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 A.NDY
A N K l N C O N

CUOMO H U D S e c r e t a r y a n d r i s i n g D e m o c r a t i c star’ A n d r e w C u o m o
wants t o g o places-assuming he c a n l e a v e s o m e b a g g a g e b e h i n d .
SAM DEALEY & JAMES RING ADAMS

ouldn’t have be,en more straightforward. The Senate cials were prosecuted in the Irancontra matter for withholding
Banking, Housing, and Urban Affairs Committee had information from Congress. Interior Secretary Bruce Babbitt
a form. The form was entitled “Statement for Com- has his own special prosecutor, probing the question of false
pletion by Presidential Nominees.” The nominee was statements to Congress. And then there’s Cuomo’s predecessor
President Clinton’s choice for housing secretary, 41- at HUD, Henry Cisneros, who resigned in the face of an inde-
year-old Andrew Cuomo, who was to complete the pendent counsel investigation. The allegation? Making false
questionnaire and return it before his confirmation statements to the FBI about pay-offs to a blackmailing mistress
hearing in January 1997. Simple, no? during a routine background check.
Evidently not. One question read: “Give the full The Justice Department apparently has not investigated
details of any civil or criminal proceeding in which you Cuomo’s responses. But it has looked at him for another reason.
were a defendant, or any inquiry or investigation by a The issue: Did Cuomo retaliate against Oceanmark by pressur-
Federal, State, or local agency in which you were the ing the federal agency charged with thrift oversight to close the
subject of an inquiry or investigation.” One of the cases he listed, S&L? After a preliminary investigation,Attorney General Janet
Smith V. Cuomo,et al., had been brought against him and others Reno concluded that the standard for appointingan independent
by the owner ofa south-Florida savings and loan, alleging an ille- counsel had not been met. Yet Reno’s inquiry was narrowly tai-
gal takeover attempt. But Cuomo failed to disclose a later suit, lored. A broader review of Cupmo’s involvements with Ocean-
brought by the S&L itself, and settled only two months before his mark reveals serious questions of bank-regulation skirting.
hearing. Why? Perhaps because Oceanmark v. Cuomo, et al. Some of Cuomo’s fellow investors in Oceanmark are also
revealed that in 1988, federal banking regulators investigated prominent figures in an array of political and financial scan-
Cuomo and fellow investors for possible change-in-control vio- dals. And the secretary clearly grows anxious when asked about
lations. The nominee should have listed that investigation, too, in his past business associates and their affairs. HUD lawyers even
answer to the second part of the question. He did not. threatened a lawsuit when TAS submitted detailed questions.
How serious is this? Reagan White House aide Edwin Meese Most notable among Cuomo’s past associates is Michael
was investigated by an independent counsel for incomplete per- Blutrich, head ofthe law firm which Cuomo joined as a $150,m
sonal financial disclosures. Several Reagan administration offi- a-year partner in 1985. Blutrich recently pled guilty to looting an
....,,............... ........., .,..... ... .......... ... .,.,.. .... ... ... .......... ...... ...... ... ............. ......... ... ... insurance company in Florida of some $237 million, some of
SAMDEALEY is TAS’s assistant managing editor. JAMES RING which went into a business controlled by the Gambino crime
is an investigative writer for TAS.
ADAMS family. Andrew Cuomo would like to play down his close rela-

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 tionship with Blutrich and dismiss it as a thing of the distant which those project proposals were approved. One of these
past, but financial disclosure documents show a relationship communities was Westchester County, a largely affluent New
lasting practically to the day of Cuomo’s Senate confirmation York suburb whose liberal denizens were shocked at the prospect
hearing as HUD secretary in 1997. of a housing project in their backyards.
Paul Feiner, then a county legislator who was skeptical toward
THE SON ALSO RISES HELP, says Cuomo interrupted a telephone conversation one
As the eldest son of Democratic lion Mario Cuomo, Andrew night in 1988 with an emergency breakthrough by an operator.
had one ofthe best educations in hands-on politics. He got into Cuomo’s call was a tongue-lashingfor Feiner’s position on HELP.
the game at 16, helping in his father‘s first state-wide race. He took “There was a tremendous amount of pressure,” recalls Feiner. At
part in Mario’s losing bid for mayor ofthe Big Apple in 1977, and the time he told a reporter that Cuomo had threatened him, say-
in his successful run for lieutenant governor a year later. Bub ing, “I’ll ruin your career. I’ll break every bone in your body,”
Andrew’s real start came in 1982 when, at 24, he ran his father’s unless Feiner supported the project. Cuomo dismissed these alle-
winning gubernatorial campaign. In a primary against the for- gations. “It’ssad that [Feiner’s] mind would work in such a way,”
midable New York City Mayor Ed Koch, Andrew led the cam- he said. “I think it’s even ethnically disparaging.”
paign from 37 points down to a victory margin of four. In the gen- Now the Democratic supervisor of a Westchester town who
eral run-off against the vastly better financed Republican Lew holds a seat on HELP’Sadvisory board, Feiner hardly seems out
Lehrman, Andrew again prevailed. The uphill victories testi- to get Cuomo. In fact, he calls HELP a “total success” and says
fied to Andrew’s burgeoning campaign and management skills. that “perhapswithout the pressure it would have been impossible
During his father’s years in the governor’s mansion, young to get the complex built.. . . But I would have preferred a little
Cuomo refined his political touch. He campaigned hard for more compromising with the community. It was a bad taste of
Walter Mondale’s presidential bid, bringing in sawy media con- government where things were being rammed through.”
sultants. And he was largely responsible for staging one of his
father’s most memorable moments, the carefully crafted speech THE OCEANMARK BOG
at the 1984 Democratic National Convention. Notwithstandingsuch unpleasantnessin the non-profit sector, it’s
Young Cuomo also got an education in hard-nosed politics. one of Andrew’s for-profit ventures that has now come back to
In 1983, the New York State Investigation Commission (SIC) con- haunt him. As a corporate lawyer in the Blutrich firm, he repre-
cluded that Cuomo and two other aides-including current sented a group that in 1986 decided to invest in a family-owned,
NBC News star Tim Russert-bullied members of the allied federally chartered savings and loan in North Miami Beach
Liberal Party to support a Cuomo-favored candidate to head the called Oceanmark. Andrew himself was also one of the investors.
party. According to the SIC report, the three men “intervened in The original owners of the thrift, the Fenster family, had lived in
the internal affairs of the Liberal Party in order to obtain a reso- Florida for generations, and they soon concluded that they were
lution ofthe factional dispute.”Party members testified that the losing control of the bank to outsiders who wanted to plunder its
governor’saides threatened them with the loss of lucrative state assets and discard the shell.
jobs and patronage if the party’s fight was not resolved in a way Their suspicions were aroused by the accidental discovery
“acceptable” to the governor. that what they called Cuomo’s “New York Group,” supposed-
After this brush with notoriety, Andrew left Albany in 1984for ly five major investors, consisted of at least 22, who among
Manhattan to join the staff of New York District Attorney Robert them controlled more than half of Oceanmark‘s stock. Con-
Morgenthau. In 1985he became a partner in the Park Avenue law cealed takeover groups are a major no-no in financial regula-
firm of Blutrich Falcone &Miller, a haven for his dads financial tion, and Cuomo’s group had filed none of the required change-
boosters. One partner, Lucille Falcone, was Mario’s chief fundrais- incontrol papers. So the Fensters’ lawyers hit them with the first
er and, according to reports,Andrew’s girlfriend. In his memoirs of what has become a series of lawsuits.
the governor even wrote he would likely join the firm when he left A constant theme in this convoluted legal history is the polit-
public service. (It ceased to exist before he could do so.) ical well-being of Andrew Cuomo. The New York Group offered
Also in 1985, Andrew took a leaf from the playbook of his to settle this first suit in 1990, just an hour before the Fensters’ legal
future brother-in-law Joseph Kennedy, who had started his career team was set to take a deposition from Andrew. (Several months
by founding a non-profit corporation to provide lowcost heating before, Cuomo had backed out of another scheduled deposi-
fuel to the poor. Andrew’s variant was a non-profit called Hous- tion, submittingan affidavit that he was sick with nausea, diarrhea,
ing Enterprise for the Less Privileged (HELP),which provides tran- and headaches. The next day the New York Post had run a picture
sitional homes and services to the homeless. In 1988 he quit his of Cuomo, wearing black tie at a party the previous night, over
law practice to work full-time as president of HELP, a post he the caption, “He’s one sick puppy.”)
manned until joining HUD as assistant secretary for communi- As part of the deal, Lynn Fenster and her family signed off on
ty planning and development in 1993. a press release apologizing to Andrew for “statementsmade in the
Cuomo’s zeal for philanthropy turned not-so-neighborly, heat of the moment.” “I regret any personal hardship this pure-
however, when community legislators questioned the location ly business dispute may have caused Mr. Andrew Cuomo,” read
and size of HELP projects, and when they attempted to slow the release. “I have always considered him an outstanding pro-
what they saw as the non-deliberative, willy-nilly speed with fessional and count him as a friend.”

30 LICENSED TO UNZ.ORG J a n u a r y 1999 . The American Spectator

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 The 1990 deal looked like a total victory for the Fensters. The
NewYork investors agreed to put their stock in trust for five years
and then give Oceanmark first dibs on buying it back.
What the Fensters didn’t know, however, was that the Feder-
al Home Loan Bank Board (FHLBB)had separately investigated
the New York Group and entered into a secret supervisoryagree-
ment on June 17,1988. The agreement noted that “the FHLBB
believes there is an issue as to whether there has been a violation
of” control laws, but “is willing to forebear from the initiation of
proceedings.” The terms were that Cuomo and the other group
members had to dispose of their Oceanmark stock within a year.
If any remained in their hands, stated the agreement, the stock
“shallbe donated to Oceanmark.”By acceding to the agreement’s
stem language, Cuomo and his fellow investors avoided any fault-
based action by the FHLBB.l AND
Despite its clear interest in knowing about the agreement,
Oceanmark only leamed about it by chance in early 1991. For the
next three years, the thrift tried without success to get a copy
from the Office ofThrift Supervision (OTS), the new federal reg-
ulator set up after the savings-and-loandebacle. Finally, in 1994,
the Fensters took Cuomo and his group to state court in Florida,
charging them with “an illegal conspiracy to commit fraud” by
failing to abide by the supervisory agreement.
The suit dragged on until 1996,when suddenlyan armistice was
reached. Oceanmark received a copy of the federal order, and the-
New York Group agreed to exchange their stock for a largely
worthless class of non-voting shares. The bank withdrew its suit.
But what astounded Lynn Fenster was the speed with which the
settlement was approved. “It went through like a rocket,” she says.
The Fensters were especially impressed when Cuomo assured
them he could clear up a residual problem with the OTS office According to the Fensters, Cuomo took “no” very badly,
in Atlanta, which supervises Florida thrifts. “One of the things that threatened reprisal, and retaliated by pushing the OTS into an
Andrew said,” recalls Ms. Fenster, “was, ‘Don’t worry about a extended examinationaimed at closing Oceanmark down. ‘With-
thing. I know people in Atlanta and I can take care of this.”’ in a month after we refused to do what Andrew demanded,” says
Friedlander, “the OTS was back on this bank like white on rice.
AN INDEPENDENT And they ate us for lunch.”
COUNSEL ALL HIS O W N When Oceanmark began receiving what its auditors saw
Why did the settlement come so quickly? To the Fensters it as unusual demands concerning recapitalization require-
seemed that members of the New York Group, even those no ments from OTS regulators, the Fensters appealed to the
longer active in the case, had suddenly decided to smooth the path agency’s ombudsman. In a letter of March 4,1997, Ocean-
for Andrew’s career. Indeed, just three weeks later Cuomo was mark noted that the acting head of the OTS at the time,
nominated to replace Henry Cisneros as HUD secretary. But Nicholas Retsinas, was simultaneously HUD’s assistant sec-
the Fensters were less inclined to throw rose petals on his progress. retary for housing and the federal housing commissioner,
The result was a nasty face-off that led to the Justice inquiry. and hence subordinate to Secretary Cuomo. The thrift alleged
As part ofthe 1996 settlement, Cuomo asked for another pub- that Cuomo had used his authority to punish the Fensters and
lic apology. This time the Fensters refused. Explains their lawyer force a sale of Oceanmark, which, says Friedlander, would
William Friedlander, “If Oceanmark said publicly that their have incidentally produced a payoff on the non-voting stock
claim had no merit, then everything we had negotiated for- held by the New York Group.
which was the right to bring it again, to dismiss it without preju- The ombudsman considered the charge against Cuomo a
dice-would have gone out the flue.” political hot potato and passed it on to the Treasury Depart-
ment’s inspector general. The FBI launched its own investiga-
Cuomo and the other signatories may have misled regulators in
tion. In late July 1998, even as FBI agents were still conducting
order to close the deal. According to the agreement, these stock- interviews, the ombudsman revisited the complaint and con-
holders, “consistent with their desire to no longer be involved with cluded that OTS personnel might have been “plain-spoken,”but
Oceanmark, have already entered into an agreement for the sale of they “did not act in a retaliatory manner.” He found “no infor-
their stock.” But that’s exactly what the group did not do. mation” showing Cuomo’s influence.

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 In early September 1998, the Fensters filed yet another suit, Goldstein could also be a generouspolitical benefactor. Accord-
charging Cuomo, Retsinas, and current OTS Deputy Director ing to an analysis by Newsday, Goldstein, his family, and associ-
Richard Riccobono with a “conspiracy” to ruin Oceanmark. ates donated over $102,000 to Mario Cuomo’s gubernatorialcam-
Cuomo, they said, had used his political power to pressure the oth- paigns from 1982 to 1989. In the 1982 campaign alone, the
ers into harassing Oceanmark. But the real news was buried Goldstein machine contributed more than $49,000. Shortly after
deep inside the lawsuit. The Fensters said they had been inter- Cuomo was first elected,Goldstein was appointed chairman ofthe
viewed by the FBI, and that the bureau appeared to be con- State University Construction Fund, a lucrative patronage title.
ducting its own investigation of Cuomo and his associates. In addition to Oceanmark, Goldstein, Cuomo, and others in
In fact, Justice did conduct a preliminary investigation of the New York Group shared extensive interests in two other finan-
Cuomo-the kind of inquiry that can lead to the appointment of cial institutions, Hudson United and the Savings Bank of Rock-
an independent counsel. Reno confirmed this on September 8, land County. Oceanmark‘s Lynn Fenster recalls how the New York
1998,when she announced her determination that “there were no Group operated: “Shelley Goldstein would put out a call for
reasonable grounds to believe that further investigation [by a money, and you would go. And if you didn’t go-you almost
court-appointed special prosecutor] was warranted.” Then she didn’t have a choice. You didn’t have a say. The first time you
went a step further, announcing that Justice lawyers would defend didn’t bring your money-he told me this-you didn’t get to go
Cuomo, Retsinas, and ficcobono in the latest Oceanmark suit. again. And the first time you ever got worried about your money
Cuomo’s spokesmen now cite Reno’s statement in rebutting or didn’t want to stay there, he would literally write you a check
the Oceanmark charges. In a letter to TAS, “HUD staff wrote: and you would never get called again.”Thisseems to be borne out
in an April 16,1987 memo Oceanmark obtained from Cuomo’s
The real question.. .is will you allow your publication to be used as files. “It is imperative that you and I sit down together and discuss
a mouthpiece for the bogus and self-serving allegations made by the whole Venture deal and on Monday I will put out the call for
Oceanmark Bank. You are now on notice that the allegations.. .are $500,000,” Goldstein wrote to Cuomo. ‘What Ed Wachtel [a
false. You are also on notice that these allegations are ten years old,
New York Group investor] and I decided to do is call for all
previously published, and now proven baseless by the Department
monies, put it in the Savings Bank of Rockland County and draw
ofjustice, FBI, and Republican Senate. The publication ofthese state-
ments which you now know to be false and slanderous is action- the money as we need it but to have it in the bank.” Jeffrey Fen-
able. Your publication has a history of printing false material regard- ster, Lynn’s brother and partner, paints a similar portrait “Shel-
ing Mr. Cuomo. The Secretary intends to pursue all legal avenues ley would gin up an investment and he would put out a call for
regarding this matter. money. And Shelley had a thing that no one would ever lose
money. He always gave them their money back if they lost money.”
A similar letter to TAS from Cuomo’s private lawyers states, ‘We Goldstein was also a chiefclient of Cuomo-and Blutrich and
intend to protect his interests and will not tolerate any purport- Falcone-at their law firm. Other aspects ofthe cozy Goldstein-
ed reporting, based on smear tactics, to enhance anyone’s private Cuomo relationship frequently cropped up in New York papers
business agenda or to increase circulation.” during the mid-i98o’s, including:
OTS recently withdrew its examiners from Oceanmark, and In 1984 Arco Management won a state contract to man-
the Fensters’ latest suit alleging an elaborate “Cuomo Con- age the Bridge and Jackie Robinson housing projects in New
spiracy” seems strained at best. But there do appear to have York City. It later turned out that the Division of Housing and
been violations of the supervisory agreement, which federal Community Renewal, the state agency that awarded the con-
regulators have failed to pursue -specifically the divestiture of tract, had done so under a non-competitive bid. The following
the investors’ stock. The case also puts a spotlight on some p e e day the agency director claimed that the unorthodox move
ple who Cuomo perhaps wishes would remain in the dark. was in response to an emergency.The director also told the New
York Times that Arco was “recommended to me but by whom
THE NEW YORK GROUP I don‘t remember.” Arc0 was owned by Goldstein and man-
Heading up the New York Group was Sheldon Goldstein. Orig- aged by one of his two sons, both of whom belonged to the New
i d l y from Brooklyn, Goldstein moved to nearby Rockland Coun- York Group. John OConnell, another New York Group investor,
ty in the mid-fifties, where he set up shop as a realestate developer was also a member of Arco. Andrew was his dad’s right-hand
and businessman. By the 1980’s he was a millionaire several times man in Albany at the time, and Goldstein, as chairman ofthe State
over and had a long list of corporations to his name. University Construction Fund, was a state official.3
In 1987 Goldstein and Cuomo were wrapped up in a crim-
inal and civil case and a State Investigation Committee (SIC)
The current allegations are, of course, not ten years old, but arise
inquiry into a campaign quid pro quo. The allegations were that
from the Fensters’ 1996 refusal to sign a statement similar to their
1988 apology to Cuomo. Cuomo’s problems with the thrift were
after Goldstein was denied part-ownership in a Manhattan build-
.............. ............................. ................... ..... ... ...................... ... ........ ....................
“previously published” in the October 1994 TAS, in connection with
Oceanmark‘s efforts to obtain the secret supervisory agreement. The 3 Arc0 is currently a “prime contractor” for H U D property manage-
“false material” in question, H U D staff has specified, was an item on ment in Minnesota, D.C., Puerto Rico, the Virgin Islands, and every
Secretary Cuomo’s press conferences. (See O n the Prowl, TAS, state east of the Mississippi River. Upon becoming H U D secretary,
December 1997, and Correspondence, TAS, January 1998.) Cuomo recused himself from decisions directly involving Arco.

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ing rented to the state, he influenced the governor’s office to can-
cel part of the lease. A few years earlier, while a special assistant
to his father, Andrew had amended the lease. According to the
Times, Goldstein told the SIC, “I threatened to ruin [the building
owner] in the state of New York as a window contractor.” soon after,
Goldstein resigned as chairman of the State University Con-
struction Fund for “personal reasons,” according to a state
spokesman, but presumably under pressure to do so after his
embarrassingadmissions.Cuomo testified to the committee that
he had acted in the state’s best interests at the time, not Goldstein’s.
In 1988, plans for a proposed thruway exit near Sterling For-
est, the largest timberland tract in the New York City area, were
scotched for economic and environmental reasons. The pro-
ject had been pushed by Governor Cuomo. A report by the state
comptroller noted that, “over the years, this project has been
repeatedly rejected by past state governors and the New York
State Thruway Authority as unwairanted based on the area’s
traffic needs and as simply a boon for private land developers.”
Goldstein, according to the New York Times,had extensive prop-
erty interests in the area and, in 1986, attempted to purchase the
y-square-mile forest.Andrew Cuomo was his attorney in the deal.
When questioned about his ties to Goldstein, Cuomo has dis-
tanced himself. “I am one of io, 15,20 lawyers who represent
him,” he told the New York Times in December 1987. But the
April memo from earlier that year suggests a closer relationship.
“I really don’t know what you did on your taxes,” Goldstein
wrote Andrew. “I called and found out you filed for an exten-
sion. Please, please let’s put it together or some day it will come
back and bite us.”

THE WITNESS FORMERLY Predictably, Heritage soon found itself in financial straits,
KNOWN AS BLUTRICIH and its directors became uneasy for their shareholders,26,000 (75
Another New York investor in Oceanmark was Michael Blutrich, percent) of whom were elderly. Two years later, the insurance
a name partner in Cuomo’s firm. In 1996 Blutrich was exposed as company collapsed, a $++*million debacle. The Blutrich group,
a target in one ofthe largesteverFBI fraud probes, and in Novem- meanwhile, had walked away with $93 million in laundered
ber 1998 was convicted on 22 counts of racketeering, fraud, and money, and sunk over two and a half times that much in bad deals.
money-laundering.In that scam, Blutrich and others plotted with By July 1996, Heritage’s chairman pled guilty to the scam and
the thenchairman of the Orlando, Florida-basedNational Her- received eight years in prison in exchange for his cooperation.
itage Life Insurance Company to loot some $237 million from the Blutrich, along with several associates, was indicted the follow-
company through inside loans and sham realestate deals. ing month and has since begun to cooperate with the FBI. One
In 1990 the Blutrich group approached Heritage and offered of the loans that federal agents are investigating was a piddling
to invest $4million. There was just one problem: They only had $~OO,OOO to underwrite Scores, a New York strip club which the
a million. So the investors illegally “borrowed” the rest from an Feds charge became a racket for the Gambino crime family.
escrow account at Blutrich‘s firm. Soon after, a $)-million advance In exchange for testifying and helping the FBI, Blutrich
for “futurecommissions”,wasdrawn from the insurance company recently entered the federal Witness Protection Program -and
by the Blutrich group and deposited into the firm’s escrow a substantially discounted lifestyle. In court documents, one of
account. The investors bought land near the Catskills in New Blutrich’sformer associates, Shalom Weiss, charges that during
York, then billed Heritage for millions more than they had paid. the heyday of the scam Blutrich dropped $50,000 per week “sup
Another sham loan involved a Bronx land parcel owned by porting a lavish lifestyle and expensive habits.” The lavishness
4305 Associates, a two-person corporation formed in 1988 and included a Porsche, a yacht, and a $i2,ooo wristwatch, all of
named for the parcel’s street address. Blutrich was vice-presi- which he gave up as part of his plea agreement.
dent and p p e r c e n t shareholder; Lucille Falcone, president Blutrich’s expensive tastes included a passion for boys’ bas-
and equal shareholder. Blutrich persuaded a cohort to pose as a ketball. According to Weiss, “much of Blutrich’s ill-gotten gains
realestate appraiser, who valued the property at $2,346,000. It was were spent supporting or covering up” pedophilia. “He exploit-
actually worth only $700,000. Heritage made a $1.5 million loan, ed the young boys he raped and molested. He beguiled the par-
a large chunk ofwhich found its way into Blutrich’s pockets. ents of the boys whose basketball teams he coached so he could

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 meet his prurient need.” In 1994, after a two-year sting, Blutrich ample press coverage Oceanmark had received in the preceding
was charged with multiple counts ofsexual assault on a minor (to decade. What‘s more, Florida’s Connie Mack also sat on the
which he secured a sweetheart plea-bargain),and a story in the committee. A HUD lawyer confirms that a Florida C O P official
December 1998 Penthouse quotes an anonymous partner in sent committee members a package alerting them to the Ocean-
Blutrich’s law firm saying, “Everyone knew what Michael was mark imbroglio.Amazingly, however, the thrift never came up.
doing with these young boys. On more than one occasion a Senate Banking sources say the oversight had more to do
mother of one of these boys would come up to the office scream- with DAmato protecting his own chairmanship than Andrew
ing and complaining about what Blutrich was doing.”According Cuomo’s well-being. There was speculation at the time that
to the story, several sources “close to the situation” said Cuomo Cuomo might challenge the New York senator in his 1998 cam-
left the firm in 1988 in part because of Blutrich’s behavior. A for- paign, and that he posed a sipficant threat. (A Mason-Dixon poll
mer partner ofCuomo’s disputes this, however. “That’s a total lie. conducted at the time showed Cuomo edging out DAmato 41-
No one had knowledge that [Blutrich]was involved in any of this 38 percent.) According to these sources, it was understood that
s--t,” says the source, who wishes to remain anonymous. if D’Amato could protect his seat by sequestering Cuomo on
Cuomo downplays his relationship with Blutrich. In a letter HUD’s top floor, so much the better. “Generally a lot of people
to TAS, the secretary’s Fort Lauderdale attorneys wrote, “Many felt there were understandings that obviously they were going to
years ago, Secretary Cuomo practiced in a law firm with Mr. try to stay out of each other’s way,” says a senior committee aide.
Blutrich and participated with many investors, including Mr. Another reason that Cuomo’s involvement with Oceanmark
Blutrich, in a taxcredit syndication.”In fact, along with Blutrich wasn’t mentioned at the hearing may be that DAmato had his own
and Lucille Falcone, Cuomo was one of three general partners not-so-kosher connections to the New York Group. During the
in L&M Associates, a tax-sheltered oil and gas investment. And 1980s DAmato was embroiled in a nasty HUD scandal of alleged
although the partnership began many years ago (September 17, favoritism, back-scratching, and campaign donor quid pro quos.
1986),it was not until January ti, i997-the day before his Sen- Goldstein, a heavy D’Amato donor, and seven members of the
ate confirmation hearing to become housing secretary-that New York Group realized a $i7-million windfall from a juicy
Cuomo quit doing business with Blutrich and sold his interest in HUD package patched together by a senior HUD official, Joseph
L&M at a loss. A monthly disbursement check to Cuomo from Monticciolo, and pushed through by DAmato. Upon leaving
the venture, a copy of which TAS has obtained, bears Blutrich’s HUD, Monticciolo became the titular head of a Goldstein invest-
signature, and an accompanying letter shows that it was mailed ment group that included these New York Group members. Con-
in 1995 to Cuomo’s HUD address, with “best personal regards.” gressional and Justice probes were launched. Ultimately Mon-
Cuomo did not have to sell his stake in L&M to become sec- ticciolo rolled and said D’Amato asked him to cover for the
retary; he need only have recused himself from decisions involv- senator, but the case could not be made. These eight investors at
ing the partnership (which he had done two weeks earlier).That one time owned nearly half of the New York Group’s shares in
he ultimately did sell seems to suggest he was troubled by doing Oceanmark, according to documents from Cuomo’s files.
business with an accused criminal. Yet Blutrich’s fraud case had If DAmato wasn’t going to bring up Oceanmark, neither was
been widely reported months earlier, and Cuomo’s former busi- Cuomo-even if it meant a material omission on his nomination
ness associates had k n m about it almost immediately. “After...the form. Cuomo will not explain why he did not list the Ocean-
firm was raided by the FBI. . .a former employee called me,” says mark suit among the court cases in which he had been a defen-
Cuomo’s former partner. “I think that call, I’m sure, went out all dant. His HUD lawyers wrote TAS that ‘“The FBI, Department of
over the city. And that’s when I became aware that the FBI was Justice,and U.S. Senate (Republican controlled) have all stated
investigatingMichael in connection with Scores and the Mob.” that all nomination forms and procedures were correctly complied
Presumably, it was only the prospect of public scrutiny that with by Mr. Cuomo.” But there is no public record of any such
prompted Cuomo to finally withdraw his investment. statements.What’s more, according to the Office ofGovernment
Ethics, only the Senate Banking committee would have evaluated
BETTER LEFT UNSAID Cuomo’s questionnaire.Asked why Cuomo did not divulge that
Less than a month after the ink dried on the second Ocean- he was investigated by federal banking regulators, HUD lawyers
mark settlement in November 1996, Andrew Cuomo was nom- reply with word games. “Mr. Cuomo was merely a witness in
inated for HUD secretary.A month later, accompanied by his connection with an FHLBB examination of Oceanmark,” they
wife Keny Kennedy (whom he had married in 1990),one oftheir claim, and consequently not directly the subject of the inquiry.
two daughters, his mother Matilda, sister Maria, and mother-in- Young Cuomo is considered one of the Democratic Party‘s
law Ethel Kennedy, Cuomo sailed through an adulatory con- fastest-rising stars. He has indicated he’d like to playa major role
firmation hearing notable only for what was not brought up: in Al Gore’s New York campaign machine in 2000, and Wash-
Oceanmark Federal Savings and Loan. ington rumor holds that he’s a strong contender for the second
The chairman of the Senate committee charged with con- spot on a Gore ticket. More recent speculation predicts a possi-
firming Andrew was Alfonse D’Amato, whose hearty dislike for ble run for retiring Senator Daniel Patrick Moynihan’s seat in
the Cuomos was well known -and generously reciprocated - 2000. The GOP opponent in that race could turn out to be none
after many years’ rivalry in New York politics. D’Amato might have other than Alfonse D’Amato. If that’s the case, you can bet the
been expected to turn the hearing into a blood bath, given the bank on one mud ball that neither candidate will be throwing. U

34
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January I 999 - The American Spectator

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 8 FREE GIFT WORTH $25 CALL 877-282-2001 8

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