Who’s Running Group to Save Downtown? Not Mayor Giuliani

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

the job.

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

official said.

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.” Who’s Running Group to Save Downtown? Not Mayor Giuliani