Giuliani and the banks

The case of the missing $200 million

By Sam Marcy (April 14, 1994)

This might have made a very interesting story in the heat of last fall's New York City election campaign between Rudolph Giuliani and then-Mayor David Dinkins--had the capitalist press wanted to make it so. But now, considering all other events, it's probably more fit for the Post Office dead letter department than anything else.

Except for one thing--the New York Times suddenly dredged it up on April 2. It was now front-page news. The headline read, "Giuliani secures up to $200 million for buyout plan."

During the election campaign this $200 million, which the city had saved at the cost of depriving the masses of vital social services, had been regarded as something like the Holy Grail. It couldn't be touched. It had to be kept safe and secure, especially from the hands of the greedy politicians, by the cabal of bankers that controls the Municipal Assistance Corporation. MAC's leading light for years was Felix Rohatyn.

The Rohatyn leadership has now been succeeded by a grouping of Republican experts. Their solicitude for the welfare of the poor is even greater than that of their Democratic opponents.

But after all the precautions and rigid rules for safekeeping the Holy Grail, this $200 million has now been opened up. And it's in the hands of Mayor Rudolph Giuliani and the others--who had pledged not to touch a penny of it. But that was before.

How would an ordinary worker understand this matter of the lost and found $200 million? Simple: It comes from the taxes on the workers; it comes out of their pockets. It's the city treasury. In a democratic society the money would be controlled by the city council.

But nothing could be further from reality. The money is in the hands of the Municipal Assistance Corporation--set up years ago, when the city had a financial crisis in the 1970s--and another grouping called the Financial Control Board. They have the real authority over the money.

The power of the unelected

The first questions that should occur to anyone concerned with the issue are: Who are these people who exercise so much authority? Where do they get it?

They are bankers, their assistants and friends. This is the most important point to remember. None of them is an elected official. It is a case where the elected officials abdicate their political authority and shift it over to what amounts to a financial oligarchy.

This oligarchy has really and truly been the political power in New York City.

But to get back to the $200 million. All this time it was held, securely stashed away for a rainy day. Shouldn't that mean it would be dispensed on behalf of the people--the mass of working-class and oppressed people in the city? At least, that's the way it was understood.

Now, suddenly, the money is handed over to the mayor. By whose authority? And for what purpose? It really makes an astonishing story.

This money--which was saved to help the city, meaning the masses of people, in cases of real need--is going to be used, the mayor explains, to cut jobs and lay off city workers.

According to the Times, Giuliani will use the $200 million not to improve city services or help the needy. He'll use it to finance a complex plan to cut jobs using severance pay, early retirement and layoffs.

But this is not what the money was saved for. It was saved to improve the conditions of the people of New York. Where are all those constitutional lawyers who know that this money is being diverted from its original purpose through an abuse of power?

Where are all the civic organizations, the so-called watchdogs over the treasury, that usually float to the top whenever money is to be allocated for the working people, the poor and the unemployed? Not a word from any of them.

It would seem that a Republican mayor--a minority figure in this huge, overwhelmingly Democratic city--would be afraid of embarking on such a blatantly anti-working-class, really anti-people program. So where is the cacophony of discordant voices? It always surfaces whenever something progressive is brought up in the interest of the masses. But in this case, there is only dead silence.

Robbery is the only word for it

All this is, in our opinion, clearly understood by the labor leadership in the city and by the Black and Latino caucus leaders in the city council. There is no mystery about it. What the mayor has embarked on is clearly a case of unarmed robbery.

If someone had broken into the vaults and absconded with the money, it would be understood as a robbery. This is the same thing--except that the robbers are unarmed and the vault has been opened, graciously, by the new mayor with the unanimous backing of Wall Street and the leading capitalist politicians of both parties.

It should be said that the Democratic politicians are in a way opposed to Giuliani's program. But they show no inclination to fight. And by their silence they are in reality consenting to it.

They have done nothing to mobilize the people. They have done nothing to really take advantage of the airwaves or the capitalist press. They could make themselves felt, if only they would say something meaningful and propose a program of action to combat this outright pillaging, plundering of millions of dollars to finance "retirements" and layoffs of unwilling workers. Instead, they haven't so much as inquired whether anyone wants to be retired or laid off.

New York City is not only the greatest financial center in the world. It is not only the premier commercial center. It is also the site of hundreds of thousands of businesses that, although small, are nevertheless significant enough that the city attracts capital from all over the world.

Unlike the 1970s, there is no financial crisis in New York. There is no need to run to Washington for a bailout as the leading bankers did in the 1970s. So what has really happened?

A group of the most predatory bankers and industrialists now has full control, compared to their limited control in earlier years. And they're running hog wild in breaking up the progressive legislation and social improvements that took years to build up.

The situation cries out for the working class and the oppressed masses--who stand to lose the most in the Giuliani-banker conspiracy--to stand up on their two feet and mobilize. The masses alone can stop the Giuliani-banker wrecking crew.

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