David Paterson, Governor of New York is caught between the Cuomos and the Kennedys in his upcoming Senate appointment. I say, choose someone else and let them decide to duke it out in the election of 2010, if they are both really that interested and think they would be right for the job.
Andrew Cuomo, the New York Attorney General, has been slammed by the machine that is the "Kennedy factor" in his desire for Hilary Clinton's Senate seat in New York. Cuomo has an impressive resume, none the least of which is his own name recognition factor, handed down from his father, Mario, who was Governor of New York from 1982-1994. I like Cuomo's much-younger brother; on the right above, Chris (news anchor on Good Morning America; although he does tend to get a little too emotionally involved with the news!) a lot more than the AG.
Still, Andrew, is a damn good politician. He was a big part of his dad's election campaigns and worked for him as an advisor while he was in office. Cuomo developed a passion for the topics of housing and homelessness and founded a non-profit organization, Housing Enterprise for the Less Privileged in 1986, when he was just 29... it's now known as HELP, USA. The organization is still robust after 22 years (Board Chair is his sister, Maria) helping to provide transitional and permanent housing for the homeless in 26 communities in 4 states. Cuomo worked for David Dinkins in the last years of his dad's term (1990-1993) as the Chairman of the NYC Homeless Commission.
He departed New York to take a post in HUD; his first national position; appointed by Bill Clinton. With 11 years of working in housing and homelessness, Cuomo was appointed to the Cabinet under Clinton in 1997 a HUD Secretary, after the departure of Henry Cisneros.
Cisneros fell from grace over a scandal that stemmed from a former mistress, and his subsequent lies to authorities to cover it up; an atypical scenario in the Clinton days. Before he left, it was all about finding ways to free up mortgage money for the less privileged and minorities through HUD; the true roots of the subprime disaster we have right now. The goal was honorable, but the freeing up of mortgage restrictions that allowed Cisneros to raise home ownership in these United States by a huge 2% increase; from 63% to 65%. At HUD, Cuomo had the power to regulate Fannie and Freddie. Den-de-den-den. Although Cuomo had enough knowledge of some aspects of HUD, namely, urban housing for the underprivileged, he did not have any banking or residential real estate experience. He pushed Cisnero's 42% less privileged goal (Fannie and Freddie had to invest 42% of their activities to low and middle class borrowers) to 50%. It still sounds noble, but to get there, the agencies had to turn a blind eye to the risks of the subprime market, similar to all the financial institutions were just starting to do.
Cuomo not only set goals that were so aggressive as to be risky, he failed to issue regulation that would make Freddie and Fannie disclose information on predatory loan practices. His 2000 regulations required no disclosure at all. The Mortgage Bankers Association (MBA) was very chummy with Cuomo while in office, pushing him to put pressure on Fannie and Freddie and there are numerous Cuomo staffers who ended up in the MBA as lobbyists, and numerous MBA stars who have donated to Cuomo campaigns.
Worse yet was what Cuomo began with FHA loans: he dropped down payments to 3%, raised the cap to $235,000, nearly double what it had been, and initiated down payment and closing cost assistance loans to buyers who could sometimes get in a home with as little as $500 in cash.
Mortgage brokers of this era were paid "yield spread premiums" ... big upfront payments that were calculated off the difference the borrower was paying in subprime interest rates vs. what they'd have to pay based on their credit quality. As HUD Secretary, Cuomo declared the premiums legal, nullifying over 100 class action lawsuits that had been brought against brokers. The money to be made from YSP's was the incentive for unscrupulous people in the industry to drive the size of mortgages and the pool of people who were buying without the proper credit or salary history to buy, up and up and up.
What Cuomo started with the pressure on Fannie and Freddie, with the errors at the FHA, and with his change of heart on the YSP's (he initially opposed them) based on pressure from special interests and the mortgage lobby, escalated into the stratosphere with the Bush team that took over for him in 2001. That team continued practices and pushed the less privileged goal up another 6%; and deregulated the industry even further.
A close scrutiny of what Cuomo founded at HUD demonstrates why Obama has not chosen him for any type of cabinet position. The roots of the mortgage scandal can be directly traced to Cuomo's HUD stewardship, and it would be a disastrous appointment at this time.
Cuomo stumbled, back in New York, in running for Governor in 2002, before he was ready, and went into private practice as an attorney until his campaign for Attorney General in 2006, which was successful. From 2002 forward, Cuomo has been working hard to familiarize himself again with the state of New York, particularly upstate. His AG office has a solid track record, and his website is impressive. He's downplayed his housing expertise and focused on internet safety for minors, access for students to college loans, corporate bad practices such as pension fund abuse, nursing home fraud and abuse, and the like. He's railed openly against executive bonuses for financial services firms that are losing money and needed bailout. He exposed a flagrant ethics abuse by then governor Spitzer in 2007 (Spitzer had more problems than call girls). He's done this in a tempered way, without seeking the reputation as a bully that Spitzer gained when he had the post. Most importantly, he's declared for 2010 as AG. Cuomo appears to do his best work when he is involved with the politics of the state of New York, and, no doubt, he could be governor someday.
But maybe, just maybe Cuomo will battle in the 2010 election for the Senate, and it was awfully appealing to be nominated for such, with Clinton leaving .. no campaign expenses, etc. Or maybe he will challenge the current "how did I get here?" Governor David Paterson, for the 2010 nomination.
Cuomo is no doubt dismayed by the surprising candidacy of Caroline Kennedy, and really has very little he can do or say to propel himself into the post. No doubt that New York voters outside of the City (and maybe even in the city, with all the good works Cuomo's nonprofit has done there) would feel he more closely represents their interests than she does.
Oddly enough, Cuomo was married, and bitterly divorced, from one of Caroline's cousins.
If Cuomo is wise, he would cast his net in the state, and not consider national politics in the way his father did. Does that mean that Caroline is the person I'd favor for Senator?
Not on your life!
More in the next post.