RUDY VERITAS

On My Mind

I Don't Get it

I like to think I am a fairly intelligent person.  No genius, but I try and stay informed.  I read 2-3 newspapers each day.  Each week I read Newsweek, Time and The Economist.  In addition, I listen to hours of NPR every day.  Now I mention this as background to make the point that our President has been on a tear lately, appearing everywhere.  I would not be surprised at this point if we turn on the TV and there he is turning letters while explaining to Pat and Vanna what his thinking is on climate change in Copenhagen.

And yet for all these appearances, I never come away having learned anything.  I feel so stupid that I am never any more enlightened after he's finished.  At first, I blamed myself.  But it's not me.   He's a smart guy and should be an excellent communicator, but he's not.  He's charming, funny and seemingly sincere. Yet I don't understand the first thing about health care.  Sixty percent of Americans don't understand what's in any of the proposals.  I don't blame them, I don't either.  More frightening is that our representatives don't and have no plans to learn before they vote.  Health care, climate change, Afghanistan, the economy, Iraq, I haven't the faintest idea where he stands or where he's concretely going on these issues.  But he's out there all the time talking about them.

I think the White House thinks it's trite but what I'd really like to see is an Oval Office address on health care with charts and graphs.  People mock Reagan as simplistic but the tax cuts sold because the people watched him, understood what he was saying and what he wanted.  They then phoned Congress in droves.  The problem with Obama is that he can't make his case.  There is all this cheering today in Democratic circles because 40% of Americans now support health care reform.  That number is only great if you ignore the fact that we are weeks away from this vote and yet not even a plurality - 40% oppose it - supports even the notion behind the legislation.

Yes, we all agree their needs to be a fix to the rising costs and the lack of care for the uninsured.  But is his proposal - whatever that may be - going to result in a better system overall then the one it's replacing?  That is the question that millions of Americans can't answer because he can't give them the comfort level and understanding to answer in the affirmative.  And the fact that they don't understand what's happening, while at the same time the process is speeding forward, scares the hell out of them.  There's such a thing in business as 'buy-in.'  Getting stakeholders, whomever they may be, to understand and buy-in to what you're proposing.  Without that you can't move forward.  But Congress clearly does not care that the vast majority of Americans have no idea what it is they're doing on health care.  That, I believe, is where the anger comes from.  Are the radio yahoo nutjobs exploiting that anger to turn the argument into socialized medicine?  Yes, they are.  The White House doesn't get that. 

Maybe there's a growing arrogance at play here.  Obama thinks a speech before Congress will make the poll numbers turn around, just like a few hours in Copenhagen will bring Chicago the Olympics.  Both calculations turned out to be gravely mistaken.  I don't know how to make him turn this around.  Clearly a Nobel Prize is not going to be the answer.  All I know is that if I haven't the faintest idea what's going on then I can guarantee you that 97% of Americans don't either.  That is not the right atmosphere to remake 1/5 of our economy in a few months.  Nor is it democratic.

Wrong Lessons Learned & The Keystone Cops

Usually when a scandal erupts involving law enforcement the analysis on how to fix the problem is invariably wrong.  Two recent examples - one local and one national.  The national one involves this man in California who kidnapped this then young girl ten years ago.  He kept her imprisoned, raped her and sired two children by her.  Now all you're hearing as a result of this matter is tougher restrictions on sex offenders.  The problem of course is that all of this was eminently preventable had the system then and now done its job properly.  He was sentenced to serve 50 years for a previous sex crime and got out in 11.  Why?  When he left prison the parole board gave him a letter of commendation.  Huh?  He was visited regularly by the local police, who never bothered to check the outlying buildings on his property.  His probation officer described him as a model probationer.  Now be clear on this, he had this young kidnapped girl - and eventually two children by her - on his property and no one discovered them.  They were not - like the Austrian case - locked in a cellar for 20 years.  And no one thought this odd. 

One of the main lessons to be learned from this, which no one has yet mentioned, is how much of a mockery this case makes of the whole burgeoning sex offender registry industry.  This man would clearly have been of the highest level.  Certain resources would be devoted to monitoring him as opposed to someone who was a much lower level offender.  But I can tell you from first hand experience that the drive to classify everyone convicted of any 'sex crime' no matter how non-violent or minor at the highest level, draws resources away from someone like this California guy who might have needed them.

It is the burden of local police to live with the classifications made by zealous prosecutors and cowardly judges.  Label everyone the highest level, looks good at election time.  But it's the local cops who have to deal day-in and day-out with the ramifications of that, not the judge or the prosecutors.  If cops were smart they would be as outraged as I am by this 'level inflation.'  The classifications are meaningless if everyone, regardless of severity of crime, is considered the same.  The lessons from this California case is that the system needs reform and people need to do their jobs.  It is not an expansion of the sex offender registry industry in all its manifestations.

The local example of law enforcement incompetence is right here in New York City.  Once again the public and newspapers are taking away the wrong lessons.  The story is this.  It turns out, astonishingly, that numerous employees of the NYC Buildings Department (DOB) were active members of organized crime.  They worked in the Department for years while maintaining their links to their crime family.  All of this went undetected.  Now it would be one thing if all these men joined the DOB and then went into a life of crime.  But no, they entered City service as active mafia members.  Some newspapers are blaming Mayor-for-Life Mike (I'll explain in a minute why I don't really blame him).  I have seen no account that pins the blame squarely where it ought to lie.  And that is with the Keystone Cops at the NYC Department of Investigation (DOI). 

You may not know this, but every single City employee is fingerprinted and a background check is performed through the FBI database before you can be considered a full-time employee.  It has been that way for at least 25 years. All of those checks are handled by DOI.  How is it even conceivable that all these members of organized crime went undetected?  Further, how is it that there has been no assigning of blame or call for reform at DOI.  The only comment has been that DOI will now expand its use of federal databases. 

After I left HDC, the City forced HDC to sign an agreement with DOI allowing them to check their employees as well as review annually low income tenants living in HDC subsidized projects.  DOI has and does bill HDC millions for their staff assigned to the corporation as well as the work performed.  I can tell you with some knowledge what an extraordinary waste of money this is from HDC's perspective.  From DOI's it is a nice income stream since they rip off the corporation outrageously.  But forget all that for a minute.  In the 6 years that DOI has been doing this their big accomplishment was discovering that a cop lied about her income to receive Section 8 housing and that the wife of a band member from the Monkees had been falsely claiming residency to stay in subsidized housing.  Those two things cost HDC millions in payments to DOI.  Millions that could have gone towards housing.  Does anyone besides DOI think this has been a good financial bargain for HDC, the City or those needing affordable housing?  I can assure you it is not. 

And of the mob infiltration of DOB?  Well, the larger point I am making - having worked in and around government for decades - is this: when you try and do everything well, you're usually going to do nothing well.  DOI used to have a limited function.  It checked the background of city employees, investigated incidences of wrongdoing in city agencies and ran the Vendex system to monitor contracts and contractors who do business with the City.  It also oversaw the City Marshalls.  Now it has its hands in everything.  It has completely run amok.  So much so that at the end of the day it's primary mission, verifying that the City is not employing gangsters, never gets done.  The culprit is not DOB, they relied on DOI.  But you will never see DOI being pilloried either in the press or at City Hall.  It is an agency completely out of control that has no sense of its core missions.  They constantly want to glom onto every state and federal investigation.  They are known by everyone as a joke for their investigative abilities.  Not to mention their total lack of professionalism.  If there's a leak in an investigation run jointly by DOI and the Feds or the State, everyone knows it came from DOI.

As to why I don't blame Mayor-for-Life Mike, you can't blame him.  Even though he sold himself as a manager par excellence he is probably the worst manager we have had since Jimmy Walker.  I always want to qualify sentences like that by saying, "except of course for David Dinkins," but in this case I can't.  The reason Bloomberg is so much worse than Dinkins as a manager is that Dinkins had Norman Steisel.  Dinkins' Harlem gang knew he was inept.  They forced him to bring on a deputy mayor who would run the city, which Steisel did.  It was Dinkins' policies that made him such a disaster. That coupled with his total hands-off approach to the job. 

Bloomberg believes that commissioners should be left alone to do their jobs not encumbered by strong deputy mayors.  And so you have agencies that have become completely unaccountable.  No one oversees them so no one at City Hall knows whats going on or seems much to care.  And this is his preferred method of managing the city.  The exception of course was Dan Doctoroff, but he didn't oversee line agencies.  It is amazing to me that no newspaper has called-out DOI for their massive bungling of this.  As an agency it remains immune from criticism, for which we all suffer in a hundred different ways.

Jerry Shargel to the Rescue

I usually don't comment on celebrity news stories.  But I will on this one.  Is Robert Halderman guilty of blackmailing Dave Letterman?  I don't know.  He is presumed innocent before the jury that will hear his case. And that is as it should be.  But I do know two things.  First, he and I were both represented by Gerald Shargel.  Jerry was my lawyer for 3 1/2 years.  Jerry has a pattern.  He takes high profile cases with big fees.  Mostly he has a bad track record of winning acquittals for his clients.  The press focuses on Gotti and the gangsta rap producers so the impression is that he is very successful.  The hallmark of a Shargel case is that the press will be all about him and not his client.  Sure enough, as I expected, the day after Mr. Halderman was arraigned there was a profile story on Jerry.  He gets these case, he bombasts, gets profiled and his clients point of view is rarely expressed.  Jerry has used this refrain "there's much you don't' know," as entree to the morning talk shows to promote himself in this case.  This is all a tactic to intimidate Dave Letterman, but it won't work.  Jerry is hoping to frighten off Letterman by the prospect of the grilling of a lifetime in the witness box.  It won't happen.

The second thing I know is of the public's unfettered affection for David Letterman.  It used to be, when I was growing up, that Walter Cronkite was the most trusted man in America.  A good case can be made today that that person is David Letterman.  No jury is going to accept the mud thrown at Dave.  Further, the Manhattan DA's Office under Morgenthau doesn't prosecute outright bad cases.  They are not the US Attorney's Office.  They are not contriving evidence to get Mr. Halderman for no reason.  Do I believe there's more we don't know about David Letterman's sex life?  Probably.  Do I believe it will have any material bearing on whether this guy extorted him for $2M?  Not a bit. 

Letterman is a smart guy.  He is, in a very timely fashion, getting out all the sordid stuff about himself.  By the time Jerry gets him on the stand there will be nothing there.  Do I think Jerry Shargel knows some bombshell secret?  Some Perry Mason moment waiting to be sprung at trial?  Nope.  This is classic Shargel.  It will ensure that the next potential defendant thinks of him first when needing a criminal defense lawyer.  It will do nothing to help the defendant's case or his chances of retaining his freedom.

Polls show that 30% of Letterman's audience would abandon him because of the scandal.  Don't believe it for a second.  Dave is beloved in a way that Leno can only dream of.  He is cranky, obstinate and opinionated.  But he is always a straight shooter and a seemingly very decent guy.  It is that reputation, built up over thirty years, that will see him through this and any mud that Jerry Shargel tries to throw will rebound causing him to look like Crispin Glover.

Hate Crimes Legislation - Always Wrong

I am opposed to hate crime legislation regardless of which group is receiving the protection.  Murder me or beat me up and all the law should care about is the act.  Motive only plays a role in determining your level of guilt and occasionally severity of punishment.  I don't have a lot of issue with a judge sentencing someone on the upper end of a range because the defendant killed X because he hates blacks or Jews or Mormons.  But a separate crime with more severe penalties?  It's really outrageous.  I am a gay man.  Love me or hate me because of that fact.  I am indifferent.  Crack my head open because of that fact and all I care about is that you are caught and sentenced for busting my skull.  I don't want you penalized because you're a homophobe - that's between you and your god.  Is it unfair that gays do not have federal protection while a whole host of other minorities do?  Sure.  But I don't want to compound the original mistake of hate crimes legislation by adding my group or anyone elses.  Furthermore, as you all know I am huge proponent of the 10th Amendment.  These federal hate crimes statues are just an excuse for the federal government to intrude in state crimes when it doesn't like the result.

I am covered by this statute at the moment because I am Jewish.  I reject that protection.  No Presbyterian's or Baptist's murder is less serious than mine because he believes in Jesus Christ and I do not.  If I am attacked by a white Evangelical do we get to choose whether he accosted me because I am gay or because I'm a Jew?  Does it matter to me, all bruised and beaten up, which part of me he dislikes more?  No, it does not.  If Pres. Obama wants to do something productive he should focus on expanding rights, not reducing them to a few protected classes.   Rather than continuing to vaguely promise to end Don't Ask, Don't Tell, If he were a man of his word, he would just do it.  That would be a worthy accomplishment

This added hate crimes protection for gays and lesbians will pass Congress and be signed into law.  It is unfortunate that so many gay men and women can't understand that this is one club we should not be standing in line to get into.

Abasing the Judiciary - Let's All Go to the Lobby

As you know I am currently undergoing sex offender registration in Westchester County and have been for the last 16 months.  The judge overseeing my case is the Hon. Jeffrey Cohen, judge of the county court.  Judge Cohen was selected - as I told you he would be many months ago - three weeks ago by the county Democratic Party to run for State Supreme Court.  I've listed Judge Cohen's numerous deficiencies in the past and will again before election day.  Westchester County is comprised mostly of suburbs.  As such, like much of America,  campaigns are waged by lawn signs sprouting up everywhere.  They're an eyesore but there's something very democratic about the whole thing.  Being raised in the city we never saw many lawn signs.  It was all palm cards and posters in store windows.  And even that isn't done much anymore.

But again it's grass roots and always gave me a good feeling.  But we live in an electronic age.  One in which even are most revered and cherished institutions and offices have been made low.  Clinton on Arsenio, McCain on Twitter and everyone on The Daily Show & SNL.  New York is held out as a very progressive state because we no longer elect the judges to our highest court.  We do, however, for most other judicial positions.   But judges are still expected to display some decorum in how they wage their campaigns.  This is not Texas after all.

Now imagine my shock when reviewing Judge Cohen's campaign expenditures (available on- line) the other day to discover that he paid almost $6,000 to Val Morgan/Screenvision.  Do you know what that company does?  They place ads in movie theaters prior to the  film starting.  You know, usually it's Coke or Mountain Dew.  Sometimes it's for a tanning salon or the local Italian restaurant.  Occasionally it's for a Tony Hawk X-Box game.  But State Supreme Court is not some county judge hearing speeding tickets and variance requests.  It's a serious office that requires some gravitas.  It doesn't always happen, as I have written.   We expect better of candidates for the office than selling themselves like so much popcorn, nachos or pretzel bites.  I know the data doesn't concur, but I tend to be totally turned off by products that advertise in movie theaters.  I think it's a horrible trend and I try to punish advertisers by not buying their products.  I hope and believe the citizens of Westchester County will feel the same with anyone wasting their time and delaying their show. 

Every day this election season candidates routinely appear at my Metro North station to shake hands and hand out palm cards to commuters.  Recently I've seen a County Executive, District Attorney candidate and a few Supreme Court candidates. That is the proper and respectful way to run for that office.  I have not seen a lawn sign for Jeffery Cohen anywhere, although his opponents have them everywhere.  Perhaps movie theatre ads will be his sole communication with the voters.  Or maybe he views everyone through the prism of seeing us all only as potential perps, to be held at arms length.  In this case, however, they're called voters.  In short, catering to an oversized ego by displaying yourself fifty feet across a movie screen, while hiding from the voters, does nothing but abase an otherwise honorable position.

Copped a Plea - Follow Up

I have received a number of e-mails today in response to my post regarding Ray Harding's guilty plea.  To a one they have focused on my contention that I am not the motive for whatever may have transpired as alleged by the Attorney General.  I think I need to be clearer about this because there is an important piece I have as yet not mentioned and might help you understand why I truly believe what has been alleged regarding payments to my lawyers is untrue.

Gerald Shargel was my attorney is this whole criminal matter with the exception of the first eight weeks in 2002.  Shargel and I arrived eventually at a fixed fee retainer agreement that provided he would represent me in this matter for a fixed fee.  That meant whether the case was plead or went to trial.  Whether it lasted two more months from when we signed it or two more years.  I ended up personally paying Shargel and his associates nearly $600,000 for this case.  Most of that came from the sale of my home which was  sold specifically in order to pay my lawyers. Furthermore, as I have said many times on here, the timeline of my case and Alan Hevesi's term in office don't jibe.  Ray is accused of accepting these payments long after I was already in prison.  The case was over.  Shargel stopped returning my phone calls and responding to my letters.

Now here's the point.  It is a very, very serious thing for an attorney to sign a fixed rate retainer agreement and then solicit funds without the knowledge and consent of his client.  It is an extremely serious breach of attorney ethics that can get you disbarred.  In fact, it's criminal.

What has been missing in all the coverage of this is that when the Attorney General alleges that Ray Harding did whatever he did motivated solely by the need to pay my lawyers he is alleging criminal activity by Gerald Shargel.  For the record, I do not believe Ray paid Shargel or that Jerry Shargel solicited or accepted funds behind my back.  I do not believe it.  But Andrew Cuomo keeps saying it and the New York Times prints it repeatedly; most recently above the fold, on the front page yesterday.

I used to have a boss who would frequently say, "The laziest people in the world are reporters."  Ironically, he was a former reporter himself.  It has not been my personal experience that his belief is true.  I have found reporters to be needy - especially during my tenure at EDC having to explain complex financing deals - but generally not lazy.   Lately though, the New York Times is making me reconsider.

The galling thing in all this is not the the NYT owes me the courtesy of a phone call to verify the AG's claim and never places said call.  No, because I am felonious scum different rules apply and the NYT doesn't check facts with felonious scum.  The galling thing is that when they keep printing the AG's assertion they are unknowingly accusing someone of a crime.  A crime that can get them disbarred.

What I do not get is why the New York Times is so lacking in inquisitiveness as to ask the AG to substantiate this claim.  Since Cuomo keeps saying this I am assuming he must have canceled checks or wire transfer confirmations into a Shargel account from Ray.  The money certainly never came to or through me.  Isn't the fact that the AG is alleging this serious charge at Gerald Shargel worthy of checking up on?  Is Danny Hakim so busy that he can't ask the AG's press office for the evidence?  Is Danny Hakim so clueless that he can't see that if this were true it might be another story or a good paragraph in the one he was writing?  I guess so.

Gerald Shargel is everywhere on TV these days promoting himself under the guise of advocating for his client, Robert Halderman (the alleged Letterman blackmailer).  Am I wrong or wouldn't the serious accusation made against very high profile Gerald Shargel by Andrew Cuomo be newsworthy? 

I have a pretty good idea I know where that $800,000 went and I do not believe it went to Gerald Shargel.  But on the off chance I am wrong I would sure like to know because I would immediately file charges with the NYS Bar Association and the Manhattan D.A. against Mr. Shargel.  All I can say is that if Ray Harding is using me falsely as an excuse for whatever he did, it's contemptable.  If he's not, then Gerald Shargel's conduct needs to be brought to light so his current and future clients can be made aware to beware.

Copped A Plea

One of the great brass rings in politics is getting your name mentioned favorably in a page one article above the fold in The New York Times.  My father, Ray Harding was no exception.  Happiest were the days he could go down the night before the story appeared to get the paper from the Times building.  Well today he got the biggest story ever about himself, above the fold.  From my point of view it's a sad and shameful day.  But not for the reasons you might think.

In Agatha Christie's wonderful work, Witness For the Prosecution, Sir Wilfred, a criminal defense attorney, says to his client who will soon be indicted for murder, "There is no shame to sitting in the dock.  Kings, prime ministers, even lawyers have stood in the dock."  When my father was first charged in this criminal complaint I made it very clear that I thought the charges were baseless. I was happy to say that I believed him innocent and that he should fight for his name.   It was the criminalization of routine political life.  Change the law, fine.  But do not decide post facto that we don't like how politics is conducted in this state.  I've said before if rewarding political favors by officeholders is now a crime, then every Surrogate Judge in the state - and especially in Manhattan - is guilty of far more serious criminal activity than has been alleged and plead to here.  Every conservatorship or guardian ad litem awarded to friends and political backers is now criminal.

But now he has copped a plea.  OK, that's fine.  We do what we need to do to put things right and move on.  I have no problem with that.  I copped a plea, but for different reasons and damaging only myself in the process.  I deeply regret that I plead to the charges against me but, as I will explain another time, I had no choice.  My father on the other hand did have a choice.  He could have chosen to fight the charges or, if the prosecutors agreed, plead to something lesser to expedite this and save the need for a trial.  There would  have been a felony conviction, probably prison time and a loss of his ability to practice law. But he would have only hurt himself, no one else.   Now faced with similar circumstances what would I do?  In fact, what did I do when I was faced with exactly the same situation?

In 2002 and 2003 the US Attorney's Office approached my lawyers several times seeking my cooperation in what they hoped would be a far ranging inquiry into the Giuliani Administration.  You see its completely misunderstood by the public and most of the press that Rudy Giuliani is not liked by his former colleagues.  In fact, they hate him.  I was shocked to come to that realization.  They desperately wanted an indictment of high Giuliani officials, and I don't mean me.  I can say with 100% certainty that had I agreed to cooperate and given them nothing more than what I have written in these posts over the past months, Tony Carbonetti would have been indicted and in all likelihood convicted by the Federal Government.  There is simply no question about it.  Further, on the Bear Stearns deal alone, Randy Levine would have undergone a major investigation.  I knew all this then and I know it now.  A deal to cooperate would have helped my situation immeasurably.  I doubt I would have avoided all prison time, but it sure would have reduced it significantly. 

When presented with these requests I said no.  I said it once, then twice, and on the third time I told Henry Mazurek, my attorney, to tell them to fuck off.  It would never even have dawned on me to "give up" Tony Carbonetti in order to save my hide.  Even if I had known of some extremely serious crime like he killed someone or ran a drug ring out of his apartment (neither is true) I would NEVER have told the US Attorney's Office.  It would have been unthinkable.  And that is especially true if I were involved in something fishy with him.  Throw him over to save myself on something we were both involved in?  I simply could not have done it then and I for sure absolutely could not do it now.  That doesn't make me a hero.  It just made me a good friend.

Now I get it's scary at the age of 74, almost 75, to think about prison and penury.  It was scary for me at the age of 40.  But you have two choices in life: fight for your rights and freedom or concede and accept your fate. There is no third way.  Hurting someone else where the only rationale for doing so is to lessen your pain is never acceptable.  Under any circumstances.  If Ray Harding and Hank Morris conspired to defraud or commit some crime and Ray Harding now feels that what he did was wrong, fine cop a plea, take your punishment.  But from everything I have read Hank Morris didn't mislead Ray; he didn't deceive him into doing something illegal that he thought was something else.  They are both savvy adult men who did whatever it is they did, legal or illegal, with full knowledge of their actions.  I see no 'out,' no escape clause from the two choices I have described above.  

Is Hank Morris's fear of prison any less real or distressing than is Ray Harding's?  When presented with a choice back in Nov. 2003 of letting me kill myself or working with my shrink to have me put under observation at a NY hospital, Ray Harding chose the third unthinkable option.  He, on his own accord, gladly sent me to prison.  More precisely, the hell that is the MCC in Lower Manhattan.  Now he is sending Hank Morris to years in prison.  It's an easy thing to do, send people to be incarcerated, when you've never experienced it firsthand.  Much harder - in fact unthinkable - when you've been there yourself.  Thanks to the deal he cut yesterday, only Hank Morris will have to know what it's like to lose his freedom.  Ray Harding saved himself from that nightmare at Hank Morris's expense.

You learn in prison that there is nothing, and I mean nothing, worse than ratting.  Rapist, child molester, Islamic terrorist, all pale as labels compared to being tagged a snitch.  Especially, boy I can't stress this enough, especially when you are doing it only for self gain.  I never held to the 100% absolutist view of this rule - I could see a few exceptions.  But the street view prevails in prison - nothing worse you can do than snitch.  So here we are.  Knowing what I know now - that Tony Carbonetti and other RWG administration friends would disown me after prison - would I have done anything differently?  As far as that goes, not a thing.  My disappointment in them is far, far outweighed by my hatred for the US Attorney's Office and the corrupt way it administers justice.  I wouldn't have dropped a dime then and I wouldn't do it now.

Making this worse for me is that the NYT insists on printing again this scurrilous statement that Ray's now admitted crimes were motivated by his need to pay my legal bills. I don't know how many different ways to say this but there isn't a single word of truth in it.  I believe Cuomo's office continues to say it because it provides a motive and I believe Ray Harding doesn't publicly deny it because it provides him with some excuse other than venality. It also perpetuates Ray's view of himself as the loving, long suffering father of me.  He never paid for my legal defense.  I don't know how many other ways to say it.  I said at the beginning that it is a sad and shameful day. It is indeed.  It's shameful what my father did and the sadness I feel is entirely for Hank Morris and his family. 

The Giuliani - Madoff Connection

First, let me say I don't think what I am about to mention is news.  I just think it hasn't been widely disseminated.  Second, I have mixed feelings on where I stand. OK, what am I talking about?  In the weekend newspapers it was revealed that the actual nuts and bolts mastermind behind the Madoff scandal, Chief Financial Officer Frank DiPascali, Jr.,  is going to cut a deal with the Feds.  Supposedly he is giving them names in exchange for leniency.  Now be clear on this; Bernie Madoff is the public face of the world's largest Ponzi scheme, but the man who made it run, day in and day out, was Frank DiPascali.  For all of the rage the investors have launched at Madoff, the one who moved the financial levers and switches everyday to swindle them was Frank DiPascali, not Bernie Madoff.  The phony dot matrix printer statements that they received each month came from DiPascali's 17th floor offices.  

Now what should I care about any of this, I wasn't stupid enough to invest with Madoff.  I care because it makes me wonder how I feel about Rudy Giuliani's law firm representing Mr. DiPascali.  Marc Mukasey is officially listed as Mr. DiPascali's attorney.  Marc is a partner at Bracewell & Giuliani, the Mayor's law firm in New York.  The New York office of the firm is run by Giuliani Partners (GP) principal and Rudy protege at the Law Department, Dan Connolly.  Not a single chance that Rudy and Denny Young weren't consulted before Mr. DiPascali was taken on as a client.

I have and always believed that everyone accused is entitled to a good defense.  I fault no attorney for doing their damnedest for their client, whether he be Jeffrey Dahmer or the Unabomber.  And if that attorney is a tenacious public defender, I have all the more respect for their ethic.  But what we're talking about here is money and perception. Rudy Giuliani is not some hard working public defender, far from it.  He wants to be President or Governor or something.  And as such, perception morphs into reality.

When a Saudi prince attempted to give the 9/11 Fund $10 million, Mayor Giuliani took an incredibly principled stand by returning the check after the Prince's people handed out statements at Ground Zero attempting to explain the 9/11 terrorists rationale and blame U.S. policy for the attack.  I was not two feet from the Prince when his aides started to hand out that disgusting document.  I was never prouder of Rudy than I was that day when he told the Prince to take his check back.   Naturally, it has been hinted in the media that Giuliani Partners later had business dealings with Prince Alwaleed bin Talal, choosing to ignore his fierce anti-Israel and anti-American rhetoric.  The Prince always likes to counter that he loves America, he owns so much of it (Saks, Citicorp, Apple, Newscorp...).  

But with so many victims of Bernie Madoff and Frank DiPascali out there, from museums, pension funds, charities, schools, and Holocaust survivors does Rudy Giuliani really want to help pay his Madison Avenue penthouse's monthly maintenance or his Hamptons Country Club fees with the profits of that fraud?  Because any monies that Frank DiPascali is using to pay his legal bills with Mr. Giuliani's law firm come directly from the fraud and its victims.  I agree that Frank DiPascali deserves a defense.  But does it have to be Rudy Giuliani who profits from it?  Is that what he wants?  I know perfectly well that Rudy does not hold the same views I do about defending the accused.  On many occasions, publicly and privately he has stated that heinous defendants wouldn't get his representation were he a practicing criminal defense lawyer.  You can be damn sure that had Henry Louis Gates's case not been dropped, Rudy would not have taken up the charge.  There's a defendant who the former Mayor believes should have just "shut up" in the face of a clearly out of control cop.  But Mr. DiPascali?  Years and years of methodical, ruthless deception on an unprecedented scale.  Will former Southern District US Attorney Giuliani be of any help in the DiPascali prosecution in the US Southern District?  Mr. Mukasey was an Asst. US Attorney there as well.  Maybe he can influence his old colleagues to go lenient on the greatest fraudster of all time. Or maybe it should be noted that Marc is appearing before Judge Richard Sullivan who filled his dad's seat on the court.

Mr. Giuliani has maintained for nearly 8 years that his clients at Giuliani Partners are no one's business and he has steadfastly refused to release a list of his clients, even during his failed presidential run.  But law firms are a different animal.  You can't go into court and withhold your law firm's name when representing a client.  Now maybe if the attorney actually representing Mr DiPascali wasn't a Rudy guy through and through (see Addendum) or the Managing Partner wasn't a Rudy protege and GP principal partner, Mr. Giuliani might, might be able to say, "I don't approve every client my law firm accepts."  But there is no credible way that can be true in this case.  Not with a client this high profile.  And you know that they would not have accepted him and risked adverse publicity if the fees generated were not astronomical.  

So there you are.  Earth shattering revelation?  No.  But I think it is perfectly reasonable for the victims of the Madoff disaster to ask, while they wait to see some small compensation from the bankruptcy court and their various lawsuits, what Rudy Giuliani and his partners will do with their money that they have received from Frank DiPascali.  Give it to charity?  Return it to the investors?  Some of it?  The press has been so extraordinarily gracious to Mr. Giuliani about his businesses and their clients in the past.  So I do not expect much from them in terms of inquiry.  But maybe some defrauded Madoff investor will ask the question, "What does Rudy Giuliani plan to do with our money now that he will have a goodly chunk of it?"

ADDENDUM

Frank DiPascali's attorney of record is Marc Mukasey.  I first met Marc during the 1989 Giuliani campaign for Mayor.  His mother, Susan Mukasey, had asked that he be given a position.  At first he was a volunteer, later becoming Deputy Volunteer Coordinator under Mindy Franklin, Randy Levine's girlfriend.  At that time, his last name was Saroff.  His mother was at that time remarried to Federal Judge Michael Mukasey, a longtime Rudy friend.  I had always assumed his mother was divorced from his father and had simply remarried.

Later, after the campaign, Mindy and I ran into Marc one day outside of our gym.  I said, in my not very funny way, "Marc Saroff, how the hell are you?"  He turned stoned cold and corrected me, "It's Mukasey."  "Oh," I said, " I didn't know."  It turned out, he explained, that he had legally changed his name to Mukasey.  I assumed - for no particular reason - that I had been mistaken.  His father therefore must have died or been an abandoning low-life deadbeat, hence the desire to rid oneself of the name.  Mindy set out in her determined fashion to find out the truth.  What she discovered sickened us both.  It turned out that Mr. Saroff pere was alive and well.  Furthermore, he was not a lowlife.  He had remained close and in contact with Marc after the divorce from Susan.  It turned out that Marc wanted his step father's last name because he wanted to go into the law.  His step father at the time was a famous Federal Judge, handling major terrorism cases.  Marc had gone to his real father and asked him to give his permission for Marc to be adopted by Judge Mukasey.  I can only imagine what a wrenching thing that must have been for the father to deal with. He gave his consent.  Mindy and I would always look upon that kid as an unremitting scumbag for having done that to his father and for the reasons behind it.  We both could not help think what a scheming, manipulative and clawing person Marc would become if he had notions like this at his young age.

Well Marc did not bet wrong.  His step father, now father, went on to become Presiding Judge for the Second District in New York and was so while Marc was an Asst. US Attorney there.  He later became Attorney General of the U.S. vehemently defending Bush policies such as torture and illegal wiretapping.  And in his final days as AG suppressed the Inspector General's report on Justice Department policies during the Bush years.  Marc landed well as a partner at Bracewell & Giuliani practicing white collar defense law.  And now he is front and center in representing the greatest swindler in the history of our country.  I am sure his father would be proud.  At least one of them.

The Zarb

I can't seem to get away from old associates in the news.  Today's New York Times contains on the front page an extensive investigative piece on my old boss, Charles Millard (NYT story).  Charlie was President of the New York City Economic Development Corporation (EDC) when I was an Executive Vice President during the Giuliani Administration.  I've mentioned Charlie in passing for my post on Randy Levine.  I have wanted to write a post on Charlie alone since he's deserving of one.  I started to but didn't think it would be of general interest.  Well a front page piece in the NYT makes the subject a subject of general interest by default.

As anyone who was around back then knows Charlie and I were like oil and water; we did not get along.  It reached the point where it became so bad that for my last year at EDC he and I did not speak to each other, using my deputy to serve as go between.  What were my issues with Charlie?  Well, let me just say that if you had asked me before the NYT piece what, if anything, Charlie Millard would ever get into hot water over I would have said it would be as a result of his need to please those he viewed as big players, to demonstrate that he can deliver and simply to rub elbows with major financial movers and shakers.   And that is precisely why he has a congressional committee, an inspector general and I suspect some prosecutors taking a look at his tenure as President of the Pension Benefit Guaranty Corporation (PBGC).

Charlie, as I have said before, is a bright guy.  His problem is that he isn't self aware enough to know those things he knows and those he doesn't. Couple that with crippling insecurity and paranoia and you have a bad mix. Charlie had a stern, successful father who never saw him as a great success.  Charlie's need to constantly ingratiate himself to "his betters", to impress them with his savvy, is what lead in measure to his current difficulties.  I can totally see him calling Goldman and saying, as is recounted in the Times' piece, that he was going to revamp the PBGC and would they like to help.  He knew precisely what he was doing.  He wanted behemoth Goldman Sachs to look upon him as a benefactor of business.  And then he could steer the permanent consulting contract to them.  Not out of any criminal motive, I believe, but just so he could show Goldman that he could deliver.  Wouldn't that have made his dad proud (his father passed away in 2003). Charlie's need to please and never disappoint his superiors was really a bad father complex at work.  In all the time I knew him as a member of the city council, in private practice or as President of EDC I never knew him to take a stand on principle that might endanger his standing or put in jeopardy being well thought of by those to whom he reported.

I can't help but compare his tenure with my time at HDC.  I sought out experts and processed their advice.  Rather than suck up to the investment banks that were showering me with attention, I remained extremely wary at all times.  I knew those people weren't friends, they wanted my business and I never lost sight of that.  That is why, whatever my transgressions, not a single person has questioned my professional stewardship of HDC.  Unlike Charlie, I knew I would not have and did not want, a future in the financial or housing industry.  Therefore, I had no need or desire to impress or ingratiate myself with anyone I did business with for some future gain.   My professional interests were HDC first, last and always while I ran the corporation.

Charlie Millard was a city councilman before becoming President of EDC .  As such he managed a staff of 3-5 people and that represented the largest staff he had ever supervised.  Here he was at EDC with 180 people to manage.  He was regarded by nearly everyone at EDC as the worst boss you could hope to have: petty, insecure, thoughtless, pompous and vain.  Partly it was not his fault, as contrary to popular belief, management is not something that happens naturally.  You need the right personality and skills.  In a few they are innate.  In most they take years to develop.  Charlie's skills were honed to please superiors not harness lasting excellence in a multi-billion dollar corporation.  Charlie would, at the drop of a hat, throw out sound policy and business decisions in order to please Randy Levine or Cristyne Lategano, his immediate and nominal bosses.  This was the major reason he received so little respect from those at EDC. 

While he did much good for the city and the Giuliani Administration, he could never balance that with his hunger for publicity and praise.  The best example any of us who worked there could give you centered around the Frank Zarb incident.

One day late in my tenure at EDC, the VP of Marketing, Abby Spilka, came to tell me that Charlie wanted us to present an award to Frank Zarb (at the time Chairman of NASDAQ and a Rudy supporter).  "An award for what?" I asked.  "He didn't say," she said.  "I don't get it.  He wants us to create the rationale for presenting Frank Zarb with an award or to create the physical statue?" I asked Abby.  "No," she answered, "he will come up with the reason.  He wants us to design and order a statue."  "I'm still confused.  Are we supposed to pretend that this is something we have handed out for generations and Zarb is the latest recipient or we're creating this for him?" I asked.  "Well Charlie is going to pretend that Zarb is the latest winner of whatever this is," Abby explained.  "This is nuts, you know," I said.  Abby was always correct regarding her superiors and just smiled. 

I called the staff together.  I oversaw Marketing, Creative Services, Public Relations and a few other departments.  I explained to them what Charlie wanted and what we needed to do.  They just stared at me.  "Yes," I said in response to their stares, "he is creating this award to ingratiate himself with Frank Zarb. For what purpose I have no idea, but you can be sure it has nothing to with EDC." It was then that I thought of something funny and started to laugh.  Luke Cusack, my loyal number two, asked me what was funny.  I turned to the V.P of Creative Services.  "Sue, here's what I want.  I want something over the top.  I want something to rival the Heisman or the Stanley Cup.  This whole thing is a joke so lets get some laughs out of it. I want this thing to be huge and gaudy."   

So Sue researched some companies that made these types of awards and came back with a proposal.  It was big alright.  We nicknamed it The Zarb.  I had Sue and Abby take it to Charlie for his final OK.  I wasn't 100% sure he wouldn't figure out that this was a joke.  I thought there might be a small chance he would see that we were mocking him with this huge, ridiculous statue.  But, as I suspected, Charlie did not get the joke and was absolutely thrilled.  He had no sense of irony so we were safe. He was so delighted with what I had done that for a short period of time thereafter we had a thaw in our relations.   

Charlie planned an awards ceremony in order to present this thing.  He tasked my department to set it up and create some press for it.  I complied and my staff did their usual superb work.  Charlie ended up calling this the EDC award for excellence in something. I now forget exactly what.  I didn't attend the ceremony.  I thought this whole thing was just too idiotic to participate in.  But my staff reported back that Frank Zarb seemed a little bewildered by the whole affair.  I saw Frank Zarb some years later on a plane headed to DC.  I really wanted to ask him if he knew the whole thing was a Millard suck up.  But I didn't. 

What was the point?  All this money spent on an award and ceremony to accomplish what?  For a few minutes alone with Frank Zarb?  To receive Zarb's gratitude and recognition in the future for honoring him?  For God's sake, this man has a business school named after him.  Did Charlie really think this mystifying award was going to make Zarb remember him after his tenure at EDC was over? 

So why am I telling you this?  It is either an amusing story or it isn't, but that's not the reason.  To understand the man at the center of the New York Times' piece today you have to know what motivates him.  What I am demonstrating is a psychological pattern of behavior. 

Create a problem - or an opportunity, depending on how you look at it - and then take advantage of it.  In the Zarb case the goal was to ingratiate himself to Frank Zarb, for whatever unknown reason.  So create this phony award and seem as though after careful analysis Frank Zarb emerged the winner.  Same thing at the Pension Benefit Guaranty Corporation.  Goal: develop a close, beholden relationship with major investment palyers: Goldman, Black Rock, JP Morgan.  Create a problem - the supposed diaster that was PBGC's investments - and lift your skirt, so to speak, so that they would begin salivating and jump all over the corporation's president. 

I am also willing to bet my life, knowing Millard as I do, that at some point early on in this he found a way to speak to Treasury Secretary Hank Paulson.  There can be no question that Charlie would have loved the sitting Secretary and the former Chairman of Goldman to know of his existence.  So Charlie either called him directly or found a way to bump into him.  He matter of factly asked Paulson's thoughts on Goldman doing this large amount of work for PBGC.  What Paulson should have said was, "this is a completely improper conversation given my past association."  But we now know that Hank Paulson, the man who bailed out AIG in order to save Goldman from the fate of Bear Stearns, has no ethics.  So I am sure he said, "Oh they'll do a splendid job.  What's your name, again?  We should have lunch."  Once a Goldman man always a Goldman man.

This was classic Charlie.  On the Friday afternoon of Labor Day weekend he called to tell me that he wanted my staff to write him an op-ed piece for the Wall Street Journal.  And he wanted to see a draft over the weekend.  "Did the Journal ask for this?"  I asked him.  He knew where I was going and started to get mad.  "No," he said, "but that doesn't matter."  The only person left in the press office was leaving to go away with her boyfriend for the weekend to Cape Cod.  I was absolutely not going to ask her to spend her holiday weekend writing spec pieces for Charlie.  I told him we would be happy to have something for him sometime on Tuesday.  He told me he needed something over the weekend.  I told him I would not ask my staff to ruin their holiday for a spec piece.  A Journal submission is serious, not something you rattle off in 20 minutes.  He called the staff member directly and ordered her to do it.  I told her not to, as her boss, and that it was me he was engaging with in a war.  She was merely a pawn.  She started to cry.  Charlie had been pretty brutal on the phone.  She said she would do it.  It really pained me that he gave no consideration to anyone's needs but his own.  My behavior towards him was totally unacceptable and insubordinate.  I fully got that.  I would have fired me.  But I was the only person at EDC who could push back at Charlie's behavior.  He could not fire me no matter what I did, so on behalf of everyone he could fire, I tried to fight the good fight.  Staff at EDC really appreciated that.

Charlies arrogance would sometimes get the better of his good judgment.  In interviewing Vinny LaPadula for the position of EDC Chief of Staff Charlie commented to him that he had heard Vinny had a reputation as "Vinny Bag-O-Donuts," and asked him to comment on it.   Vinny was totally shocked.  Vinny could be immature and a total goof at times but when it came to his professional work he was extremely good and dedicated.  But in any case, how could one take that comment without inferring some ethnic Mafia slur?  You couldn't.  It was such an incredibly inappropriate thing to say to a candidate for a high level position based on no information whatever.  But that was Charlie.  He thought that comment was clever and more than that believed it was a great interview technique.  Put the subject ill at ease with an out of left field question.  He did it to me the first time he interviewed me.  I told him to go fuck himself.  Tony Carbonetti, whatever his thoughts on Millard before that Vinny interview, viewed Charlie as a WASP anti-Italian asshole afterward.

I learned more about management from watching Charlie Millard and how not to treat people then from any other source.  He once awoken a Senior VP of EDC at  2AM to criticize his punctuation in a memo he had given Charlie.  The interesting aspect of Millard's tenure at PBGC left out of the NYT piece was how he got the job.  Knowing Charlie, I can only imagine the intense and unrelenting lobbying that must have gone on to get it for him.  It was too bad the Times didn't cover that part. 

Whenever I was close to getting the Mayor to fire Charlie, Millard would go into Rudy's office and turn it around.  The last time I tried, shortly before I left EDC, it was a done deal.  Rudy had called Millard in to fire him.  No one, not Cristyne or Tony or Mastro, or Levine was going to stick up for him; although Charlie was feverishly trying to get one of them to make his case.  But when the meeting took place -according to Rudy's recounting to Carbonetti - Millard literally begged the Mayor to give him a few months to find something else.  Rudy told Tony that is was too pathetic - he just couldn't fire him after that display.   After I failed that last time to get rid of him I decided it was him or me and he had won.  I started to look for a new job in the private sector when I was offered HDC.

As I said, Millard is a bright guy.  But there is no question that having become President of PBGC in 2007 serving under the most unpopular U.S. President in our lifetime that Charlie had his eye squarely fixed on an escape exit should the next President not be a Republican as seemed highly likely.  That is what lead him to behave the way he did more so than usual.  Black Rock and Goldman were the emergency exit should it be Hillary or Obama and not McCain or Giuliani.  Venality and self preservation, not criminal intent are what lead him to hand over PBGC's billions.

ADDENDUM:   

Everyone at EDC had a favorite Charlie Millard story.  There were hundreds of them.  Some thoughtless thing he did, a call he made to some extremely important person on a flimsy pretext in order to make that person aware of his existence, or just a bonehead thing.  I think my favorite - and I had a lot of Millard stories back then - was our meeting with a consular official.

Charlie invited me to a meeting that had been requested by the economic attache at the Slovakian Consulate.  He wanted to discuss Slovak investment in NY and American investment in Slovakia.  Standard type meeting.  Charlie and I sat on one side of the conference table and the Slovak gentleman on the other.  This meeting occurred sometime in 1997. 

Charlie asked the guest to proceed and he outlined his vision for investments of mutual interest.  Charlie, I should mention, was not a great student of current affairs outside of New York City.  He did not seem to have a particular world view other than mouthing general Republican platitudes.  So when Charlie responded, he began by talking of his respect for Czechoslovakia.  He must have said Czechoslovakia ten times in 5 minutes and Prague was mentioned even more.

I shook my head in disgust.  Didn't he at the very least read the briefing materials I know he must have been given?  Taking the pad of paper laid between us I wrote out in large block letters, "SLOVAKIA - CZECH REPUBLIC - NOT THE SAME THING."  "NOT PRAGUE - IT'S BRATISLAVA," I wrote.  He read what I wrote and waved his hand at me dismissively.  He went on to mention how much he'd like to go to Prague and Budapest. 

I am sure somewhere in the recesses of his mind he knew that Czechoslovakia broke in two back in 1993.  He was not a lover of European History or had recent European ancestry, as I did.  But still, you'd think he'd have recovered quickly after I pointed out the error instead of compounding it. I felt sorry for the gentleman from the Slovakian Consulate.  The very least we could have done in the meeting is demonstrated that we knew his country existed.

Where There's Smoke...

Back in 1995 Pete Vallone, Speaker of the NYC Council, went through one of his periodic spasms about smoking.  Supposedly, someone in his wife's family had died of lung cancer and he wanted to avenge their death on the rest of us.  So he proposed a smoking bill.  It was perhaps the dumbest anti-smoking legislation devised.  Only the NYC Council could have come up with legislation that allowed smoking in small, congested, non-ventilated spaces but prohibited it in large, airy ones.  The bill prohibited smoking in restaurants except in separately ventilated rooms.  The bill exempted, however, any restaurant with under 36 seats.  For all of Vallone's righteous indignation about health risks, he wasn't going to piss off the small diners and coffee shops in his Queens district. 

So the vote on the bill was set and Rudy Giuliani had to decide how he felt about this.  A meeting was called with the relevant parties at Gracie Mansion to discuss this.  As head of Inter-Governmental Affairs I was naturally attending.  Peter Powers, First Deputy Mayor, would have been as well, but a prior unbreakable commitment prevented him from going.  He called me into his office to discuss the coming meeting.  We both knew Rudy was leaning towards signing it.  His health advisor, Maria Mitchell and his Health Commissioner, Dr. Margaret Hamburg, were both virulent anti-smokers.  Both were pushing him hard to sign it.  Peter and I were of the view that there was no hue and cry from the residents of New York City for this legislation.  Smokers and non-smokers coexisted just fine.  It was rather the lunatic fringe of anti-smokers who wanted this legislation.  Peter and I were both smokers and I was once a VP at a lobbying firm that had as one of its major clients Philip Morris.  So everyone knew well ahead of time where we both stood on this.  But Peter, like many smokers, felt guilty about his habit and wasn't going to strenuously lobby Rudy not to sign it.  He left it to me to go to the meeting and be the lone voice for sanity.  Peter told me to do my best and try and win the day.  I told him I would.

Prior to the meeting I called Marty McLaughlin, my old boss and Philip Morris lobbyist.  Philip Morris was one of the few Fortune 500 companies still headquartered in New York City.  Most had fled south over the past few decades.  Philip Morris had a beautiful headquarters on Park Avenue.  In an earlier smoking law, Marty had inserted language that exempted that building specifically from all of the law's provisions.  You could smoke anywhere you wanted in their headquarters.  It was the only building in the City so exempted.  Even City Hall was covered, although we all secretly smoked in Peter Powers' office.  Marty explained to me that the rhetoric was heating up.  Philip Morris had told him that they would move out of New York if this legislation passed. That was serious stuff.

It's important to remember that at this time Rudy Giuliani had not yet discovered cigars.  I am totally convinced that had this conversation happened after he developed his taste for expensive cigars it would have been completely different.  Not because of any selfish motive; cigar bars were always exempt.  But rather he would have had a smokers perspective.  It was a choice, and government should not interfere in people's lives more than is absolutely necessary.  The whole phony employee second-hand smoke issue wouldn't come into play until Bloomberg created it as an excuse to ban all smoking in 2002.  But timing is everything and that was not to be in 1995.  

So we gathered in the dining room at Gracie for a late afternoon meeting.  There were about 6 or seven people but it really boiled down to Maria and Peggy on one side and me on the other.  No one else present was going to speak openly against the legislation.  Either because they sensed were Rudy's head was or because they were afraid of Maria Mitchell.  Although very attractive and capable of being extremely charming, she was a vindictive person and played the game rough.  I don't say that as a criticism, it's just the fact.  Most who never came up against her admired her for those traits.

So we sat around the table and the NYC legislative affairs office outlined the legislation - pros and cons.  It was Martha Hearst presenting who was also personally anti-smoking so it was not exactly an even-handed presentation.  Martha made it very clear she would have taken the legislation further.  But she was always the professional.  Just to be clear when I say someone is 'anti-smoking' I don't' mean that they don't smoke.  Yes, that too, but I mean they detest the habit and are perfectly happy to see the practice abolished.  I know plenty of people who don't smoke who would not be labeled anti-smoking.

So after Martha finished Rudy asked Peggy for her views.  Peggy was always mild mannered and confident.  She was not a strident person although she had definite convictions.  What made her formidable was the fact that she was competent, assured, intelligent and not strident.  I believe Rudy liked and trusted her opinion.  Peggy said she supported the legislation, had hoped it would have been tougher but as a compromise she supported it and urged him to sign it.  Maria, waiting for me to jump in, launched into a anti-smoking tirade.  She quoted numbers and health costs.  She seemed panicky.  I think she thought I had the ability to turn Rudy's head around and wanted to prevent that.  I knew going in that I did not.  I knew he would sign it.  I was, however, unprepared for what he would say about it.

I finally cut Maria off.  "Mayor, this is flawed legislation.  How crazy is it that under this bill the largest most well ventilated restaurant can't permit smoking.  But a coffee shop, with tables crammed next to each other can.  How is that a logical argument for protecting anyone's health?  Thirty-six people occupying a space the size of the Pool Room (the Four Seasons Restaurant - a large, airy space) cannot smoke.  But thirty-six people crammed into a room this size can.  This is about Peter Vallone having a personal animus towards smoking, it's not about health and you shouldn't view it through that prism.  And what about the cost to business?  They're going to invest this money and who knows it Peter is not going to come back for another bite of the apple and scuttle whatever investment they made.  We're supposed to be pro-business.  I don't know if this will decrease restaurant business but the restaurant association says that it will."

Maria glared at me.  It appeared Rudy didn't know about the capacity exemption  before I said it.   I had made a good point.  She knew it.  "Fine," she said, "lets get rid of the exemption, include all restaurants."  Martha chimed in to say, "Peter (Vallone) will never go for that.  He can't piss off the diners and coffee shops in his district.  That's why the exemption is there.  Mayor, i think this is as far as he's going to get for awhile.  I also should tell you that the votes are there for an override.  He would absolutely make this a leadership issue."

"Exactly," I shouted, "this is not about health, its politics.  And while it's fine for Maria and Peggy to approach this from a medical perspective, however flawed their facts, this bill is not about health, it's politics."

Maria asked Peggy to talk about second-hand smoke.  Peggy recited numbers and what she said were the medical effects of second-hand smoke.  I shook my head violently.  "Mayor, for the record, you should know that the World Health Organization (WHO) refutes everything Peggy just said.  They have said they cannot establish a link between second-hand smoke and disease" (at the time I said this, that was the case as it related to WHO).  "That's not true!  Maria shouted.  "Like hell it's not, I read it in the Times," I said.

Rudy then turned to someone from the Law Department who gave the legislation their blessing from a legal standpoint.  Finally Rudy said, "I think I've heard enough."  I knew he was about to say he'd sign it, I could just tell.  I had to say something before he was on the record as supporting it.

What I said next was probably a mistake when dealing with Rudy Giuliani, but I knew we were losing so I didn't see that I had a choice. "Mayor," I interrupted, " I have it on good authority that should this legislation become law Philip Morris will close down their headquarters and move.  They will leave New York and with them alot of jobs."  He paused and got mad.  "Oh yea?" He said.  "First, I don't believe they will leave New York, they're bluffing.  Secondly, if they do leave," he leaned forward and pointed his finger at me, " you tell them I will personally help them load up the boxes, you hear me?"  He started laughing and broke out into a grin. He started to wave his hand.  "Bye, bye.  Farewell. We can find a buyer for their headquarters in two minutes.  You tell them that!" 

"Mayor, I don't think they're bluffing, but I will tell them," I said.  He then asked Martha when the vote would happen.  Maria had a big grin on her face, she had won.  I am not a gracious loser on policy matters.  Things in life matter.  What we do in government is not just some academic exercise, we're affecting people's lives and should do it as infrequently as possible, I believe.  

As it happened the Council voted in the smoking restrictions.  Businesses spent a lot of money to comply only to find that investment wasted a few years later when smoking was banned everywhere.  Philip Morris left New York shortly after the legislation passed and took nearly 1,000 jobs with them.  Rudy began smoking cigars and enjoyed doing so in the exempted cigar bars.  Interestingly, that is where he would meet the third Mrs. Giuliani, Judith Nathan.  Maria Mitchell left the administration in a mini-scandal.  Peggy Hamburg left to take a job in the Clinton Administration.  Martha Hearst would leave Legislative Affairs to become a Deputy Commissioner of Sanitation.  Bloomberg would appoint her Commissioner of the City's Department of Citywide Administrative Services.  I would leave to go to EDC and then HDC.  Peter Vallone bequeathed his Council seat to his son when term limits kicked in.

The Big Lie

It was the 1988 Presidential Debate between Michael Dukakis and George H.W. Bush when Peter Jennings asked Gov. Dukakis a question about childhood poverty in America.  Jennings premised raising this issue at a presidential debate on a statistic he quoted.  He said that 33% of children in this country live in poverty.  Were that true it surely would merit attention at a 90 minute debate of this magnitude.  Childhood poverty I am sure deserves discussion any time.  What struck me then watching that was the statistic was so patently false.  There was simply no possible way that one third of all children in this country lived in poverty.  It was absurd on its face to suggest that.  I waited for the governor to challenge in some fashion the purported fact.  But he did not.  He accepted it and droned on some liberal answer.  Dukakis was blasted by the media - and rightfully so - following the debate for not challenging the question since, naturally, the statistic was false.  Jennings too was criticized for it.

Last night I was listening to the president's press conference in my car when a reporter for BET named Andre Showell asked him about unemployment, specifically minority unemployment.  Here's the question: 

"Thank you, Mr. President. As the entire nation tries to climb out of this deep recession, in communities of color the circumstances are far worse. The black unemployment rate, as you know, is in the double digits, and in New York City, for example, the black unemployment rate for men is near 50 percent."

I was stunned.  I have no idea what the unemployment rate for black men is in New York City.  I suppose I could do some research today and find out.  What I know, as I know my own name, is that it is nowhere near 50%.  It is nowhere near 25%.  How do I know this?  Because I am a fairly intelligent person who can reason.  Can you imagine what NYC would be like if the unemployment rate for black males was 50%???  There would be demonstrations on a daily basis.  There would probably be riots.  I am not singling NYC out; the same would be true in any major city in this country if that premise were true. 

I waited for the president's response.  I was sure he would not fall into the Dukakis trap.  I hoped he would give some compassionate answer but say he wasn't quite sure that figure was correct although whatever the figure is, it's much higher than it should be and is causing a lot of pain.  Something along those lines.  But I really wanted someone as logical as this man to say "whoa, 50%?  That can't be right."  I was severely disappointed. 

I won't reprint his answer because it's what you would expect, a lot of liberal spending proposals along with the compassion. But what he did not say is, "here's my answer, but I'm not sure I agree with your figures."   It is so disappointing that a President of the United States this smart isn't comfortable enough to answer the substance of a question without buying into the premise.  A white politician might not do it for fear of looking out of touch with the plight of minorities.  But what exactly is Obama's excuse?  

My father always used to say: if something doesn't sound right it probably isn't.  The danger of not challenging that statistic in this incredibly lazy society runs the risk of it being accepted as fact and quoted.  I wonder how many people today, especially minority politicians, are quoting that statistic?  It was said in a presidential press conference, I'd believe it if I were dumber or had mischievous intent.  I also have to assume that this Andre Showell must not be a total idiot to have gotten himself a press pass to the White House.  He had to have known, just on its face, that number could not have been true.  Someone should be taking him to task today as well.

The danger of the big lie left unchallenged is its propensity to spread.  This recession - or whatever we're calling it - is historic and causing terrible pain throughout the country.  I believe that wholeheartedly.  But problems, decisions and the national discussion that surround them must always be had honestly.  Or as honest as is possible in Washington.  By cooking the books in a venue as rarefied as a presidential prime time news conference Mr. Showell didn't help any cause yesterday, he only set it back.  Worse, he now has engendered comparisons between Obama and Dukakis.  The Obama people can't possibly find that a good thing.

The High Water Mark

Some interesting Rudy developments over the last two days.  First, Siena College released a poll showing Rudy trouncing Gov. Paterson 56%-29%.  Second, Rudy seems to have decided to launch his campaign yesterday with an interview with the NY Post (hard to know for sure because it is a Giuliani superstition never to formally announce his candidacy for any office).  In it, he comes out fervently against gay marriage.  This set of events taken together portend very badly for Mr. Giuliani.  Or as he might say: very, very badly. 

If you look at the Siena numbers Rudy is off his high mark in both the head-to-head and his favorable, unfavorable.  Less people like him and more dislike him - it's becoming a trend according to Siena's numbers.  The revealing number - less focused on - is the Rudy/Cuomo head-to-head.  Here, Andrew trounces Rudy 53%-39%.    You see how fast that 56% becomes 39% when presented with an actual choice besides Paterson?  That 56% is Rudy's high water mark in this race.  For a well-known figure like Giuliani going from 39% to 51% in a general election will be extremely difficult.  Further, I would argue that if the election were held today between Rudy and Paterson, Rudy would not even garner 56%.  These are extremely bad numbers for Team Rudy and I know they know it.  They need a new strategy and new thinking over there in Times Square (home of Giuliani Partners).  Do we have any evidence of that?  Quite to the contrary.

The smart thing to do in order to reintroduce Rudy to the voters - and make no mistake that is what has to be done - is to show what he did in '93': a kinder, thoughtful, more compassionate Rudy.  An image to counter the established mean Rudy impression left over from '89' and the police riot in front of City Hall.  Over in Times Square they believe that this race boils down to continuing the '08' campaign while sprinkling in some '89' and 9/11.  Bad, bad miscalculation.  And what is the first major policy pronouncement to be heard from candidate Giuliani?  He has staked out the far-right 'no at all costs' anti-gay marriage position.  Someone over there in Times Square thinks they're still campaigning in Texas, Oklahoma, Missouri or - I almost started to type Iowa - Georgia.  Rudy is not only out of step with the majority of New Yorkers on this issue he is positioning himself to be on the wrong side of history.  My guess is this is no accident.  Tony Carbonetti, Peter Powers and whoever else makes up the Rudy political braintrust these days believes that the Rove/Bush strategy of winning at the margins will work here in NY.  Create a coalition of Catholics, conservative Hispanics, blue collar democrats, maybe even some blacks since they hate gay marriage more than any other minority group, along with upstate Republicans.  It is sad beyond words that the man who was Christ like after 9/11 feels that this is the only way he can now win an election in NY.   He appears at a fundraiser and says of his dais companion Newt Gingrich, "I consider him a role model."  Now as everyone knows I think Gingrich is great and correct on many issues; but this is New York State, you can't win here proclaiming Gingrich as your role model and Dick Cheny as the model Vice President. He still thinks he's appearing at rubber chicken dinners in San Antonio or Orange County.  But as the results of 2008 showed, those voters didn't want him either.   What should Rudy be doing?  Sometimes people over-think things when the answer is right there. 1993.

Instead of idiotic Republican fundraisers, Rudy should regain the steely nerve he used to have before he discovered G-5s and give a series of policy speeches as Reagan did in the late 70's.  Appear before public policy groups - maybe even unfriendly ones - and discuss the problems facing the state.  The one thing that always marked a Giuliani mayoral campaign was a great issues team.  Lots of well reasoned and enunciated policy statements.  The hallmark of the presidential race?  A great pride in never answering a policy questionnaire or issuing any innovative position papers. 

He balanced eight budgets and reinvented the most intransigent government in the country.  And all he has to say is some badly written vague platitudes about too much state spending?  He was a prosecutor during the last great Wall Street shakeout.  While I wouldn't play up the prosecutor side too much, he should be reminding voters that he was doing this while Andrew was still in law school.  Don't get me wrong.  I loved when Rudy would get tough, just not mean.  There's a line and his coterie wouldn't then and surely won't now tell him when he crosses it.  If you read my past posts I lay out very clearly the mistake Rudy made in listening to what I call the Randy Levine strategy.  In essence it says that to position Rudy nationally you had to go hard right and discard the non-partisan, independent, problem solver label that made him mayor twice.  Is there any question that had Randy Levine, and I am sure many others, not been listened to that Rudy could basically walk into the Governor's Mansion? Even notwithstanding the incredible number of scumbags he's taken on as clients over the last seven years. 

The state is in crisis.  He wants to lead us out of it.  So far makes sense.  But I know - because I know the man and all the players involved - that they believe they can do this on the cheap.  I don't mean money; they'll raise whatever they need.  I mean he doesn't want to work for this as he did in '93.'  Rudy has no fire for anything anymore other than personal financial gain.  That he can get worked up about.  Unfortunately not much else. 

If he wants to be governor, great.  But he is going to have to work for it.  If he wants to be like Bush and appear only before staged friendly audiences that will clap whenever he says 9/11 - forget it.  And as I have said before, he is going to have to explain himself for 2007 and 2008.  The positions he took were not only at variance with his own past statements they won't sell to New York State in 2010.  Starting from 39% and bashing gay marriage just doesn't seem like a smart opening strategy to me.  I'd say Team Rudy is not off to a winning start.

What To Do About Rudy?

Newspaper reports tell us that Giuliani Partners (GP) is not doing well.  In addition, they tell us that the former mayor is seriously exploring a run for governor.  Neither of these two things should come as news.  Based on my conversations with Tony Carbonetti in 2001, 2002, and 2003, GP wasn't exactly a fraud from its inception - not a criminal conspiracy -  but it was premised on the ignorance and gullibility of its clients, call that what you will.  The premise, as he explained it in 2001, was to form a web of interrelated companies with each partner holding a different percentage of shares in each company based on his 'expertise' and intended commitment to that company.  The problem from the beginning was that there was no expertise.  Maybe hard to remember now, but back in December 2001 Rudy Giuliani was - to paraphrase the Beatles - bigger than Jesus Christ.  In fact, Tony and I referred to it as the Jesus Effect.  Rudy walked on water back then and could do no wrong.  People would line up and pay handsomely to touch the hem of his garment.  I think the hope of GP was to line up all these clients and then learn on the fly how to do what it was they were expecting of them for all those millions.  But they never delivered.  The problem became loss of focus and greed.  When people are throwing huge sums at you and seemingly expecting no results, then your desire to produce them wanes.  

The list, if we actually could see it, of GP clients is no doubt impressive over the last 7 years.  The results from all those contracts is less clear.  You read with great regularity of the signing of these clients but you rarely heard of any accomplishments on behalf of them.  We all heard with great fanfare the signing of Mexico as a GP client to recast their police and law enforcement.  I think we all know how that worked out.  Australian readers of this blog regularly send me information on the sale of a GP subsidiary, Giuliani Capital Advisors, to Macquarie Bank.  Big press releases when it was announced.  But as we now know the company has lost millions for the bank.  Apparently the deal was predicated on Rudy becoming President and privatizing thousands of miles of US roads, a major financial interest of Macquarie.  That is why Macquarie vastly overpaid for what was an empty vessel - Giuliani Capital Advisors.  We all know how that worked out too.  The business plan of Giuliani Partners shifted from seemingly well intentioned, albeit perhaps naive, to something of a fraud.  They realized quickly that they could build up these various Giuliani entities with clients and paper assets, then sell them off for high prices; although the fundamentals underlying the companies didn't really exist.  There was never any there, there.

That was the greed part.  The loss of focus occurred naturally once he decided to seek the presidency.  Giuliani Partners without Giuliani is just a bad consulting firm.  That's what clients started to realize.  It is no surprise to me, as the papers report, that most of their remaining clients are overseas.  Foreigners are the last to realize that an  American politician has lost his marquis status.  I would be more interested in knowing who the remaining American clients are. That to me would be a sign of the health of GP.  Do American companies continue to seek and value GP's advice?  Not so much, I fear.  The irony is that Rudy used to boast about his private sector credentials by talking about the steel mill he ran while he was Associate Attorney General.  He cut payroll, trimmed the fat, restructured and turned the company around.   Were GP to focus its talents in actually doing some real work, Rudy's claimed CV talents would seem a natural fit in this economy.  Turning around failing, poorly managed businesses - who doesn't need that these days?  But they don't want to work at GP.  They're still stuck in the last economy of creating phony wealth.  And I suspect Rudy doesn't want to work at GP either.  Like his hero, George W. Bush, he prefers the adoration of crowds at $75,000 a pop to the drudgery of office work. 

After the defeats of 1960 & 1962 Richard Nixon too wanted to make some serious bucks.  But he did it the right way.  He joined a law firm, practiced law for real and argued a number of landmark cases including before the Supreme Court.  You didn't hire Nixon merely for his name, you also hired him because he was a damn good attorney.  He made a lot of money for the time, but did it honorably.  People tend to forget that about Nixon.  But what GP and Rudy do isn't honorable.  They add no value to the companies that retain them.  At the end of the day, isn't that what a successful consulting firm does - they add value?  Where are the GP successes on that score?  I am convinced that by the end of 2007 Peter Powers and Tony Carbonetti saw a win in the presidential race as the only thing that was going to save GP from a day of reckoning.  Rudy apparently much prefers his law firm to Giuliani Partners.  I am sure the reason for that is that there he can still make rain.  A few phone calls to friends in Congress or some state legislator on behalf of a client is sure easier than figuring out how to restructure a failing company.  Although unlike Nixon, Rudy has never used his considerable legal talent and intellect for a client in court.  It would do him so much good if he did.  He'd be 'in the arena' once again mentally.  Instead he chooses to give these inane, pablum stump speeches to National Associations of Podiatrists or whomever.   

As for the race for governor, were Andrew Cuomo to be hit by a bus tomorrow it would be Rudy's to lose.  But Andrew Cuomo isn't going to be hit by a bus tomorrow.  So where does that leave Mr. Giuliani?  He's in an interesting position.  For as long as many of us can remember Albany was a politically divided town - you could always blame the other guy.  Not anymore.  Now it is a solely one party town.  And that party, the Democrats, are making a royal disaster of things.  If ever there were going to be a transformational election in NYS, it would be in 2010.  If ever a white knight were needed it will be 2010.  If we ever needed a man who can make hard decisions and balance a budget honestly it is now.  But this is not 1993, although at GP I think they think it is.   Inept black man, failing economy, bad poll numbers and a ballooning deficit.  Sound familiar?  Except Paterson is not Dinkins and no one takes the Governor seriously as a candidate in 2010, which was not true of Dinkins in 1993.  Rudy had a wounded, out of touch incumbent to run against back then.  I suspect that will not be the case this time.

As I've said before, the Rudy Giuliani of 1993 was no accident.  He was a much matured, smarter, candidate and politician then in 1989.  He sought very hard to become one in those intervening four years.  The Rudy of 2009 is much closer to that of 1989 then 1993: smug, condescending, nasty, self-righteous, unrestrained, and wholly non-genuine.  And what about the Rudy of 2007-2008; the candidate who sought to be the most right-wing in a pretty conservative pack of candidates.  What happens to him? Rudy sold his soul in 2007, not knowing he was going to need it back in 2010.

Spending 9 or 10 months running around NYS yelling 9/11 and War on Terror isn't going to cut it.  He could talk about his record of accomplishment as mayor, but as I've said before the Randy Levine strategy of turning Rudy into Dick Cheney or Sam Brownback took all the luster off of that.  So what to do?  He needs a come to Jesus moment or speech in which he explains why he strayed and apologizes to NY for it.  He needs to explain 2007-08 before he can move on to talk about 2010.  Because make no mistake, the right-wing conservative policies espoused by candidate Giuliani in the Republican primaries are completely out-of-step with the vast majority of New York State voters.  They are a platform for total defeat and quickly.   And candidate Cuomo will replay them in ads over and over again.

At the moment he is a non-credible person.  I wouldn't believe much of what he's going to say.  Trust me, if I actually thought candidate Giuliani in 2009 was akin to candidate Giuliani of 1993 or 1997 I would strongly consider voting for him, in fact I would.  I love my state that much and the challenges are direly serious.  But he's not - he's not even close to being that person anymore.  Money, fame, adoration, have all changed him.  Unfortunately his defeat wasn't humiliating or prolonged enough for him to have learned anything from it.  Losing by two stolen points can be a strong motivator for change.  Coming in 7th isn't going to inspire much self-reflection.   Further, the combination of Rudy nemesises: Cuomo, the Clintons, Obama, all lined up against him, wow - that will be powerful stuff.  Throw in some mischief making by my old boss Alfonse and Rudy is much more handicapped then it appears right now. 

The last and possibly most damaging turn to a Giuliani candidacy is that he's gotten soft.  I honestly believe that Rudy thinks the press will treat him like it did post 9/11 or the national press did in the presidential race.  The NY press is salivating to tear him to shreds.  They hate his persona and resent the free ride the national press corps gave him in 2007.  Rudy thinks - honestly believes - that press coverage is Hannity, Rush, Fox News and CNBC.  He goes on, makes some nonsensical statement on world economic policy, giggles a lot and then moves on.  Those daily tete a tetes in the Blue Room made him muscular; they toughened him up.  He's soft and lazy now - with an even thinner skin - and the press, unlike then, has no fear of him.

But, with all of that said, if Attorney General Cuomo should contract Dungy Fever or meet that bus head-on, notwithstanding all I've said, there is no Democrat in the potential field who can match Rudy.   He would win by default.  And at the moment that should be a very scary prospect.  Trust me, you don't want 1989 Rudy, or worse yet 2009 Rudy, running our state.

American Abu Ghraib

Bernie Madoff will spend his first night in prison this evening at the Metropolitan Correction Center (MCC) in Lower Manhattan.  It will be the start of many months spent at the MCC.  I was going to write about my stay at the MCC when it was time appropriate in my series, J'ACCUSE.  But Mr. Madoff's incarceration compels me to say a few words.  If there is an American version of ABU Ghraib, the MCC is it.  I was in 8 prisons in the first two years of my sentence including the notorious Atlanta USP.  Nothing, absolutely nothing in my entire prison experience compared with the month I spent at the MCC.  Make no mistake, those people who think - maybe even Mr. Madoff thinks - that what awaits him in prison when he is finally sentenced will be worse than his time in holding at the MCC are kidding themselves.  The MCC is a place filled with horrors.  The most sadistic and brutal guards - and I repeat I was at a United States Penitentiary - are working at the MCC.  It was the start of my prison experience and I had no way of knowing that this was going to be the worst of it.  I saw inmates brutally beaten by guards for no reason.  Health care routinely denied.  The living conditions were the worst I experienced.  Mr. Madoff will spend an indeterminate amount of time starting tonight in the Special Housing Unit, the SHU .  That's what many lay people call 'the Hole'.  It is as filthy and squalid a place as you might dream in your worst nightmares.  Bugs in your bed, on the wall and in the food.  The food, at least in 2003, was totally inedible.  I don't say that as someone who is finicky.  I have now had food from various prisons and nothing could compare with that.  The smell of the food - the rancid, putrid smell - caused me to be unable to eat and I lost 25 lbs in a month and contracted a form of dysentery.  Conrad Veidt said in 'Casablanca' that "...human life is cheap".  That was never more true during my years in prison than at the MCC .  The staff there is so poorly trained, so ignorant and so consumed with hatred for the inmates, that your life - your very life - is always in jeopardy.  Far less from your fellow inmates than from the staff.  I have never seen brutality and sadism as I did from the guards at the MCC.  No inmate in my experience was as twisted, cruel and indifferent to human suffering as was the staff at the MCC.  Nothing I write here, I'm simply not gifted enough, can covey the level of human depravity as existed in the staff of the MCC.   

As some point early in my case - when the idea of prison still seemed unfathomable - I purchased  book for white collar criminals facing prison written by a man who had done a year in a low security federal camp.  Much of what he said would have no bearing on my later experience but he said one thing early on in the book that struck me and stayed with me throughout.  He said that when you enter prison as a middle or upper class white male you are instinctively going to self identify with the guards not the inmates.  You'll see yourself in their mold, not the scum - as you perceive them - that you are forced to cohabitate with.  The author's biggest shock and mine too was discovering how wrong that perception was.  The guards are not there to help you and they sure as hell don't identify themselves with you.  Bernie Madoff will be looking to the COs (corrections officers) at the MCC tonight for assistance in making this transition.  He will be sadly mistaken.  He is the highest of high profile inmates and high profile inmates are always treated somewhat differently by the Bureau of Prisons (BOP).  The BOP hates, really, really hates when it is revealed publicly how horrible conditions are at federal prisons.  They want nothing bad to happen to Mr. Madoff lest it be revealed in court for all the world's press to hear.  They count on the public's lingering misconceptions about federal prisons as country clubs or cushy compared to state prisons.  With the exception of Texas and California , I never met an inmate who had done both state and federal time who wouldn't much rather be in a state prison.  And it was never even close.  Federal prison in general is a much harsher place to be incarcerated than are state prisons these days.

I know what Bernie Madoff did was terrible.  I can't argue, although part of me wants to, with his getting life.  But I cant wish the MCC on even the worst person.  There are many experiences in life that you can possibly fathom without having lived them.  Prison to a small extent can be imagined although not in the main.  But time served at the MCC is unimaginable.  Many of you will say: good, he's getting what he deserves.  But I can't wish that place on any 70 year old man.  Even Bernie Madoff.