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The Steamroller in the Swamp

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And then, days before the election, Spitzer came clean to the Times. His father had, in effect, financed the campaign. Bernard was really paying off the co-op loans; Spitzer was supposedly repaying his father, which permitted Spitzer to claim the money was technically his. Spitzer said the scheme was legal. If so, he had lawyered election and tax codes close to the line.

Perhaps Spitzer’s clearer infraction, though, was that he misled—some said lied to—not only the public but also his closest campaign aides. “People were disappointed and shocked,” says one aide. Spitzer was remorseful—“He felt bad,” says the aide. He won the election, but barely.

Later, I asked Spitzer, now the state’s ethical crusader, whether he regretted this deception. “I just would have been completely transparent about it,” he tells me. “I didn’t realize how necessary it was to be transparent about every personal financial transaction.” It’s difficult to hear the word transparent and not think that the more precise word is honest. Spitzer once told me that he’d learned at the D.A.’s office there are some fights in which, as he put it, “you can never concede errors because you just can’t do it.” Maybe this is one of those.

Joe Bruno’s spirited jibes conceal a truth—power has been slipping away from him. In the past four years, the Republicans have lost four Senate seats. When Spitzer became governor, they held a bare three-seat majority. Spitzer was determined to shrink it further. He dangled jobs in his administration in front of a number of Republican senators, and one of them, Michael Balboni, from Nassau County, took him up on it, becoming Spitzer’s Homeland Security chief. That put his Republican seat up for grabs in a largely Democratic district. (Spitzer campaigned for the Democrat, who took the seat, a victory that made both Democrats and Republicans appreciate Spitzer’s electoral muscle.)

For Spitzer, as for every governor, the most important policy tool is the budget. Spitzer had ambitious goals: Lower taxes, redistribute school aid, insure uninsured kids, among others. As a top priority, he was also determined to rein in health-care spending, especially Medicaid, a program on which New York spends far more than any other state.

To do this, Spitzer took aim at perhaps Bruno’s most important patron: the powerful health-workers union Local 1199 SEIU, headed by Dennis Rivera. The Republican organization statewide is very thin, and in the absence of effective field operations, the party has often counted on 1199’s manpower and wealth. Every year 1199, with Bruno’s support, fiercely opposes any health-care cuts. Spitzer’s interests—killing Republicans and cutting health-care spending—aligned nicely. “It’ll be a tough fight, but it’s the right fight,” Spitzer told his staff.

Predictably, Spitzer got the fight going. During the campaign, he had refused the union’s endorsement. Then, at a March breakfast talk to the Association for a Better New York, Spitzer stood onstage at the New York Hilton with a favorite weapon, his PowerPoint presentation. A slide appeared on a large screen. GUARDIANS OF THE STATUS QUO, it said in giant letters. To illustrate the concept, the logos of 1199 and its ally, the Greater New York Hospital Association, were shown. “Now, my good friends at 1199 and Greater New York, I want to put your logos up here just so everybody will know who you are,” he said, introducing them to the crowd. (It got worse; soon he was, in effect, calling them liars.) It was a stunning personal assault. He rubbed their noses in it, and his staff loved every minute. “I have never in my professional life seen anything like that,” Kenneth E. Raske, the president of the hospital association, said.

At 1199, they were “horrified.” “We’re true believers,” as one union official put it. “We represent 200,000 health-care workers, a lot of whom make $7.15 an hour.”

Privately, Bruno had been telling Rivera’s team to go on the attack. “If you don’t defend yourselves, we can’t,” he said. Spitzer had already scheduled a meeting with Rivera, and even had a compromise in mind. But two days before the summit, the union put up a series of powerful ads, part of a campaign that cost $4.5 million. Hospital workers, many of them minorities, looked into the camera and said things like “I don’t know why Governor Spitzer is attacking me and my hospital.”

The union had used a similar tactic against Pataki to devastating effect. In 2002, 1199 had previewed its ads for Pataki—“punched them into the VCR,” says one Spitzer aide. That year, Pataki and Rivera came to a historic compromise, as it would later be known, earning Rivera’s workers millions and Pataki the union’s endorsement. Spitzer’s people had deep contempt for the compromise. “Pataki buckled,” said one.


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