Governor Cuomo is hosting a $15,000-a-head fundraiser at the Top of the Rock tonight to raise money for a “likely battle with special interest groups” over his budget agenda. The location is appropriate because 30 Rockefeller Plaza (“30 Rock”) is owned by – and host to – some of the leading lights of the Committee to Save New York, the big business lobby that has come together to back Cuomo in his fight for tax cuts for the wealthy and budget cuts for everyone else.
30 Rock also brings together some of Committee’s – and New York’s – most notable corporate welfare cases, extremely wealthy people and companies who still want more: more handouts, more bailouts, more tax breaks, more loopholes. A quick and dirty review of some of the key players at the building, and how they profit at public expense:
30 Rock is owned by the real estate firm Tishman Speyer, which put up $1 million in funding for the Committee and was a top donor to Cuomo. Rob Speyer, Tishman Speyer’s co-CEO, is also co-chair of the Committee and one of its key founders.
Tishman Speyer has been involved in a number of publicly-subsidized development deals, including the new Yankees stadium, which received $663.5 million in taxpayer subsidies, according to Good Jobs First. In 2006, the Village Voice found that the Yankees had billed city taxpayers for Tishman Speyer’s lobbyists, as part of a deal with the Giuliani administration where the city agreed to pay the planning costs of the new stadium.
More recently, the New York Fed agreed to bail out several Tishman Speyer properties in Chicago with a favorable debt restructuring, in what the company celebrated as “great news.” The company had fallen on somewhat hard times following the 2008 financial crisis when it defaulted on loans and had to walk away from Stuyvesant Town (where it had made many enemies). Several New York Fed board members sit on the Partnership for New York City’s board with Rob Speyer including Partnership CEO Kathryn Wylde, another Committee co-founder, and so the unusual agreement to backstop a billionaire’s real estate concern with public funds from the Fed was merely a handshake between friends.
Lazard, an investment bank known for its mergers and acquisitions work, has been a tenant at 30 Rock since 1993. Felix Rohatyn, the honorary chair of the Committee to Save New York, is a top executive there and was a longtime partner before his current stint, which began early last year (from 2006-2008, Rohatyn was an adviser to Dick Fuld, the CEO of that spectacular Wall Street failure, Lehman Brothers).
Lazard won the dubious distinction of being the first major Wall Street bank to incorporate in an offshore tax haven (Bermuda), when its CEO, the late Bruce Wasserstein, took it public in 2004. At the time, the prospectus noted that corporations do not pay taxes on income in Bermuda.
Tax avoidance appears to be in the firm’s DNA: Rohatyn’s mentor, the late Andre Meyer, pioneered the use of the real estate tax shelter, according to Cary Reich’s biography of him, Financier: The Biography of Andre Meyer. Meyer, Reich writes, realized the tax benefits associated with real estate long before most other bankers did. Meyer was a longtime confidant and business partner of David Rockefeller, whose family still keeps offices in 30 Rock.
In his book on Lazard, The Last Tycoons, William Cohan notes that many Lazard partners enjoyed lunching at the exclusive Rockefeller Center Club atop 30 Rock:
This was the ultimate – a scrumptious buffet of gourmet salads, fresh shrimp, and filet mignon, an uninterrupted view south of lower Manhattan, and the private companionship of numerous corporate CEOs and Wall Street bankers and attorneys. There was no bill or menu, just a warm greeting from the maitre d’ and the quiet comfort of exclusivity. Maybe the appeal of the Rockefeller Center Club was nothing more complicated than Fitzgerald’s observation of the ‘consoling proximity of millionaires.’ (emphasis mine)
The Rockefeller Center Club was also a favorite lunch spot of Citigroup chairman Dick Parsons, an original founder of the Committee to Save New York, along with many other high rollers in New York City. You could imagine the plot for the Committee being hatched there over filet mignon, but it closed in 2009 after a dispute with its landlord, Tishman Speyer.
The building’s most famous tenant is NBC, owned by GE until recently, and now a joint venture of GE and Comcast. NBC and GE have a number of close ties to the Partnership for New York City. Lazard and Rohatyn have also worked closely with GE over the years, and helped it engineer its takeover of RCA during the 1980s.
NBC (and GE), engaged in a high-profile shakedown of New York taxpayers in 1987, when the company threatened to move its headquarters to New Jersey unless it received generous tax breaks. The city eventually granted the company an estimated $100 million in real estate and sales tax breaks over 35 years. The deal included $800 million in tax-exempt financing, so that the NBC could renovate its studios. Eight years later, it got an additional $7 million in tax breaks from the Giuliani administration.
Those deals, however, pale in comparison to the publicly-funded bailout financing that NBC’s parent, GE, got from the New York Fed during the financial crisis: $16.1 billion in emergency loans. Incredibly, GE CEO Jeff Immelt sat on the New York Fed’s board at the time, essentially overseeing his own company’s bailout. Another Fed board member, Loews CEO James Tisch, joined GE’s board in June 2010. Tisch is also a director of the Partnership for New York City and husband of Merryl Tisch, chancellor of the New York State Board of Regents.
This only scratches the surface of GE’s lengthy record as a corporate welfare recipient; as Matthew noted recently, the conflicts of interest surrounding GE’s business dealings are deep and ugly with all the attendant benefits.
By going to 30 Rock, Cuomo is tapping the corporate gravy train that fills the coffers of Tishman Speyer, GE, Lazard, et al, robs the state of much-needed revenue, and causes budget shortfalls. Cuomo will put these funds to work protecting their tax breaks and promoting the absurd notion that public sector workers caused our budget problems, despite the obvious role of highly-leveraged, bailed-out financial conglomerates like GE and Tishman Speyer in sinking the economy in the first place. The corporate power elite perpetuates itself through a vicious cycle. Cuomo seems to have gone along for the ride, and unless he faces something along the lines of a Wisconsin moment, he is unlikely to turn back.