Barrett: Bill Thompson Received Millions in Loans from the "Labor Bank" He's Promoted as Comptroller
City comptroller and Democratic mayoral candidate Bill Thompson and his wife Elsie McCabe received three loans totaling $1.4 million from Amalgamated Bank, which calls itself "the labor bank" and does a multi-billion dollar business with his office, the Voice has learned.
McCabe is also the president of an art museum that is building a new headquarters on 109th Street and 5th Avenue, and that Thompson has called public officials to support. At the same time that the couple got two of their Amalgamated mortgages in the summer of 2008, the developers building McCabe's museum and a companion luxury condo project obtained $161 million in construction financing from the United Labor Life Insurance Company (ULLICO), which is based in Washington, D.C. and describes itself as "the only multi-line financial services company owned by labor." Wachovia is participating in the ULLICO loan and providing approximately $19 million in permanent financing specifically for the museum once it is built. Wachovia has acted as a major underwriter of city bonds, selected by the comptroller and the city's budget director (Thompson has also joined other pension funds in a lawsuit against the bank).
Thompson did not answer e-mailed questions about how the combination of the personal and museum mortgages might affect his independence from labor as comptroller or, if elected, as mayor. At the time all the loans were awarded, Thompson was widely perceived as a favorite in the 2009 mayoral election, with Michael Bloomberg still supporting the retention of term limits. Amalgamated was then owned by Unite/HERE, the 500,000-member merger of garment and hotel workers (they have since split).
ULLICO's board is entirely comprised of labor leaders from across the country, including New York. Its current CEO, Ed McElroy, who took over in 2009, was the president of the American Federation of Teachers (AFT) and an influential member of ULLICO's board in 2008. New York's Randi Weingarten recently replaced McElroy at the AFT. Both Weingarten and McElroy denied any knowledge of the museum loan, and another ULLICO official attributed it to a relationship with the condo builder, Brickman Associates, though he said ULLICO had never done business with Brickman before this deal. A Thompson aide, Gayle Horwitz, says that Thompson "had no role in the ULLICO, or any other financing for the museum," though one former top public official tells the Voice that Thompson personally called him and successfully pressed for millions in assistance for the project.
Thompson also declined to respond to inquiries about the Democratic district leader who, acting as a court-appointed receiver, sold him the Harlem home that Amalgamated financed. The $2.1 million price -- which was agreed to in May 2008, months before the meltdown in housing prices -- was $340,000 below the listed price and $100,000 less than the price listed in court records four years earlier. The receiver, Marc Landis, conceded that Thompson's offer was "the only one" he considered, though he insisted he did not discuss it with Thompson until the August closing.
When Thompson and McCabe bought the four-story brownstone at 106 West 121st Street a couple of weeks before their September 2008 wedding, Amalgamated provided a $729,000 mortgage and a $400,000 home equity credit line. The Voice has obtained records indicating that the interest rate on the mortgage was 6.05 percent, while Thompson provided a heavily redacted monthly statement for this October indicating that it was 7.1 percent. He declined to indicate what his monthly payment has been since the granting of the loan to reconcile these differences. The New York Times reported that rates on the type of "jumbo-light" mortgage obtained by Thompson were "hovering around 7 percent" at the time; even conventional conforming mortgages, granted on homes below $417,000, were going for 6.52 percent on average.
But even Thompson's claimed rate is a bargain because of Amalgamated's decision to split the mortgage and the credit line into two separate transactions. It was split as an apparent end-run around a $729,750 ceiling set by Congress a couple of months earlier for these "conforming jumbo" mortgages. If a mortgage exceeded that amount -- which Thompson hit on the nose -- he would have had to pay what the Times said were "true jumbo" rates of 7.29 percent and above. That's what a single mortgage for the combined $1.2 million would have cost Thompson. The mortgage is still listed in city records as a GMAC mortgage, but a spokeswoman for the company, which serviced mortgages for Amalgamated at the time, says that Amalgamated "provided the money to buy the loan" and that GMAC "sold it shortly after to Amalgamated."
Amalgamated officials acknowledge that it was their loan, but would not answer questions about whether it was listed as a GMAC loan to avoid questions about whether the bank had split the loan to evade the federal ceiling and give Thompson the best deal possible. GMAC's Jeannine Bruin explained that when a company like GMAC services a loan, "its name is on the paperwork, and often people mistake the servicer for the mortgage holder." Horwitz said "Amalgamated suggested that the loan be split." She also contended that "in anticipation of public scrutiny regarding these transactions," Thompson obtained letters from GMAC and Amalgamated confirming that "the rates they received were the normal going rates."