Bloomberg Battles Schumer On Wall Street Reform Fight

Mike Bloomberg vs. Chuck Schumer


A rift as big as Wall Street is dividing the two most powerful Politicians in New York — Sen. Chuck Schumer and Mayor Michael Bloomberg.

Bloomberg visited the Capitol last week seeking to defend the financial industry. But in the process, he wound up sitting in on a GOP gripe session about New York Democrats — and, sources say, chimed in to criticize Schumer for turning against a hometown industry that has fueled both men’s careers.

Relations between the billionaire mayor and the state’s senior senator — and its sole remaining Democratic powerbroker — have curdled in the heat of policy disagreements and Schumer’s backing of Kirsten Gillibrand for Hillary Clinton’s old Senate seat.

Bloomberg had previously criticized the city’s congressional delegation in generic terms for backing stringent regulation of banks and giant hedge funds, arguing that it would cripple the city’s most vital industry.

But the third-term mayor has become increasingly disillusioned with Schumer in recent days, sources say, singling out the Brooklyn Democrat in recent meetings with business leaders and politicians.

In an April 12 meeting in Senate Minority Leader Mitch McConnell’s spacious office overlooking the National Mall, Bloomberg said that Schumer has been “AWOL,” that “this is a real problem for New York City” and that “our senators who are normally in the middle of it aren’t there,” according to a Republican senator briefed on the meeting.

Another person familiar with the meeting said Bloomberg was simply agreeing with criticism of Schumer leveled by McConnell and didn’t lash out pre-emptively: “They said that Chuck was not doing anything, that he was very unhelpful, that he wasn’t providing the ballast for New York,” the source said, adding, “Bloomberg didn’t disagree.”

McConnell’s office declined to comment other than to confirm that the meeting took place. Bloomberg's office also declined comment, but a person close to the mayor downplayed the conflict, saying, "Their relationship is fundamentally strong."

Schumer, whose wife once served as Bloomberg’s transportation commissioner, is reportedly miffed that the socially liberal, economically moderate independent hasn’t aired his gripes personally during their regular one-on-one phone conversations.

“The mayor’s jihad against [President Barack] Obama and Schumer and the Dodd bill [is] a curious strategy,” said a person close to Schumer. “When you come down to Washington and argue for next to no regulation, it puts New York in the cross hairs more, not less.”

The issue of regulating Wall Street is arguably the stickiest of Schumer’s career — forcing him to choose between an industry that has pumped more than $10 million into his campaigns and the political survival instincts that have made him one of the party’s canniest strategists.

Given the choice, Schumer has chosen to regulate, not praise, Wall Street. “He took our money and is now showing us the back of his hand,” said one banking industry executive who has unsuccessfully tried to get Schumer to roll back provisions empowering state attorneys general to sue financial firms.

Added one Schumer ally: “This is not an easy issue for Chuck Schumer, obviously. This is an industry he’s close with — but they blew up the world’s economy, and Chuck has reconciled himself to that reality. Bloomberg did not.”

Schumer watched warily as the career of Senate Banking Committee Chairman Chris Dodd (D-Conn.) was destroyed by perceptions he was too close to Wall Street and had no intention of being accused of backroom deal making on behalf of banks or hedge funds.

Schumer raised tens of millions from Wall Street as chairman of the Democratic Senatorial Campaign Committee — cash that helped propel Democrats to the majority in 2006. But he’s played a relatively minor role in the current fight over regulation.

When he has weighed in, it’s often been to punish the banking sector, backing Obama’s plan to impose a tax on the nation’s biggest financial institutions.

“I think it’s a tough issue for him,” said Brian Gardner, a financial analyst based in Washington. “I think any senator wants to protect his home-state interests.”

Even though Bloomberg and Schumer still get along — and the senator’s wife, Iris Weinshall, recently kibitzed with the mayor at City Hall — the two haven’t had one of their one-on-one dinners in months.

The race for Clinton’s old seat has been a sore spot.

Schumer supporters say Bloomberg political operatives Kevin Sheekey and Brad Tusk actively encouraged ex-Tennessee Rep. Harold Ford Jr. to run and backed the strategy of labeling Gillibrand a Schumer puppet.

But the tension between Schumer and Bloomberg stretches back to the mayor’s successful reelection bid last fall. At the time, Senate Majority Leader Harry Reid (D-Nev.) wanted to lend support to Bloomberg’s reelection campaign, but Schumer — who supported Democrat Bill Thompson — intervened and urged him not to, according to people familiar with the matter.

That Bloomberg griped with McConnell is telling; the GOP leader has been chilly toward Schumer since 2008, when Schumer’s DSCC steered attacks toward him for his support of the wildly unpopular Wall Street bailout bill.

But now faced with a bill that will arguably have more effect on New York City than any other piece of legislation this Congress, Schumer is taking a low-profile role — despite serving in Democratic leadership and on the Senate Banking Committee, which has jurisdiction over the issue.

Tennessee Sen. Bob Corker, who has been a central GOP negotiator on the Wall Street bill, said he’s had only one meeting with Schumer — and that was on the issue of proxy access, which would give shareholders more power to nominate directors to serve on a corporate board, a task delegated to him by Dodd.

Corker said his scores of other meetings have been with Dodd and Sens. Richard Shelby (R-Ala.), Judd Gregg (R-N.H.), Mark Warner (D-Va.) and Jack Reed (D-R.I.).

Corker said Schumer “hasn’t been that visible in these negotiations.”

But Democrats insist that Schumer has been working behind the scenes to shape the bill — although even some of them admit privately to being surprised that Schumer has not been trying to make the bill more palatable to the banks or Wall Street’s interests.

“Otherwise, it’d hurt him with the caucus,” said one senior Democratic aide. “He’s trying to thread the needle.”

Indeed, with polls showing Reid losing soundly in November, Schumer could very well be in a race for majority leader in the fall — and if he sided with Bloomberg and the banks, he could be tarred by many of the more liberal Democrats eager to crack down on Wall Street.

Schumer’s chief opponent for the majority leader job, Illinois Sen. Dick Durbin, also has ties to financial interests — with the Chicago Mercantile Exchange based in his home state. But the CME could stand to gain big if the bill results in an enormous increase in trading volume — giving Durbin even more latitude to rail against Wall Street.

Durbin said his party’s interests haven’t conflicted yet with his home state’s interests.

“To this point, I don’t believe that I have had any problems supporting provisions they can support,” Durbin said of the futures industry in Chicago.

The same can’t be said about Schumer.

Sen. Robert Menendez (D-N.J.) praised Schumer for taking a “balanced approach” in pushing for a financial system with “clear rules of the road.”

Sen. Ted Kaufman (D-Del.), who has been vocal about his concerns about the bill, said Schumer’s been navigating the competing interests with precision.

“I wouldn’t say he’s not defending the banks, but I think he’s trying to find the best legislation and he feels the politics will take care of itself,” Kaufman said. “But that’s a very naive kind of approach for this town.”


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Sources: Politico, Youtube, Google Maps

Peter Kauffmann: Paterson's Communication Director Resigns

Gov. Paterson's Communications Director Peter Kauffmann Quits


The scandal engulfing Gov. Paterson claimed another victim: communications director Peter Kauffmann.

Kauffman resigned Thursday afternoon from his $175,000-a-year job, the third person in a week to bolt from the scandal-scarred administration.

"As a former officer in the United States Navy, integrity and commitment to public service are values I take seriously," Kauffmann said in a statement.

"Unfortunately, as recent developments have come to light, I cannot in good conscience continue in my current position."

Paterson's now former criminal justice deputy secretary Denise O'Donnell also said in her resignation letter last week that she could not "in good conscience" continue serving Paterson.

Former state Police Superintendent Harry Corbitt, whose agency is also under investigation, retired Thursday.

A veteran of Hillary Clinton's political operation, Kauffmann joined the administration last March 23.

He was charged with turning around Paterson's press operation and tanking poll numbers in the wake of the U.S. Senate appointment debacle that included the trashing of Caroline Kennedy.

This week alone, Kauffmann was forced to go before investigators for two agencies because of the scandals engulfing Paterson.

On Tuesday, he met with investigators for the state Public Integrity Commission, which was probing whether Paterson illegally solicited and accepted World Series tickets last October from the Yankees.

Kauffman's testimony directly contradicted Paterson's claim that the governor had always intended to pay for the tickets to the World Series game.

Kauffman told investigators that Paterson at first told him that he'd been invited to the game by Yankees President Randy Levine - a claim that was quickly refuted by Levine himself.

Paterson, according to Kauffmann's testimony, then indicated that no payment was necessary because he attended in his official capacity.

The governor also made no mention of having written a check for the tickets or wanting to pay for the tickets used by his son and his son's friend Meanwhile, Kauffmann on Wednesday was brought before investigators for Attorney General Andrew Cuomo who are probing whether the governor and state police tried to improperly influence a woman who claimed a top Paterson aide brutally assaulted her on Halloween night.

Press secretary Marissa Shorenstein, who is close to Kauffmann, has also met with Cuomo's investigators.

Paterson is said to have asked Shorenstein to contact the woman and ask her to say there was no violence involved.

Those close to Shorenstein say she was duped by the governor.

She was under the belief that there was no physical assault but simply a bad break-up between the woman, Sherr-una Booker, and the aide, Charles Johnson.

The Daily News reported earlier this week that Paterson's staff told the governor it would no longer issue statements on his behalf regarding the scandal.

They told him such comments should be made through a lawyer.


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Sources: NY Daily News, Google Maps

New York's Corrupt Democrat Party Ruining The State

New York Politics Gone Wild...For Democrats


Once a source of national leaders of both political parties, New York state has descended into a bizarre, riveting spectacle of corruption and political debasement, with its governor facing calls to resign as well as new charges of accepting illicit perks and lying under oath, the dean of its congressional delegation giving up his gavel over corruption charges and another House member announcing he won’t run again amid allegations of sexual harassment.

And that was just yesterday.

The latest, dizzying episodes of political disgrace in New York follow a half-decade of disaster during which three top state politicians were forced out amid allegations of everything from large-scale theft to small-scale sexual indiscretions.

And while Republican leaders have drawn their share of blame (and indictments), New York is now effectively a one-party state. Its current scandals attach themselves to the dominant Democrats, and the riveting soap opera is feeding a narrative of corruption that threatens to deepen the party’s national woes and distract from the White House’s attempt to refocus the country on health care. And it also hastens a decades-long diminution of the state’s 20th-century pre-eminence, a rise powered by the reform-driven Roosevelt presidencies.

“I have never seen a situation in New York, in my entire life, where there are so many legislators who have turned out to be bums — and a couple of executives, too,” said former New York City Mayor Ed Koch, whose third term as mayor dissolved in a humbling scandal at the Parking Violations Bureau.

Albany’s political scandals are a diverse mix, but the current wave began when Alan Hevesi, the respected, professorial state comptroller, was accused first of using his staff for errands and then of selling access to New York’s giant pension fund. Eliot Spitzer followed, driven from office for paying for sex, but already dogged by charges he’d used the state police to spy on his top Republican foe.

That rival, New York Senate Majority Leader Joseph Bruno, a Republican, was next, indicted for allegedly taking bribes. Then on to Rangel, the dean of the congressional delegation and a worthy heir to the man he defeated for the seat, Adam Clayton Powell Jr., who was censured by Congress for corruption that included Caribbean trips. On Wednesday, Rangel stepped down from his chairmanship of the House Ways and Means Committee after the House ethics committee found that he had broken House gift rules by accepting corporate-sponsored travel to the Caribbean.

Paterson, for his part, reportedly intervened in an aide’s domestic violence case and allegedly received free tickets to Yankees games, then lied about it to investigators.

Democrats have dominated the recent scandals, but the party owes its edge over the state’s frayed Republican Party largely to the fact that it has more members in office.

Two Republican congressmen left office in recent years amid ugly scandals: Rep. John Sweeney was defeated after his wife’s reports of domestic abuse became public; he’s now reportedly under investigation in a lobbying case. And Rep. Vito Fossella was forced out when a drunken-driving charge led to the discovery of his second, secret family.

In New York City, meanwhile, prosecutors just finished tending to one of former Mayor Rudy Giuliani’s top aides, Bernard Kerik, the former police commissioner, who was convicted on corruption charges. And the city has heard a steady drumbeat of lower-level indictments, with members of the state Assembly, state Senate and City Council marching to the courthouse on charges ranging from extortion to domestic violence.

At this point, only two of the six statewide elected officials, Sen. Chuck Schumer and Attorney General Andrew Cuomo, were actually elected to the positions they hold.

The hail of dropping shoes has shocked even the state’s blithest political operatives.

“It used to be, you could at least look across the river at New Jersey and feel good about yourself. Those days are gone,” mourned Kevin Sheekey, Mayor Michael Bloomberg’s longtime political adviser, adding, “It’s going to get worse before it gets worse.”

New York loves to reflect on itself, and the city’s scholars say the core of its political problems is one that haunts old Democratic bastions everywhere: The old, vibrant, flawed Democratic machines have collapsed, but they haven’t really been replaced by anything.

“We’ve cut off our new sources of talent and basically kept young people out,” said Mitchell Moss, a professor of urban planning at New York University. “[Rep. Edolphus] Towns and [Former Rep. Major] Owens and Rangel were very tough on young African-American politicians. You had to be a blood relation to get anywhere.

“And the only way we had a woman [in statewide office] was Hillary Clinton coming in or [Sen.] Kirsten Gillibrand getting appointed,” he said.

Rangel is a fixture of the Democratic establishment, one of a “gang of four” that dominated Harlem politics for decades. Paterson is the son of another of that group.

Their simultaneous fall “is the end of the Democratic machine,” said Vincent Cannato, a New York historian and biographer of the late Mayor John Lindsay.

One mark of the empty talent pool: The state’s elite have pinned their hopes on the appointed lieutenant governor, Richard Ravitch, to save the legislative sessions. Ravitch is 76, emerged from retirement to take the job and plans to return to private life in the fall.

Other scandals have been less predictable — or explicable. Spitzer’s fall was triggered by private vice. And Democrats in the White House and in Congress are deeply concerned about the fallout from allegations of sexual harassment directed at upstate Rep. Eric Massa by a male aide.

POLITICO broke the news of the charges Wednesday afternoon, which partially drowned out the White House’s attempt to focus on health care. The report, and the subsequent news that House Majority Leader Steny Hoyer knew of the allegations, raised a troubling echo of the 2006 revelations about former Rep. Mark Foley (R-Fla.), who dragged his party down with him in a scandal over inappropriate contact with House pages.

While Washington Democrats cast pained glances at New York, New York Republicans are seeking to capitalize on the situation. Massa’s vacant seat is a likely Republican pickup, and the gathering storm has endangered congressional Democrats in a delegation that is down to a sole Republican.

“If Gillibrand has a close race, Republicans could make three to five House seats very competitive in New York,” said Bill Cunningham, a former executive director of the New York State Democratic Party.

Republican gubernatorial candidate Rick Lazio Wednesday released a Web video featuring a “Democrats’ Hall of Shame” and calling for “fundamental change.”

The havoc is likely to have an immediate and unpredictable effect on the state’s fiscal future, already imperiled by an $8 billion deficit. Rangel's forced exit saps New York of a major defender on the Hill and leaves the state without control of a marquee committee in the House — at a time when California Democrats including Speaker Nancy Pelosi, Energy and Commerce Committee Chairman Henry Waxman and Education and Labor Committee Chairman George Miller are already hogging the top slots.

The most powerful New Yorkers post-Rangel occupy far less lofty perches: Upstater Louise Slaughter runs the Rules Committee, a powerful post but one that leaves her outside the inner circle of leadership; eastern New York’s Towns runs the House oversight panel but is often a step behind the ranking Republican, Darrell Issa; and Brooklynite Nydia Velazquez is chairwoman of the Small Business Committee, which controls a relatively small budget.

The scandals have also badly damaged the state’s clout in Washington, according to Rep. Anthony Weiner, a Democrat from Brooklyn.

He said he saw an immediate demonstration of New York's reduced clout on Wednesday, when a delegation of 12 Democrats from the state called a meeting with Pelosi to address their concerns that the Senate version of the health reform bill would seriously shortchange the New York.

"You probably could have accomplished as much as we did with a call to Nancy [Pelosi] by Charlie Rangel," Weiner told POLITICO.

"Look, Charlie was a powerful voice for New York in a place where we badly need it,” Weiner added. “We're not powerless, but we're definitely less powerful than we were ... . It's bad."

It’s a Democrat, though, who seems best positioned to capitalize, at least for now, on his party’s collapse: Attorney General Andrew Cuomo, son of former Gov. Mario Cuomo, who has kept his nose clean and is currently investigating Paterson.

Veteran Village Voice investigative reporter Wayne Barrett, who has exposed a score of scandals in Albany and City Hall, said, “I’ve never seen anything like this." But he sees the possibility of stability looming on the political horizon, in the form of Cuomo, the state’s Prince Hal.

“Every power player in New York has been swept aside in what seems like an instant,” said Barrett. “Where does this all end?... I guess the only great hope is Cuomo.”





A Generation of New York City's Corrupt Pols Laid Low


Steven Rattner, former New York Times reporter, failed media investment firm founder, friend of Bloomberg and Sulzberger, and Car Czar, is one more former political star caught up in the New York pension fund scandal.

As the NY Times and WSJournal report today, the SEC is investigating Quandrangle Group founder and crazy social climber Rattner for paying $1 million to play with the state's massive pension fund.

The state pension fund was just a hilarious morass of corruption, mostly revolving around former comptroller Alan Hevesi, who was the sole trustee of the whole system. Charges have been filed against former deputy comptroller David Loglisci and Hevesi pal (in Post parlance) Hank Morris.

Morris, a Democratic political consultant who ran Chuck Schumer's '98 and '04 campaigns, was the man to send your massively inflated "finders' fees" to in exchange for pension business. Morris and Lovlisci made tens of millions in kickbacks, because they directed the "alternative investments" wing of the $122 billion fund.

And just this week former Liberal Party chair Ray Harding was charged with accepting $800,000 in reward money (from the Morris kickback pool) for some favors he did for Hevesi. Is anyone else growing to like this Andrew Cuomo kid?

So! Quadrangle—meaning Rattner—paid $90k to acquire a shitty movie Loglisci produced, and three weeks later they were doing $100 million worth of business with the pension fund. Shortly after that, Quadrangle paid $1.1 million in fees to Hank Morris.

Here is the film, Chooch, that actual legitimate investment firms invested in, in order to get that sweet pension business. Let's just quote the entire plot summary:

The life of Queens resident Dino Condito is about to take a surprising turn. After letting down his softball team by striking out in the bottom of the ninth against Hoboken, his crew brands him the chooch. Trying to cheer up his cousin Dino, Jubilene Condito cashes in his savings from his first holy communion and springs for a vacation to Cancun.

You mean leave Queens? asks Dino, as if the thought had never occurred to him. But there's a mix-up on the way to the airport involving a mysterious bag of money. As soon as Dino and Jube land in Mexico, they're abducted by a pair of thugs and left in the desert at the mercy of a trio of soldiers.

It takes reuniting Dino's old Queens crew, including Dino's beloved pet dachsund, to save the two cousins. Only after a jail bust, donkey ride, chicken coop explosion, and a life-changing love affair at the local bordello does the crew finally arrive to save the day. Returning home in triumphant glory with his reunited crew and newfound love Ladonna, Dino discovers the meaning of family, friendship and neighborhood.

Oh man. Rattner paid almost six figures for the rights to distribute the DVD of this heartwarming action-comedy. The only user comment is a 2-star pan from someone who knows an actress with a bit part in the movie from back home in Denver. Hah. Chooch: the shitty low-budget mob mix-up comedy that brought down a large segment of the early-2000s New York political establishment.

And now Rattner will save the auto industry for Barack Obama, who hired him because Rattner millions in donations to get himself out of the investment business and into Democratic politics.


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Sources: Politico, Gawker, NY Times, Wall Street Journal, Washington Post, Google Maps

Is Obama Secretly Using Al Sharpton To Turn On Gov. Paterson?? Sell Out!

Al Sharpton Turning On Paterson?


The Rev. Al Sharpton, the civil rights leader who holds sway in the New York City community that's Gov. David Paterson's home and political base, is convening a group of Black Democratic Leaders there who could urge him to resign amid two misconduct scandals, a party adviser told The Associated Press on Thursday.

Rev. Al Sharpton, who is getting closer to the White House by the minute, played a critical role in selling David Paterson on opting out of a re-election run -- and now he may be moving his old friend out the door completely.

The adviser, who spoke on the condition of anonymity because of the sensitivity of the issue, said Sharpton is expected to say he's rethinking his support for New York's first black governor.

The meeting is set for Thursday night at a restaurant in Manhattan's Harlem neighborhood and follows a flurry of calls overnight in which many of the leaders reconsidered their support for Paterson. Those calls were also voiced in a similar summit Saturday in Harlem, although the group overall supported Paterson's plan to continue to serve. He had ended his campaign for a full term the day before.


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Sources: AP, Politico, NY Daily News, Google Maps

Jon Stewart Mocks Paterson, Charlie Rangel & Nancy Pelosi (Video)

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The New York Crimes - David Paterson & Charles Rangel
www.thedailyshow.com
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Sources: The Daily Show, NY Post

Peter King Warned Paterson That Gillibrand Was Wrong Choice

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Sources: MSNBC, Youtube, Google Maps

David Paterson Says He Never Abused His Office, Won't Resign

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Sources: MSNBC, Politico

David Paterson Bows Out Of NY Governor's Race Amid Scandal

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Gov. David Paterson Pulls Plug On Election Bid, But Won't Resign


A beleaguered Gov. Paterson has pulled the plug on his election bid, a source close to the governor said Friday.

He will announce the decision later Friday.

Paterson been under fire for contacting a woman who accused one of his top aides of domestic violence.

The source said the governor has agreed not to seek election, but he will not resign, opting to serve out the remainder of his term.

The decision clears the way for Attorney General Andrew Cuomo, who is the favorite of many Democrats, to seek the nomination unimpeded.

Cuomo's office is investigating whether Paterson and the state police improperly contacted the woman, Sherr-una Booker, who made the allegations against his aide, David Johnson.

A day after speaking briefly with Paterson, Booker failed to show up for a court hearing against Johnson - and the matter was dropped.

Mayor Bloomberg Friday described Paterson's situation as "very sad."

And he added: "It's not good for the state to have the state government that isn't functioning as well as we need it to function in these very tough economic times."





Gov. Paterson's Aide Resigns Amid Domestic Violence Controversy


A top aide to Gov. Paterson abruptly quit Thursday over the mushrooming scandal involving the governor and State Police.

As she resigned, Public Safety Deputy Secretary Denise O'Donnell ripped the handling of a domestic violence allegation against Paterson aide David Johnson.

Paterson aides admit the governor spoke to Johnson's accuser a day before she was to appear in court earlier this month - and a member of the governor's police detail also met with the woman.

"These actions are unacceptable regardless of their intent," O'Donnell said in a statement.

"It is particularly distressing that this could happen in an administration that prides itself on its record of combating domestic violence."

O'Donnell charged that State Police Superintendent Harry Corbitt informed her in January that a senior administration staff member had been involved months earlier in a domestic incident.

Corbitt said there had been no arrest and that it was being handled by the NYPD - and O'Donnell said she asked if State Police were playing a role.

She said Corbitt assured her his agency was not involved and she only learned the truth after reports emerged Wednesday night.

"For these reasons, I am resigning" effective Thursday, she said.

A Paterson spokesman did not say whether the governor also knew about the Johnson incident in January.

State Police had no comment.

Johnson, whose ex-girlfriend has accused him of brutally assaulting her on Halloween, was suspended without pay pending an investigation by Attorney General Andrew Cuomo.


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Sources: NY Post, NY Daily News, Google Maps

Gov. Paterson's Aide Under Scrutiny; More Dirty, Racist Attacks

Paterson Aide’s Quick Rise Draws Scrutiny


David W. Johnson has worked for Gov. David A. Paterson for much of his adult life. He began as a young, ambitious intern from Harlem when Mr. Paterson was a state legislator. He rose to be Mr. Paterson’s driver, serving as a kind of protector and scheduler.

In recent months, however, Mr. Johnson’s ascent has been striking: he is now one of the most senior people in the governor’s administration, paid $132,000. He is described as Mr. Paterson’s closest confidant, a man with a designated room for his overnight stays in the Executive Mansion, and a broadening role in areas like campaign strategy, government initiatives and the management of the governor’s staff.

A review of Mr. Johnson’s rise and his history, undertaken after he emerged as perhaps the man closest to the state’s chief executive, shows that he was twice arrested on felony drug charges as a teenager, including a charge of selling cocaine to an undercover officer in Harlem.

The examination of his background, based on interviews and records, shows he has at least one other arrest, for misdemeanor assault in the 1990s, although there is very little publicly available about that case.

In a statement, Mr. Paterson noted how long ago the drug arrests had happened. “David Johnson has demonstrated, over the course of his adult life, that people can change their personal circumstances and achieve success when given a second chance,” he said. “I will not turn my back on someone because of mistakes made as a teenager.”

Mr. Johnson, 37, has also on three occasions been involved in altercations with women, two of which led to calls to the police. As recently as October, the police responded to a complaint of harassment at a Bronx address of a woman involved with him. It is unclear if the altercation was verbal or physical or both, but the case is listed as closed.

In 2001, when Mr. Paterson was a state senator, Mr. Johnson, according to a person who was present, punched a girlfriend outside the senator’s Harlem office. No arrest resulted, and Mr. Johnson, through a spokesman for the governor, said that he never touched the woman, that she had come to the office inappropriately and that she had been asked to leave by others. He declined recent requests for interviews.

The woman involved, who insisted on anonymity, said in a recent interview that Mr. Johnson had gotten violent with her in the episode. She said she did not file a formal report, but said she had filed an earlier domestic violence complaint to the police about Mr. Johnson. She declined to offer evidence of that.

A spokesman for Mr. Paterson said Mr. Johnson underwent a standard background check by the State Police in 2008, which found no criminal record. Regarding the October incident, the spokesman, Peter E. Kauffmann, said, “The governor looked into the matter, and the complaint has been withdrawn.” He said Mr. Paterson planned no further inquiry into Mr. Johnson’s history.

Mr. Paterson has made domestic violence a key issue in his career; when he was lieutenant governor, it was among his signature causes. In 2008, just a few months after taking office as governor, he signed a major expansion of New York’s domestic violence law to allow judges to issue civil protection orders against people in dating relationships, in addition to those who are married.

Last October, two weeks before the episode involving Mr. Johnson and the Bronx woman, Mr. Paterson opened a campaign to raise awareness about domestic violence, gathering with advocates for a lighting ceremony at the Empire State Building.

He has also become increasingly vocal in his criticism of former Senator Hiram Monserrate, who was convicted of misdemeanor assault last fall for dragging his companion down the hallway of his apartment building. On Friday, the governor praised the Senate’s move to expel Mr. Monserrate and spoke at length about the pressures that victims of domestic violence face from their batterers.

“This seemed like a classic case of a woman who was intimidated, who didn’t really understand what her independence could be, and was victimized,” he said of the Monserrate case, adding, “The reality is that it’s really just a prelude to another attack, in many instances.”




Part of Inner Circle

Mr. Johnson’s increasing prominence, and Mr. Paterson’s reliance on him, have worried some veteran aides to the governor, who themselves are trying to assist Mr. Paterson as he faces an enormous fiscal crisis and a daunting election effort. They would not speak by name, but more than four current or former officials expressed concern that Mr. Johnson and another aide, a former state trooper, had become the governor’s innermost circle and were simply not best equipped to help him tackle the multiple challenges facing him.

Some heads of significant government agencies have said they feel they have to go through Mr. Johnson, often known as D. J., to get to the governor. And several current and former administration officials said that Mr. Johnson’s dressing down of the governor’s Washington office in September contributed to the departure of several seasoned people from the office.

“I started getting messages from D. J. telling me to call certain players in my industry,” said one former official, who spoke on the condition of anonymity to avoid antagonizing the governor.

Mr. Johnson, the official said, started to manage administration press conferences, dictating the order and seating of speakers and calling agencies to request they draft statements on particular issues.

“We were all quite surprised about D. J. taking more of a policy role,” another former official said. “It seemed like it was a long way to come in a short period of time for a guy who had been the governor’s wing man.”

Recently, the role evolved further, as Mr. Johnson began shaping campaign strategy.

Bill Lynch, one of the governor’s longtime political strategists, said that he talked campaign strategy with Mr. Johnson and that it had been Mr. Johnson’s idea to hold a series of community conversations in New York City late last year.

Asked what made Mr. Johnson qualified to be involved in campaign strategy, Mr. Lynch said: “I don’t know much about his history other than his working for the governor. But as far as I’m concerned, his instincts on these campaign things are good, if not damn near perfect.”

Assemblyman Keith L. T. Wright, a Harlem Democrat, said of Mr. Johnson: “I look at him as a gatekeeper. I actually think he’s done pretty well.

“He’s been with David for years. He is a good filter for David. David trusts him. And his influence has grown.”

Mr. Paterson first hired Mr. Johnson as an intern in 1999. His role, according to a co-worker from those days, was to be an advance man and to perform constituent services. He worked only about 10 hours a week but was considered “gung-ho,” the co-worker said, always volunteering to attend town-hall-style meetings and the like. He graduated from John Jay College of Criminal Justice in 2002.

“He wanted to be in the mix,” the co-worker said, “and because he was from Harlem, he had a natural connection with people there.”

An Imposing Figure

Mr. Johnson, the colleague said, was also valued because of the imposing figure he cast. At 6-foot-7, with a booming voice, he made Mr. Paterson, who is legally blind, feel secure, and so he was often scheduled to travel with him.

Mr. Johnson also helped keep people in line on those occasions when a troublesome constituent threatened to raise a ruckus in the Harlem office.

“Every now and then it was good to have a big guy in the office,” the colleague said.

Mr. Johnson eventually became Mr. Paterson’s driver, and at that point their relationship was further cemented.

“When you’re going back and forth to Albany a few times a week, once you get past Exit 17, you’re spending a lot of time alone with the other person in that car and you’re going to talk,” the colleague said.

Mr. Johnson’s first known arrest was in 1989 when he was 16; he was handled as a youthful offender, and the records sealed.

Two years later, when he was 18, he was arrested on drug charges, this time after selling crack cocaine to an undercover officer, according to people with knowledge of the episode.

The arrest by a 23rd Precinct officer occurred on the corner of Madison Avenue and East 107th Street, about a block from his mother’s apartment. It led to his indictment five days later on a single count of criminal possession of a controlled substance in the third degree with intent to sell, a felony for which he could have received up to 25 years in prison, the people with knowledge of the episode said.

Three months later, he pleaded guilty to a lesser felony, attempted criminal sale of a controlled substance in the third degree, a felony with a maximum of 15 years; he was sentenced to five years of probation, which a law enforcement official said he completed without incident. Mr. Johnson was treated as a youthful offender, and the records of the case were sealed.

Mr. Johnson’s disputed encounters with women came to involve at least one senior aide to Mr. Paterson in 2001. Woody Pascal, then Mr. Paterson’s chief of staff, interrupted the altercation between Mr. Johnson and the woman who was then his girlfriend outside the Harlem office. Mr. Pascal said he offered the woman counseling.

“Mr. Johnson and a companion had some kind of dispute, and I broke it up,” Mr. Pascal said in an interview. “I sent Mr. Johnson in one direction, and I counseled her, and that was the end of the dispute.”

The police were not called.

The woman said Mr. Pascal “handled it all.”

She said she had filed a police report against Mr. Johnson for domestic violence before the episode outside Mr. Paterson’s office, but nothing ever happened to him.

“It was a long time ago,” she said. “They didn’t take things as seriously back then.”

Mr. Paterson’s office encouraged The New York Times to speak to Deneane Brown, a woman it said had been present for the episode.

Ms. Brown, who now works for the State Department of Housing and Community Renewal, said she saw a brief part of what she described as a heated argument, or lover’s spat, but no violence. She said she had remained friends with Mr. Johnson.

“If there had been anything violent, I’m trained in domestic violence, so I would have had a duty to file a report,” she said.

Deemed a Dating Dispute

Asked last week about the episode, Mr. Paterson said he was not aware of it. But the governor recalled a separate episode involving Mr. Johnson and a woman, which he said also occurred in 2001, where the police were called.

In Mr. Paterson’s description, Mr. Johnson was having a dispute with a woman he was dating, and he visited her home. When he arrived, the police were there and spoke to him.

He said Mr. Johnson told him of the episode when Mr. Paterson was about to become lieutenant governor on Jan. 1, 2007, because his staff members would be subject to background checks.

“I asked him, Was there an arrest? ‘No.’ Was there a complaint? ‘No,’ ” Mr. Paterson recalled. “There was nothing. So it just sounded to me like an argument between two people.”

The governor said he was aware that Mr. Johnson might have had another problematic encounter with a girlfriend last October in the Bronx. He described it, essentially, as a bad breakup.

Interviews with people who have been briefed on the police report indicate that the police responded at 9:50 p.m. on Halloween night, and that the dispute involved the woman’s costume and whether Mr. Johnson had torn it off her or menaced her further. Mr. Johnson was gone, the interviews suggest, by the time the police arrived.

The woman, in a brief interview this month, said that there had been an incident and that she had not seen Mr. Johnson since. She would not comment further.

Asked whether Mr. Johnson’s history had been considered before his most recent promotion, to director of executive services — he received a raise of $23,850 — Mr. Paterson said: “Obviously, it was a breakup. They know a number of people in common, and it just sounded like breakups you hear about all the time.”

Mr. Paterson also said that Mr. Johnson had grown significantly over the years and that he did not believe that Mr. Johnson had problems with women.

“In D. J.’s case, other than, you know, that he had broken up with a few women that he went out with, I have not found him to be that kind of person,” the governor said.

Referring to the October episode, he added: “I think in anybody’s history, you can come up with a couple incidents where they acted improperly. And this may, and I accentuate may, have been one of them.”


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Sources: NY Times, CNN, Google Maps

Gov. Paterson Disses Harold Ford; Taunts Cuomo

David Paterson Fights Back


In an exclusive interview with The Daily Beast’s Lloyd Grove, New York’s beleaguered governor takes the gloves off—dismissing Harold Ford and taunting Andrew Cuomo.


After a week of fighting off rumors that he was quitting his job over a bombshell New York Times story rife with allegations about his private life, the Times has denied that such a story is in the works, and New York Governor David Paterson is full of beans.

“The quickest way to get 150 percent effort out of me is when I’m attacked or under pressure,” Paterson said Tuesday afternoon in an exclusive interview with The Daily Beast, when I asked him if he feels energized when he’s up against the wall. “People have told me that, but when you’re in the middle of it, you don’t really know,” he added.

As for New York’s first lady, Michelle Paige Paterson, who has also been drawn into the fray, “Michelle is probably even better than me,” he said, noting that his wife has been married once before. “She once told me, ‘If I could get through my divorce, I can get through anything!’ ”

In a wide-ranging phone conversation, Paterson also dismissed the prospective Senate candidacy of Harold Ford Jr., and taunted his still-undeclared Democratic primary opponent, Attorney General Andrew Cuomo, suggesting Cuomo is “afraid.”

“He’s in the candidate protection program,” the governor said dryly. “He doesn’t talk about anything. I hear he made a comment about the Super Bowl the other day, but he was talking about last year’s Super Bowl. He doesn’t talk about anything current.” Warming to his theme, Paterson continued: “Political strategy tells me that’s a very smart thing to do, and everyone pats him on the back for it.

My question is, fine, it’s politically smart, but when you are that afraid, that political, what are you going to do if you get elected? Now you have to deal with the legislature. What’s this new openness and transparency? What’s going to change in Albany if everybody is political and the whole process is failing right now because it’s overly politicized?”

The Cuomo campaign-in-waiting declined to respond to Paterson’s swipe.

Regarding former Tennessee congressman Ford’s prospective primary race against Senator Kirsten Gillibrand, whom Paterson appointed last year to replace Hillary Clinton, the governor clarified remarks he made last week that were interpreted as supportive of Ford (he’s “worthy,” Paterson had said) and a slight against Gillibrand.

“I just don’t think Harold Ford knows the issues of this state, the problems of this state,” Paterson told me. “He’s not even close to her or in her orbit.”

The governor acknowledged that last week’s media frenzy—sparked by unsubstantiated claims in the tabloids and various blogs about alleged canoodling in closets and restaurants —has knocked his underdog campaign off stride and temporarily hurt his fundraising efforts against the cash-rich Cuomo.

“Toward the end of last week, things started to get back on track when no one denied my understanding that the Times did not ask me about these problems,” Paterson said, referring to a 90-minute interview session he had with Times Albany reporter Danny Hakim last week. In a remarkable column on Sunday about a story that has yet to be published, Times public editor Clark Hoyt supported the governor’s assertion that it wouldn’t contain seamy anecdotes of the sort splashed by the New York Post.

“We’ve made a few [fundraising] calls where there’s kind of a wait-and-see thing because these rumors are swirling,” Paterson said. “And their effectiveness is not in their accuracy but in the anxiety they produce—not only for me, but for people in this tough economy who don’t want to put money into something they don’t think is working. I’m no different than anyone else. I understand the distraction. That’s why the rumors were hatched.”

Hatched perhaps by the Cuomo campaign?

“I don’t know that,” Paterson said, noting that nearly two years ago, when he as lieutenant governor replaced disgraced Gov. Eliot Spitzer, “there was some hysteria, right before I came into office, over a crazy story about me being pulled over while driving a car. It was Albany-based. Now I don’t think Andrew had anything to do with that.”







Gov. Paterson: "Somebody Is After Me"



Those lurid rumors flying around about New York Gov. David Paterson? "None of this is true. It's a flat-out lie," he said in a wide-ranging interview with CNN's Larry King on Thursday night.

Since word of an imminent New York Times story electrified New York political and media circles last week, Paterson has been on the defensive. But day after day, the putative piece has failed to appear -- allowing gossip and conjecture to flourish.

Sex? Drugs? Graft? Theories about the article's focus have taken on lives of their own.

Asked whether the onslaught of rumors means "somebody (is) after you," Paterson was blunt. "Clearly somebody is. ... I won't kid you. I think I have thought about who might be after me."

He declined to name the suspects, but he encouraged the media to turn its focus from the whispers to the whisperers.

"Maybe those in the media might investigate why the sources are saying what they're saying."

During the sit-down, Paterson also knocked the Times for its handling of the frenzy.

"The human decency, if not journalists' ethics, I think would compel an organization when they see a person being slandered for over two weeks now ... to clear the air and at least say that the charges that are being made are not in the perimeters of our investigation."

Absent a public clarification, the governor pleaded for the Times to publish its piece at once, "so I could be out of my misery."

It's not clear whether the governor will get his wish. He said that New York Times Albany Bureau Chief Danny Hakim, whom he identified as the writer of the article, told him he was not sure when it would run.

Paterson also blamed some of his plight on the fresh memory of former Gov. Eliot Spitzer's prostitution scandal, saying that his predecessor's dalliances conditioned the public to assume sexual misbehavior in the governor's office: "I think people have still a sort of sensitivity to that, to the point that people would tend to believe anything they hear these days." He added, "I think that's victimized me."

At one point, King teed up an opportunity for Paterson to say that the Times article will vindicate him, but the governor didn't swing.

King said: "And you're positive that nothing of this is ever going to come forward and prove true?" Paterson replied: "Asked and answered."

On the question of drug use, Paterson opted not to issue a new denial, telling King he had "denied that just the other day." Similarly, he turned down the host's offer to rebut the charges against him "one by one," saying, "I've already denied these charges in several media outlets."

He cited the need to deprive the rumors of momentum for his reluctance to engage in specific denials.

Between the accusations and deflections, the governor squeezed in a few jokes. Echoing a quip he made earlier in the week that "the only way I will be leaving office before (my term ends) is in a box," Paterson told King, if "you hear I've resigned, it means you're invited to my funeral."

The gallows humor continued later with a timely reference to former President Bill Clinton's heart episode. "I hope he comes on your show tomorrow to dispel the latest rumor, denying that I had anything to do with his heart condition," he told King.


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Sources: The Daily Beast, CNN, Google Maps

Bloomberg & Paterson Continue Battles Over Medicaid, School Funding

Mayor Bloomberg vs. Gov. Paterson In Medicaid Money Fight



Gov. Paterson and Mayor Bloomberg are showing a unified public front on the Senate health care bill, but they're in a heated backstage battle.

The governor is steamed that the city pushed language into the Senate bill forcing the state to give it more cash - while the mayor says Paterson is cheating the city.

"They're screwing us on Medicaid," one city official said.

The Bloomberg administration says the state is shortchanging the city $500 million in health care stimulus money. The city sued the state over it in July.

Joined by officials from Las Vegas and Los Angeles, the city last week got Senate Majority Leader Harry Reid to increase state-to-local funding in the Senate bill.

However the state wants to strip it from the bill.

Last March, the state agreed to pass $2.7 billion of its overall health care Stimulus funds to localities, with $1.92 billion earmarked for the city.

Bloomberg aides argued that typically the state bears 66% of Medicaid costs, but is hanging on to as much as 80% of the Medicaid Stimulus money.

The state says a 3% cap on local spending on Medicaid growth will save the city $1.2 billion.

Bloomberg and Paterson agreed on one thing yesterday: New York needs more from the final health reform legislation.

"The governor and I will have to get through some tough times together," Bloomberg said. "We won't always agree on everything. You have a right to be wrong."





N.Y. School Groups To Sue Governor Over Withholding Planned Aid


Groups representing New York public schools plan to go to court and challenge Governor David Paterson’s authority to defer aid payments this month to ease a state cash shortage.

Paterson said yesterday he would withhold $750 million of payments this month to schools, local governments and health insurers to avert a squeeze after the Legislature in the third- most populous U.S. state didn’t cut spending as much as he wanted.

The governor said New York “may” run out of funds this month, even after borrowing from its investment pool and reserves. Withholding payments was preferable to the chaos that would result “because no one knows what to do when you run out of money and you still have obligations,” Paterson said at a press conference today.

“It is likely we will sue,” said David Albert, director of communications and research at the New York School Boards Association. Group members “are concerned about the ability of the governor to do this going forward.”

School districts in New York are allowed to sell bonds and notes, including revenue anticipation obligations backed by anticipated state payments. Paterson’s actions come in the middle of the school year, after districts submitted budgets to public vote in May and sent property tax bills based on those spending plans in September.

Cuts in state aid are more difficult to handle at mid-year when districts have less time to compensate with spending cuts, said Kevin Casey, executive director of the School Administrators Association of New York.

Cutting Expenses

“If you know you have $100,000 less income at the beginning of the year, you can eliminate one position, but if the reduction comes at mid-year you have to cut two positions to get the same dollar savings in a six-month period,” Casey said.

When Paterson initially proposed outright cuts in school aid Oct. 15, the governor said 95 percent of the state’s more than 600 districts had reserves available to cover the loss. He sought to impose the biggest reductions at the financially strongest districts.

Yesterday, he announced an across-the-board 10 percent, or $150 million, paring of the $1.5 billion of aid payments due tomorrow. The cuts will avoid breaking the state law, which doesn’t allow the governor to impound appropriated funds, he said.

Aid to New York’s school districts, set at $21.9 billion in the beginning of the year, is the largest segment of the $133.2 billion state budget. New York schools spent $15,981 per pupil in 2007, the most of any state and 65 percent more than average, according to the U.S. Census Bureau.

Cities’ Reductions

Paterson’s withholding of 10 percent, or $45 million of the state’s $450 million aid payment to municipalities tomorrow comes just two weeks before the Dec. 31 end of the fiscal year for 44 cities, said Peter Baynes, executive director of the New York Conference of Mayors.

Paterson said yesterday he was obliged to withhold state aid because lawmakers’ $2.77 billion plan for reduced outlays and generating additional revenue approved earlier this month isn’t enough to ease the state’s cash squeeze in December or close an estimated $3.2 billion deficit for the year ending March 31.

Senate Democrats are exploring “all legal options,” because “the governor’s actions are clearly impoundment by another name, and the courts have long determined he does not have that authority,” said Travis Proulx, a spokesman for Senate Democratic leader John Sampson of Brooklyn.

Manage the Cash

Assembly Speaker Sheldon Silver, a Manhattan Democrat, was more conciliatory when he appeared with Paterson at a news conference in New York City today. It is the job of Paterson and Budget Director Robert Megna “to manage the cash of the state” in an appropriate manner, an activity not subject to lawmakers’ approval or disapproval, Silver said.

“Right now it appears to be a postponement based on cash flow,” Silver said. “I assume at some point, that cash will come back to those school districts.”

Paterson’s announcement of the withholding described the moves as a cash management action rather than eliminating the obligation to pay. “As sufficient revenue becomes available, the state will potentially pay the amounts that were delayed,” the announcement stated.

Next Budget

Other actions to close this year’s deficit will be part of the budget Paterson said he will present in mid-January. The governor “reserves the right to institute further payment delays over the remaining months of the fiscal year in order to preserve the state’s cash position,” according to the announcement.

For the next fiscal year, state projections showed a $6.8 billion deficit, followed by a $14.8 billion gap the following year when federal stimulus aid runs out, and $19.5 billion the next year, when temporary increases in the state’s top income tax rates expire. The figures didn’t incorporate the spending cuts and other actions approved by lawmakers and Paterson this month.



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Sources: Bloomberg News, NY Daily News, Google Maps

Schwarzenegger, Paterson Slam Senate Health Care Bill

Blue State Governors Rip Senate Health Care Bill


The governors of the nation’s two largest Democratic states are leveling sharp criticism at the Senate health care bill, claiming that it would leave their already financially strapped states even deeper in the hole.

New York Democratic Gov. David Paterson and California GOP Gov. Arnold Schwarzenegger are urging congressional leaders to rework the Medicaid financing in the Senate-passed bill, warning that under that version their states will be crushed by billions in new costs.

After the Senate passed the bill in a Christmas Eve vote, Paterson said the expansion would leave New York $1 billion in the lurch. The state faces a $6.8 billion budget shortfall heading into the 2010 fiscal year.

“[I] am deeply troubled that the Senate version of the bill worsens what was already an inequitable situation for New York and I will continue to be an advocate on behalf of New Yorkers to ensure we are treated fairly by this critical federal legislation,” Paterson said in a statement.

In a letter to House Speaker Nancy Pelosi, Schwarzenegger wrote that the legislation would create a “crushing new burden” for a state with a whopping $20.7 billion budget deficit.

“When asked for my support, I was assured that federal legislation would not increase costs to California or include new unfunded mandates,” Schwarzenegger wrote. “Unfortunately, under nearly every scenario we can predict, the federal health care reform legislation being debated would cost California’s General Fund an additional $3 billion to $4 billion annually.”

The resistance from the governors of two Democratic megastates underscores the anxieties facing states as they grapple with the prospect of a massive expansion of the Medicaid program.

The problem is that New York and California, both of which already have expansive Medicaid programs, will pay a higher share of the new expansion costs than many other states that have traditionally limited coverage.

“The inequity built into the bill puts hardship on states and would put them in the position of making cuts to providers,” said Susan Van Meter, vice president of federal relations for the Healthcare Association of New York State.

Schwarzenegger warned that the Senate health care legislation could sink his state.

“As the partner responsible for implementing this program, I am telling you that our Medicaid program is already at the breaking point, and if federal health care reform is passed without addressing the underlying faults in the system, health care reform will fail,” Schwarzenegger wrote in his letter to Pelosi. “[I]f Congress fails to address the existing unfunded mandates and adds yet another layer, federal health care reform could collapse the very safety net system it seeks to expand.”

Both governors’ criticisms are notable because they are distinct from the opposition to the health care bill voiced by many Republican governors. Neither Paterson nor Schwarzenegger has opposed Democratic health care reform efforts in general and both have been largely supportive of President Barack Obama’s domestic agenda.

Schwarzenegger has embraced Obama and singled him out for his “great leadership” in a joint appearance in Los Angeles in March. Obama returned the favor by calling the California governor an “outstanding partner.” And in an interview with CNN as recently as last week, Schwarzenegger said Obama "should get a straight A" for his first year in office "when it comes to effort."

While Paterson’s relationship with Obama has been cool since the White House asked him earlier this year not to pursue a bid for a full term in 2010, he is not philosophically at odds with the administration.

“The bottom line here is money,” Rep. Eliot Engel (D-N.Y.) told POLITICO on Monday, adding that bill the House passed in November was far more generous to New York. “I think that if a state like mine is doing what it is supposed to be doing we should be praised and not punished.”

In a Christmas Day op-ed that appeared in the Buffalo News, Paterson wrote, “New York taxpayers are being used to pay for handouts to other states.”

“New York was an early leader in covering its citizens, with limited assistance from the federal government. The Senate bill will fund Medicaid expansions for states that lagged far behind New York while depriving New York of the same funding. We are being punished for our leadership,” Paterson wrote.

Paterson has an ally in another prominent officeholder who is considered a presidential ally: New York City Mayor Michael Bloomberg, who has enjoyed a mutually beneficial political relationship with Obama.

Last week, Bloomberg called the Senate-passed bill a “disgrace,” and warned that if it could result in city health clinic closings if it were enacted as passed.

Paterson also carries the backing of the majority of the New York House delegation, which last week wrote a letter to Pelosi and Senate Majority Leader Harry Reid asking them to correct the inequities as the bill moves into conference negotiations.

New York Democratic Sens. Chuck Schumer and Kirsten Gillibrand said they were receptive to Paterson’s concerns.

"We agree that states that have already expanded their Medicaid programs should be rewarded for their generosity, and we are going to work very hard to make sure that happens in conference," Schumer said in a statement.

Brendan Daly, a Pelosi spokesman, told POLITICO that the speaker intended to address Schwarzenegger’s concerns in the upcoming conference negotiations.

“While the House health insurance reform bill is more favorable to California than the Senate bill, we understand the governor’s concerns, and we will work with the Senate to address them when we reconcile the two bills. Our goal is to ensure that all states are treated fairly,” Daly said.



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Sources: Politico, Google Maps