Rudy Giuliani’s out. So is President Bush’s buddy. But maybe the
ex-banker will bite.
It’s the latest parlor game among New York’s
political and business elites: guessing who among them will be chosen to lead
the rebuilding of lower Manhattan.
Ever since Governor George Pataki and Mayor Giuliani announced the formation of
a public authority that will decide how to spend billions in federal aid, the
city has been rife with rumors about who will be appointed to head it and, to a
lesser extent, who will sit on its board. Aides to Mr. Pataki suggested that
Mr. Giuliani could even get the nod, in tribute to his leadership during tough
That’s not going to happen. Sources say Mr. Giuliani never wanted
But Mr. Pataki may be closing in on a second choice, according to
several sources in New York’s
business and labor communities. He is John C. Whitehead, a former Goldman Sachs
executive and chairman of the Federal Reserve Bank of New
York, who served as a deputy secretary of state
during the Reagan administration.
Mr. Whitehead, in a message relayed by his secretary on Nov. 20,
denied that he’d been approached about the job. The Governor’s office was
similarly tight-lipped. “At this point, we’ve not made any final decisions,”
said Pataki spokesman Michael McKeon. But two state officials said that Mr.
Whitehead was at the top of a very short list. An announcement has been
“imminent” for more than a week. “I think we’re pretty much there,” a state
So what’s the holdup? State officials said the biggest one was
that Mr. Giuliani has yet to submit the names of the three nominees he will
appoint to the nine-member board. (Mr. Pataki will appoint the rest.) That’s no
surprise-dust-ups between Messrs. Pataki and Giuliani have been one constant of
political life over the past six years. Yet several sources said that the real
dispute is between Mr. Giuliani and Mayor-elect Michael Bloomberg. Mr.
Bloomberg, who opposed the authority’s creation during his campaign, now wants
some say in the nominations.
“The problem is, there may be something less than consensus
between Mayor Rudy and Mayor Mike,” said one prominent New
York business leader.
When the authority’s formation was first announced on the eve of
the election, many speculated that the appointments had been allotted so that a
lame-duck Mr. Giuliani could thwart attempts by Mark Green to influence the
rebuilding process-assuming, of course, that Mr. Green would win the Mayoralty.
That bit of intrigue ended when Mr. Green lost to Mr. Bloomberg on Nov. 6. But
suddenly, Mr. Giuliani encountered a successor who expected to be included.
“Mike and the Mayor discussed this a short time ago,” said
Bloomberg spokesman Ed Skyler, “and the Mayor told Mike that he would certainly
have input on the appointments.”
Mr. Skyler denied any friction between the Mayor and his
successor. “That just isn’t the case,” he said. A City Hall source said the two
men simply hadn’t had time to discuss the matter of appointments yet. He put
the blame on Mr. Pataki, who, he said, has yet to call to ask how things are
“To my knowledge, there’s been no discussion between the
Governor’s office and the Mayor’s office on any of these appointees,” he said.
All the infighting and delays
might be amusing if the job of the authority weren’t so serious. Manhattan is full of recently formed task forces with
ambitious plans for the World Trade Center site; the Lower Manhattan Redevelopment
Corporation, as it’s officially known, will actually have power. Board members
will redesign a large area of downtown Manhattan-not just the 16-acre disaster site-and will have
authority over the many billions in federal aid that will be channeled into the
“When this super committee gets together, it will call the shots,
so it’s very important who’s on it,” said Mary Holloway, executive director of
the Association for a Better New York.
The unpaid chairmanship will be a full-time job, Mr. Pataki has
decided-a requirement that effectively limits the field to the rich and the
Mr. Whitehead, 79, is both. Several state officials said his
selection was not yet a certainty. But one added that he would meet many of the
criteria that Mr. Pataki is looking for: good ties to the financial community,
Bush administration bona fides and a lot of free time.
Mr. Whitehead retired from his Federal Reserve post at the end of
1999, and from his job as chairman of AEA Investors, a private equity fund
founded to invest money for the Rockefeller, Harriman and Mellon families, in
1997. He was Secretary of State George Schultz’s chief deputy through the
mid-1980’s, and before that a co-chairman of Goldman Sachs.
Mr. Whitehead has good ties to the Bush White House as well. In
2000, he gave $100,000 in soft money to the Republican National Committee.
The process of selecting the board has been conducted in strict
secrecy, and state officials said only Mr. Pataki knows for certain whom he plans to appoint. That hasn’t kept
people from trying to figure out who’s on the list. First it was Mr. Giuliani’s
name that was on everyone’s lips. But no one was really surprised to hear that
he wasn’t interested. Many suggested the move would be a step back in terms of
“You go from being the man,” said one developer, “to working for,
basically, [Empire State Development Corporation President] Charles Gargano.
For the man of the man.”
Last week, Roland Betts, the chairman of Chelsea Piers and a
close friend of President Bush, was said to be the odds-on favorite. But the
time demands of the job took Mr. Betts, 55, out of consideration, though he is
still considered likely to be appointed to the authority’s board.
Other names of possible board members that have circulated with
varying degrees of certitude in recent weeks include Walter Shipley, the former
chairman of Chase Manhattan Bank; former Treasury Secretary Robert Rubin; New
York Stock Exchange chairman Richard Grasso; Pataki intimate and former
Metropolitan Transportation Authority chairman Virgil Conway; and Jerry Speyer,
the omnipresent real-estate tycoon. Mr. Gargano would likely be an ex officio member, along with Peter
Kalikow, the developer who now chairs the M.T.A.
As the rumor mill churned, it became clear that not everyone was
clamoring to take the job. Mr. Betts bowed out of the chairman’s slot. Mr.
Shipley, according to several sources, decided he didn’t want to be on the
board. Deputy Mayor Joseph Lhota, Mr. Giuliani’s right-hand man, made it clear
even before the selection process started that he wasn’t interested.
Why the lack of enthusiasm?
“It’s extremely time-consuming,” said one prominent real-estate
executive. “[And] you’re going to be caught between a lot of warring factions.”