Fathers and Sons Ride Bent Political See-Saw

The criminal charges brought April 15 by State Attorney General Andrew Cuomo against former Liberal Party boss Ray Harding weave a tapestry of fathers and sons, ambition and greed, and political ties that either were cut or else tightened to the choking point.

They signal the demise of two prominent politicians, Mr. Harding and former City and State Comptroller Alan Hevesi, whose actions were at least partly motivated by concern for their sons. Mr. Cuomo, on the other hand, could ride their misfortune to a governorship once held by his father, and displace an incumbent whose own dad has been a major player in New York politics for more than four decades.

And Andrew Cuomo over the past quartercentury has been a particular nemesis of Ray Harding, first in an attempt orchestrated by his father to strip him of his power, and seven years ago by withdrawing his candidacy for Governor so late in the process that he inadvertently reduced the Liberal Party to irrelevance.

Strayed From Liberals' Roots

Of course, there are those who would argue that Mr. Harding long before that betrayed the party's origins by turning it into a patronage tool. Mark Green, the Larry David of New York politics, famously proclaimed more than two decades ago that under Mr. Harding, the organization was neither liberal nor a party.

THIRD TIME'S NOT THE CHARM: State Attorney General Andrew Cuomo (left) has been the scourge of longtime Liberal Party leader Ray Harding, first when he tried to oust him from power on behalf of his father Mario a quarter-century ago, then when he quit the 2002 Governor's race and cost the party its automatic spot on the state ballot, and finally last week when he brought criminal charges against Mr. Harding connected to state pension fund machinations.

Whether you accepted that characterization or not, there was no disputing that the party had drifted from its roots when it was founded 65 years ago by two labor leaders who came out of the Garment District, Alex Rose and David Dubinsky. Mickey Carroll, a political reporter for 40 years before becoming polling director for Quinnipiac Institute, said last week, "Ray was a charming rascal. He was a political operator and a very successful one, but he was not Alex Rose."

While Henry Stern, a longtime Liberal operative who until recently had been its chairman, said the party's "game was to make the Republicans liberal and the Democrats honest," it's hard to imagine Mr. Rose giving its endorsement to Rudy Giuliani over Mayor David Dinkins in 1993, as Mr. Harding did.

He was rewarded for his efforts when Mr. Giuliani narrowly prevailed, aided mightily by votes on the Liberal ballot line from many residents who would have been loath to pull the Republican lever. The party got more than its share of jobs at City Hall, including three Deputy Mayors—Fran Reiter, John Dyson and later, Mr. Harding's son Bob—plus Mr. Stern's return as Parks Commissioner and another Harding son, Russell, who started with a top post at the Economic Development Corporation and moved to heading the Housing Development Corporation early in Mr. Giuliani's second term. When reporters asked about Russell's lack of a college degree or any background in housing, the then-Mayor sneered that this would be another occasion in which he would take pleasure in seeing them proved wrong as time went on.

That didn't work out quite as well as Mr. Giuliani might have hoped. Russell Harding was eventually found—after a change of administrations led to greater cooperation with the inquiries of Village Voice reporter Tom Robbins—to have been stealing from HDC from virtually his first day leading it, and he went to prison for embezzling $400,000 from the agency and possessing child pornography.

When he was caught, Mr. Giuliani was among those who ignored his own responsibility for creating that situation in favor of expressing sympathy for Ray Harding. The Liberal Party vice-chair—he never actually took the top title, Mr. Stern pointed out—apparently chose to milk such emotion rather than engaging in the kind of introspection that can slow down big-time operators like Mr. Giuliani and himself.

Doubled Son's Take?

But if the charges brought by Mr. Cuomo, which were accompanied by a separate filing against Mr. Harding from the U.S. Securities and Exchange Commission, are to be believed, he improperly received twice as much money as his son embezzled.

In Ray's case, there are no charges of phonied-up expense reports of the kind that doomed Russell once his credit-card statements found their way to Mr. Robbins and then to prosecutors. Instead, according to the State Attorney General, he was a party to what the Tammany Hall philosopher George Washington Plunkitt a century ago called "honest graft" but which prosecutors regard as anything but honest.

A month ago, Mr. Cuomo's office brought a 123-count indictment against Hank Morris, Mr. Hevesi's close friend and political consultant, and the then-Comptroller's Chief Investment Officer, David Loglisci, for steering millions of dollars of pension fund business to firms that either kicked back money to them or contributed money to Mr. Hevesi's political campaigns.

In Mr. Harding's case, his involvement in the alleged scam stemmed from he and Mr. Hevesi both having concerns about their sons' futures. Mr. Harding, whose law practice slumped badly after Mr. Giuliani left office at the beginning of 2002 and the Liberals lost their automatic ballot line due to Andrew Cuomo's abrupt exit from the Governor's race later that year, had his resources further drained by Russell Harding's legal bills. Mr. Hevesi, on the other hand, had a son, Andrew, whom he envisioned taking the Queens Assembly seat he had held before becoming City Comptroller in 1994.

According to a deposition given by Attorney General's Investigator Gerard Matheson, information provided by a high-ranking official in the State Comptroller's Office—identified by others as then-Deputy Comptroller Jack Chartier—indicated that Mr. Harding had told him "he was having financial trouble and needed money to help pay his son's legal expenses and for other reasons." Mr. Harding, who had long supported Alan Hevesi politically—including giving him the Liberal line in the 2001 mayoral election— asked whether Comptroller's Office business could be steered his way.

Was Hevesi Directly Involved?

That apparently led to a conversation between Mr. Chartier and an unidentified official who published reports have stated was Mr. Hevesi himself, who the deposition said referred the matter to Mr. Morris.

Mr. Matheson states in his deposition that eventually, according to the official others have identified as Mr. Chartier, Mr. Morris and Mr. Loglisci arranged for Mr. Harding to receive $300,000 as a finder's fee for bringing $20 million in pension fund investments to a firm known as Paladin, and another $505,000 for his role in bringing $110 million in pension fund business to the Pequot Diversified Offshore Fund.

In the case of the fee from Paladin, the only written mention of Mr. Harding came in a letter from the firm to Mr. Loglisci, and Mr. Harding was paid directly by the broker on the Pequot deal, contrary to regulations governing such fees.

The investigator stated in his deposition, "As [Mr. Harding] knew, he was not a bona fide placement agent," but rather someone whom the Comptroller's Office and the state pension fund— which had Mr. Hevesi as its sole trustee—brought the investment to at his own request "for the purpose of enriching the defendant" at the expense of the pension fund and the public itself.

In addition to past favors rendered, Mr. Harding was able to assist Mr. Hevesi in creating a vacancy in the Assembly that could be filled by Andrew Hevesi.

An Opportunity Arises

At the end of November in 2004, six months after Mr. Harding began receiving payments from Paladin, Mr. Chartier approached Michael Cohen, who held Mr. Hevesi's old Assembly seat, about whether he'd be interested in stepping down. Mr. Cohen, whose wife was seriously ill, said he'd be will- ing to if he could secure a job with a six-figure salary that would not require him to give up his public pension.

Mr. Hevesi then apparently instructed Mr. Chartier to explore that possibility, which led to a meeting with a top aide to then-Governor George Pataki whom the New York Post identified as Adam Barsky, a friend of Mr. Harding's who previously worked closely with Robert Harding in the Giuliani administration.

Mr. Barsky, according to the deposition, told Mr. Chartier that Ray Harding would introduce Assemblyman Cohen to a top executive at the Health Insurance Plan of Greater New York, which Mr. Harding had served as a lobbyist. Mr. Cohen was subsequently hired by HIP for a $150,000-a-year marketing position and stepped down from his elected office in March 2005.

A 'Bipartisan' Speedy Election

Mr. Chartier quickly arranged for Andrew Hevesi to get the support of the Queens Democratic Party for the seat, and then, apparently at Alan Hevesi's direction, met with a second aide to Mr. Pataki to have a special election held quickly, preventing other potential candidates from raising money and putting together strong campaigns. In a show of bipartisanship that in Albany usually occurs only when legislators are seeking to carve the most favorable district lines for themselves, the special election was arranged two months later, and Andrew Hevesi—who Mr. Cuomo said was unaware of the improper machinations on his behalf—became an Assemblyman.

Speaking about those implicated in the pension fund transactions, the Attorney General said April 15, "They were using the fund as a piggy bank to pay people who were doing them political favors. The brazenness is breath-taking."

Of course, Andrew Cuomo has been accused of brazenness himself, and ironically enough, Mr. Harding was a pivotal figure in two of those situations.

The first came shortly after Mario Cuomo was elected Governor in 1982, with Liberal Party votes providing the margin of his surprisingly close victory over Republican nominee Lewis Lehrman. Mr. Harding had also played a key role in Mr. Cuomo's gaining the party's mayoral nomination in 1977, although that was a decision heavily influenced by both Gov. Hugh Carey and former Mayor Robert Wagner. Soon after taking office, however, Mr. Cuomo, with the aid of "a certain devoted son," Mr. Stern noted ironically, tried to to put together a coup to oust Mr. Harding from power. Mr. Stern's theory is that Mario Cuomo believed Ray was too independent to be controlled; others suspect Mr. Harding's lust for patronage offended the new Governor.

'Diminished the Party'

Mr. Harding survived the power struggle but, Mr. Stern said, "It diminished the stature of the party. And Harding was traumatized by this, because this was his life and his livelihood."

It was revitalized by Mr. Giuliani's victory a decade later, but Mr. Harding's influence at City Hall dissipated once Michael Bloomberg became Mayor in 2002. He gave the party's nomination for Governor that year to Andrew Cuomo, whose case was being pressed, not surprisingly, by his father.

But the man with the inside track on the Democratic nomination was the State Comptroller at the time, Carl McCall. His chance to become the state's first black Governor led many African-American leaders to resent Andrew Cuomo's challenging him, and the sharp elbows Andrew had wielded as a top aide to his father the Governor for most of his 12-year tenure had also generated antipathy.

It became clear early in the race that Andrew Cuomo was more likely than the mild-mannered Mr. McCall to mount the kind of hard-hitting, aggressive campaign that stood a chance of unseating Mr. Pataki. But there was also strong sentiment that if he used such tactics to wrest the nomination from Mr. McCall or weaken his chances in the general election, it would amount to committing political suicide by costing him the support of many black Democrats.

Exit Left Liberals Gasping

Constrained by political realities, Mr. Cuomo shortly before the September primary dropped out of the contest. He still had the Liberal line, but it became clear he wouldn't campaign for the November election and risk taking away votes from Mr. McCall. Mr. Harding tried to argue that even as just the Liberal nominee, Mr. Cuomo had the better chance of being elected, but he was spitting in the wind in a desperate attempt to get the 50,000 votes necessary to retain the Liberals' ballot line. Andrew's noncandidacy generated about 17,000 votes, and the party dropped into the void, while Mr. McCall's lackluster campaign resulted in his losing by 16 points to the incumbent Governor.

His failed attempt, however, had opened the door for Mr. Hevesi to run to succeed him as State Comptroller, and he was elected despite the Pataki landslide.

Seven years later, Mr. Harding is in serious trouble, and it is becoming increasingly clear that Mr. Hevesi is likely to follow him into the criminal dock. Andrew Cuomo, on the other hand, has used this investigation, as well as his previous work since succeeding Eliot Spitzer as Attorney General, to rise to the top end of the see-saw: at this point he is considered the odds-on favorite to be the Democratic nominee for Governor next year barring a dramatic reversal of the fortunes of David Paterson.

If that comes to pass, the only Republican seen as having a hope of denying him the chance to become the first son of a New York Governor to capture the office would be Mr. Giuliani, the man who remembered to be grateful to the guy who helped bring him to power.