A Jostled Czar, John Whitehead Roiling His Foes

The meeting of the Lower Manhattan Development Corporation on Nov. 14 began in the usual way. By 8 a.m., its members were arrayed around a U-shaped table, speaking in the mumbled tones of men who are not accustomed to speaking loudly, or even clearly, in order to be heard. There were a few jokes and mild laughter.

The bland proceedings belied the tensions in the room. The LMDC, created to rebuild the former World Trade Center, has become a dysfunctional family. And the relative who wasn’t at the table-state economic-development czar Charles Gargano-may cause the most trouble in the coming months.

Mr. Gargano, as chairman of the LMDC’s parent organization, the Empire State Development Corporation, ostensibly is the LMDC’s boss. But now that the gubernatorial election is over and Mr. Gargano’s boss, Governor George Pataki, has been re-elected, Mr. Gargano will be seeking a greater role for himself in the LMDC, according to city and state officials. And if Mr. Gargano had his druthers, other officials say, a newly constituted LMDC would not include John Whitehead, its current chair.

Mr. Gargano is already making a move. According to officials familiar with the LMDC, he has directed his staff to book him at LMDC meetings and events, which he has attended only sporadically so far. “Everything was in a holding pattern until Election Day,” said one official close to the LMDC. “There was this silent feeling in the room that nobody rocks any boats.”

Some are getting rocked now. The immediate aftermath of Election Day saw a spate of stories about Mr. Whitehead’s tenuous hold on his job. Board members loyal to Mr. Whitehead reportedly blame Mr. Gargano or his staff for those stories.

“You guys [in the press] are just being used by someone else who wants Mr. Whitehead out so he can run the board himself,” asserted one person close to the LMDC board, who spoke to The Observer on condition of anonymity.

Mr. Gargano’s spokesman declined to comment.

All of this comes just weeks before the LMDC faces a huge hurdle: presenting a new set of design plans for the World Trade Center site, ordered up after the first set, introduced last July, was widely derided, then scrapped. And the disagreements are coming to the fore as Mayor Bloomberg, facing a yawning budget gap, is asking Albany for help in implementing unpopular tax increases.

Settling all of this will be a major challenge for Mr. Pataki. On election night, he received enthusiastic applause when he promised to rebuild lower Manhattan. Republican sources say the rebuilding effort will be a “massively important priority” for Mr. Pataki’s third term.

From the beginning, Mr. Whitehead was a wild card. On the one hand, he is a loyal Republican (in recent years, he has contributed close to $400,000 to the party and its officials) and a reassuring choice for the city’s bankers and business people. But the octogenarian’s many years in the public and private sector, plus a proclivity for speaking his mind, made him a bit of a risk for an administration that prizes discipline and loyalty.

Early Tensions

Mr. Whitehead rankled Mr. Gargano from the beginning, when he pointed out to reporters-in a manner widely interpreted as paternalistic-that he had sworn in Mr. Gargano when he was named ambassador to Trinidad and Tobago during the Reagan administration.

But he really steamed Mr. Gargano on a frigidly rainy day last January, when a battery of federal, state and city officials gathered to announce business-development grants for lower Manhattan. These sorts of announcements-frequently upstate-were the bread and butter of Mr. Pataki’s re-election campaign.

Just prior to the meeting, the Governor learned that Mr. Whitehead had met with President Bush at the White House. “I want to thank two people who came back from the private sector to do this job,” Mr. Pataki said then. One was “John Whitehead, who I know just went down and met with the President just a few days ago in Washington. John, thank you.”

It was Mr. Pataki’s way of trying to seize control of Mr. Whitehead’s surprising announcement, which completely eclipsed the announcement of the business grants in news reports, to Mr. Gargano’s fury. Mr. Gargano-who was the event’s master of ceremonies-didn’t even know about the Bush meeting until it was mentioned in front of reporters.

Mr. Whitehead stepped on Mr. Gargano’s headlines again last May, when Mr. Gargano was the guest speaker at the Association for a Better New York breakfast. After the event, Mr. Whitehead, surrounded by reporters, mentioned that ground had been broken at the 7 World Trade Center site. The remark not only startled reporters, but came before a planned ribbon-cutting, upstaging Mr. Gargano and the Governor.

The issue of who has the most direct line to President Bush has become the subtext of many of the tussles between the LMDC and the Pataki administration. Mr. Pataki, of course, has access and clout with the White House, but as a major donor and former Reagan administration official, so does Mr. Whitehead. And then there is Roland Betts, the Chelsea Piers developer who is a Yale classmate of the President’s and was an investor in the Texas Rangers when Mr. Bush owned the team.

“They may think their connection to the President will protect them,” muttered one state official about the LMDC, “but it won’t.” And so the struggle over Mr. Whitehead’s future is consuming a certain faction of the Pataki administration. A couple of days after the election, The New York Times ran a story saying that “some people close to the governor are pushing for [his] replacement.”

Mr. Whitehead denied it, but way down in the story, Mr. Pataki’s spokesman, Michael McKeon, was quoted as saying: “It’s always natural after a year of time to evaluate what has happened and how to improve on something.” A nervous Mr. Whitehead called the Governor, who was on vacation, to check on his prospects for future employment. He received the assurances he wanted, and on Nov. 14, Mr. Whitehead declared: “There’s no truth to the reports at all. I have no plans to leave and the Governor and the Mayor have no plans to fire me, so I’m in office to stay.”

But some state officials aren’t so sure, and even on Nov. 19, Mr. McKeon wasn’t offering much comfort, saying: “The Governor is confident that the LMDC has done a good job, but that doesn’t mean we shouldn’t look at ways to make it even better.” Sources close to the Governor say he simply hasn’t turned his attention to the future of the LMDC.

Still, some people who have the Governor’s ear are unhappy. “John Whitehead’s ‘independence’-which the New York Times editorial board likes so much-just means he’s accountable to no one,” one official in the anti-Whitehead camp griped. Several scenarios are being talked about. Under one, Mr. Whitehead quietly leaves after the design plans are introduced-sometime between Christmas and New Year’s, say, when no one’s looking. Or else he stays until spring, when talk of his resignation has long died down.

In this scenario, Mr. Gargano takes on a greater role in the LMDC, Mr. Whitehead eventually leaves, and Mr. Gargano becomes the “acting chair” of the LMDC indefinitely.

Meanwhile, there are other subplots. Some state Republicans-including some who are loyal to Mr. Gargano-see Deputy Mayor Daniel Doctoroff’s dual stewardship of the 2012 Olympics bid and the city’s role in lower Manhattan as an inherent conflict of interest. “How can you develop midtown office space and lower-Manhattan office space in a time of no resources?” said one. “How can you do the lower-Manhattan transit hub and the extension of the No. 7 subway line? There just isn’t the money.”

“We all have a lot of things to do,” Mr. Doctoroff said in a telephone interview. “My job isn’t just about the Olympics or lower Manhattan, its about all New York City. The effort to bring the Olympics is incredibly important as we contemplate the long process of rebuilding.” Mr. Doctoroff denied that there were any tensions between him and Mr. Gargano. “I’ve never heard that from him directly or indirectly,” he said.

Mr. Betts has also been putting out his own fires. As head of the site-planning process, he has repeatedly butted heads with Madelyn Wils, the Community Board 1 president who is close to Assembly Speaker Sheldon Silver. “Roland and I have discussed many issues,” Ms. Wils said. “We may not agree on everything, but we agree on most things. That’s just part of the dialogue. I’ve never been the kind of person not to say what’s on my mind.”

Mr. Betts also said the two have a working relationship.

Not so agreeable is Mr. Silver. At hearings he held last week, he expressed his “dismay” and “outrage” about what he called “unclear lines of authority,” and repeatedly battered Alexander Garvin, the LMDC’s architect, for “lack of public input” into the planning process. What was particularly peeving Mr. Silver, it came out, was that neither the Port Authority board nor the LMDC board had voted on the parameters of the new design plans. This was of paramount importance to him. “Without a vote, you have no accountability,” he said after the hearings.

As the lid begins to boil off the pot, LMDC board members insist that any behind-the-scenes machinations are beside the point. “The design process is about to bear fruit; the architects plans are coming back in,” Mr. Betts said. “I’ve seen enough of them to know now those will be spectacular-so the whole process is working.”