Tom DiNapoli's Appointment Logs: He's Just Too Nice a Guy

Categories: Wayne Barrett

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Tom DiNapoli is too nice a guy.

The state comptroller apparently can't say no to anyone who wants to meet with him, though he has a mixed record when it comes to delivering what his bellringers want.

I've been reading half a foot of DiNapoli's appointment schedules from 2007 to now and I wouldn't want to sit in his chair for one of his typical days. It's not grueling. It's galling.

DiNapoli has, for example, rarely missed a Vito Lopez event, doing four between July 22 and August 25 of this year alone, even as scandals around the Brooklyn assemblyman and Democratic county leader were beginning to explode. And DiNapoli doesn't do a drive-by; he's listed for a combined eight hours at just three of the Lopez events, with no departure time noted on the fourth.

Morning, noon or night works for DiNapoli, too, who was scheduled to stay until 10 at night at Lopez's Lindsay Park gala, a celebration at a Williamsburg housing development. DiNapoli also had at least one Lopez meeting in his office. When the Voice asked DiNapoli if he had any regrets about all this picnicking and partying with Vito, he sighed deeply and declined to answer the question.

DiNapoli also had 12 meetings with New York City Comptroller Bill Thompson, who spent a few weeks posing as a possible primary challenger to DiNapoli at the end of 2009, after he narrowly lost the mayoral race to Mike Bloomberg. On July 26, 2007, Thompson brought Bruce Brickman to an hour-long session. Brickman is the partner of Thompson's current wife and then girlfriend, Elsie McCabe, in a condo/museum project on 5th Avenue. I did a story last year about Thompson's possible charter violations in his multiple efforts to get state and city officials to fund this project. DiNapoli dismissed this as a "getting to know" introductory session. "It's a this-is-who-we-are" meeting that DiNapoli spokesman Dennis Tompkins says resulted in no business with Brickman.

The Thompson/Brickman meeting occurred a few months after Bloomberg announced with great fanfare at a Guggenheim Museum press event that the city would sink $12 million into McCabe's Museum for African Art and barely a month before Governor Eliot Spitzer attended a groundbreaking for the project. Thompson had already that year personally lobbied a top executive of the state's economic development agency to get grants for the project, one of four public officials Thompson improperly approached. The state-run Harlem Empowerment Zone was in the midst of approving $2 million for it.

In addition to the possibility that DiNapoli could put pension fund money into the Brickman project, his office had to approve state grants for it and was charged with the responsibility of auditing those expenditures. As I noted last year, the city's Conflict of Interest Board has fined lower level officials for using their public position on behalf of spouses or girlfriends. DiNapoli's so-what response to my questions about this meeting, even though Brickman was the only potential pension fund suitor or state contractor Thompson ever brought with him, was disingenuous.

The Times reported last year that DiNapoli met on May 16, 2007 with Alfredo Villalobos, a former board member of the giant California pension fund, CALPERS. Fernando Ferrer, the former mayoral candidate and borough president, introduced Villalobos at this meeting, according to the Times. But Ferrer's name is not listed on the schedule at this meeting, suggesting that the list of contacts I'm working from might be incomplete.

Ferrer is listed four other times, including twice later in 2007, before DiNapoli awarded a $10 million investment to Craton Equity Partners, a client of Villalobos's Arvco Capital, which collected a $100,000 fee as a placement agent for obtaining the Craton business with the New York fund. In January 2008, Arvco received $3.6 million in fees from two other firms for serving as a placement agent with the DiNapoli fund.

Neither Ferrer nor the lobbying firm he works for, Mercury Public Affairs, filed any disclosures as placement agents in connection with this deal. Michael McKeon, a Mercury director, told the Times that they didn't have to because Ferrer didn't perform as one, though it was representing Arvco, which did. McKeon had his own meeting on December 12, 2007 with DiNapoli, bringing along three executives from Lazard Freres. A onetime top aide to George Pataki, McKeon is now leading a Republicans for Cuomo effort in the gubernatorial campaign. DiNapoli's aide told the Times in 2009 that the Villalobos meeting was a perfunctory "meet and greet" session and that "no business" was discussed, even though some happened.

Ferrer told me that he was "unaware that Villalobos had a pending request" with DiNapoli's office at the time of any of his 2007 meetings, and that he was also "unaware that an actual investment had been made." He said he first learned it "when I read about the investment" in 2009.

What the Times could not have known a year ago was that Villalobos would implode. California Attorney General Jerry Brown has sued him for $95 million. Among the charges is that he took $50 million in fees as an agent arranging investments in the pension fund he once served as a board member. Court records indicate he and two others have taken the Fifth Amendment. He's filed for bankruptcy and facing a federal criminal probe. Craton, which is run by the son of a former state senator, has also appeared as a controversial Arvco client in the California ruckus. None is more controversial than Villalobos's biggest client, Apollo's Leon Black, who had a May 12, 2008 meeting with DiNapoli. News stories out there indicate that the probes started when the Times revealed the DiNapoli meeting.

The Daily News revealed that DiNapoli's rabbi, Assembly Speaker Shelly Silver, who put together the votes in the legislature to make DiNapoli comptroller when Alan Hevesi resigned, brought a former Ranger goalie Mike Richter in to see DiNapoli. Richter is now a partner in Environmental Capital and was hunting for pension business he didn't get. Silver is a Ranger season ticket holder. He sought no fee for arranging the unproductive introduction, but he appears a half dozen times on DiNapoli's schedules.

Silver's onetime counterpart, Assembly minority leader John Faso, another old buddy of DiNapoli's from two decades in the assembly, got a couple of meetings as well, leading to no business, but Faso's firm had to pay a $500,000 fine to Cuomo's office for its attempts to manipulate the fund on behalf of three client companies. The firm is barred from doing business with the fund for five years.

In another one of the roughly 160 meetings with current or ex state legislators that appeared on DiNapoli's diaries, Brooklyn's Daryl Towns brought in Suzanne Shank, president of Siebert Brandford Shank & Co., a major underwriter of state bonds. Betsy Gotbaum, in her final days as the city's Public Advocate, accompanied Jeffrey Leeds, the head of another investment firm on November 25, 2009. Former city council speaker Peter Vallone and his lobbying partner Tony Constantinople, trooped in twice, once with a client, Commerce Bank. Chung Seto, the head of the state Democrats before Charlie King and the head of her own consulting firm, is listed as bringing in "construction representatives." Ex GOP state senator Nick Spano had coffee. Placement agent and former comptroller Carl McCall dropped in.

Not only did DiNapoli have breakfast with soon-to-be-banned financier Steve Rattner, his Quadrangle Group is listed at a July 2008 meeting. Mario Biaggi Jr., the son of the congressman whose law firm played a key role in the Wedtech trial where his father was convicted, was another visitor. DiNapoli made periodic appearances at Larry Seabrook's Bronx African American Chamber of Commerce events. Seabrook is now under federal indictment, and the chamber was named in the case as one of the pass-through he used to grab member item funds and steer it to his family and other associates. Indeed, DiNapoli went to a January 2009 chamber event, long after the city had frozen grants to it and news accounts indicated that this largely nonexistent group was under investigation for fraud.

Then, there's the dynamic duo of Al Sharpton and Charlie King, who combine for 14 appearances on DiNapoli's diary, counting his visits to a National Action Network King Day or other festivities. DiNapoli's campaign says Sharpton is not listed as having endorsed him, but DiNapoli said: "I think he's supporting me." Sharpton and King's trail is a complicated and lengthy saga.

King became the national director of Sharpton's piggy-bank group, the National Action Network, in 2007, though we learned later that he was actually paid as a consultant. Even when King, who is now the Andrew Cuomo's anointed executive director of the State Democratic Party, stepped down as NAN's second-in-charge last year, he remained a consultant to NAN.

All the while that King was Sharpton's official sidekick, he also was a registered lobbyist as the principal of a couple of companies of his, one actually named The Movement Group, which is what you call yourself when advocacy goes corporate. King also set up his own political consulting firm, securing Senator Kristen Gillibrand's business even before he bothered getting incorporation papers. Three months after Gillibrand hired King, Sharpton endorsed her. It was a year and a half before election day, earlier than he's ever backed a candidate in a statewide or city race.

If you think it might be hard for King to keep all these hats straight, imagine the problems DiNapoli had. King and Sharpton started trooping into his office in March 2007, shortly after DiNapoli was appointed. DiNapoli says that they were there to "reinforce" the complaint he got when state legislators interviewed him before appointing him to the comptroller post, namely that "there was a lack of access for minority firms" when Alan Hevesi, DiNapoli's predecessor, was comptroller. The meetings were all about "promoting opportunities for emerging managers," said DiNapoli. "We never talked about particular companies."

The odd thing about that claim is that Sharpton and King appear on the schedule at least twice with particular vendors. King was joined at a meeting on October 11, 2007 with "Stone Mill principals," a reference to a financial service company that King told the Voice was headed by John Gilstrap. On November 30, 2007, Sharpton and King were accompanied by Brian Mathis, the president of the Provident Group. DiNapoli's office said that neither of these companies got any business with the fund.

We couldn't even find a Stone Mill entity incorporated in New York connected to Gilstrap, though another company he owns did contribute $3,000 to King when he ran for attorney general in 2006, and Gilstrap added $100 individually. Gilstrap, who appears to run a janitorial and facility management firm, did not return Voice calls. King said this was "a meet and greet" session, precisely the term DiNapoli used, adding that "they were emerging managers." DiNapoli said this "introduction" was not about "a specific investment" the pension fund might make, and none ensued, an unsurprising result considering that Stone Mill barely existed.

Mathis is a former Harvard Law classmate of President Obama's who was an early heavyweight on the Obama finance committee and had already co-chaired a major fundraiser for him at the Grand Hyatt by the time he met with DiNapoli. The comptroller and King agree that this was about expanding access for minority firms, not specifically Mathis', which also got no known business. When I got Mathis on the phone, he started by announcing "the rules of engagement" that govern his "conversations with reporters," namely that everything is off-the-record. It was all a bit too much for this country boy, so I told him I had my own set of rules, and that I wanted an on-the-record response to questions I had about the purpose of his session with an elected public official in a public office. He decided it was better that you not know and hung up.

King never registered as a lobbyist for these minority firms but he did register, through one of his lobbying firms, for a company that was picked to manage $30 million of pension funds, Plainfield Asset Management. Plainfield was first funded by DiNapoli in the same 2007 time frame as King's meetings with DiNapoli. A Connecticut hedge fund, Plainfield is currently under investigation by the Manhattan District Attorney's office and the Connecticut attorney general. The firm's audited statement found that 43 percent of its assets were "in hard-to-value investments at the end of 2007," according to a subsequent Fortune magazine expose of the firm. That's when DiNapoli was assigning millions in pension funds to Plainfield.

DiNapoli's office claims that they "cashed out our investment in 2008, although the process takes time." Spokesman Tompkins said the allocations to Plainfield occurred before the Securities and Exchange investigation of the firm began, which was news to me since published reports have only indicated that investor complaints were recently filed with the SEC, not that any investigation was launched there. Plainfield says it's still doing business with the pension fund, and it has received fees in 2010, though the comptroller lists it as liquidated.

King insists that it is "a total, total coincidence on Plainfield," contending that he "never spoke to anyone ever on asset allocations from anywhere to Plainfield." He did meet with DiNapoli, minus the Rev, on March 23, 2007, right around the time he incorporated The Movement Group. Plainfield got its first business that June. The initial $10 million placement was doubled in September, and King was listed for two October meetings with DiNapoli.

Records indicate that Plainfield has been paid nearly $2 million in fees by the fund. A Plainfield spokesman agrees with King that he had nothing to do with swinging these asset deals, insisting that he worked exclusively for the company on its Aqueduct business. That's right Aqueduct, the casino contract that is the hottest scandal in New York politics, the subject of an inspector general's report that mercifully did not mention King.

That's another story, but the importance of it in this context is that King was a registered lobbyist for Capital Play, a bidder on the Aqueduct contract that Plainfield was financing, around the time of his 2007 meetings with DiNapoli. Plainfield and Capital Play were joined at the hip, with Plainfield providing the full $250 million in financing for this casino contract bid. That makes the timing of King's representation of Capital Play an indication of when he first had reason to boost Plainfield.

The Movement Group filed documents with the state lobbying office indicating that they represented Capital Play in October 2007. Another relationship tying King to Plainfield is King's eventual association with one of Albany's top power players, Bolton St. John's, a lobbying firm he joined that was headed by ex assembly speaker Mel Miller. It represented Capital Play throughout 2007. Not only is King listed at times as a lobbyist affiliated with Bolton, Jan Feuerstadt, who is King's partner in his own lobbying firm, is or was also affiliated with Bolton.

Plainfield told me that King formally began to represent them in mid 2008. King, on the other hand, says he just worked for them for only three months in 2009. The fact that, contrary to when Plainfield says he started, King didn't actually register as the company's lobbyist until 2009 is a pretty good indication of how fluid these relationships can be, and how deceiving the time periods of filings can be. Lobbyists can call themselves advisers at times and not file at all.

Plainfield donated a half million dollars to the National Action Network in mid 2008. Sharpton told the Daily News that much of the unusually large grant was used to pay King, who was already being paid as Capital Play and/or Plainfield's lobbyist.

The most salient fact about all this Plainfield/Capital Play intrigue is that regardless of whether the pension fund's business with Plainfield was connected to King's overtures, the allocations proved, in short order, to be bad investments. The same applies to Sharpton and King's extraordinarily lucrative association with the two firms, which is a scandal the IG inexplicably missed. Capital Play was forced out of the Aqueduct bid process by a raft of ethics issues and dropped King in mid 2009, but its leaders were assimilated into AEG, the company that won the bid in January and sparked the scandal.

What sparked all the interest in DiNapoli's logs was Cuomo's settlement with Global Strategies, a political consulting group. The April 2010 agreement, which required Global to pay a $2 million fine, revealed that Global had helped arrange a meeting between DiNapoli and a Global client, Leo Hindery, whose investment firm, Intermedia, received a $15 million boost in its allocation of pension funds after the meeting. The schedule lists the meeting on April 5, 2007. It included Hindery and Roberto Ramirez, the ex Bronx Democratic leader.

When news of the meeting first appeared, a year before the settlement, a spokesman for Ramirez said that he'd known Hindery for years, and "had served with Comptroller DiNapoli in the Assembly for a decade," succinctly stating one of DiNapoli's biggest problems (almost everyone who ever served with him, from Lopez to Ramirez, had a friend or a client). The Times reported that DiNapoli's office at first denied the increased allocation, eventually acknowledging it. The office had never disclosed either the increased investment or the placement agent roles of Global and Ramirez, as required, on public records.

Ramirez's spokesman explained then that this was just all good work for two friends and that he was "happy to introduce them," insisting that Intermedia "has never been a client of Ramirez's firm," which is called Mirram. The settlement with Global made clear that Global and Mirram had a partnership called Global Mirram and that he had been paid nearly a million dollars by Hindery, precisely for arranging prior meetings with state and city funds, which meant, oddly enough, that there was some truth to the Ramirez claim. A very fine line of truth.

Few of the DiNapoli visitors I've looked at wound up giving campaign contributions to him, perhaps because of the mushrooming scandal and limitations he imposed on himself. DiNapoli didn't even fundraise for the first year and a half he was in office, and after that he barred contributions from managers and agents. Still some gave, like the two Arvco-connected donors who combined to kick in $10,000. But either heat or conscience prevented DiNapoli from turning much of this business into a payday. Incredibly, between the time that news of the Ramirez meeting broke and the time that Global settled with Cuomo, DiNapoli actually retained Ramirez's firm as a consultant to his campaign, a striking lack of judgment. He dropped them when the settlement was released.

The Voice got these logs from the comptroller's office after weeks of back and forth, some directly with DiNapoli. I was disturbed by DiNapoli's refusal to comply with a freedom of information request filed by DiNapoli's opponent, Harry Wilson. I told DiNapoli that my deceased colleague Jack Newfield and I had brought a lawsuit three decades ago, represented by the New York Civil Liberties Union, that established in law the fact that appointment diaries and phone logs maintained by a publicly paid assistant in a public office were public record. We had sued a city comptroller, Harrison Goldin, to get them while covering what was then referred to as the bus shelter scandal, an illicit contract award that led eventually to convictions and Goldin's electoral demise. DiNapoli's office had spurned multiple Wilson requests for months.
Wilson kept reformulating the requests and I kept pushing in conversations with DiNapoli's staff. Finally they gave the logs to me, and subsequently to Wilson.
I am sure because I did these logs very quickly that I have missed stories but I now know why their release was delayed until election eve. There is no evidence in them that DiNapoli is dishonest, but they shine a disturbing spotlight on his weakness, an extreme collegiality that demands a deeper sense of how important appearances can be.

Research assistance: Lily Altavena, Samantha Cook, Ryan Gellis, Jared Greenfield, Puneet Parhar and Brianna Strange



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