New York’s 4.3 million registered voters may not get to cast a vote on whether the term limits they approved in 1993 and affirmed in 1996 should be lifted to allow Mayor Michael Bloomberg to seek four more years in office. But one tiny group of citizens is getting heard: the business people who quietly encouraged the mayor to run again and are now loudly calling on the City Council to let him.
And these aren’t small businesspeople. In an Open Letter published in daily newspapers last Thursday, 30 signatories representing the highest echelons of investment banking, corporate law, private equity, real estate, credit card, lobbying and other industries called on the Council to “extend term limits in order to give New Yorkers the opportunity for whomever they think can do the best job during these tough economic times, including our current mayor.”
Their emergence comes amid continuing media coverage of how one well-heeled voter, cosmetics heir Ronald Lauder – who funded the 1993 campaign to enact term limits – feels about the mayor’s proposal. Lauder supports only a one-time extension for the Bloomberg mayoralty, putting him at odds with Bloomberg’s own proposal to change the law to extend term limits to 12 years for all offices going forward. In comments printed Monday in the New York Times, Lauder depicted the question of whether to extend term limits once or forever as a personal choice: “It took a lot of emotion even to extend term limits this once. … I was opposed to even extending it once. For the love of this city, I will do it once, but that is it.”
Had the mayor announced earlier in the year that he wanted to change the law, voters themselves – rather than Lauder or the Council – could have had a chance to decide the term limits question directly. But as the mayor explained last week, “it’s just too late” now to get such a measure on the ballot. So—unless the Council opts to call a special election, which some members are advocating—the voters’ choice on a third term will likely come next November when they actually vote for mayor. And although candidates from City Council Speaker Christine Quinn to Comptroller William Thompson to U.S. Rep. Anthony Weiner have all been running for the post, at this point it’s unclear who else there will be to choose from. As the Post’s David Seifman wrote last week, “Who’s going to take on a guy who spent $85 million in his last municipal election?” By comparison, John McCain is running his nationwide general election campaign for president with the $84 million in public financing he’s received since his party’s convention. Bloomberg spent at least $73 million on his 2001 race.
For the mayor’s business backers, the choice will be clear whoever runs. “Under Mayor Bloomberg and his partners in city government, we have enjoyed six years of economic growth. Our schools are improving and the neighborhoods of all five boroughs are flourishing,” the Open Letter asserts. “Young people are flocking to our highly regarded universities, the city is bustling with tourists and we are renowned for innovation in public health, cleaning up the urban environment, helping people out of poverty and maintaining our status as the safest big city in America.”
But the financial crisis has put all that at risk, the letter continues, threatening “massive job losses, business failures and budget deficits.” Getting through the crisis quickly and intact, the missive warns, “depends on continuity of great leadership.”
At a time when 23 percent of the city’s population lives below the new local poverty threshold (of $26,138 annual income for a family of four), the shared socioeconomic status of this group is hard to overlook. Most are prominent members of the establishment elite, like former secretary of state, Nobel laureate and lobbyist Henry Kissinger, and developer and Daily News owner Mortimer Zuckerman (one of the press barons, along with the Post’s Rupert Murdoch and the Times’ Arthur Sulzberger, whom Bloomberg consulted before announcing his move). Some of them are, like the mayor, among the world’s richest people; David Rockefeller is one who lends his name.
A few are intimately involved in the very financial crisis that underlies the rationale for Bloomberg’s re-election, such as Goldman Sachs’ Lloyd Blankfein, JPMorgan’s James Dimon or Morgan Stanley’s John Mack. Developers – whose role in reshaping New York under Bloomberg has spurred both praise and protest – are also represented. William Rudin, a major real estate developer and manager who also heads the Association for a Better New York, told the Daily News that, “If the story is told properly, and if there’s a fair discussion in the media and in advertising of the pros and cons, people will understand” Bloomberg’s bid for more time.
This view is widely held in the business community. “When I surveyed members of the Partnership in September, there was almost unanimous agreement that the economic crisis facing the country and the city over the next two to five years will require extraordinary management of the city and that Bloomberg is by far the best mayoral candidate to take that role,” says Partnership for New York City president Kathryn Wylde. Twenty-five of the 30 people who signed the letter are on the Partnership’s Board of Directors. “This came from Democrats as well as Republicans and from people who are friends and supporters of the other candidates.” (Bloomberg’s now a political independent, after having long been a Democrat, then changing his affiliation to Republican before his first mayoral run.)
Wylde adds: “I think the reason people on the list were willing to go public is because they are acutely aware that we are at the beginning of what could be a fundamental challenge to U.S./New York City leadership in the global economy, which threatens the level of employment, public services and quality of life that New York and America seek to maintain.”
There’s no denying that well-off investors and big-time developers have a stake in the city’s survival. “They’re as much citizens as anyone else and the fact that they’re making their views and intentions known is perfectly fine,” says Dick Dadey, the executive director of Citizens Union and a critic of the approach Bloomberg has taken. “I welcome it.”
But like other players in city politics—such as unions, nonprofit organizations and community groups—private-sector interests depend on their relationships with city government to do business. And some question the way ties between Bloomberg and his business backers are influencing the process. “If Mayor Bloomberg gets the blessing of the developers and the private interests of the city, he’s able to go forward with it?” asks Chris Keeley, associate director of Common Cause/New York. “That’s deeply disquieting. That’s giving them a bigger say than anyone else in the city.”
Some use even stronger terms. Councilman Bill deBlasio says the mayor’s only discussion of his plans “occurred among billionaires.” Councilwoman Letitia James says the mayor only “consulted an oligarchy.” James and deBlasio are pushing a bill that would call a special election. Rev. Mark V.C. Taylor of the Church of the Open Door, who lent his support to the bill at a press conference Monday, said: “When rich men in power use a crisis caused by other rich men to assert that current laws should be changed in their favor, this threatens democracy.”
Here’s a closer look at the business interests and political involvements of the 30 people who lent their names to the Open Letter:
David Barger, 50, the CEO of Jet Blue. In September, he and Bloomberg attended the opening of JetBlue’s new terminal at JFK (Price tag: $875 million, with $800 million in financing from the Port Authority and a $40 million “exempt facilities bond” from the New York City Economic Development Corporation). Barger’s total compensation in 2007 just topped half a million dollars. Barger gave $2,500 to Democratic mayoral hopeful Rep. Anthony Weiner in January – his only recorded donation to a municipal candidate. Barger’s $17,500 in federal political donations since 1997 have favored Democrats. JetBlue opposes but Bloomberg supports the federal plan to auction off space at New York’s airports to improve traffic flow.
Candace K. Beinecke, 60, had also cut a check to one of Bloomberg’s would-be replacements, Speaker Christine Quinn, in July. The chair of the law firm Hughes Hubbard & Reed, Beinecke is a pioneer for women in the world of corporate law – named one of the “100 Most Influential Women in NYC Business” by Crain’s New York Business last year, and also selected in 2007 as one of the 50 most influential woman lawyers in the county by the National Law Journal. She’s also the chair of a $45 billion investment fund, a trustee of fellow signer Steven Roth’s Vornado Realty Trust. Her $16,800 in federal campaign contributions over the years have favored Democrats.
A major player in the 1970s fiscal crisis when he supervised the city’s budget as head of the Emergency Control Board, Stephen Berger was the state’s commissioner of social services from 1976 to 1977 and the executive director of the Port Authority in the late 1980s. He chaired the state commission that in 2006 recommended the closure of nine hospitals around New York. Once a top exec at GE Capital, Berger now runs Odyssey Investment Partners, a private equity firm that controls more than $1.4 billion in assets. One of its funds invests in Wastequip, a firm that has a few small contracts with New York City agencies. Over the years he’s donated more than $180,000 to candidates at the city, state and federal level – mostly Democrats.
Lloyd C. Blankfein‘s $73.72 million compensation package ranked eighth on the Forbes CEO Compensation index in 2008. The 53-year-old has been the chairman and CEO of Goldman Sachs since June 2006, but has a 27-year history with the company. Goldman Sachs won subsidies for its new building in Lower Manhattan worth a reported $650 million. Blankfein has given $132,000 to federal candidates (mostly Democrats) and $17,500 at the state level – almost all of it to the Goldman Sachs political action committee. In 1989, he donated $300 to Ed Koch. He’s a member of the New York State Commission to Modernize the Regulation of Financial Services, formed by Gov. Eliot Spitzer in 2007; one of its goals is to avoid “unnecessary regulatory and administrative burdens.” Goldman Sachs handles the underwriting of some city bonds.
Kevin Burke, 57, earned many New Yorkers’ ire during the Queens power outages of 2006, but Bloomberg had his back, telling reporters that the Con Ed CEO was doing a “great job” and warning: “If you want to fine Con Ed, just go to your electric bill and next time you get it, you’re going to have a higher cost. If you want to fine yourself, that’s probably a good idea. . . . I don’t know why anybody thinks that that would be a good thing.” Bloomberg defended Burke again a year later after a Con Ed steam pipe exploded in Midtown – until the firm threatened to sue the city over the blast. Burke has given $26,650 to federal candidates and PACs – with the money ending up split between Republicans and Democrats – according to Federal Elections Commission records.
Russell L. Carson was a Citicorp executive in the 1960s and 1970s and since 1978 has been a general partner at Welsh, Carson, Anderson & Stowe, a private equity firm that specializes in buyouts and handles $16 billion in investments. His $449,000 in federal campaign contributions since 1997 includes a $100,000 check to a Draft Bloomberg (for president) PAC this past January. Carson has also donated money to the cause of charter schools, an education model that Bloomberg also favors.
Kenneth I. Chenault is the chairman and CEO of American Express, where in 2007 he made $26.3 million. A resident of Westchester County, Chenault has donated $97,000 to Democrats at the federal level and, in city giving, contributed to David Dinkins in 1989 and 1992. He’s led American Express’s sponsorship of a number of city-promoted cultural events under Bloomberg, and worked to raise funds for the World Trade Center memorial project. American Express has reported rising default rates and said it is lowering cardholders’ credit limits as it absorbs the fallout from the credit crisis.
When the credit crisis claimed its first victim in Bear Stearns last March, JPMorgan Chase chairman and CEO James Dimon won control of their former rival Stearns and got $29 billion in taxpayer guarantees in the bargain. A director of the Federal Reserve Bank of New York, Dimon served on Bloomberg’s anti-poverty commission. He made $28 million in 2007 and has given nearly $200,000 to federal candidates, mainly Democrats, since 1997. A report by a committee of creditors set up to oversee the Lehman Brothers bankruptcy last week accused JPMorgan of causing the Lehman crisis by freezing Lehman funds that JPMorgan held. JPMorgan underwrites some city bonds.
Newmark Knight Frank is one of the city’s biggest commercial real estate firms and since 1979, Barry M. Gosin has been its CEO. Since 2002, Newmark has done more than $30 million in business with the city, including a $2.6 million contact to manage a building for the Administration for Children’s Services from 2004 through this past April. Gosin has donated $31,000 to city candidates since 1989; in the 2009 cycle, he has supported Weiner to the tune of $2,400.
Jonathan N. Grayer is the chairman and CEO of Kaplan, Inc., the instructional products company, which is a wholly owned subsidiary of the Washington Post. According to city records, Kaplan has done $75 million in business with the city since 1999, most of it during the Bloomberg years.
Susan L. Hayes runs Cauldwell Wingate Company, a major construction firm and sits on the mayor’s Commission on Construction Opportunity. She’s also until recently been the treasurer of the New York Building Congress, the leading voice for the industry. The Building Congress has spent $100,000 lobbying city government during Bloomberg’s mayoralty; its top priority was getting a controversial water filtration plant approved for the Bronx, which Bloomberg green-lighted. Hayes gave $200 to Quinn’s 2009 campaign fund in January.
Fifty-two year old Glenn H. Hutchins is co-founder and co-CEO of Silver Lake, a private investment firm whose purchase of a chunk of NASDAQ gives him a seat on that exchange’s board of directors. Since 1997, Hutchins has donated a quarter-million dollars to federal candidates, mostly Democrats.
Robert P. Kelly serves as chairman and CEO of the Bank of New York Mellon Corporation, which controls $196 billion in assets, and recently joined a committee of creditors overseeing the Lehman Brothers bankruptcy. Prior to his time at Mellon, Kelly was a key player in the 2001 merger between First Union and Wachovia—a deal that some observers contend contributed to Wachovia’s demise in recent weeks.
Henry A. Kissinger was secretary of state and national security adviser under two presidents and shared the 1973 Nobel Peace Prize for negotiating the end of the Vietnam War. Now he runs Kissinger and Associates, a lobbying firm whose list of corporate and foreign clients is so closely held that, after President Bush picked Kissinger to head the 9-11 Commission and critics suggested possible conflicts of interest, Kissinger resigned rather than divulge who paid his firm. Judges in at least three countries have sought to question Kissinger about controversial aspects of his work for presidents Nixon and Ford; his critics accuse him of complicity in ordering the secret bombing of Cambodia, efforts to foment a coup in Chile, approval of the Indonesian invasion of East Timor and the conduct of Operation Condor, a joint campaign by several South American dictatorships to round up and kill dissidents. In municipal campaigns, Kissinger has donated money to Rudolph Giuliani and Betsy Gotbaum. He is now an adviser on John McCain’s presidential campaign.
Henry R. Kravis is No. 49 on the Forbes list of richest Americans, with an estimated worth of $6.5 billion. He’s the head of KKR, a private equity firm, and was the subject of the book and movie “Barbarians at the Gate,” which told the story of his hostile takeover of RJR Nabisco in 1988. In a 2006 speech, he addressed complaints that private equity firms, which often lead buyouts of companies, trigger job losses. “All of us in this room who are sponsors do create numerous jobs and much stronger companies positioned to grow,” he said. “We should be very proud of this.” He’s given $61,000 on the federal level, mostly to Republicans,
Rochelle B. Lazarus, 60, is the chairman and outgoing CEO of Ogilvy & Mather Worldwide, a major advertising and marketing company. She’s also a director of Merck and General Electric.
A named partner of the law firm Wachtell, Lipton, Rosen & Katz, Martin Lipton “specializes in advising major corporations on mergers and acquisitions and matters affecting corporate policy and strategy,” according to his bio on the firm website. According to the ABA Journal, late last year Lipton sent out a memo to clients “advising corporate board members to resist shareholder efforts to dictate executive compensation and reduce CEO powers” that also “advised companies to be judicious in deciding which whistle-blower complaints merit investigation.” Lipton has divided his $25,000 in federal giving between the two major parties. His firm is advising Wells Fargo on its current attempt to take over of mortgage-debt-plagued Wachovia.
As CEO of Macy’s, Terry J. Lundgren, 56, makes $12 million a year. His company has been lobbying the City Council over zoning issues for a number of years.
John J. Mack is the chairman and CEO of Morgan Stanley, which recently won the right to convert to a bank holding company to protect itself from the fallout of the credit crisis. In 2005, Morgan Stanley won $16 million in 9/11 funds through the city and state for moving employees downtown. Morgan Stanley underwrites some city bonds.
Donald B. Marron runs Lightyear Capital, a private equity buyout firm, but he spent 20 years as PaineWebber’s CEO until it merged with UBS in 2000, then ran the combined company until 2003. UBS just announced 2,000 layoffs as a result of the credit crisis.
When everyone expected Bloomberg to follow the law and leave office after two terms, Richard D. Parsons was touted as a potential replacement. A lifelong associate of the Rockefeller family and early supporter of Giuliani, Parsons is the chairman of Time Warner and co-chaired the mayor’s poverty commission.
Steven Rattner manages the private equity firm Quadrangle Group (whose portfolio includes Cablevision) and is a trustee of the Metropolitan Museum of Art.
David Rockefeller, the grandson of Standard Oil founder John D. Rockefeller, was an officer of the Chase Manhattan Bank, founder of the Trilateral Commission and longtime chairman of the Council on Foreign Relations. Brother of Vice President Nelson Rockefeller, friend of Kissinger and other world leaders, Rockefeller has sometimes taken heat for his role in foreign affairs: In 1979, he helped persuade President Carter to allow the Shah of Iran to come to America for medical treatment, a move that spurred the takeover of the American Embassy in Tehran. He is a director of the Rockefeller Foundation, a leader in the philanthropic world, and is helping to fund the conditional cash grants to poor families that is at the heart of Bloomberg’s antipoverty push.
Wilbur L. Ross, Jr. is a billionaire largely because he knew which bankrupt companies were worth buying. He’s also the ex-husband of New York’s former lieutenant governor, Betsy McCaughey. Ross made the news in 2006 when an explosion at a West Virginia mine he then owned killed 12 workers. He’s given $15,000 to city candidates since 1989. Lately, Ross has been buying up small banks affected by the mortgage crisis.
Steven Roth, 66, is Chairman and Chief Executive Officer of Vornado Realty Trust, which built the new headquarters for Bloomberg LLP and was selected by the state and city in 2005 to head the development of a new Penn Station, which is now stalled. One of the 400 richest Americans, Roth tried and failed to bring a Wal-Mart to Queens in 2004. His company has spent $366,000 lobbying City Council since 2002.
Jerry I. Speyer is the Chairman and CEO of Tishman Speyer, the development and real estate giant that owns the MetLife and Chrysler buildings and Rockefeller Center, bought Stuy Town and Peter Cooper Village, is building one of the Bloomberg administration’s signature, publicly subsidized projects at Yankee Stadium and won but then relinquished the right to develop the MTA’s West Side rail yards, another anchor project of the Bloomberg years. Speyer has donated $25,000 to city candidates since 1989, including $4,950 to public advocate candidate and Councilman Eric Gioia last year.
James S. Tisch is the CEO of Loews Corporation, a holding company that owns controlling shares in, among other firms, the insurance giant CNA Financial Corporation (which has been hit hard by the subprime crisis), Diamond Offshore Drilling, Loews Hotels, and two natural gas firms – HighMount Exploration & Production LLC and Boardwalk Pipeline Partners. Tisch has donated $150,000 to federal candidates on both sides of the aisle, and in the 2009 municipal cycle he cut checks to Quinn ($2,000) and Weiner ($250).
Tim Zagat founded the influential Zagat restaurant survey with his wife Nina in 1979 and has become a high-profile figure in the tourism and hospitality industry.
Strauss Zelnick is the founder of ZelnickMedia, a private equity firm that buys media companies. He’s the former CEO of BMG Entertainment, and a donor of $2,000 to Weiner.
Mortimer B. Zuckerman is the publisher of the Daily News and the chairman of Boston Properties, which owns more than 5 million square feet of office space. Zuckerman has given $32,000 to federal candidates from both parties, including $10,000 to Joe Lieberman after the Connecticut Senator lost a 2006 primary to an anti-war candidate.