Andrew Cuomo and the Bloomberg way of choosing leaders

Patrick Foye. (Geoffrey Walter.)
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Andrew Cuomo may not have the most cordial relationship with Michael Bloomberg. But when it comes to the philosophy he employs in making appointments, the governor does seem to be following the mayor's lead.

In particular, the governor’s recent selection of two men with substantial private-sector accomplishments, and far less transportation-and-infrastructure experience than their predecessors, to lead the MTA and the Port Authority follows the Bloombergian pattern of business-savvy non-specialists for top, highly specialized public positions.

“I think Governor Cuomo has proven that he is able to attract people who are otherwise employable," said Kathryn Wylde, president of the Partnership for New York City, New York's most powerful business lobby, and a strong Bloomberg supporter.

"Not too many public executives are able to get so many bright and capable people to leave jobs that frequently pay a lot more and do public service," she added.

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Jay Walder, a transportation expert who brought oyster cards and congestion pricing to London before taking the helm of the MTA in 2009, has left for a more lucrative gig as head of of Hong Kong's better-financed, privately run subway and commuter-rail system. Christopher Ward, another technocrat, one who worked his way up through various bureaucracies before becoming head of the city Department of Environmental Protection in 2002 and then the Port Authority in 2008, has yet to announce his future plans. 

What defined both Walder and Ward, and what so upsets the transportation advocates who mourn their departure, is that they understood transit from being immersed in it for years, and were clearly committed both to quality-maintenance and innovation. Cuomo has replaced them with two men whose main strengths, aside from presumed loyalty to the governor, is their established ability to manage large organizations on a budget.

Patrick Foye, Cuomo's nominee to replace Ward at the Port Authority, started out as a corporate lawyer, before moving into real estate, and then, ultimately, the public sector, when he became C.E.O. of the United Way of Long Island. There, he implemented business practices more commonly found in the private sector and encouraged other nonprofits to do the same. Later, he worked as co-chairman of the Empire State Development Corporation and as deputy county executive for Nassau County's Republican executive Edward Mangano. (Earlier this year, Foye resigned in protest of Mangano's resistance to state oversight of the county's troubled finances.) He went on to join the Cuomo administration as its deputy secretary of economic development.

Joe Lhota, meanwhile, is a Harvard MBA who is leaving a position as executive vice president for administration at the Madison Square Garden Co. to lead the MTA. He served in the Giuliani administration as a budget director and finance commissioner, and then deputy mayor of operations, the period of his resume for which he is best known. Prior to that, Lhota had a lengthy career in public finance at Paine Webber and First Boston. He was the only candidate of the six recommended by a governor-appointed search committee who did not have significant transportation experience.

The mayor, a strong supporter of both Ward and Walder, has long been one of the most outspoken advocates of putting private-sector expertise to use in the public sector. This policy had its most extreme expression in the short-lived appointment as schools chancellor of Cathie Black, who was highly rated media executive but who knew nothing about public education. The rationale for Bloomberg's first campaign for mayor in 2001, as well as his effort to overturn term limits to seek a third term, was largely based on the notion that he, as a successful billionaire businessman, was better equipped than his career-government competitors to turn the city’s economy around.

His rhetoric has often been laced with disdain for career politicians. And his appointments to key posts in his administration have been notable for their reliance on successful business types looking to try their hand at municipal governance.

Bloomberg's current and former deputy mayors for economic development Robert Steel and Dan Doctoroff (who now works, in the private sector, for Bloomberg's media company), Black and her predecessor Joel Klein, Finance Commissioner David Frankel and NYCHA Commissioner John Rhea all came from long, seemingly unrelated careers in the private sector. 

Cuomo, who in addition to his time at the federal department of Housing and Urban Development, and as attorney general, spent two years working for Andrew Farkas in the real estate business, is pursuing a course that may be roughly described as Bloomberg-lite. That is, he clearly favors appointees with proven private-sector marketability, but he tends to go for people, like Lhota and Foye, who have government experience, too.

On Tuesday, Cuomo announced his selection of Jerome Hauer and Steven Kuhr to run the Division of Homeland Security and Emergency Services: each of them has both public- and private-sector experience. His deputy secretary for health, Jim Introne, worked in both the public and private health care sectors. His director of agency redesign and efficiency, Paul Francis, was Spitzer's budget director, and spent a quarter century in the private sector, including stints as Chief Financial Officer of Ann Taylor Stores Corporation and Chief Operating Officer of the Financial Products Division of Bloomberg LP.

“Paul knows as much about how the private sector works as he does about how government works,” Cuomo said in a statement at the time. “This is exactly the type of experience and perspective we need in order to take on the critical task of reorganizing and right-sizing state government for the first time since the 1920s.”

The explanation could have applied to Cuomo's selections of Lhota and Foye.

“Lhota’s a guy who brings a private-sector mentality into government, in a good way,” said Fred Siegel, a senior fellow at the Manhattan Institute and scholar-in- residence at St. Francis College in Brooklyn.

Siegel, a frequent critic of the current mayor and a former Giuliani adviser, said that Lhota's appointment didn't exactly signify a Bloomberg-like desire on Cuomo's part to run public entities like businesses, "with an emphasis on phony measurement systems."

But, he said, “Lhota brings in a private-sector mentality in the sense that he is looking for outcomes."

In theory, given the state of the MTA's finances, that's a useful mentality for its next leader to have, at least in the near term.

"Running one of these large transportation agencies requires you have some real background in finance, to really understand how the bond markets work and really understand management and human resources, because their workforces are large," said Ken Fisher, a real estate attorney and former city councilman (and son of a onetime MTA chief). "They have tens of thousands of employees each."

These appointments signify the beginning of a period in which the governor has political ownership of the some of the state's most important functions in a way he never did before, and the pressure will be on from the very start for all these appointees to perform well. But it is surely not lost on Cuomo that the optics of his selections work well, as he continues to cultivate a highly useful profile as a business-friendly social liberal.

"Cuomo wants to keep very high favorables on his management chops and part of that is to bring in business leaders,” said a Albany lobbyist who knows both Lhota and Foye well. 

Cuomo articulated his rationale for hiring Lhota and Foye in a Monday interview on David Paterson’s radio show.

Of Lhota, he said, “He was deputy mayor. Long resume in government service. Also has been in the private sector. So he knows downstate New York and the inter-relations, MTA, city government, state government. He gets it. You know, when you talk about these positions David, it’s like you’re trying to find Superman. You look at the challenges that these agencies are facing, and you look at the qualifications of these individuals, and I think it's a real match.”

“Government in some ways today is an impossible riddle,” Cuomo continued. “Do this, do this, do this, but you’re not getting any more resources ... More with less can’t be a slogan, it’s going to have to be a reality. And if there are any two people who can do it, these are the two.”