The Democratic National Committee (DNC) recently waived its donor requirements to allow Michael Bloomberg into the upcoming presidential debates — months after the billionaire former New York City mayor “donated” $300,000 to the DNC — fueling ongoing resentment that the party is selling its democratic process to an oligarch.
But although Bloomberg is an oligarch, his rising poll numbers and interviews with some of his supporters indicate that many voters hope he may prove to be a benevolent one who will use his wealth for the public good, in contrast with Donald Trump’s authoritarianism and venality. This image of the noble plutocrat is one Bloomberg has cultivated for the past two decades. Judging by the cheers that came from many op-ed columns after he declared his presidential candidacy, it appears that many powerful media figures have bought in.
This is an old story. Dating back to Bloomberg’s days at City Hall, well-heeled pundits have long been oblivious to — or at least untroubled by — the conflicts of interest between business, politics and philanthropy that Bloomberg has engaged in with a brazenness that rivals a certain other New York billionaire who currently resides in the White House.
Of course, Bloomberg is a far more talented administrator with a far less odious public persona than Donald Trump. But his competence and acumen may distract from the potential corruption of a Bloomberg White House. Voters disgusted with the fiasco of the Iowa caucus count might be tempted to see Bloomberg as an ideal private sector savior from the tyranny and incompetence of party hacks. But a closer look at Bloomberg’s past and present shows that he might be running the most sophisticated racket going.
Charity Begins at Home
Years ago, a Bloomberg aide told Richistan author Robert Frank that the then-mayor viewed politics as “a highly effective form of philanthropy.” Setting aside the grating condescension, Bloomberg’s presidential run should have us wondering to what extent this formulation should be reversed. Does the billionaire view his charitable donations as down payments on political loyalty?
The New York Times reported in December 2019 that the Bloomberg campaign “is drawing on a vast network of city leaders whom he has funded as a philanthropist,” and noted that mayors of cities that have received significant grants and assistance from Bloomberg Philanthropies are “forming the spine of Mr. Bloomberg’s [presidential] campaign.”
All of this has a familiar ring to New Yorkers who lived through Bloomberg’s audacious and ultimately successful 2008 effort to overturn laws barring him from a third term as mayor. Dozens of representatives of local nonprofits and cultural institutions testified at city council hearings in support of a one-time term limit exception, each of them having to maintain the obvious fiction that their support for Mayor Bloomberg had nothing to do with their organizations’ dependence on Bloomberg Philanthropies.
Observing this humiliating scene, legendary local journalist Wayne Barrett described the effects of Bloomberg’s wealth on city politics: “The richest man in New York is also, for the first time, the mayor of the city and one of its grandest philanthropists, making it almost impossible for the rest of us to talk to him without wondering at some level of consciousness: ‘Can I get a slice of this guy?’ His personal and public outlays have flooded the city’s bloodstream for years now, and few are so uninterested in a possible transfusion of their own that they will take him on.”
Unlike the money-laundering grift that Donald Trump calls his “charity,” Bloomberg Philanthropies is a reputable organization with $9 billion in assets that does important work across the U.S. and globally. But that means that Bloomberg may be able to use philanthropic donations as a means of buying political support to an extent Trump could never dream of.
The vast conflicts of interests between Bloomberg the candidate and Bloomberg the philanthropist may seem benign compared to the open corruption of Trump’s profiting from lobbyists and government agencies booking rooms in his hotels. But Bloomberg has also used his political office to advance his financial interests, and done so in a way that is characteristically far more refined and profitable than Trump.
When Bloomberg became mayor of New York in 2002, he stepped down from running his company, but the city’s Conflicts of Interest Board held a number of sessions over his majority ownership in Bloomberg L.P., a company whose primary revenue was (and continues to be) the leasing of data terminals and software to financial institutions. The board determined that the new mayor could maintain his stake because no single bank made up more than 10 percent of company sales and could therefore wield outsized influence on City Hall. For some reason, the board didn’t find a problem in the prospect that the mayor would be beholden to the entire financial industry on which his wealth depended.
Bloomberg was mayor at a time of tremendous growth in the financial industry — much of it aided by the fraudulent investments and government bailouts that came before and after the calamitous financial crisis of 2008. Goldman Sachs, for example, expanded from 13,000 employees in 1999 to 30,000 in 2013 — tremendous growth fueled by crooked bubbles and bailouts that surely resulted in the leasing of thousands more Bloomberg terminals. Not coincidentally, Bloomberg’s wealth quintupled during his time as New York City mayor. In 2001 he was the 42nd-richest American with a net worth of $5 billion. He left office in 2013 ranked 10th with $27 billion.
Throughout those thirteen years he was faced with choices that pitted his own financial interests against those of the majority of his city. In 2010, for example, when the city budget was squeezed by the recession set off by his customers on Wall Street, Bloomberg railed against proposed taxes on hedge funds even as he pushed for thousands of teacher layoffs.
The tax would be “the best thing that ever happened to Connecticut,” he declared, adding that “I can’t imagine why every hedge fund wouldn’t pick up tomorrow and move” and “Hedge funds are a bunch of desks with terminals on them — they can be anyplace.”
Even Bloomberg’s Trumpian reference to his own company’s terminals didn’t lead to investigations over whether the mayor was improperly influenced by the fact that hedge fund taxes might result in decreased money available for Bloomberg L.P. products.
Bloomberg has indicated that if he is elected president he will again step down from running Bloomberg L.P. while maintaining his ownership stake. This arrangement is no different from the one Trump made with his own privately held company, and we all know how that’s turned out. There’s no reason to expect that a Bloomberg presidency would have fewer instances of conflict of interests than Trump’s, and in fact there might be more. Imagine President Bloomberg having a hand in determining tax and regulations policies for the same Wall Street banks that are the main source of his company sales.
Old-Fashioned Grift With Newfangled Tech
If none of these egregious conflicts of interest are enough to worry those who adhere to the narrowest possible definition of corruption, there’s the fact that Bloomberg’s mayoral administration presided over a series of criminal kickback schemes that belie his good government reputation.
The most far-reaching of these was the implementation of CityTime, a digital payroll system whose original $63 million budget ended up costing taxpayers over $700 million in what U.S. Attorney Preet Bharara called “one of the most elaborate and massive schemes to defraud the city ever charged.” At the time, many observers noted the irony that a system meant to more precisely track public employee hours itself became a scheme for wildly overcharging the city.
But what may have seemed ironic in isolation was in fact a clear pattern of impunity for the same managers who demanded severe “accountability” from their workers. Nowhere was this more clear than the Department of Education (DOE), where Bloomberg and his schools chief Joel Klein led a campaign to use test scores to weaken teacher tenure while allowing the DOE to be turned into a slush fund for embezzlement and featherbedding among high-salaried consultants.
In one particularly outrageous but not atypical scandal, the DOE’s chief financial officer George Raab, a former executive at Bear Stearns (which collapsed in the financial crisis), was found to have hired four other former Bear employees as consultants so that they could spend city time planning to launch a new investment firm. One of the consultants and Bear alumni was a hypnotherapist who was paid almost $400,000 to help DOE managers by “improving their ability to adapt to change” — work he did largely from his home in Nova Scotia.
No More Free Passes
Toward the end of Bloomberg’s final mayoral term, three weeks after three CityTime consultants pled guilty for their role in one of the great robberies in New York City history, longtime New York Times executive editor Bill Keller wrote a glowing eulogy in which he claimed that the billionaire’s wealth “allowed him to self-finance his campaigns and remain largely unbeholden to the city’s clamoring interest groups. Freed from the obligations of retail politics, he could staff his government with top talent rather than people holding political chits…. The great urban contraption that is New York City government has probably never been so well run.”
Keller and many of his media peers have consistently overlooked the shady dealings that have long surrounded Bloomberg. Perhaps this is partly because Bloombergian corruption is classy corruption — performed by highly educated functionaries who dress well for galas and understand plausible deniability. When they appear to skim a little (or a lot) off the top, it’s unfortunate but doesn’t shake media confident in their suitability for the job.
Another reason for the free pass that Bloomberg seems to get from the media might be the ever-lowering bar that Trump sets for what constitutes ethical behavior.
When Zephyr Teachout, a longstanding anti-corruption activist, accurately described Joe Biden’s history of “carrying water for the credit card industry” as a “corruption problem,” she was widely criticized for slander, and her preferred candidate Bernie Sanders was pressured into apologizing to the Biden campaign. Pundits and politicians can split legal and linguistic hairs to define corruption in a way that implicates Donald Trump and exonerates Joe Biden and Michael Bloomberg. Voters have a different way of looking at it, which is one reason Trump was able to exploit — however unethically — the vulnerabilities of “Crooked Hillary” in 2016.
Finally, and perhaps most ominously, there is the shadow cast over reporters by Bloomberg Media Group, which has grown in size and scope since the mayoral days to become one of the few stable sources of employment in a crisis-ridden industry.
“In a fast shrinking journalism world, Bloomberg News pays terrific wages and offers real job security,” Intercept reporter Ryan Grim tweeted after Bloomberg announced his run, “Bloomberg’s run will put a lot of reporters in a difficult spot. No reporter wanted to work at Starbucks next so the [Howard] Schultz dunks were easy. This will be tougher for folks.”
One might think that the first media mogul to run for U.S. president might be sensitive to public perceptions of the potential dangers of this accumulation of power. But Michael Bloomberg seems to have concluded from his past 20 years that he is above such concerns.
When he was asked in a 2018 Iowa radio interview about the challenge media employees would face should he run for president, Bloomberg responded with a laugh: “Quite honestly, I don’t want the reporters I’m paying to write a bad story about me. I don’t want them to be independent.” In case anyone thought Bloomberg was joking, his campaign launch was accompanied by the head of Bloomberg Media announcing a policy of “not investigating Mike” or his primary opponents.
If Democrats want to retain any credibility as they campaign this year against Trump, they must make it clear that Michael Bloomberg must sell his company and step away from his philanthropy this race.
Correction: This piece has been updated to reflect that CityTime cost taxpayers $700 million.