Aspiring Attorneys General Zephyr Teachout, Tish James, Sean Patrick Maloney and Leecia Eve tell us whether or not Donald Trump and his crew are emblematic of the New York real estate world, and what would change if each of them gets to be the new sheriff in town. Plus, we sit down in producer Alex Lynn’s rent-controlled walk-up with Mark Green as he runs down this year’s race and revisits several of his old ones including his own A.G. run back when.
And if you want to go deep, here are the full transcripts of our phone conversations with Zephyr Teachout and Leecia Eve and — boo! — email exchanges with Tish James and Sean Patrick Maloney. (And listen to the episode for dramatic readings of those emails from the Bleecker St. Ensemble Extras, featuring Alex as Sean, Harry as Tish, and Azi as Azi.)
Azi: Why was Trump able to operate so questionably, and so openly, for so long in New York?
Zephyr: That is a critical question. I mean, New York City real estate is at the heart of so much of what is wrong in New York — not just New York City but New York State. But also as we see now, Donald Trump comes out of New York City real estate. This spine that connects everything from tenant harassment, to tax fraud to Donald Trump and I — real estate money is huge in New York. In 2016 it was about a tenth of all the political money spent in campaigns came from New York City real estate. And so we can’t always know the precise ways in which that kind of big money power influences people, we can say s— this is the premise of your question — but we can say there is a big problem here. Yeah, we need to change some of the laws in Albany, but even under existing laws there is a huge amount of illegality going on in New York City real estate. I’m sure you’ve seen the ProPublica report that two-thirds of the — when they looked at 6,000 rental properties that were getting 421A tax benefits — they didn’t actually have the proper applications on file. This is an outrageously high number. There’s been incredible reporting by Adam Davidson and others, talking about money laundering – a lot we don’t know. And then the reports of tenant harassment, being pushed out so that developers can charge higher rates are widespread. So, I got to give the last attorney general credit about, a little under 2 years ago he brought in a great leader in the real estate finance bureau and they started becoming more aggressive in investigations but the New York Attorney General actually has to a play a really key role here. And, first of all, we’ve got to take on Donald Trump but second, we don’t want to have another Donald Trump and third, there are so many people directly hurt by the illegal actions of New York City real estate but also by the ways in which big developers spend their money, spreading it across the state to really have a lot of power throughout the state.
Azi: That gets me into my second question on this. Is he unique, or emblematic of the New York real estate economy?
Zephyr: Trump’s corruption is totally unprecedented. And this is arguably the most corrupt administration in history. His own use of the office to make money, the repeat scandals of his associates, the repeat scandals of the people in the administration but also his big supporters, whether it’s Chris Collins, or Duncan Hunter, the Trump circle is profoundly corrupt. In some ways it seems they really don’t understand the charge of corruption, or are willing to run roughshod over it. But I got to say, when he was rising through the real estate ranks in New York, he was using some pretty typical tactics. Spreading around a lot of money, making sure he was donating to lots of campaigns, rubbing elbows with the right people, being close to people in power. Clearly, not every developer is crooked and not every developer is Donald Trump. I want to be totally clear about that, but, at the same time, and we see this, this — Donald Trump the president having come out of and built his power and built his networks of power in the culture of big money in New York City real estate. And I think that’s really important. I think we have to take a really hard look in the mirror at what role our acceptance of this kind of elbow rubbing and big real estate money looking, the other way, what that’s meant. I guess this gets back to your first question, but I want say something about my own agenda, which is, we’ve never really had — again, I think the current bureau is really moving in the right direction — but we never really had a New York Attorney General who made taking on New York City real estate absolutely central. And to do that, you have to not take real estate money. I’m the only candidate for attorney general who isn’t taking real estate money and this isn’t little trickles of money. This is a massive amount of money going into my opponents’ campaign and one of my opponents is taking in the last filing $150,000 through the LLC loophole, through several different LLCs is coming from the Durst Organization, a major developer. And when you look at that, just common sense tells you these aren’t people, these are LLCs, and they’re giving this money for a reason and they definitely want to maintain their influence in political law enforcement circles and we really need — it’s past time, an attorney general who says we are going to uncover every rock, we are going to fight for tenants rights, we are going to seek criminal referrals where necessary. One of the things I really care about is creating an ombudsman who is out working in the community who — a lot of times, big developers assume that people don’t know their rights, so they’re going to get away with everything or just get away with a slap on the wrist. Go understand the way in which tax fraud is rampant; understand and investigate really difficult issues of money laundering. These are hard case to investigate. It takes resources but it has to be a priority because we can’t stand for the corruption that’s coming out of New York City real estate anymore.
Azi: And that leads me right to my third question: How would the real estate community be policed on your watch?
Zephyr: There’s a series of different buckets. One is, I will vigorously litigate unlawful developer and landlord behavior. Tax fraud and other fraud are rife across real estate developments. Relatedly, there is a widespread problem of people being pushed out of their home through harassment by landlords. One of the many tools that can be used in this area is, under the executive law, which says the attorney general must / should investigate businesses who repeatedly seek to make illegal acts. So, one of the problems is we sometimes look at these as isolated instances, but when you have a developer who repeatedly harasses, or repeatedly violates or repeatedly engages in tax fraud, that ratchets up the power of the attorney general’s office to use executive law 63-12,to investigate patterns of illegal behavior. That’s an important tool I will use. I mentioned this before but I’ll take referrals where necessary and continue to beef up the criminal unit. I have a bunch of other sub-topics but one of the values of all this too, is that, when we get settlements, those settlements should be used to establish funds for / to maintain affordable housing. [8:56] So, as the people’s lawyer, the job is to investigate illegality, get those settlements, make sure the people who are the most hurt, get the benefit. And working with community groups is going to be incredibly important. I mentioned earlier the role of the ombudsman, which I think is really important, having the office of the attorney general out in the community — you may not know that your child being sick is related to a tenant harassment claim. In fact people don’t know their rights, they don’t necessarily know what’s going on. So, making sure that we’re a presence in the community is going to be critical, and then joining with tenants right groups where appropriate, on litigation. [9:47] I think it’s outrageous how New York City real estate has run roughshod over New York politics. There’s New York City big real estate, big money in state senate elections around the state. Upstate everywhere and the pain and suffering and inequality it’s causing across the board just can’t go on anymore.
Azi: You mentioned Davidson at the New Yorker, and his reporting has led to this episode’s questions about real estate and Trump.
Zephyr: And if I didn’t mention it, but I think I talked about money laundering before, I think there’s so much we don’t know; investigation is critical, but we certainly have to be looking very hard and have to be very aggressive about going after money laundering.
Azi: He appeared on the Ezra Klein Show and he said he had heard from a former state official that there was a concern that if you investigate too aggressively the New York real estate economy, or New York real estate and the money laundering, that if you investigate it too aggressively, it’ll actually have a deleterious effect on the New York economy, and therefore there was a concern that you sort of have to let a certain amount of it go by. I’m wondering if you heard that argument and if you have any thoughts about the ripple effect?
Zephyr: That’s totally outrageous, as an argument. A really vibrant economy where poor and working-class New Yorkers can afford to live depends on enforcing the laws. And there’s no such thing as Too Big to Fail in real estate. And basically that’s the argument I hear: too big to jail, too big to prosecute, too big to investigate. That didn’t work and led to the financial crash and arguably our failure to prosecute and investigate big real estate in New York has led to a Democratic crash. So, no, as the next attorney general I think the job is to investigate and enforce the law, be the voice of the people whose voices have been silenced and you’re always going to hear arguments from those in power that threatening their power threatens the entire economy but what’s good for the biggest corrupt developers is not what’s good for New York.
Azi: You mentioned previously that you had concerns about Gov. Andrew Cuomo’s use of a message of necessity, I think when you discussed the Safe Act. That was one of the reasons you said ‘hey, this is a problematic process. As AG, is there any role in looking at that or is that strictly a legislative-executive function?
Zephyr: Well, there’s three areas. Of course the attorney general is involved in proposing and supporting legislation from time to time although the essence of the job is legal strategy. But there are three main areas I plan to use my platform, to really push for reform. One is mass incarceration, one is voting rights, and the third is campaign finance reform and corruption in Albany. And in that third category obviously some of the things that we have to look at is, how concentrated power is, the whole three men in a room system that makes it very hard to hold lawmakers accountable; the way in which legislation is rushed through with abuse of the message of necessity, being used far more often than it should be and that really shuts people out. So, I’ll always be a voice for transparency, more openness, more accountability, because I see these as core Democratic functions and if you’re the voice of law, and the chief law enforcement officer in the state, your job is to stand up for openness, accountability, and justice. And those are the three areas where I think i can have the biggest impact and New York desperately needs reform in those areas.
Azi: And my last question for you, because I know you’re waiting at an airport to travel and campaign more: You go the New York Times; you got the Daily News; you got Ocasio-Cortez. You seem to be the front-runner in this race. I’m wondering if you see yourself as the candidate to beat heading into the primaries?
Zephyr: I mean we’ve had unbelievable momentum in the last couple of weeks; its really exciting. And I am out there campaigning for every single vote. So many people in the state still do not — haven’t really turned their attention to this race. And we are reaching new voters every day. I am really proud, not just of the endorsements but what the endorsements are based on. Understanding that I have anti-corruption expertise, and understanding that I am truly independent, and understanding that it matters that I am the only candidate who doesn’t take corporate money. So, I’m feeling really good, but we’re out there trying to reach every single voter.
Azi: And where are you heading off to, just out of curiosity?
Zephyr: Where am I going? We’re going to the Democratic Rural Conference in Octavia, for a forum. We have forums — I think three this week. They’re great. They’re a great chance to meet voters. So, I’m flying to Buffalo.
Azi: And this is a return to roots of sorts for you. You did organizing for Dean, in rural states, you grew up in a rural area in Vermont.
Zephyr: Hmm hmm. I actually love campaigning. I love talking to people all around the state. I love hearing the questions you don’t expect at these forums. And when I am the Democratic nominee to be the next attorney general, I look forward to continuing to really be out there and listening to people. Thank you so much for having me on.
Azi: The first question I have is: Why was Trump able to operate so questionably and so openly in New York for so long?
Leecia: Well, the reality is that with the exception — the glaring exception — of the building that he owns in midtown Manhattan, he hasn’t really built anything in New York City in decades. He is much more of a shady brand and marketing guy who has exploited tabloid fame into a reality tv career. And I really appreciate your question because I know a lot of New Yorkers and people around the country have that question on their mind. I think the larger question is: How has Donald Trump conned so many people into thinking that he is in fact a legitimate business person at all, starting with gossip writers. Some folks followed a couple of decade ago—tabloid editors and then NBC and now large pockets of the American public who think he’s this great deal maker when we now now pulling back the layers of the onion that he isn’t.
What I will say to you, regardless of how much he has or has not been a part of the real estate industry and he hasn’t really been at all a part of it at all in the past two decades, as Attorney General I am going to go after aggressively conmen of all stripes, whether they’re running bogus charities like the Trump foundation, which hasn’t met in almost two decades; whether they are ripping off New Yorkers with for-profit fake schools like Trump university, of whether they’re engaging in any other type of shady enterprise.
Azi: And that leads me into a second question about Trump and New York. Is he emblematic of the New York real estate economy?
Leecia: Well I don’t believe he’s emblematic and I also don’t believe he’s unique. We’ve got bad actors in all sectors of our economy and real estate unfortunately is no exception and its unfortunate because New Yorkers across the state but particularly in New York City are struggling so hard to find quality affordable housing and we’ve got too many shady folks in the real estate industry that are making it impossible for them to achieve that dream that we all want and that we all as New Yorkers should have. So unfortunately I don’t think he is unique but I don’t think he’s emblematic and in large part because as I mentioned at the outset, he hasn’t really been a member of the real estate community in a meaningful way. Now he’s conned a lot of New Yorkers including a lot of members of the press and he’s taken folks across the region and the state and the country for a ride in terms of somehow conveying that he’s this great businessman or real estate mogul when in fact it’s all about him using his name and his fame as much as possible but it’s really frankly a mirage and I am pleased that the former attorney general did investigate and prosecute and seek compensation for New Yorkers who were conned by him and Trump University. I am so pleased to see that Attorney General Barbara Underwood commenced her investigation and now her litigation with respect to the Trump Foundation foundation, which has clearly violated, clearly violated, state law in using charitable nonprofit contributions for his own personal benefit, whether it’s to pay off settlements or to have someone paint a hundred thousand dollar portrait of him that hangs in a non-public club. So I don’t believe he’s either unique, unfortunately because there are other bad actors in the industry but I don’t believe that he’s emblematic because he hasn’t frankly been a part of the industry to the extent that he’s tried to convey he has been for many years.
Azi: So my third question for you is sort of along this line and after I want to pick up on the comment that you just made about the shady actors in the real estate industry. How would the real estate community be policed on your watch?
Leecia: Well I would make sure that the real estate community, whether you are a small player or a large player , that you’re complying with New York state law and frankly New York City law and to the extent that there is are violations after violations of even New York City statues that is something that as attorney general I would aggressively investigate and prosecute. So, by way of example, real estate owners who are seeking to get rent increases based upon purported improvements to their properties. Well we have found time and time again that those rent increases aren’t justified, that the improvements purported to have been made in many cases aren’t made so that’s an area that is ripe for investigation and prosecution to the extent that that conduct continues and unfortunately it continues to this day. When you have slum absentee landlords who are taking hard-earned resources from New Yorkers and are not providing them with homes that are safe to live in, that is another area that I would investigate and aggressively prosecute. We all work too hard — too many New Yorkers struggle too hard to make ends meet to turn over those hard-earned dollars to a slum landlord and to then be living in a place that is not fit for any person let alone family members and children in which to live. And then we have landlords and, you know, I’m not casting aspersions across the real estate industry writ large, but we have landlords who clearly have used time and time again minor technical violations of a lease agreement as a basis for evicting tenants in the hopes of getting new tenants that would pay substantially higher rent. That kind of conduct violates both the spirit of in some cases New York City law but also New York State law. Those are just three areas where I as attorney general would aggressively investigate and prosecute bad real estate actors because this issue is too important not to be aggressively monitored and not to be aggressively prosecuted.
Azi: The other question I have for you, it’s sort of about the process of how this campaign and this election cycle has ?? One of the candidates has gotten the endorsements of two major newspapers based in New York, the Daily News and the New York Times. Another candidate in the race has gotten the support of the sitting governor who seems to be on his way to reelection. In the new york times, when they endorsed one of your opponents they had a lot of encouraging words for you, you know, one of the most impressive records, or resumes, of somebody running for this office in quite some time. I’m just wondering if you see the path to your victory—if your campaign is where you want to be in this moment and if you’re thinking about staying in public service even after this election.
Leecia: Well, thank you for you that question. My campaign is absolutely where I want it to be and it is getting stronger every every hour of every day, with about 17 or 18 days to go before the Thursday September 13 primary. Listen, I am proud that I’m on the ballot not because one person did or didn’t endorse me or a group of people in a room who are part of the party leadership did but because more than 40,000 New Yorkers across the state—across the city, from Long Island, through New York City, the North Country all the way to my hometown in Western New York took the time to learn about my candidacy and sign their names on the dotted line. And more than 40,000 New Yorkers—they’re the reason that I’m on the ballot. and they did that back in May and June and we’ve been building our support across the state every day as I campaign across the state making my case to voters and listening to their concerns. And with respect to the New York Times, I would very proud of what the New York Times said about my candidacy. They called it a strong candidacy, talked about my litigation experience. I do in fact have more litigation experience in courtrooms across this state by far than any other candidate, from the Southern District of New York to the Western District of New York. They talked about my experience fighting in the trenches for social justice for more than 25 years as a lawyer for Joe Biden, as a lawyer for Hillary Clinton, as the first woman and the first person of color to be the chief economic development adviser to a governor of this state in this state’s history. What they didn’t mention but one of the things I very much like to share with prospective voters because I’m so proud of it: I’ve been a lawyer now for 28 years. A New York lawyer. For 28 years. But the case that I’m most proud of is a case where I represented every single woman — hundreds of women — incarcerated in a District of Columbia prison, because of prison conditions they were living in. We had clients who did give sexual favors to guards because they thought that was the only way they could be able guarantee being able to see their children, something they should have been automatically entitled to do. One of my clients literally had her legs shackled to a hospital bed as she brought a child into this world. And I’m proud to say that I just didn’t file a lawsuit, I didn’t go on television, it wasn’t about press releases. It was about engaging in hundreds and thousands of (hours of) really hard strategic legal work. And I’m proud to say that we fought, we fought hard and we won. And I was 29 years old when they case was commenced. Barely 30 years old when we got unprecedented relief for these women that actually stands as a seminal case in terms of prison reform across the country. That gives New York voters a glimpse of the kid of lawyer that I was when I was barely 30 years old. It gives you some sense of the kind of attorney general I will be as I celebrated just my 54th year of age. So I’m extraordinarily gratified by the support we’re getting. I have complete strangers every day of the week from the borough of Brooklyn, Manhattan, all across the city, all across Long Island the central part of state and upstate New York say to me “Leecia, we’re so glad you’re running. We’re proud Democrats. We’re proud Democrats.” And what they’re basically saying is “We know you’re not the endorsed candidate but they say “we’re so glad you’re running because you are by far the best prepared, most qualified New Yorker who understands all the needs of the state. They know that as council to Hillary Clinton, it was my job to understand all the needs of the state. I worked for Hillary for four and a half years fighting with her in the trenches to advance women’s rights and civil rights and immigrant rights and LGBTQ rights and voting rights. It was my job as the chief economic development adviser to the governor overseeing 11 agents in state government from ag and markets to the economic development agencies. My understanding when I was at the state fair last week about the importance of the dairy industry isn’t because someone gave it to me as a talking point. It’s because it’s reflective of the work that I have done. So I’m very pleased and proud and frankly humbled about where we are in this race and I am sending every waking moment continuing to make my case to voters who are really frightened about what we’re experiencing from this president who is seeking to undermine so many of the values and the rights that we hold dear.
Azi: And just one last question: You mentioned you worked for Hillary Clinton and that landmark case with women in prison who were hackled which seems remarkable that it even had to be litigated. And I’m wondering if you’ve commented more or had a chance to think about not Hillary Clinton but Bill Clinton 20 years later, reflecting on his role with Monica Lewisnky and what that looks like in the current environment. He got questions about it while he was promoting on a book with (James) Patterson. I’m wondering if you had any thoughts about his role and what that incident from 20 years ago looks like today as someone who worked in the Clinton orbit.
Leecia: Well I didn’t work for President Clinton; I proudly worked for Hillary. But clearly what the president did was wrong. Clearly what he did was wrong. And some people have said “well we need to move forward” and I agree we need to move forward but I do believe while I believe that William Jefferson Clinton was a great president, not a perfect one but he was a great president in terms of how our country became stronger economically and more just on his watch, I am concerned because I do believe that in the more recent interviews with respect to his new book that he should have said more about recognizing that his conduct was wrong and reflecting the most sincere apology possible to Miss Lewinsky for the wrong that he committed so that troubles me and I hope that even though that was many years ago what we’re seeing over and over again in the me too movement and what we’re seeing unfortunately now thousands of times with respect to the Catholic church is that just because something happened 10 or 15 or 20 or 30 years ago doesn’t mean that the pain that survivors of domestic violence or abuse suffer goes away. Now that was not the case with President Clinton; that was a consensual relationship but clearly it was something that was wrong and that wrong I believe should be acknowledged and appropriately recognized for what took place because what I think we’re learning now more and more is that abuse of power is something that shouldn’t be tolerated in any circumstance and we as a society as astate as a nation really need to grapple with these issues, deal with them openly and sincerely and for people who have made a mistake — I’m not talking about people who have committed crimes — people who have made a mistake. The president of the United States — great president — but he made a mistake. He made a big mistake. I think people in positions of power, whether they’re in government or in their corporations, needs to acknowledge even if they haven’t engaged in criminal wrongdoing that they have made a mistake and to sincerely and publicly apologize for that mistake and then talk about what they learned about themselves and what they learned about the process of seeking forgiveness and increasing awareness about this so that in a few years hopefully we won’t be talking about these situations as much as we are today not because we’re brushing them under rug — just the opposite. But because there’s a greater recognition of what is appropriate behavior and what is absolutely inappropriate and wrong behavior in the workplace. Those are my thoughts and we need to move forward but we also need to recognize pain, we need to recognize wrongdoing and I think only when we do that can people who have made mistakes and the victims of those mistakes best be able to move forward with their lives and carry on.
FAQ: Why was Trump able to operate so questionably, and so openly, in New York for so long?
Sean: Listen, it’s easy to say that campaign contributions protected Donald Trump. I’m sure that’s what people will say and there is some truth to that. I think the dirty secret here is that there is a tremendous amount of white collar crime and corporate malfeasance that is simply ignored or tolerated. There are at least two reasons for this – first, campaign fundraising has created an unquestionable coziness between politicians and the industries they are supposed to regulate, and that is certainly true of real estate. Obviously, not every politician who takes money from someone is bought and sold. We have public financing in New York City, and still Donald Trump operated with impunity. But coupled with that coziness is the fact that these crimes take more time and effort to prosecute, and investigators might be hesitant to take on a fight they could lose. So these types of crimes have just been downgraded in priority, and that allowed crooks like President Trump to get away with questionable business practices with zero real accountability. When I am the attorney general, my office will prioritize these types of crimes because they are difficult, not in spite of it. The Office of the Attorney General is uniquely positioned to do something about these guys in New York City and around the state — the AG just has to make it a focus of the office.”
FAQ: Is he unique or emblematic of the New York real estate economy?
Sean: As I said, I think President Trump is emblematic of our approach to white collar crime generally, and I think that is especially true of real estate in New York. There’s a lot of money sloshing around in this system and way too many entanglements with regulators and law enforcement. It’s about time someone does something about it.
FAQ: How would the real estate community be policed on your watch?
Sean: The attorney general has an obligation to follow the facts and the law, and I can promise you one thing, when I am attorney general, if those facts tell me you’re committing a crime, I don’t give a damn who you are — shady landlord or real estate billionaire — we are coming for you.
FAQ: Why was Trump able to operate so questionably, and so openly, in New York for so long?
James: Trump built his empire on real estate and, at the foundation of his business model was discrimination. The FBI investigated claims of racial steering and the Department of Justice filed a lawsuit which was settled without any admission of wrongdoing. Perhaps this was Trump’s first lesson of what later became a business model; breaking the law and making minor restitution is part of the cost of doing business. When the penalties don’t touch the principal, when they don’t threaten the business’s livelihood, breaking the law is just a factor in a cost-benefit analysis. Perhaps it was more profitable to discriminate and pay the price of a consent decree than to follow the law. In sum, penalties for breaking the laws around discrimination and rent stabilization are too low and enforcement is too spotty in New York to dissuade truly bad actors.
FAQ: Is he unique or emblematic of the New York real estate economy?
James: Trump is very much emblematic of the New York real estate economy. One only need look at yesterday’s news to see that his own son-in-law shared a similar approach, in this case by falsifying building permits in order to conduct construction on rent-regulated buildings. This type of work is commonly known as eviction-by-construction and is a problem that runs rampant through the real estate industry. There are literally thousands of landlords who have business models built on forcing rent-regulated tenants out of their units in order to de-regulate them.
FAQ: How would the real estate community be policed on your watch?
James: The first and most important change that needs to happen is legislative. The rent stabilization loopholes must be closed; we must eliminate vacancy decontrol, change the law around preferential rents, and better regulate increases collectible due to repairs and improvements. These loopholes are what collectively create the incentive to force rent regulated tenants out of their apartments so they can be decontrolled. They are the fuel for the fire that is gentrification.
Even absent those changes, however, enforcement of real estate abuses must be more aggressive, smarter, and better coordinated. While the existing Attorney General’s office has a real estate bureau and task forces devoted to housing enforcement, it needs to have a bureau dedicated to tenant and homeowner protections. I have spent much of my career protecting tenants and taking on unscrupulous landlords who try to harass or harm them. The Housing Protection Bureau will work with Housing and Community Renewal (HCR) and City agencies including the Department of Buildings (DoB) and the Department of Housing Preservation and Development to investigate and root out the widespread fraud and harassment in the housing business: false registrations, illegal rent increases, fraudulent deregulations, building permit applications that misstate tenant status, harassment, and discrimination. For too long housing enforcement has relied on self-reporting and investigation by HCR, with little enforcement permit violations by (DoB). When I am Attorney General, that will no longer be the case. And, the aftereffects of the foreclosure crisis remain. Modification scams, deed theft, and zombie properties that undermine our neighborhoods’ health proliferate. We must root out scammers and work to enforce the zombie property laws that make banks responsible for upkeep.