A few days after the election, Leventhal and Bloomberg and a few aides sat around Bloomberg’s kitchen table in his Upper East Side town house. They were putting together a new team to start at full speed on January 1. At one point, Leventhal asked the new Republican mayor, “And how many Republicans do you need to hire?” Bloomberg answered by pressing his thumb to his index finger to create a meaningful zero.
Mike Bloomberg did not need to hire anybody, he insisted. There were no donors to appease, no supporters who had bargained their endorsement for some city favor. With such freedom, Bloomberg’s hires—with a few exceptions—would be the best that he and Leventhal believed they could find at the time.15 Bloomberg told reporters that he would not ask potential hires about party, even whether someone had worked for his opponents like Mark Green. And there would be no effort at diversity, he added. “I am not looking at race, ethnicity, gender, whatever.”16
Even outgoing mayor Rudy Giuliani had little pull with his successor.
Few of Rudy’s team were kept in the city’s top jobs. Nicholas Scoppetta, who was in charge of children’s services for Giuliani, took over the city’s fire department still reeling from devastating losses in 9/11. Iris Weinshall, married to U.S. Senate Minority Leader Charles Schumer, stayed on as transportation commissioner. Taxi Commissioner Matthew W. Daus remained. John Doherty, who had been sanitation commissioner during Giuliani’s first term, returned to the job. At the top level, there were also a few others who satisfied Bloomberg’s political supporters, but not many. Bloomberg, who often said aloud what others were thinking, told reporters that when he took a look at Giuliani’s team, he decided that “not all of his appointments were brilliant.”17
Bloomberg let it be known that he liked strong personalities. He admired passion, and he enjoyed arguments, or as he saw it, debates. He wanted people who would move fast, far beyond the comfort level of the city’s workforce. He expected data—data about the problem, data about the proposal to fix it, data about whether it worked once he’d tried it. And he especially wanted people who could sell their mission to the public, whether it was anti-tobacco or pro-bicycle or rebuilding a whole new region of the city.
Two of the biggest and most immediate challenges were public safety and a shrinking budget.
There were rumors that Bloomberg planned to ask Bernard Kerik to stay on as police commissioner,18 after a little more than a year on the job for Giuliani. Fortunately for Bloomberg, that didn’t happen, and a few years later, Kerik would be imprisoned for tax fraud and lying under oath19 (thus requiring city officials to chisel his name off the entrance to the Bernard Kerik jail in Lower Manhattan).
Instead, Bloomberg chose Raymond Walter Kelly. Highly educated, highly capable, an ex-marine and police officer, he had already been police commissioner for two years under former mayor David Dinkins. Hours after he won the election, Bloomberg had called Kelly to offer him the job. He did not waste words. “So, you want to be police commissioner?” Bloomberg asked impatiently. Even though the $150,000-a-year salary was a pay cut for Kelly, who had been in private business, he answered, “It would be an honor.” It was like the ex-marine answering with a salute.20
The other immediate challenge was an emergency budget. An obvious candidate for the job was Marc Shaw, who had become a master at wrestling with big government budgets in New York—the city’s, state’s, even the troubled Metropolitan Transportation Authority’s that ran the buses and subways. Soon after the election, Leventhal introduced Shaw to Bloomberg. The mayor-elect sat quietly as the chronically disheveled budget maestro talked about the possibilities and hazards of city budgets—especially the one with a big hole in it that the mayor would be forced to announce only forty-five days after he took office. After about twenty minutes of attentive listening, Bloomberg picked up a pen and, in his tiny, left-handed script, wrote, “Hire this guy” on Shaw’s file. “It was my dream job,” Shaw said later of his position as first deputy mayor for operations. “I was also the one who worked for Mike Bloomberg, the mayor who happened to be a billionaire. Others were working for Mike Bloomberg, the billionaire who happened to be mayor.”21
There would be plenty of other star players. For development, Bloomberg would choose Daniel L. Doctoroff, a forty-three-year-old, high-energy financier who had been pushing for New York to win the Olympics in 2012. Even with strong support from Bloomberg, however, Doctoroff did not get everything he wanted as deputy mayor for economic development and rebuilding. Mainly, he had decided to hire Alex Garvin, a respected urban expert at Yale, as the city’s planning commissioner. Not so fast, the newly elected mayor told Doctoroff.
To help plan how the city would grow, Patti Harris had brought in Amanda Burden, a well-known socialite and urban planner. She and the domineering Doctoroff would not be an easy team. There were shouting matches, usually out of the mayor’s earshot.
Then there were the people who the overconfident Mark Green had already offered jobs even before the election. Most of those commissioners-in-waiting kept waiting. One exception was Dr. Tom Frieden, a talented public health physician who had been in India fighting tuberculosis for the World Health Organization. When Green had called to offer the job of health commissioner, Dr. Frieden had wisely suggested they wait until after the vote.22
Frieden would become another superstar in the early Bloomberg years. When Bloomberg first met Frieden, in what was supposed to be a job interview, the two had what one official called an instant “mind meld.”23 Both supersmart, they talked rocket-fast. And Bloomberg cared deeply about Frieden’s work as a public health physician and advocate.
It would take a while for Bloomberg to find someone ready to overhaul the Department of Education. After the state legislature granted him full control, Bloomberg looked for someone with the strength of a four-star general to manage 1.1 million students, 75,000 teachers, and 1,600 schools. Joel Klein, who had been the lead prosecutor in the antitrust case against Microsoft, had almost no education credentials. But he was tough—tough enough to take on an education system that had become a bureaucratic quagmire.
Adrian Benepe, who became Bloomberg’s parks commissioner, was the scion of a park-loving family (his father helped turn the festering drug den at Union Square Park into an urban market and playground). Benepe would focus on using private funds to help develop public spaces, and he would oversee the restoration of Central Park and the addition of more than seven hundred acres of new parkland including the High Bridge and Brooklyn Bridge Park.24
Peter Madonia, who became Bloomberg’s chief of staff, had worked for Mayor Ed Koch as deputy commissioner for the fire department, among other jobs, until his family needed him to help with the Madonia Brothers Bakery in the Bronx. When Patti Harris, a friend from the Koch days, called, Madonia agreed to have lunch with Bloomberg, who seemed to be asking for advice about a potential run for mayor. Asking for advice, however, was a standard Bloomberg ploy. Yes, he wanted advice, but he also wanted to judge whether this person could work for him as his chief of staff, his doorkeeper and one of the toughest jobs in the city. Madonia did a lot of the unpopular stuff, like cutting the budget for the mayor’s office by 20 percent and culling twenty-five cars from the mayor’s fleet.25 He sorted through the daily blast of unresolved questions that reached the mayor’s office because they could not be solved down the line. And his job was to solve those issues before they reached the mayor, or worse, the press.
Madonia, a rough-hewn character with a good bit of the Bronx under his belt, knew how to deal with problems big and irritatingly small. The captain at a firehouse was trying to get porn off the computer—the problem bounced to Madonia. War games were necessary for the city as part of emergency preparedness—over to you, Peter.26
Dennis Walcott, who had been head of the Urban League in New York, took the post of deputy mayor for education and stayed with Bloomberg all twelve years. Michael A. Cardozo, a top-flight lawyer, would become corporate counsel known for fighting long and hard
before settling any complaint big or small.27 Verna Eggleston, who had worked in children’s services for Mayors Koch and Dinkins and had helped advise Bloomberg in his campaign, would be commissioner for the Human Resources Administration.
To deal with the business community, Bloomberg and Doctoroff worked to bolster confidence by hiring from the business world. Among the first was Andrew Alper, who had been chief operating officer of investment banking at Goldman Sachs. Alper would encourage investment through the city’s Economic Development Corporation and would help guide the city into better times.28
At every level, Bloomberg aimed at the top of the list, and this high-powered crew was Bloomberg’s step one. When the press or public asked what the mayor was doing in his first hundred days, the answer was that he was hiring the best team he could find. Yes, but what is he actually doing? they would ask. The answer would come again—the mayor was hiring the best team he could find. In virtually every case, the new hires told the same story. With the final handshake, Bloomberg would welcome the new team member. Then he would say, usually in a whisper, “Don’t fuck it up.”29
10
A BILLIONAIRE’S CITY HALL
“Happiness can never buy money.”
—A favorite Bloomberg joke
Michael Bloomberg would always be the first billionaire mayor of New York City. His campaign ads stressed that he came from a working-class family—no family money, no trusts to help start out—but by 2001 Bloomberg himself could not pretend to be a regular nine-to-five kind of guy. Sure, he rode the subways—the express trains on Manhattan’s East Side that regulars claimed suddenly looked a lot cleaner during his time as mayor. Like many self-made moguls, he enjoyed being recognized for his net worth, and the rich man kept slipping out of his prepared texts. He admitted repeatedly that he liked wealthy people and wanted more of them in his city. “I am what I am,” he would say—his Popeye defense, his staff called it when somebody thought he was showing off about his money. Or he would sometimes joke, sort of, that “happiness can never buy money.”1 Such comments would get him in trouble when he couldn’t resist reminding people that he wasn’t just another politician; he was Michael Bloomberg, one of the richest men in the world.
The transition to public official number one in New York City was never going to be easy for a man cosseted in the private citadels of the rich and immune from meddling stockholders at his very private company. He was constantly annoyed at a press corps nosily trying to find out where he was on weekends. The New York Post, at one point, ran a front page with his face on a mock milk carton.2 And when it was obvious that he was playing golf in Bermuda, the Post began calling him “Bermuda Bloomy.” The mayor was said to be “furious” when journalists including those at the New York Times revealed details of his lavish weekends with fifteen hours of golf, dinners with friends, and his planes ever ready to whisk him back from his Bermuda mansion to the city in a little more than two hours.3
The billionaire also wanted to keep a lot of his personal and company details private, to reveal only what was absolutely necessary to city officials and the media. Bloomberg’s first public report of his finances had come during the 2001 campaign, and the Times complained, in what was certainly a Timesian understatement, that the billionaire candidate was “frugal with the details.”4 The document, which the candidate’s aides called a “reconstructed tax return,” said that Bloomberg had paid 39.56 percent of his income in taxes, which amounted to payments of more than $500,000. How much more? Not telling.
There were a few bare details.5 Bloomberg had established trusts for his sister, Marjorie Tiven, and a former girlfriend, Mary Jane Salk, and there was a loan to his ex-wife, Susan Brown Bloomberg. There was a list of boards that counted him as a member (the Metropolitan Museum of Art, the Jewish Museum, Lincoln Center, the Old Vic, the Big Apple Circus, Johns Hopkins, and fourteen others).
He had invested $10 million6 in a film called Focus, based on an Arthur Miller story about a nebbish of a man who, in 1944, begins to learn about anti-Semitism firsthand when his new glasses seem to make him look Jewish. Released in 2001, Focus struck too many reviewers as preachy and heavy-handed, and it made almost no money, even with Bloomberg’s help and Miller’s name.
Journalists, who had to take notes and were not allowed to copy the documents, complained that Bloomberg’s first release of financial details was so limited that there were only four precise figures in his thick, official-looking folders. Those were about his philanthropy, which went from $26,592,284 in 1997 to $33,693,286 in 1998 to $46,969,972 in 1999 and then more than doubling to $100,451,454 in 2000 shortly before he actually announced he wanted to be mayor.7
As he prepared to take office, he listed five homes, each worth more (a lot more) than the city’s highest category of $500,000 and up. There were two estates in Westchester, outside the city (Armonk and North Salem); a sprawling penthouse apartment in Vail, Colorado; his beaux arts mansion in New York City, where he would live instead of staying in the mayor’s home, Gracie Mansion; and a massive “cottage” in Bermuda.8 (By the time he left office, he would own twelve homes, including in London, Westchester County, Southampton, Long Island, Wellington, Florida, Bermuda and, of course, his ever-expanding town house in one of the deluxe neighborhoods of New York City.)
Once he was in office, the city had rules designed to make certain there were no conflicts of interest. There were rules about what he could own and rules about whether he could pay bonuses to his favorite employees. And even though he had technically resigned from his positions at Bloomberg LP, there were new rules about how much he could get involved with his company. To negotiate these complicated matters, Bloomberg encountered New York City’s admittedly timid Conflicts of Interest Board, which had never dealt with a politician whose financial network was as large and diverse as Mike Bloomberg’s. It took a full eight months before the board and the new mayor could finally come to terms over what he could own and how involved he could be in his company.9
As Bloomberg was giving the shreds of information to the conflicts board in 2002, Forbes ranked his wealth at a hefty $4.8 billion from his successful data/news/research business. It was a good reason why he took only $1 a year as salary from the city’s taxpayers.
The city’s conflicts of interest agreement opened the door ever so slightly into Bloomberg’s shuttered world. Bloomberg had to sell or donate to charity his vast stock and hedge fund portfolio within ninety days—eighty stocks worth more than $500,000 each and ten more worth over $250,000 each. A group of money managers would invest his money and report to Bloomberg generally about how well they were doing.
Bloomberg could keep his large portfolio of tax-exempt government bonds—fifty-nine of them at this point, each worth more than $500,000 (the largest category of an asset that the city had). Many of these bonds helped fund such local projects as the city’s subway system, the City University of New York, the water finance authority, and other public necessities. The conflicts board decided that they did not want to discourage anybody from owning government bonds, so he was advised not to sell the bonds and even, if necessary, buy more.10
The report revealed that there were Bloomberg Terminals at “virtually every major banking and investment firm” in the city, but the board saw no real conflict there. How could a mayor operate, especially after 9/11, if he could not talk to the business community?
The company was a different story. One important issue for the city and the conflicts board was how this billionaire mayor could continue to own his multibillion-dollar corporate empire. Bloomberg owned 84.55 percent of Bloomberg Inc., which in turn owned 80 percent of Bloomberg LP. Bloomberg’s company owned thirty-four subsidiaries, at least thirty of which used the name Bloomberg in their titles. Other employees from the early days like Thomas Secunda or Duncan MacMillan or Charles Zegar mostly owned a few bits of the company, although it was enough to make them very rich in later years. Merrill Lynch still owned 20 percent of the Bloomberg bo
nanza (until Bloomberg bought that share back for an estimated $4.5 billion during the recession of 2008).11 The mayor vowed to recuse himself from any city matter that involved his old friends at Merrill Lynch.
Bloomberg agreed to resign from all top positions in his company, but he argued that as a major stockholder, he needed a little leeway. The board granted him access to Bloomberg LP in four cases: (1) the possible sale of Bloomberg LP or a significant part of the company; (2) the sale or purchase of “a significant asset”; (3) a major financial commitment, such as a major borrowing; (4) any major change in the company’s employee compensation policy or structure.12 It was not exactly a blind trust, but it was the best the ethics board could do.
Meanwhile, Peter Grauer, an investment banker who got to know Bloomberg when their daughters rode horses together, took over Bloomberg’s company along with Alexius Fenwick, Thomas Secunda, and Matthew Winkler.
Still, Mayor Bloomberg could not make himself scarce at his old company. Employees recalled seeing him stroll through their offices, not often, but often enough. He would hover over a model of his London offices ( a “significant asset” under the ethics agreement, he could argue). It was being built while he was still at city hall, and Mike Bloomberg, the engineer, would take part in virtually every major decision.
The new mayor had a Bloomberg system on his desk, and he used the four-carat Bloomberg email to check in with his old friends in the industry and his trusted allies at the company like Secunda.13
The man in charge, Peter Grauer, said he felt free enough to modernize the business, but for one series of changes, he decided he needed Bloomberg’s okay. One day Grauer took his proposals to Bloomberg at city hall, and the mayor barely looked up. “You do it,” he told Grauer. “It’s your job.” Grauer said that the mayor’s “involvement in what we did over those 12 years was de minimus.”14
The Many Lives of Michael Bloomberg Page 13
