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Helping hand from dad

Family funds fill the till of gubernatorial hopeful Spitzer

BY MICHAEL ROTHFELD | Newsday Staff Writer

June 22, 2006

New York state Attorney General Eliot Spitzer is seen after a fundraiser at the Glen Oaks Country Club in Old Westbury. (Newsday / Karen Wiles Stabile / February 15, 2006)

When Attorney General Eliot Spitzer accepted the Democratic Party's endorsement for governor last month, he credited the influence of a father who taught him that in America, anything is possible.

But Bernard Spitzer, who rose from the Lower East Side tenement of his boyhood to amass a fortune in real estate, has served as far more than a role model. He has used assets valued at nearly $500 million to help enhance his son's political career.

The elder Spitzer, 82, and his immediate family have pumped hundreds of thousands of dollars into his son's campaigns since the first losing bid for attorney general in 1994. A family charity has donated at least $140,000 to groups led by his political allies - a practice that some have questioned. Bernard Spitzer also lent his son $5 million to pay for early campaigns when Eliot was largely unknown.

The younger Spitzer, 47, who likes to be called "the people's lawyer," told Democrats at the state convention in Buffalo on May 30 that he was inspired by his father, the son of Austrian immigrants.

"He didn't have money or connections; he knew no friends in high places. And yet, it didn't matter," Spitzer said. "It didn't matter because my father lived in a New York where this was no barrier to success."

Through Spitzer has little trouble raising money now, his relatives have continued to do their part. He reported $19 million in his campaign coffers in January, with his parents and brother Daniel, a neurosurgeon, donating $326,000, records show.

Targeted donations

The Bernard and Anne Spitzer Charitable Trust - on which Eliot, Daniel and their parents are board members - gave a total of $66,000 in 2004 to NARAL Pro-Choice New York, an abortion rights group; the Drum Major Institute, a think tank; and the Progressive America Fund, a voter mobilization effort. The groups, whose leaders back Spitzer for governor, received $75,000 from his charity between 2000 and 2003.

Donations to his allies were a fraction of the $2.6 million the foundation awarded in 2004, and Spitzer spokesman Darren Dopp said the gifts were not linked to politics. Still, Rachel Leon, executive director of the civic group Common Cause/NY, said they raise questions about "what's public and what's private.

"When a group endorses a candidate, the public deserves to know if there's even an indirect financial relationship," she said. "We have this growing number of elected officials who have personal wealth who do good things with it, but does it intersect with their public duties and roles?"

Yesterday, Nassau County Executive Thomas Suozzi, Spitzer's Democratic opponent, accused him of ignoring the campaign finance proposal he described a month before winning election in 1998.

"It would make it impossible for people either to spend excessively of their own money or raise money from those who have interests before the government," Spitzer had said on WNBC-TV. "Money is a cancer in politics."

Dopp said Spitzer has refused contributions from anyone with pending business before his office. "No other elected official meets that standard," he said.

Dan Cantor, the executive director of the Working Families Party, is a board member of the Progressive America Fund, which received $30,000 from the Spitzer charity. Spitzer gave the Working Families Party $35,000 in 2002. Cantor said the party's endorsement was not related to donations.

"We're just thrilled that someone who cares about the nonwealthy is going to be in charge here of the state," Cantor said. "To be the guy that took on Wall Street, stands up for the underpaid, immigrant deliverymen ... that's not the usual career path for the son of a big real estate family."

Spitzer and his relatives declined an interview request.

The family fortune is born

Bernard Spitzer graduated engineering college at 18 and served in the Navy during World War II. He started a contracting business and branched into real estate, building high-rise towers including the one on Fifth Avenue in Manhattan where Eliot Spitzer, his wife and daughters live at no cost.

Eliot, the youngest of three, attended the private Horace Mann School, earned degrees from Princeton and Harvard Law School, and worked as a prosecutor in Manhattan.

Spitzer's family money essentially financed his bid for attorney general in 1994, when he lost, and again in 1998, when he narrowly beat Republican incumbent Dennis Vacco.

For the two campaigns, he spent a total of about $12 million, using mostly personal funds and bank loans. Spitzer borrowed about $5 million from his father to help settle the loans, and also was earning $200,000 a year consulting for his father. He finished repaying his father in 2004.

Those practices prompted Vacco in 1998 to accuse Spitzer of violating campaign finance laws. Spitzer did not tell reporters until just before the election that he borrowed from his father. Spitzer "has acknowledged that his answers to those questions should have been clearer," said Dopp, adding that the loans were legal. Spitzer financed his later campaigns through political contributions.

In 2001, he and his brother joined the board of the family foundation set up in 1982.

Potential conflict of interest

Because the attorney general oversees charities, Spitzer's role might pose a conflict of interest, said Blair Horner, legislative director of the New York Public Interest Research Group. Dopp said Spitzer recuses himself from his office's oversight of the trust. Some trust activities have overlapped with Spitzer's political interests. Between 2000 and 2004, the charity gave $101,000 to NARAL's foundation. NARAL also has given $10,500 to Spitzer's last two campaigns and endorsed him.

Kelli Conlin, executive director of NARAL Pro-Choice New York, has attacked Spitzer's foes, Suozzi and Republican John Faso, on abortion-related issues.

Mary Alice Carr, a spokeswoman for NARAL, said the donations emanated from Spitzer's mother's support for abortion rights, and his work on behalf of that cause. Carr said Spitzer "without a doubt is the best candidate for choice in this race."

The trust invests in hedge funds, including some whose managers donate to Spitzer. Lawrence Golub, a friend of Spitzer from high school, and his wife, Karen Finerman, gave a total of $100,200 to Spitzer's bid for governor. Both have been managers in Bedford Falls Investors Lp, and he is a founder of Golub Capital Partners. The trust had $4.8 million invested with those groups in 2004.