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A Phil Hall Op-Ed: One of the most audacious political comebacks is taking place now in New York City with Andrew Cuomo, who was forced to resign as governor of New York State in 2021 amid multiple charges of sexual harassment. By the time he left office, Cuomo’s record as governor was a shameful skein of scandals, most egregiously in his attempt to cover up how his Covid-19 pandemic policies resulted in the deaths of elderly patients in the state’s nursing homes.

Incredibly, Cuomo is now the leading candidate for the Democratic Party’s nomination for New York City mayor. That is quite a comeback, but the real kicker is that Cuomo had a political career after his first foray in high-profile politics contributed to nothing less than the collapse of the economy.

Back when Bill Clinton was running around in the White House, Cuomo was appointed Secretary of Housing and Urban Development (HUD) in January 1997 to replace scandal-plagued Henry Cisneros. Cuomo had previously served as HUD’s Assistant Secretary for Community Planning and Development since 1993, but he had no experience running a department – although being the son of then-New York Governor was a big plus in Washington’s nepotism-supportive environment.

What kind of a job did Cuomo do at HUD? One of the key accomplishments of his tenure involved coercing Fannie Mae and Freddie Mac to buy more home loans issued to lower-income homeowners – in his mind, Cuomo believed this would expand homeownership to traditionally disenfranchised demographics. If you were around in the late 1990s, you will recall that these borrowers were the target of subprime lenders – and you’ll also recall how that situation worked out.

“One of the key reasons why (Fannie Mae and Freddie Mac are) bankrupt today and why the government is spending hundreds of millions of dollars in supporting them is because of the edicts pushed through by Mr. Cuomo,” said Dick Bove, a highly respected analyst with Rochdale Securities, in a March 2010 interview on CNBC. Bove dubbed Cuomo the “father of the subprime crisis” and added, “It’s also thought by many that the hundreds of thousands of people who are losing their homes are [doing so] to a great degree because of the actions taken by Mr. Cuomo at HUD.”

Edward J. Pinto, a senior fellow and director at the American Enterprise Institute’s Housing Center and a former chief credit officer at Fannie Mae in the late 1980s, looked back at Cuomo’s reign of error at HUD and observed in a 2010 interview, “They should have known the risks were large … Cuomo was pushing mortgage bankers to make loans and basically saying you have to offer a loan to everybody.”

Veteran financial journalist Robert Stowe England, author of the acclaimed 2011 book, “Black Box Casino: How Wall Street’s Risky Shadow Banking Crashed Global Finance,” told me in an October 2011 interview I wrote for MortgageOrb that the Clinton-era HUD carried a lot of blame for the Housing Bubble. He noted how Cisneros and Cuomo “raised the affordable loan limits and allowed the GSEs to purchase private-label bonds to meet those goals without regard to their effect on the safety and soundness of Fannie and Freddie or the systemic risk that was being created.”

Even the progressives knew that Cuomo was a disaster at HUD. On Aug. 5, 2008, the Village Voice – a New York City alternative newspaper with a decidedly left-of-center political slant – ran a cover story by Wayne Barred called “Andy’s Kids” that assigned blame for the housing crisis on Cuomo.

“He took actions that – in combination with many other factors – helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments,” Barrett wrote. “He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded ‘kickbacks’ to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.”

So, why isn’t Cuomo more closely associated with the housing crisis? For starters, Cuomo is a master of positive publicity – in fact, at HUD he allocated $900,000 on a brochure detailing his accomplishments in leading the department. And like his father, he has been a media darling for years. Lest we forget, he was widely praised by the left-friendly mainstream media for his daily pandemic-era news conferences – until the depth and scope of the nursing home deaths scandal became too obvious to ignore.

And he also has rich friends who are helping to enforce public amnesia over Cuomo’s incompetence. Yesterday’s edition of the Financial Times had an article called “Andrew Cuomo’s Wall Street Backers for New York Mayor Look Beyond His Past” that observed how “Cuomo’s campaign and an independent committee supporting him have taken in millions of dollars in contributions from finance, real estate and other corporate interests that have helped him far out-raise his competitors. High-profile contributors include hedge fund billionaires Bill Ackman and Dan Loeb, financiers Steven Rattner and Anthony Scaramucci and media mogul Barry Diller.”

Also, Cuomo is in the right place politically at the right time. His closest rival in the June 24 mayoral primary is Zohran Mamdani, a self-avowed socialist who wants to freeze rents and create a new 2% income tax on the city’s millionaire residents. The current mayor, the scandal-burdened Eric Adams, bolted from the party to run as an independent for re-election.

Still, those of us who remember Cuomo’s time at HUD and the damage he created cannot be happy to see him secure a political comeback. I hate to imagine what new lows of bad management he could bring to the Big Apple’s City Hall.

Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].

Photo courtesy of Andrew Cuomo’s Facebook page