The House That Andrew Cuomo Built

Written by Phil Hall
on July 12, 2010 No Comments
Categories : Blog View

[i]BLOG VIEW:[/i][/u] Political junkies within our industry may wish to pay extra attention to this year's race for New York governor.[/b] Andrew Cuomo, the state's attorney general, is the Democratic candidate in that race, and his role in the subprime mortgage fiasco is slowly beginning to raise concerns. On March 3, Dick Bove, an analyst with Rochdale Securities, turned the heat up on Cuomo by recalling his 1997-2001 tenure as Secretary of the Department of Housing and Urban Development (HUD). ‘One of the key reasons why (Fannie Mae and Freddie Mac are) bankrupt today,’ said Bove during a live CNBC interview, ‘and why the government is spending hundreds of millions of dollars in supporting them, is because of the edicts pushed through by Mr. Cuomo.’ Cuomo was also dubbed the ‘father of the subprime crisis’ by Bove, who added, ‘It's also thought by many that the hundreds of thousands of people who are losing their homes are [doing so] to a great degree because of the actions taken by Mr. Cuomo at HUD.’ In a May 30 article in the Buffalo News – an influential upstate New York daily newspaper – Cuomo was sought out to comment on his HUD record. Cuomo would not speak with the newspaper, though one of his campaign's spokespersons, Josh Vlasto, issued a written statement that ignored Cuomo's HUD record while blaming the current crisis on solely George W. Bush's administration. ‘The GOP is trying to cover up the Bush administration's complicity in allowing Wall Street and the banks to turn mortgage lending into the Wild West,’ Vlasto said. ‘It is a well-established fact that those institutions were the main source of risky lending.’ This is not the first time that Cuomo has been blamed for a key role in the circumstances that led up to the economic crisis. On Aug. 5, 2008, an article in the Village Voice – a New York alternative newspaper with a decidedly left-of-center political slant – put the blame for the collapse of the government-sponsored enterprises on Cuomo's plate with Wayne Barrett's cover article, ‘Andy's Kids.’ ‘Andrew Cuomo…made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis,’ Barrett wrote. ‘He took actions that – in combination with many other factors – helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded 'kickbacks' to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.’ In November 2009, the Cato Institute published the white paper ‘Three Decades of Politics and Failed Policies at HUD.’ The white paper gave the impression of Cuomo as an incompetent egomaniac who spent over $235,000 to announce an anti-poverty program and $900,000 on a brochure detailing his accomplishments at HUD. Somewhat surprisingly, Cuomo's Republican opponent in the gubernatorial race, former Rep. Rick Lazio, is not joining the chorus of denunciation. But maybe that is because Lazio has his own unchecked baggage. On April 13, the Village Voice's Bartlett published an article with a fairly self-explanatory headline: ‘People's Champion? Rick Lazio Is a Wall Street Creature.’ And if that's not bad enough, the article's subhead added, ‘His fingerprints are all over the recent economic collapse.’ Cuomo's gubernatorial campaign has not quite kicked into full motion yet (he has barely made any official campaign appearances), and I am sure that his election push will focus on his efforts as New York's attorney general in bringing post-meltdown subpoenas and lawsuits against Fannie Mae, Freddie Mac and companies within the mortgage banking industry. But at some point in the near future, Cuomo will have to directly answer the questions about his HUD tenure and the impact that his decisions had on the current state of affairs. The test of a genuine leader involves an open and frank explanation of controversial decisions and actions that may have created more harm than good. To date, Cuomo has yet pass that test. – Phil Hall, editor, [b][i]Secondary Marketing Executive[/i][/b] [i] (Please address all comments regarding this opinion column to hallp@sme-online.co

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