At the beginning of [Donald] Trump’s campaign for Board of Estimate support of the Commodore abatement plan in late 1975, Trump and attorney Sandy Lindenbaum met with Comptroller Harrison Goldin and Dick Wells, a Goldin aide. Goldin wound up the meeting by assigning Wells to meet with Trump and Lindenbaum to study the particulars of the project. Wells didn’t handle Board of Estimate matters for Goldin then, nor was he experienced in assessing a complicated real-estate transaction. Instead, Wells, who managed Goldin’s recent statewide campaign, was described to me by a former Goldin aide as the comptroller’s principal political assistant.
Those on Goldin’s staff who did handle Board of Estimate issues, as well as those experienced in real-estate transactions, were excluded from these early discussions. In place of them, Wells involved Charles Goldstein, a partner in the law firm of Baer and McGoldrick, to serve as a pro bono counsel to the comptroller in assessing the Trump proposal. The addition of Goldstein further politicized the issue.
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The Baer firm, which recently became Schulte and McGoldrick, has been the legal and fund-raising arm of Goldin’s political campaigns for at least a decade. Goldin says he’s known Thomas Baer, a founder of the firm, since he was 13 years old. He has known Charles Goldstein for 15 years. Eleven partners and associates of the firm contributed $10,000 to Goldin’s 1978 race. Even when he had only minor opposition in 1977, the same 11 kicked in $6100. The return address on Goldin’s filings with the Board of Elections was 460 Park Avenue, the Baer firm’s address. In 1973 five different Baer partners were listed as treasurers for 15 different Goldin committees in his first campaign for comptroller. Goldstein is even listed as a treasurer for Goldin’s 1972 state senate race.
Goldstein began negotiations with Trump and city attorney Michael Bailkin, who designed the tax-abatement plan. The initial plan called for Trump to purchase the hotel, sell it to the city, and then lease it back from the city at a nominal rental (and no real-estate taxes). “Goldstein argued that the city leaseback might have constitutional problems,” recalls Bailkin. “So he suggested we use the state’s Urban Development Corporation.” Goldstein and Wells discussed the UDC concept with its president, Edwin Cohen, another close Goldin associate. Cohen and Goldin had been associates in the same law firm in the ’60s; Cohen’s wife worked in Goldin’s office as an assistant counsel.
Goldstein happened to be on retainer as outside counsel to UDC at the time. He represented the agency in co-oping apartments on Roosevelt Island, a business without much of a future since the project was near completion. His UDC fees had declined from $73,000 in 1974 to $29,000 in 1975. The negotiations — now between UDC, Bailkin, Goldstein (still representing Goldin), and Trump resulted in the following arrangement: The leaseback arrangement would be with UDC, not the city; UDC would receive a $300,000 fee and Goldstein would be retained as UDC’s counsel on the deal (his fees would be paid by Trump and funneled through UDC). “I suggested that UDC retain Goldstein,” explained city anorney Bailkin, “because the comptroller trusted his judgment. I thought it would secure Goldin’s vote for the project.”
In the first of what has become a series of city-UDC business-incentive projects, Goldstein earned $66,000 on the Commodore. Though Goldstein had done no economic-development projects for UDC prior to the Commodore, he has since been paid $857,ooo in fees and expenses on a dozen incentive projects. Every investment project represented by the Baer firm has been supported by Harrison Goldin at the Board of Estimate, though his staff has sometimes required changes in the terms. (Goldin subsequently hired a staff assistant referred to him by Goldstein and assigned her to handle all of Goldstein’s projects at the board.)
Goldin’s support of the UDC tax-exempt projects is ironic since a recent draft audit by Goldin has assailed another city program of business tax exemptions as giveaways. UDC is not involved in this other program, whose abatement terms are not nearly as generous as are the Goldstein deals invariably supported by Goldin.
Goldin said that anyone who believed that Goldstein’s retainer would secure his vote for the Commodore and subject incentive projects was “naive.” He denied that he had any special tie to the Baer firm and claimed that he’d known each of the 11 partners who contributed to his campaign before they joined the firm. “It’s really quite a small town,” he explained.
Goldin insisted that he would not have signed off on the project unless Walter Prawzinsky, his deputy comptroller, approved it. I asked him if that meant Prawzinsky, a career civil servant known for his fiscal shrewdness, was an unelected comptroller. Goldin quickly explained that he made the policy decision as to whether or not the Commodore tax exemption and UDC/city agreement should be supported. He said Prawzinsky merely indicated when he’d extracted the best terms from Trump that he thought he could. Prawzinsky was not involved in Goldin’s initial meeting with Trump and Lindenbaum. Nor was he consulted when Goldin turned it over to Wells and Goldstein. He was brought in later in the process and by the time he was, he knew where Goldin, Wells, and Goldstein stood. All that was left for him was a salvage job.
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Sources close to UDC say that Goldstein’s firm has, in effect, run the UDC legal department in recent years. While the Goldin connection may have had something to do with Goldstein getting into the UDC contracts, it’s clearly not the only factor keeping him there. The firm contributed $7800 to Carey’s recent race. They’ve also established a close relationship with UDC’s new president, Richard Kahan, who was formerly staff director for the incentive projects and worked closely with Goldstein.
When Kahan was named president by Carey, Goldstein co-hosted a formal celebration at the Plaza Hotel. One partygoer described the scene: “I got an invitation to ‘meet the new president’ of UDC, and here it’s from a guy UDC pays fees to. I went and there was a Baer partner at the door. He would steer each dignitary that arrived over to a photographer who’d take pictures of Kahan, the dignitary, and a Baer partner together.” Another Baer partner, who’d gone to law school with Kahan, did the closing when Kahan bought a $60,000 East Side co-op. Under Kahan, Baer fees at UDC have continued to rise.
Last October, Kahan asked the Baer firm to handle negotiations on a new Trump/UDC project, the $400 million convention center. Earlier, Ed Koch had named Baer, formerly the head of the firm and still associated with it, as his pro bono representative on convention-center negotiations. The city and state — in the person of Baer and Goldstein — could negotiate convention-center positions without ever leaving their office. Goldstein could now bill UDC for discussions with his own former partner.
Though his firm earned more than a million public dollars from UDC and city contracts he got through Goldin, Goldstein refused to talk to me. ❖