MyDD :: Spitzer May Face a Primary Challenge

Why, why, why, why, oh why?

Newsweek is reporting that Ken Langone, billionaire and former New York Stock Exchange compensation committee chairman, is out to destroy New York Attorney General and 2006 gubernatorial candidate Eliot Spitzer. In that position, Langone approved an unheard-of $140 million pay package for NYSE chairman Dick Grasso. Langone and the rest of the compensation committee were a hand-picked crew of Grasso's cronies and apparently misled the full NYSE board about the details of his compensation. When it came out, Grasso was asked to leave and then sued by the NYSE for repayment.

Arguing that Grasso's compensation was illegal under New York state law, which dictates that executives of non-profits (like the NYSE) receive only "reasonable" pay, which is "commensurate with services performed," Spitzer sued to have Grasso's pay package overturned and replaced with something less extravagant. Also named in the suit was Ken Langone. Though Grasso and Langone claims these charges were baseless, Frank Ashen, the NYSE's head of HR, admitted that he misled the board in regards to Grasso's compensation and made a $1.3 million payment to the NYSE.

Since then, Langone and Grasso have repeatedly attacked Spitzer, mostly in the press, and mostly in the arch-conservative Wall Street Journal op-ed pages. Now it seems they're planning on taking their vendetta one step further. Langone is working to get Nassau County Executive Tom Suozzi to challenge Eliot Spitzer in the New York gubernatorial primary next year.

Langone and his wife have already given about $80,000 and in an interview with NEWSWEEK, Langone confirmed that he would use his Rolodex of well-heeled Wall Street bankers and assorted multi-millionaires to raise as much as $30 million or more for Suozzi should he be the one to challenge Spitzer. "I live in Nassau County and I'm very impressed with the job he's done," Langone said. "He's proven to me he can manage things and I believe he would be an outstanding governor and I am prepared to raise as much as it takes for him to be a viable candidate. No limit, no limit."
. . .
Suozzi carefully sidestepped questions about a potential Spitzer challenge. He said, at least twice, that he "is focusing on being county executive of Nassau County" and praised Spitzer for doing a "great job as attorney general." However, Suozzi also refused to rule out a potential run for governor.

As far as Langone is concerned, Suozzi welcomes his support for his county executive race (Langone lives in Nassau County). Suozzi said he first met Langone in October of 2002 at a house party in Long Island, long before Spitzer filed his case against Langone last year. However, he says the two have spoken since then and considers the billionaire financier "one of many contributors." But not all his contributors are worth upwards of $3 billion like Langone, who is the co-founder of Home Depot Inc.

This is an insane abuse of wealth to play games with serious, serious politics. But beyond that, how is it that Suozzi is even entertaining this kind of vindictive campaign? Suozzi has by all accounts done a good job as County Executive. He came to office on a reform platform, sweeping out the corrupt Republican machine that had run the county for years. At the same time, he's come under fire for being overly ambitious. That's not always a bad thing. But with the party's favored candidate for Governor up in all of the polls by at least 33%, maybe Suozzi should keep his ambition in check.

The other troubling factor here is that Langone is a hardcore Republican financier. Like all good executives (he's a co-founder of Home Depot), Langone gives to a few top Democrats as well. But he's given about ten times more money to Republicans than Democrats.

Looking at Langone's giving patterns, something jumps out at me. He donated $2,000 to William Weld's 1996 campaign for Senate. These days, Weld and Langone still run in the same Wall Street social circles. And it's quite possible that Bill Weld will be the GOP candidate for Governor facing Eliot Spitzer next year. A well-funded, bruising Democratic primary might even the 2006 playing field for Weld.

This wouldn't be the first time Ken Langone has used some bizarre tactics to attack a political opponent. In 1999, while Langone was on the board of Tricon Foods, Pizza Hut ran television spots in New York that mocked then-likely Senate candidate Hillary Clinton. Tricon is Pizza Hut's parent company. Langone was a former finance chairman for and major financial backer of Rudy Giuliani -- then expected to be Clinton's opponent. Democrats cried foul, calling the commercial an illegal contribution.

Here's hoping Tom Suozzi doesn't let himself get played by Ken Langone's dirty tricks.