News & Politics

Harry Wilson Gets Backing By Our Media Overlords (Updated)


All three New York City newspaper owners have endorsed GOP comptroller candidate Harry Wilson, who is also backed by our mogul mayor.

The real Gang of Four hasn’t caballed like this since the term limits extension of 2008 and the re-election of Bloomberg in 2009. Like term limits, this insider power play might have worthy consequences, because Wilson is clearly the class act of the GOP ticket. But he might also be a class war act, just like the defiant override of two publicly approved term-limit referendums was a couple of years ago.

The quartet of elite endorsements looks like another example of our media overlords knowing so much better than we do what’s good for the common folk.

While the Gang is also simultaneously endorsing Andrew Cuomo in a no-choice election, they reserve this level of enthusiasm for class allies — even a comparative millionaire piker like Wilson — throwing oddball critiques in the direction of Wilson’s opponent, Tom DiNapoli, who can make a reasonable claim that he’s cleaned up the horrid mess he inherited from his convicted predecessor, Alan Hevesi.

What’s really disturbing, though, is the invisible hand of Steve Rattner, another big booster of the term-limit extension. Wilson just went to Rattner’s book party, which was hosted by Bloomberg and Times‘ publisher Arthur Sulzberger, both of whom, like Daily News publisher Mort Zuckerman, have been described as beneficiaries of Rattner’s financial advice. Sulzberger and Rattner have been sweating next to each other for years in early morning gym workouts. (The third owner, Rupert Murdoch, is not a card-carrying member of the Bloomberg/Rattner axis, but endorsing Republicans is virtually a reflex reaction at his Post).

By any fair analysis, Rattner is — and this is really odd — Wilson’s most important supporter.

Indeed, Rattner’s published account of Wilson’s performance as a member of the Rattner-led and Obama-appointed Auto Rescue Task Force is the only rationale for Wilson’s candidacy. No one has stepped forward to challenge Rattner’s portrayal of Wilson in Overhaul, and while I detailed several negatives in that portrayal a few weeks ago, Wilson emerges in its pages as a nonpartisan giant whose skillful practicality and boundless energy equip him uniquely for this job. Without this six-month stint of towering public service, Wilson would be just another bright hedge fund profiteer who hates taxing his class, as he is depicted in DiNapoli’s ads.

The inconvenient truth is that Rattner looted the pension fund Wilson wants to control.
Wilson’s spokesman Bill O’Reilly responded to my e-mailed questions about Rattner with answers wholly inconsistent with the heated abuse Wilson has repeatedly thrown in DiNapoli’s direction about the fund fraud. Asked to comment about Rattner’s conduct with the fund, which is said to have earned him a $6 million fine and a two-year-ban from the securities industry, all O’Reilly would say was “Harry roundly criticizes any of the sordid conduct that took place during that time.” While O’Reilly said Wilson and Rattner are “good friends,” he said that Wilson “has never spoken with Steve Rattner about the investigation.”

O’Reilly would also not answer questions about whether Wilson will “maintain a relationship” with Rattner should he become comptroller, or whether Wilson would “discuss any business of the office” with Rattner. He did state categorically that Rattner “has not played any role in the campaign and would not play any role in the comptroller’s office,” which is different from saying Wilson wouldn’t discuss office matters with him.

O’Reilly’s assurance that Rattner has nothing to do with the campaign is belied by a City Hall story from just a couple of weeks ago, which highlighted DiNapoli’s supposed hypocrisy about Rattner by quoting an unnamed source who recounted in remarkable detail a 2008 breakfast DiNapoli had with Rattner, seeking his fundraising help with major Democratic donors. This Regency breakfast and subsequent contacts, including a previously undisclosed July 30 meeting with Rattner’s firm at DiNapoli’s office, occurred shortly before the Democratic National Convention in August, suggesting that the unnamed source’s contention that it was tied to donors was true, contrary to DiNapoli’s denials.

The hit-up sessions also came before any of Rattner’s fund wrongdoing was publicly known, but while Rattner’s firm was still doing substantial business with the office.
City Hall cited “a source with direct knowledge” of the conversation. This source was so well informed he knew that DiNapoli picked up the tab, which means it’s either the waiter or the prince of the city with egg on his face. The story was certainly a campaign-orchestrated event, suggesting that Rattner was quite willing to question DiNapoli’s “character” for Wilson’s benefit, as this deep throat did.

As to the broader question of whether Rattner was helping with endorsements, either directly or through Bloomberg, O’Reilly said that Wilson has “no knowledge” of Rattner talking to anyone at the Times or News
about their endorsements. Ditto for Bloomberg.

The Times never answers any questions about its endorsements even as it insists on transparency from everyone else, and my efforts were rebuffed this time, as in the past. But I did manage to get Zuckerman on the phone. He assured me that he never discusses endorsements with anyone other than Arthur Browne, the editorial page editor. He denied discussing the Wilson endorsement with Rattner or Bloomberg, or talking to them about the stranger endorsement earlier this year of Reshma Saujani, the Rattner-generated candidate who snared 19 percent of the vote in a primary against incumbent eastside congresswoman Carolyn Maloney. Rattner’s daughter worked in Saujani’s campaign. Rattner, his wife Maureen White and Bloomberg’s girlfriend Diana Taylor were Saujani’s biggest name backers.

Zuckerman spent most of the interview making fun of me so I couldn’t tell if he was joking when he said he “didn’t have the slightest idea” that Rattner was supporting Saujani or had praised Wilson. “I didn’t read Steve’s book,” said Zuckerman, who was listed in the acknowledgements as a loyal friend, “and I didn’t know he was connected to Wilson.” Looks like he doesn’t read his own newspaper either, which has certainly reported on Rattner’s ties to both campaigns. But the hyperventilating in Daily News editorials about both Maloney and DiNapoli — who the paper accused recently of running “a dishonest weasel campaign” — suggests that something more is going on here than clearheaded judgment.

The Times was a bit better behaved, but its charge that DiNapoli “failed to push hard enough to create public campaign financing for the comptroller’s office” is bizarre. Hevesi collected $10 million in contributions for his 2006 race; DiNapoli a mere $3 million, precisely because he’s imposed choking restraints on his fundraising that he wasn’t legally obligated to do. Wilson is what the Times used to hate — a self-funder who has bankrolled 60 percent of his own campaign costs. The paper put its denunciation of DiNapoli as too “beholden to the Democrats in control of Albany,” right next to its endorsement of Attorney General candidate Eric Schneiderman, who helped install John Sampson as Democratic conference chair of the state senate and Pedro Espada as majority leader.

These wild editorial swings, and reports that DiNapoli was given such short shrift at his Times endorsement interview that the decision appeared a foregone conclusion, add to the suggestion that connections have directly or indirectly fed this process — either Bloomberg’s or Rattner’s or some combination thereof. No one will ever admit this, and Bloomberg’s press secretary Stu Loeser was as emphatic in his denials of any endorsement contacts as Zuckerman, suggesting that the Gang may have figured out a way to do this telepathically.

This has all happened at a time when one might expect Rattner’s influence to be on the wane. Instead, the Wilson endorsements and the ballyhooed book party came at almost the same time as the revelations of the SEC/Cuomo settlements. News accounts had Rattner going from a raised glass to a bent knee literally overnight, from a party celebrating his cosmic skills to a settlement commemorating his cosmic greed. He reportedly still faces perjury charges if he doesn’t conclude this pending agreement.
Indeed, if Wilson closely examined the charges against Rattner as well as the agreement his company has already signed with Cuomo, he would find that the financier’s conduct was among the worst of anyone involved in the many pension fund fraud cases. He not only paid a million in sham finders fees to Hank Morris, the campaign maestro who elected Hevesi and then sold tickets to their joint auction of a public fund, but also arranged a DVD distribution deal for “Chooch,” the zany film project of the brother of the bureaucrat who ran the fund’s day-to-day operations. Few other fund predators paid off both gatekeepers.

Yet Bloomberg has already brazenly announced that the settlement won’t alter his relationship with Rattner — personal and financial — and Zuckerman told me much the same thing. Rattner does have redeeming social value (the auto rescue for example), but people with great public power and responsibility, from Bloomberg to Zuckerman to Wilson, must also send signals that they respect the law and are disturbed by those who break or circumvent it. Instead Margaret Carlson, a Bloomberg News columnist who wrote a memoir of the mayor that’s never been released, hosted the Rattner party in Washington, just as Bloomberg and Sulzberger did here.

Most book parties recruit journalists, especially those who’ve already written reasonably friendly stories about a book, but Rattner’s New York party excluded them, like the Huffington Post’s Marcus Baram, who broke the book story (Houghton Mifflin, Rattner’s book publisher, says it had nothing to do with the selective list). That meant that the owner of the greatest newspaper in the world was co-hosting a book party limited to captive journalists, vetted no doubt by one-time reporter Rattner himself.

Wilson’s chummy appearance in such a crowd sends quite a different signal than the one he’s projected in the campaign, when he’s turned DiNapoli’s single known meeting with a placement agent into broad shots at the comptroller’s integrity in administering the fund. Wilson has gone so far as to link Hevesi and DiNapoli, declaring that the fund was run “as a criminal enterprise under Hevesi and DiNapoli is under investigation by Attorney General Cuomo,” branding DiNapoli’s protracted refusal to release his appointment schedules as “highly suspicious.”

On the other hand, Wilson’s reticence to confront wrongdoing in his own circle has recently repeated itself with John Faso, the former GOP assembly leader who was the party’s gubernatorial candidate in 2006. Faso has been a fundraiser for Wilson, introduced Wilson at his first public appearance back in January, and, as O’Reilly put it, “has been an invaluable help” to Wilson during the campaign.

Like Rattner’s firm, Quadrangle, Faso’s law firm, Manatt Phelps & Phillips recently signed a settlement with Cuomo’s office, agreeing to pay $550,000 in fines. But Rattner wasn’t a party to Quadrangle’s $12 million settlement, and is negotiating his own individually, just as Faso didn’t sign Manatt’s agreement. Manatt acknowledged, though, that Faso, acting as a partner/lobbyist, tried five times to set up meetings for three different clients seeking business from the pension fund. The firm agreed in the settlement that there was an “inherent” conflict of interest “in the use of placement agents and other intermediaries,” which was what Faso functioned as, and that it was “a practice fraught with peril and prone to manipulation and abuse.”

Faso got three of the meetings he sought, two with DiNapoli. The agreement says he wasn’t licensed as a placement agent or securities broker and that he did not include these activities on his lobbying disclosure forms. One of the clients, George Kellner, had given $54,350 to Faso campaigns in recent years (including small donations from his parents). Another, Wyser Pratte, was a thousand dollar donor to Faso, who claimed he received no compensation for these efforts (perhaps because they were unsuccessful).
DiNapoli, according to sources contacted by the Voice, sent Kellner to Peter Carey, the director of the comptroller’s hedge fund unit. Even though Kellner was seeking business the office didn’t offer, Kellner’s request remained active for a year a half before it was finally declined.

O’Reilly had essentially the same answers for Faso as he did for Rattner, calling Wilson and Faso “friends” and saying that Faso has “particularly provided insight” to Wilson about the “state’s budget woes and irresponsible fiscal practices.” Wilson won’t say if he’ll “maintain a relationship” or “discuss any business of the office” with Faso, only that Faso won’t do any business with the fund. In fact, O’Reilly went out of his way to say that “John has never done any business with the fund,” as if Faso’s failure to secure the business he sought was a badge of honor.

Asked to comment on Faso’s conduct as described in the Manatt settlement, O’Reilly said: “Harry has not read it, so he doesn’t have a comment. But John will have no investments in the pension fund. He was precluded the moment he started helping Harry. He well understood that — all funders do.” In fact, since Manatt is barred for five years from doing business with the office, Faso is too, if he remains there.

O’Reilly says Wilson subscribes completely to Cuomo’s code of conduct, which is a set of rules for the private parties dealing with the fund, and to DiNapoli’s code, which applies to the comptroller’s office. He would go further, ending contributions from law firms to do business with the office, which Wilson charges has been a source of thousands in campaign contributions for DiNapoli.

But his blind eye — and that is the only way to describe his unwillingness to read the Manatt settlement as well as his partying down with Rattner — indicate that he is more comfortable with abstract rulemaking than with the sort of tough personal judgments this office requires. Rattner and Faso are his chance to send a signal of public reproach, to raise a wall around the office he seeks, telegraphing that he will break with anyone who tries to compromise it. He can’t bash DiNapoli, or question the integrity of the fund under his management, and remain cozy with friends charged with attempting to milk it.

Update: After this item was posted, I got an e-mail from Bloomberg press secretary Stu Loeser informing me that I’d misunderstood his cryptic e-mail. I quoted him as denying that the mayor had talked to anyone at the Times or News, or with Steve Rattner, about endorsing Harry Wilson. Loeser wrote: “My ‘no’ was meant in response to you asking me if there was anything I’d tell you” about any role Bloomberg might have played in these endorsements. This could mean that Loeser doesn’t want to leave the impression that the mayor didn’t talk to his buddies Sulzberger and Zuckerman because it would be inaccurate, and he actually did. Or it could mean that Loeser wasn’t commenting either way on the mayor’s conversations with his fellow moguls because their conversations are encapsulated with privilege, even when they don’t actually occur. You be the judge.

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