1:35 pm Nov. 15, 2011
For several months now, as Andrew Cuomo has held out against Michael Bloomberg's sweeping proposal to change the way taxis work in New York, his father Mario has played a small background role as a board member of Medallion Financial, one of the financiers of the yellow-taxi industry.
A spokesman for Andrew Cuomo said he didn't know whether or how often the former and current governors had discussed the taxi bill, which passed the legislature in June but has stalled for want of the governor's signature. But the spokesman reiterated what has been the position of the governor's office all along, which is that Mario Cuomo's financial arrangement with Medallion Financial, whose president and industry sector opposes the outer-borough taxi plan, doesn't matter, in terms of Andrew Cuomo's position.
"Any speculation about the Governor's father is irrelevant and will have no bearing on the governor's decision," said the spokesman, Matthew Wing, in an email.
To be clear: It is entirely plausible that the current positions of father and son in relation to the Bloomberg administration's plan to create a new category of outer-borough taxi are purely coincidental, and that the governor would have sought to put his stamp on a major transportation reform even if his father had no ties whatever to the industry.
Further, Mario Cuomo's arrangement with Medallion Financial (which also donated a substantial amount of money to Andrew Cuomo’s most recent gubernatorial campaign) dates back to 1996, a couple of years after his departure from the governor's office and six years before his son's first attempt to run for it. And it's hard to believe that the former governor would risk harming a career-long reputation as a reformer and a stickler for ethics by lobbying his son in the service of a medallion financier looking to protect its investments against dilution.
But even if this is just a question of appearances, given the closeness of the father-son relationship and the fact that they may have talked about the taxi issue, it ought to be noted that the remuneration Mario Cuomo and his firm have derived from their relationship with Medallion Financial has not been insignificant.
Medallion Financial has paid the law firm Wilkie Farr & Gallagher, where Mario Cuomo is a partner, about $1 million in legal fees in recent years: $522,000 in 2009 and $468,000 in 2010. (The former governor did not personally bill any hours.)
Also, as the Times has previously reported, in 2009, Mario Cuomo earned $53,500 in director’s fees, and in 2010, $63,919 from Medallion Financial, according to filings with the Securities and Exchange Commission.
His earnings consist of an assortment of fees. For example Medallion Financial pays him $3,500 for every board meeting he attends, and another $1,000 for every “telephonic board meeting” he attends.
Further, the elder Cuomo has stock options in the company. If he were he to cash them in now, they would be worth $10,000 or possibly less, according to Andrew Murstein, the president of Medallion Financial.
In June, the state legislature passed the mayor’s outer-borough taxi plan, which would permit up to 30,000 livery car drivers to legally pick up street hails in Brooklyn, Queens, Staten Island, the Bronx and Upper Manhattan, something they’ve been doing illegally for years. It would also allow the city to auction off another 1,500 regular taxi medallions, which would generate a projected $1 billion for the city’s coffers.
Governor Cuomo has yet to sign the legislation and has indicated he won't in its original form, though he says is working toward a compromise.
Murstein said that while his company remains agnostic on the mayor's outer-borough taxi plan, he himself is opposed to it. So too is the League of Mutual Taxi Owners Incorporated, which also finances taxi medallion sales.
"I'm against it personally, because I think it sets a bad precedent," said Murstein, pointing out that it could depreciate the value of assets in which some small-business owners invested their entire livelihoods. Murstein also questioned whether the city would really be able to adequately enforce the geographic boundaries within which the new outer-borough taxis would be forbidden from picking up street hails.
"I've never seen the [Taxi and Limousine Commission] issue a summons to someone who illegally approached me to pick me up," said Murstein.
Taxi medallion owners, and those who finance medallion sales, generally oppose the legislation because they believe it will devalue their medallion assets, which have sold at more than $1 million each. Some taxi drivers oppose it because they fear the newly empowered livery car drivers will poach their street-hail business. Some livery base owners also oppose it, fearing it will undermine pre-arranged livery car service. And some disability-rights advocates oppose the bill, arguing it does not do enough to improve taxi wheelchair-access, and have created a strategic alliance with the medallion owners.
On the flip side, many livery base owners, livery car drivers and taxi drivers—who, as a constituency, are poorer and less powerful than their opposition—support the bill.
"There are a number of issues," Cuomo told the media during a press conference earlier this month. "I'm optimistic we're going to work through all of them. I don't think it's going to happen tomorrow."
On Nov. 4, the governor’s secretary Larry Schwartz and counsel, Mylan Denerstein, hosted a meeting of all interested parties at the governor’s New York City offices. Medallion Financial did not attend.
The mayor, for one, continues to believe that the governor wants only “minor changes” to his bill.
The SEC filings also include a few interesting nuggets on the nature of Medallion Financial’s business model.
Medallion Financial has more than $1 billion in assets under its management. It manages well over $600 million worth of medallion loans in cities including New York, Chicago and Boston.
Medallion also originates loans for the purchase of recreational vehicles
"We, Medallion Financial Corp. or the Company, are a specialty finance company that has a leading position in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. A wholly-owned portfolio company of ours, Medallion Bank, also originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, and trailers. Our core philosophy has been 'In niches there are riches.'"
As part of the firm's filings with the SEC, they described former governor Cuomo's value to the company as follows: “Mr. Cuomo’s experience at an international law firm provides the Board of Directors with strong legal skills that are useful in the discussion and evaluation of financial and general corporate affairs. Mr. Cuomo has deep knowledge of our company and its business, having served on our Board of Directors since 1996."
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