On Page D3 of some March 8 editions, a photo caption identified former New York Stock Exchange director Kenneth G. Langone as former NYSE chairman Dick Grasso.
One Fight Leads to Another
Wednesday, March 8, 2006
NEW YORK, March 7 -- The hotly anticipated legal fight over Dick Grasso's $139.5 million retirement package got more personal Tuesday, when the former New York Stock Exchange chairman answered questions under oath for the first time about the contretemps.
Grasso's deposition is expected to last all week, and New York Attorney General Eliot L. Spitzer's legal battle to force Grasso to return the money to the NYSE will not go before a jury for at least another seven months.
But that has not stopped this wrestling match among Wall Street titans from fascinating the financial world and spilling over into New York politics.
Spitzer is seeking to parlay his success as a corporate crime fighter into victory in the state's gubernatorial race this year. He had more than $19 million on hand as of the January reporting period, and two possible rivals, Republican incumbent George E. Pataki and billionaire Thomas Golisano, already have decided not to run.
But last month, Nassau County Executive Thomas R. Suozzi threw sand into the well-oiled Spitzer machine by announcing he would challenge the attorney general in the Democratic primary.
Suozzi, 43, is an ambitious and personable reformer who has had his eye on the governor's mansion for a while. But his fundraising records suggest he is getting a boost from Spitzer's legal opponents. Of the $1.7 million Suozzi had raised specifically for the governor's race, more than $500,000 came directly from friends, family and associates of Grasso ally and former Big Board director Kenneth G. Langone, who was named as a co-defendant in Spitzer's lawsuit against Grasso.
Langone is an investment banker who and was a co-founder of Home Depot Inc., a Nassau County resident and a fundraiser extraordinaire -- he was a top moneyman for former New York mayor Rudolph W. Giuliani and also helped independent presidential candidate H. Ross Perot.
Like much of Wall Street, Langone is unhappy about the financial fallout from Spitzer's investigations, but he also has a more personal reason to dislike the New York attorney general -- Spitzer's allegations in the lawsuit that Langone misled his former NYSE board colleagues about Grasso's compensation.
Spitzer is "a fraud and he knows it," Langone said. "I've seen his tactics firsthand." He added: "He would be bad for New York state. He would be bad for business development."
So Langone has taken upon himself to help find New York an alternative. Suozzi, a self-dubbed outsider who upset a Democratic establishment candidate in the 2001 Nassau county executive primary, was a natural fit. A former mayor of Glen Cove, he straightened out the county's finances, improving its bond rating and wringing concessions from the local unions. Last year, he was cited by Governing Magazine for his efforts to simultaneously cut Nassau's budget and improve services. Now Suozzi -- with Langone behind him -- wants to do the same for the state.
"I can do it, because I've done it before," Suozzi said in an interview. While respectful of Spitzer's efforts to clean up investment banking, mutual funds and the insurance industry, Suozzi contended that his own experience was more on point. "He's a prosecutor. I'm a chief executive. I've balanced a $2.4 billion budget that is larger than 16 states'. . . . I'm going to shake up the government."
Political analysts said Suozzi's history of pulling upsets and his demographic profile as an Italian American Catholic suburbanite in a state filled with all three mean that he cannot be counted out.