Former Governor Hugh Carey in his law office. (March 15,...

Former Governor Hugh Carey in his law office. (March 15, 1985) Credit: Newsday/Yarwood

Hugh L. Carey, a former two-term governor who helped pull New York City from the brink of bankruptcy in the 1970s and strove to check the state's heedless spending habits, died Sunday at his family's summer home on Shelter Island. He was 92.

"He will and should go down as the greatest governor in modern history," said former New York City Mayor Ed Koch. "It was his leadership that brought everyone together."

A Brooklyn native with Irish roots, Carey was in his seventh term in the House of Representatives when he ignored party wishes and entered the Democratic primary for governor against a favored opponent, Howard Samuels. Carey won and then beat Republican incumbent Gov. Malcolm Wilson.

Carey took office in 1975 just weeks before the state's Urban Development Corp. -- conceived to build housing in distressed areas -- defaulted on its bonds. Commercial banks in Manhattan refused to trade the city's notes, putting New York City on a path toward default.

Prospects for a turnaround weren't good. Inflation was running high and in the aftermath of Watergate, public esteem for government was low. With crime rampant in the city, some wondered whether it was even worth saving.

The mood was summed up in a Daily News headline after President Gerald Ford said he would veto any federal bailout of the city: "Ford to New York: Drop Dead"

Carey got to work, declaring in his first state-of-the-state address that "the days of wine and roses are over." His administration sold bonds to banks and union pension funds. He secured aid from public coffers wherever legislative support in Albany could be found.

Payments to bondholders were suspended and the public sector saw layoffs and wage deferrals. Taxes were raised, services cut and for the first time the City University of New York set tuition fees. Carey ultimately won $6.9 billion in U.S. Treasury loans to aid the rescue.

Felix Rohatyn, whom Carey enlisted in the effort and who served as chairman of the city's Municipal Assistance Corp., said Carey's qualities may be impossible to replicate.

"We'll remember his great leadership, his great humor, his great intelligence and his great courage," Rohatyn said. " . . . I'm not at all sure we can find someone like him today."

Robert Polner, co-author of a book on Carey called the "The Man Who Saved New York," and a former Newsday reporter, said Carey managed to persuade natural adversaries -- Republicans and Democrats, federal and local leaders, big banks and labor -- to see beyond self-interest.

Current and former public officials Sunday alluded to the country's present economic insecurity in their praise of Carey. Former Gov. George Pataki said that as the country confronts a fiscal crisis, Carey's example demonstrates that "sober, enlightened leadership can help solve even the most difficult problems."

New York City Mayor Michael Bloomberg said flags at city municipal buildings that were lowered to half staff for military personnel killed in Saturday's Afghanistan helicopter crash will remain lowered to honor Carey.

Another seminal moment of Carey's governorship came when he signed the landmark Willowbrook Consent Decree, which committed the state to care for its developmentally disabled in non-institutional homes.

Six times while in office, he vetoed bills that would have brought the death penalty back to New York State. Carey was a decorated World War II veteran who helped liberate the Nordhausen concentration camp. Polner, his biographer, said that experience convinced him that government should not have life and death power over its citizens.

Carey's second term as governor brought fatigue, friction with opponents and public gaffes.In 1981, seeking to calm fears about a contaminated state office building, Carey said he would walk into the structure and "swallow an entire glass" of the PCBs found there. He was ridiculed.In 1980, after he'd cited security concerns, the state seized an acre of land next to his Shelter Island home and a house being built there. After suggestions that Carey was more worried about losing his harbor views than his safety, the state backed off.

He did not run for a third term.

Tom Regan, who served as a close personal aid to Carey for four decades, was with the former governor in the hours just before he died, surrounded by his family.

"He was ready to let go," said Regan, 71The last two years were a little difficult for him. . . . He was prepared."

Regan said Carey could be very tough to work for, but that was because his boss was so demanding.

"He wanted the best that he could get from you," Regan said. "He wanted the best that he could get from government. He wanted the best that he could get for his constituents."

Carey married the late Helen Owen Carey in 1947. They raised 14 children. Two of his sons died in an auto accident on Shelter Island in 1969. Another son died of cancer in 2001. In 1981 he married Chicago businesswoman Evangeline Gouletas. They divorced in 1989.

Carey is survived by 11 children, 25 grandchildren and 6 great-grandchildren.

Funeral arrangements are pending, the family said in a statement.

With Dan Janison, Emily Ngo, Yancey Roy and

Nicholas Spangler

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