On January 21, 2010, the Supreme Court decided that corporations were people, too. The Citizens United ruling unleashed a new wave of influence in American elections; one that still has modern democracy reeling, as the last presidential election witnessed billions of dollars coming in from all over the country. Mega-millionaire Kenneth G. Langone, 78, was (and still is) at this frontline of legal corporatism, and his ties are everywhere, including NYU’s much-talked-about loan compensation program and the wallet of the Republican frontrunner for City Hall, Joe Lhota.
For background, Langone made his fortunes as a market-savvy investor, now a holder of some $1.1 billion in assets. He did so by putting tons of capital into a little company he founded known as Home Depot, which eventually made him millions in the hardware business. He helped former Independent presidential candidate Ross Perot’s data company go public and now sits on as a director on the Board of Yum! Brands–the largest restaurant chain in the world (read: KFC, Taco Bell, etc.).
If you’re a New Yorker, you might’ve heard his name before: NYU’s Langone Medical Center and its Stern School of Business’s Langone Part-Time MBA carry the investor’s namesake, as he was a graduate student there after attending Bucknell University down in Pennsylvania. That was the reward after he gave NYU’s medical center a whopping $200 million donation in 2008–the largest contribution in the center’s history. His unrestricted donation is now being used by the school to build a new, green hospital, just months after the Langone Medical Center famously saved hundreds of patients during Hurricane Sandy (one of whom was the benefactor himself, who was undergoing pneumonia treatment).
With this type of profile at the school, Langone was given the vice co-chair position on the university’s board of trustees (as well as the Medical Center’s); on its site, the governing body states that it’s “responsible for, among other things, creating policy, setting mission and purpose, strategic planning, reviewing programs, and relating campus to community and community to campus.” However, the “other things” are what’s important here: The board of trustees is also responsible for numerous controversial moves on behalf of the administration, spurring no confidence votes in President John Sexton across the different sub-schools.
It was the Board of Trustees who raised Sexton’s income to $1.5 million and gave him a $2.5 million bonus for his “length of service.” And the millions upon millions of eventually-forgiven loans for the professorial staff’s ritzy condos here and out east that we reported on last week? The board’s compensation committee. The foundation responsible for collecting these exorbitant funds in light of even more exorbitant tuition is their job.
Exhibit A: Robert Grossman, the medical center’s dean and CEO. He’s now given an annual paycheck of nearly $3.5 million and resides in a $6.15 million condo, guaranteed and paid for by the university. As we mentioned last week, an NYU student’s tuition is nearing $45,000, not including room and board.
(The Voice has reached out to NYU for comment on Langone’s involvement with the loan compensation program and is waiting to hear back).
Langone is no stranger to overpayment, though. In the early 2000s, he was the president of the New York Stock Exchange and at the center of a huge lawsuit by then-Attorney General Eliot Spitzer. According to the case, Langone was in charge with secretly authorizing a pay package worth $190 million for Richard Grasso, fellow NYSE chairman and NYU trustee, without telling the financial institution’s board. As a non-governmental organization, this salary for an administrator is virtually impossible, which was the main point of Spitzer’s argument. Langone defended the pay package for years, resulting in this wonderful quote he gave to Forbes in 2004:
“They got the wrong fucking guy. I’m nuts, I’m rich, and boy, do I love a fight. I’m going to make them shit in their pants. When I get through with these fucking captains of industry, they’re going to wish they were in a Cuisinart–at high speed. If Grasso gives back a fucking nickel, I’ll never talk to him again.”
The case was dismissed in 2008 on the grounds that the New York Stock Exchange had, by that point, become a for-profit entity. So, now that we have the collegiate-meets-Wall-Street connection down pat, let us move on to politics.
A few weeks after the decision came down for Citizens United, American Action Network was created to foster the new freedoms the case brought for corporate contributions: Its mission statement includes the intention “to put our center-right ideas into action by engaging the hearts and minds of the American people and spurring them into active participation in our democracy.” The ANA funds Tea Party ads and anti-Democratic campaigns, and opens its treasures chests to all sorts of corporate dollars. Langone remains a main donor to the quasi-SuperPAC, as well as an accomplice to the Koch brothers’ inner circles, but tangled money with politics way before it was officially legal.
In the lead-up to the 2000 presidential election, Langone co-founded a company called ChoicePoint, Inc., which bought Database Technologies–another company of his–for $4 million. Its contract entailed a list of ineligible list of voters in (who would’ve guessed?) Florida, a majority of whom were minorities and Democrats. It was later reported that the company erred with categorizing numerous voters as felons before Election Day, deactivating their right to a vote in a contest with a 537-ballot margin of victory.
“In a tough fight, Kenneth G. Langone is a guy you want in your corner,” Landon Thomas Jr. of the New York Times once wrote. As an outspoken Republican donor, Langone has had his financial hands in the last major GOP wins in New York. He was a major foundation of Carl Paladino’s run against Cuomo in 2010. And he bundled a ton of corporate cash for Rudy Giuliani’s mayoral campaigns throughout the ’90s. That naturally leads us to the final point.
As CEO of his own company, Invemed Associates, Inc., Langone has made the City Hall run of Rudy’s former right-hand man and protege, Joe Lhota, his newest political investment. In the frontrunner’s campaign finance disclosures, Langone and his wife, Elaine, donated a combined $9,900 to Lhota in the first part of the election cycle. He’s already been listed as one of Lhota’s main business world backers and, if Giuliani’s campaigns were indicative of anything, that position will soon be smothered in dollar signs, weaving a web between Wall Street, Washington, NYU and a man that could one day be your mayor.
This article from the Village Voice Archive was posted on June 25, 2013