Of Course The News Corp Book Deal With Cuomo Was A Bribe

Sometimes it's fun to go back and look at something you wrote in the past and see if you were right.

Back in 2014, I wrote this over the news that Andrew Cuomo would be paid $700,000 for a book he was supposed to write for HarperCollins, the Rupert Murdoch/News Corporation-owned publisher:

How many copies of this book do you think Harper Collins sells?

Do they think there's a readership out there for Andrew Cuomo's memoir?

Or maybe they think fans of Chris Cuomo will buy it?

Andrew Cuomo has the reputation for being one of the biggest asses in politics.

I can't imagine the book sells more than a few thousand copies at best.

So why did Murdoch give Cuomo at least $700,000 in compensation for this memoir?

Notice when the contract with Harper Collins was signed - right after his first year in office.

That was when Cuomo and Harper Collins Rupert Murdoch were still best buds (as demonstrated by how Murdoch flack Fred Dicker treated Cuomo in the NY Post.)

Even then, Murdoch had to know that few copies of this book would be sold.

This was a bribe from Murdoch to Cuomo in the form of a book contract.

I can't wait for the book to come out and see how many copies get sold.

I suspect this Cuomo memoir will be up there as a loss-leader, along with Murdoch's other great loss leader, the NY Post.

Then, when it was revealed that HarperCollins was going to run 200,000 copies foe the first printing, I wrote this:

A 200,000-copy first run?

Just who is Harper Collins (owned by Rupert Murdoch, btw) planning to sell this book to?

Let's assume Cuomo's family, friends and loved ones buy some copies.

Let's assume too that suck-ups who work for him buy some.

Let's assume Billy Joel takes $30 out of his drinking fund and buys a copy too.

And let's assume Cuomo's consort, Sandra Lee, forces people in her coterie to plunk down the money for the book to try and drive some numbers.

How many copies sold is that?

Now I've been watching the Hillary Clinton book sales closely, because she got a huge printing for her book too - much bigger than Sheriff Andy got actually, and her sales have not been too good.

Here's Politico on June 17:

Officials with Hillary Clinton’s publisher, Simon & Schuster, insist her book has fared well amid reports of weak sales, and that it’s succeeded despite a dramatically altered retail landscape since her last memoir.

The book sold roughly 100,000 copies from the Tuesday when it was released through the following Saturday, according to a Simon & Schuster source. The source added that the book, titled “Hard Choices,” is debuting at No. 1 on the Indie Bestseller List, which reflects sales at independent bookstores.

The 100,000 figure for “Hard Choices” includes pre-orders and e-books, the publishing sources said. Those figures get rolled into the first-day sales.

The New York Times best-seller list, which will be released Wednesday, is another metric people are watching to see how the memoir is faring.

The first 1 million copies printed of the book were pre-ordered by bookstores, although that figure does not reflect how many were bought by customers.

...

 People close to Clintonland also said the market for books has changed greatly since “Living History,” noting the closure of several hundred Borders bookstores and dozens of Barnes & Noble outlets.

Not a great start for a book that got a $14 million advance.

And it's gotten worse since:

There’s hand-wringing and finger-pointing at Simon & Schuster over the soft performance of Hillary Clinton’s “Hard Choices,” for which she got a $14 million advance, sources said — and which was replaced at No. 1 on the best-seller list this week by an “exposé” about Hillary and Bill Clinton.

The former secretary of state’s tome sold 161,000 copies in its first three weeks, according to Nielsen BookScan — but 85,000 of those were sold in the first week. That number has dropped sharply to 48,000 and 28,000 in subsequent weeks, with the most recent numbers due out Wednesday.

Simon & Schuster shipped an optimistic 1 million copies to stores. Hillary reportedly got $8 million for her last book for the publisher, “Living History,” which sold 438,000 copies in its first week and more than 1.15 million overall.

Adding insult to injury, the new book was pushed from the No. 1 spot on the New York Times best-seller list this week by Edward Klein’s story of the Clintons’ pained relationship with Barack and Michelle Obama, “Blood Feud.” A source close to Hillary has blasted the book, along with its author, as “dastardly” and a combination of “pathological lying, hate and just flat-out creepiness.”
“There’s lots of finger-pointing going on at Simon & Schuster” over the very expensive Clinton deal, a source told Page Six.

Another insider said sales of 161,000 for “Hard Choices” would be “OK” for a normal book without such a big advance and expectations. “It’s an OK number — it’s very solid — a good amount to sell in three weeks,” the source said. “And the book is $35, significantly higher than most.” Also, BookScan only measures 85 percent of the print market, and not e-books.

A rep for Simon & Schuster did not respond to a request for comment. Reports have said the early numbers for “Hard Choices” reflect that it will not sell enough to cover Clinton’s advance, or to sell the million copies shipped, which are sent on consignment, with unsold copies ultimately going back to the publisher.

Now that's the Murdoch-owned NY Post ragging on Simon & Schuster for the absurd $14 million advance they handed Clinton for a book that not too many people planned on buying.

But the Murdoch-owned Harper Collins is likely going to have a mini-disaster on its own hands with the Cuomo book, because it's hard to see how if Hillary Clinton could only sell 161,000 copies of "Hard Choices," Andrew Cuomo is going to sell 200,000 first-run copies of “All Things Possible: Setbacks and Success in Politics and Life.”

Now I dunno, maybe all the Chris Cuomo groupies out there go out and buy the book and make me eat my words, but I just have a difficult time seeing the $700,000 advance and the 200,000-copy first run printing from Murdoch's Harper Collins as anything other than payback for Cuomo's corporate-friendly policies as governor, in particular Cuomo's pro-charter policies which Murdoch loves.

Murdoch has long been known to use his media outlets to reward friends and punish enemies - he keeps the NY Post open and operating despite its losing hundreds of millions of dollars for just that purpose.

I can't see any business reason why Harper Collins would pay Cuomo $700,000 in advance for his book and print 200,000 copies in the first run other than paying him back for stuff Sheriff Andy did that Rupert liked.

So far, Cuomo has sold less than 3,000 books of the 200,000 copy first printing.

He's disclosed $188,000 in payments from HarperCollins on his finance forms, though we do not now whether he's going to get additional payments for the book despite the poor sales because he refuses to release the contract.

All of this matters because Cuomo is in the middle of taking on the legislature over ethics reform, including increased disclosure of lawmakers' outside incomes, while he refuses to be transparent on his own.

Cuomo says he doesn't have to disclose anything because he's not subject to the same kind of corruptive influences that legislators are - except that David Sirota at IBTimes reported on Wednesday that the Cuomo administration was lobbied on multiple issues by News Corporation both before and after Cuomo signed his $700,000 book contract with the News Corp-owned HarperCollins.

The book deal Cuomo got from News Corporation starts looking an awful lot like a quid pro quo arrangement and/or bribe from News Corporation to Cuomo when you see that the corporation got millions in tax breaks and other goodies out of Cuomo.

How is that different than former Assembly Speaker Sheldon Silver, now under indictment for corruption, taking bribes and kickbacks?

NT2 says it's not in their latest post called "Monetizing The Office":

“Shelly was paid 700k and Andrew was paid 700k. What did they do for that money?”

“Silver facilitated referrals to a law firm and Cuomo wrote a book.”

“Both of them monetized their office.”

“Nah. That can’t be.”

“Really? Would Cuomo have got a book deal without being Governor? Of course not.

Nobody would read a book about him if he wasn’t Governor.”

“Well, nobody seems interested in the book anyway,” we quipped.

“Cuomo personally received $700,000 or more for doing what? He didn’t write that book. You know that. He’s politically smart, but he’s not a reader or a writer. His staff wrote the book for him and that’s another problem.”

“But lots of governors do the same thing.”

“And lots of legislators are rainmakers. You can make the case that Cuomo’s monetizing of the Governor’s office was more egregious than Silver’s because he used staff to do it and it produced less value.”

“Produced less value?”

“Silver received 700k, right? That was for generating referrals for the law firm. And what was the value of the referrals? If he got one mesothelioma case, it might have been worth 100k to the law firm. If he got two it was worth 200k. We don’t know how many referrals he generated.  Maybe it was half a dozen. Maybe it was a hundred. But you know there was some value generated. Now think about Cuomo. He and his government staff produced a book that was worth what?  Well, the book tanked. That means that Cuomo was paid $700,000 for nothing of value.”

“Isn’t this just a bad decision by the publisher? They thought his book would sell. They took the risk on it and they were wrong. That’s the nature of their business.”

“That’s true. But how did the book deal come together. Did he write it and show it to them. No. He got a huge advance and that advance looks like a sweetheart deal. He got a huge up front payment. He’s getting a cut rate on purchases of the book that he can then provide to his supporters for promotional purposes. He also benefits from the promotion of the book by the publisher. He’s making out like a bandit. He monetized his office, didn’t he?”

“When you say it like that, it’s hard to disagree.”

“And we haven’t even mentioned the other side of it. What benefits accrued to the publisher? How did News Corp. benefit? Nobody has looked at that. Nobody has gone back 10 years like Preet did with Silver. What did Cuomo do in office as AG or as Governor that benefitted News Corp.  Silver directed a grant to a hospital for cancer research in 2005 and they called it a bribe in 2015. What did Cuomo do for News Corp during the last 10 years? I’ll bet you could find something, no?”

“This can’t be.”

“This is the world we live in. If Preet can make a case against Silver, he can make a case against Cuomo.”

I'm still skeptical that US Attorney Preet Bharara is going to do to Cuomo what he did to Silver, but it sure seems if Bharara decides to dig into Cuomo's business dealings with News Corporation, he'll find plenty of interesting items to scrutinize.

This News Corp/book deal stuff is in addition to the Moreland tampering that Preet is allegedly looking into already, as well as the subpoenas to donors that Cuomo's secretary, Larry Schwartz, had "pulled back" by the Moreland Commission even as they subpoenaed legislative targets.

Cuomo's pushing ethics reform this budget, claiming he'll shut the government down if the legislature doesn't give him what he wants on ethics reform (i.e., ethics reforms that pertain only to the legislature, not to statewide officials like the governor.)

Here's hoping the feds shut Cuomo himself down with a 7 AM visit and a car ride to central booking over all the criminality he's engaged in.

If they could get Silver on this stuff, you can bet they can get Cuomo too.

But will they?

Bill Thompson Used Pension Funds To Pay Off Cronies, Donors And Connections

City & State looks at Bill Thompson's tenure as comptroller and finds problems - lots and lots of problems:

Thompson’s chief responsibilities as comptroller from 2002 and 2009 were to manage the city’s $85 million pension funds and a staff of about 700 people. He touts that record on the campaign trail, and friends in both political parties credit him for steady leadership as the city’s financial steward in unsteady times.

“He is someone who has always served with distinction and dedication and brought credit to his office,” said Randy Mastro, a former deputy mayor under Rudy Giuliani. “He ran a very professional comptroller’s office as contrasted with his predecessor and successor.”

But some subordinates disagree.

Some staffers who worked in the comptroller’s office during Thompson’s tenure said he was a distant manager who played favorites, hired people with political connections and did not hold anyone responsible when mistakes occurred.

...
Sources said Thompson frequently took days off and rarely attended pension board meetings. He was reluctant to challenge Bloomberg, with whom he golfed occasionally, save for a few lower-level skirmishes.

A damning 2005 draft audit of the New York City Teacher’s Retirement System obtained by City & State found widespread mismanagement and lax practices and recommended that teachers consider an entity other than the comptroller to manage the fund.

The report, written by the State Insurance Department, found that the pension fund’s trustees did not discuss or institute guidelines for managing the fund’s investment. The trustees delegated the pension fund’s investments to the comptroller, the audit found. Moreover, the board did not regularly monitor the pension fund’s performance, Thompson’s office did not identify risks or advise trustees about how to invest the fund, and there was little discussion over investment expenses.

A summary of transcripts from board of trustees meetings in the audit indicate that the comptroller’s office did not adequately advise the trustees on whether a proposed investment strategy would meet or deviate from the board’s objectives or fund liabilities. These transcripts also show that that there was no discussion of distinguishing between controlling and accounting for investment expenses, and that no review was conducted on whether expenses were reasonable and necessary. The official audit of the teachers pension fund, released in 2009 by Gov. David Paterson—a Thompson supporter—four years after the draft audit was completed, drew different conclusions from the original draft, with no language suggesting the comptroller should not control the investment powers of the fund. The official report also indicated that investment policy guidelines were overhauled under Thompson. Thompson’s campaign declined to comment on the findings of the state insurance department in both the draft and official audit of the teachers’ pension fund.

The lack of board oversight is significant considering that under Thompson huge increases in spending on financial firms by pension funds were authorized in spending on financial firms by city pension funds at the same time that the funds were losing large amounts of money. Data for the three largest pension funds, the New York City Employee Retirement System, the teacher’s fund and the police fund, shows that investment expenses for these funds rose from roughly $90 million in fiscal year 2002 to about $400 million in fiscal year 2010, the last year the funds were under Thompson’s control.

Despite the evidence, Thompson disputes that the funds lost massive amounts of money, saying that they did relatively well considering how poorly the market was performing at the time.

“One of the things I talked about when I ran [for comptroller], as far as diversifying our portfolio, was making us less dependent on the ups and downs of Wall Street,” Thompson said. “If you look, we went into different asset places in private equity, we went into areas of real estate, we expanded our portfolio and in fact it served us when you look at the fiscal collapse in 2008 and 2009; we lost less money. During up years would we make a little less? Perhaps. But at the same point, then, we also would lose less. I think it was a very balanced approach.”

Records show that in Thompson’s last four years as comptroller, pension investment expenses totaled more than $1.2 billion dollars, compared to only $500 million in his first four years. Despite the significant increase in spending on fees, total assets for the three funds went from $88 billion in 2006 to $82 billion in 2010. 

A New York Times report also found that four out of five city pensions performed below the median for similar public pensions nationally and the city’s largest fund did worse than two-thirds of large public pension funds, even as the number of money managers who worked with the comptroller tripled.

Just how did the investment fund expenses increase so dramatically under Thompson even as the money Thompson was making in the funds was essentially stagnant and the total assets in the funds dropped?

Why the money managers were taking it, of course!

Thompson tripled the number of money managers when he was comptroller even as his funds performed below the median for similar funds nationally and the city's largest fund did worse than 2/3rds of large public pension funds nationally.

Many of these guys showed up at Thompson's 2006 inauguration speech, as detailed by the NY Times:

Nowhere was Mr. Thompson’s embrace of those investment firms more evident than on the guest list to his second swearing-in, in January 2006. The 250 names included a small number of relatives, union leaders and elected officials; more than 50 lobbyists; and another 50 fund managers, placement agents and others who stood to gain from the city’s pension funds

The Times reported that Thompson also invested pension funds with campaign donors, helping his donors make gobs of money in fees, then hit those donors up for more than $500,000 in campaign donations.

With the UFT backing Thompson so heavily even with the knowledge that Thompson's tenure as comptroller and overseer of the Teachers Pension Fund was replete with "widespread mismanagement and lax practices," it makes me wonder just what kind of quid pro quo promises have been shared between Bill Thompson and the UFT leadership.

Was anybody at 52 Broadway involved in the kickbacks and "You invest here, We'll donate there" game Thompson played while comptroller?

Was anybody who is now at AFT headquarters in Washington involved in any of that?

The nexus of corruption that exists between Bill Thompson, the city's financial players, the political establishment and the unions is quite a complex web and it takes some doing to unravel all the strands.

But as Wayne Barrett (here and here), the NY Times and City & State have started to show us in their reporting, it's there if you look for it.

CityTime Consultant Arrested For Kickbacks, Fraud And Money Laundering

The Bloomberg Consultant Scandals (and I think we can now label them such - there are enough of them) just keep coming and coming.

Another arrest was announced this morning:

A former consulting company executive was charged on Friday with receiving at least $5 million in illegal kickbacks in connection with his work as a project manager on the CityTime automated payroll project, people briefed on the matter said.

The consultant, Gerard Denault, a former executive of Science Applications International Corporation, was also charged with wire fraud conspiracy and money laundering in an indictment unsealed in United States District Court in Manhattan.

Mr. Denault was arrested in Danbury, Conn., on Thursday, and he is expected to be presented in federal court in Manhattan on Friday.
He was charged as a result of an ongoing investigation by the city’s Department of Investigation and the United States attorney’s office in Manhattan.

“It is deeply disturbing that while he was hired to help cut costs and save money, in reality, Gerard Denault was allegedly ripping city taxpayers off to to pad his own pockets,” said Preet Bharara, the United States attorney in Manhattan.

Mr. Denault’s lawyer, Barry A. Bohrer, did not immediately return a phone message or an e-mail on Friday morning.

On Wednesday, Science Applications International said it had fired Mr. Denault for misrepresenting the number of hours he had worked and promised to return to the city $2.4 million, the amount the company had billed for Mr. Denault.

The complaint filed in federal court said that for much of the last decade, the Bloomberg administration has been developing the project, meant to modernize the payroll system for city employees, and working to implement it.

Originally budgeted for $63 million, the CityTime project costs have ballooned to roughly $700 million, with additional expenditures still expected to complete the program.

Mr. Denault’s arrest brings to seven the number of people who have been charged by prosecutors in the CityTime case. One of those charged pleaded guilty in February is cooperating with investigators.

Mr. Bahara said that the investigation was continuing and that “there are more individuals yet to be held accountable.

There are more individuals yet to be held accountable in this mess?

Great - how about Bloomberg?

He is the financial and managerial genius who has overseen this mess.

Accountable Talk points out that Denault was charged with steering $450 million in city money to various subcontractors who paid him at least $5 million in kickbacks for the contracts.

Think about that dollar number for a minute - $450 million.

The mayor is going to lay off 4,278 teachers to save $300 million.

Denault steered $450 million in city money to subcontractors in a project that went $700 million overbudget in order to receive $5 million in kickbacks.

That's an awful lot of money that could have been used to pay teachers and lower class sizes that was doled out by a guy Bloomberg hired who just got arrested for taking kickbacks on city contracts.

When the mayor trots out the layoff card again in a couple of weeks, he must be called to account for this scandal. $700 million over budget, $80 million stolen by four consultants involved in the project, another $5 million in kickbacks taken by another consultant involved in the project and the investigation is still ongoing and the US attorney says more people will be held accountable for this.

So far, one person has managed to skirt accountability for this mess, and that is the Accountability Mayor himself, Bloomberg.

But no longer.

There have been too many consultant scandals, too much money stolen, too many people arrested - both consultants hired by the city and city employees who were supposed to be conducting oversight of these consultants - for Bloomberg to avoid scrutiny and accountability.

And keep in mind - this is just the tip of the iceberg.

The US attorney says more arrests are coming in the CityTime scandal, the Judith Hederman case at the DOE looks like it is going to widen and culminate in some arrests, Comptroller John Liu is investing many other city contracts, especially contracts handed out by the DOE, that look fishy (including anything involving two vendors, IBM and Verizon, who helped another DOE consultant, Willard Lanham, hide $3.6 million in stolen city money.)

The Bloomberg Consultant Scandals are just growing and growing.

Ed Koch had Donald Manes and Mario Biagi and Stanley Friedman and the Parking Bureau scandal to deal with in his third term.

Bloomberg is going to have to deal with the fallout from the Bloomberg Consultant Scandals.

And the amount of money that has disappeared in criminal activity during the Bloomberg years is adding up and making the money stolen in the Koch scandals of the 80's look like peanuts.

So have it, Mr. Mayor. Tell us how fiscally prudent you must be by laying off 4,278 teachers so you can save $300 million in teacher salaries.

Then we can ask you, point blank and on camera, how have you allowed all this money to be stolen by city consultants on your watch and how have you allowed all these city employees at the DOE and elsewhere to engage in so much criminal activity.

I mean, you are the Accountability Mayor, after all.