroyed and had to be reconstructed, but Brass’s decision was key in the chain of events that has led so far to Harding’s indictment on fraud and child pornography charges, and a guilty plea and government cooperation agreement by Harding’s former top aide, Luke Cusack.

Last week, the scandal that he helped unlock cost Brass his own job as well. A day after Cusack’s appearance in court, Bloomberg forced Brass and two other top agency executives to quit, then publicly rebuked them. Early Tuesday morning, top mayoral aides were dispatched to confront the men in their offices and demand their resignations. In a vivid display of distrust, the locks were quickly changed on their office doors. At City Hall, Bloomberg said the ongoing criminal probe had prevented him from moving earlier against the officials and issued an unusual press release containing his harshest public words to date on the scandal.

“They each failed,” Bloomberg said of Brass, general counsel David Boccio, and chief financial officer Harry Fried. “Their significant lapses in judgment or failures to report evidence of wrongdoing to law enforcement officials in a timely manner impeded the criminal investigation.”

Had the announcement been part of a clean sweep of those who either took part in or tolerated Harding’s greedy excesses—acts that cost the agency hundreds of thousands of dollars according to the federal charges—the mayor’s tough actions would have been clearly understood, if also regretted by some as collateral damage. Brass served as Harding’s number two executive for much of his three-and-a-half-year reign at HDC; his lapse in moving quickly to alert authorities about the secret locker set back the investigation. Boccio, while serving as the agency’s top legal official, purchased a deluxe sports utility vehicle at a bargain price from the agency, albeit after being browbeaten by Harding into the purchase, according to several who know him. Fried, in charge of finances, had to have spotted many of Harding’s improperly high salary boosts and to have eyed with suspicion the mammoth credit card bills that arrived with scant explanation.

But there has been no clean sweep. Instead, Bloomberg’s angry handling of the three veterans at HDC was dramatically different from his much softer response to others tainted by involvement with Harding. Last month, Richard Roberts, a former Giuliani aide who had earlier served as housing commissioner and chairman of the board of Harding’s agency, was allowed to quietly resign his posts as chairman of the city’s Health and Hospitals Corporation and as a mayoral appointee on another housing agency. There was no press release, no displeasure voiced from City Hall. But Roberts’s discreet departure came a year after the Voice reported that he had used a Harding-supplied credit card to spend $600 at a New Orleans strip club and almost $3,000 on meals at a downtown restaurant. Authorities are still investigating circumstances surrounding Harding’s purchase of a luxury auto that was given to Roberts for his use in 2000 after he left full-time government employ. It was the same SUV later pressed upon Boccio after Roberts returned it to Harding in late 2001.

Much closer to Bloomberg, and also publicly unadmonished, is Vincent LaPadula, another former Giuliani assistant who now serves as Bloomberg’s special adviser. LaPadula’s name showed up on HDC records as the recipient of $1,410 in airfare to accompany Harding on a July 2000 jaunt to Portland, Oregon, a trip that was listed merely as “city business.” In addition, LaPadula’s brother John was installed by Harding in a $70,000-per-year job at HDC, where his duties were so vague that his hiring has become one of the federal charges against Harding. The indictment refers to an unnamed “friend’s brother, who did little work for HDC but was paid a full-time salary.”

Vincent LaPadula has refused to answer press questions about his dealings with Harding or his role in his brother’s hiring. But according to former agency staffers, personnel officials were ordered by Harding to draw up a job description for John LaPadula, without any indication of what his duties might be. He ended up in the marketing department but was so extraneous that he was summarily fired—with Bloomberg’s approval—the moment his patron, Harding, was gone.

After the Voice reported last year about Vincent LaPadula’s involvement in the scandal, Bloomberg was supportive of his aide. “The Department of Investigation brought this information to my attention,” he said, “and nothing they advised me of raised serious concerns about Vinnie.” Since then, LaPadula has remained a close and prominent Bloomberg adviser, entrusted with major tasks such as the new 311 telephone line and with a desk near the mayor’s in the City Hall bullpen.

Neither of the LaPadulas returned calls, but Bloomberg aides point to John LaPadula’s firing last year, and say city investigators have yet to present a bill of particulars against Vincent LaPadula or complain about his continued City Hall presence. But law enforcement officials say privately that their investigation of Vincent LaPadula’s role, along with that of his former roommate and ex-Giuliani chief of staff Tony Carbonetti—another Harding travelmate—is ongoing.

The other culprit in the still unfolding Harding scandal, as yet unmentioned by the mayor, is Giuliani himself. If top officials at HDC, along with virtually the entire staff at the agency, failed to blow the whistle on Harding’s antics, their silence was understandable given Harding’s immense clout with Giuliani’s City Hall. His brother, Robert, was the deputy mayor overseeing the agency; his father, Raymond, was the mayor’s closest and most important political adviser. He was in regular and close contact with then top Giuliani aides Carbonetti and LaPadula, whose names were on a short list of V.I.P.s whose calls Harding instructed aides to immediately route to him, no matter where he was at the time.

Few at the tiny, 120-person agency failed to notice that Harding fell far short of the requirements for his post. He brought neither college degree nor financial background to the job and involved himself closely only in its ceremonial aspects. Yet his performance was blessed at the highest levels of City Hall. Might agency staff have suspected that his wild spending sprees had similar official sanction? If so, could anyone blame them?

No matter how many headaches Michael Bloomberg inherited from Rudy Giuliani, he remains desperately careful not to criticize his still popular predecessor. This month he will officiate at the wedding of Giuliani and his new bride, Judith Nathan, at Gracie Mansion, breaking with his own vow not to conduct mayoral marriages. Meanwhile, the scandal’s latest victims go about the task of finding new jobs and rebuilding reputations.

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