BEHIND THE HEADLINES
Elite group of executives giving advice to Paterson
But many business leaders are afraid downstate-dominated panel will ignore upstate issues.
By Tom Precious
- NEWS ALBANY BUREAU
Updated: 05/11/08 7:05 AM
-
- Anne Mulcahy of Xerox
More Photos
ALBANY — New on the job and wanting to get his own advice on economic issues affecting the state, Gov. David A. Paterson has turned to an elite group of corporate titans for wisdom.
There’s at least a couple of billionaires in the group, financiers and mega-deal-makers from the likes of IBM, Verizon, GlaxoSmithKline and even the New York Mets.
So why, then, are so many business leaders around the state, especially upstate, expressing growing concern over whom Paterson is listening to these days?
For starters, the nine-member panel includes not a single representative from upstate, which is still seeing population declines and job losses. Also, there is no voice from the small-business community. No agriculture. No tourism. No academia.
Just big business, with a downstate, and in a couple of cases, out-of-state, base.
The panel includes the heads of two companies that have downsized their upstate presence over the years — Xerox and General Electric — both of which are now headquartered in Connecticut.
Admittedly, it is an esteemed group of executives who know much about how to make money for their companies and shareholders. But upstate executives worry that perhaps the panel’s members don’t have the proper lenses with which to see the kinds of problems occurring north of their downstate or out-of-state corporate boardrooms.
“It’s certainly an impressive group of people,” said Michael Elmendorf, state director of the National Federation of Independent Business, which represents small companies. “But people forget most of the businesses are small businesses, and most of the job creation and most of the private sector payrolls are from small business.”
Andrew Rudnick, president of the Buffalo Niagara Partnership, said most of the executives on the advisory panel come from multinational companies whose bottom lines are not rocked by things like workers’ compensation or unemployment insurance costs.
“No one in that group understands the needs of upstate as an economy and the needs of upstate employers specifically,” said Rudnick, whose organization joined the Rochester Business Alliance, Unshackle Upstate, and others in voicing concerns about the advisory panel.
Upstate chairman on way out
Among the panel’s recommendations to Paterson so far is that he end the year-old system that created two chairmen — one for upstate, based in Buffalo, and one based in Manhattan — to oversee the state’s economic development efforts. The recommendation, since embraced by Paterson and now being structured, has been met with fierce resistance from upstate business groups, who say the job-creation agency will again become Manhattan-centered and cut into fledgling efforts by the state’s new Buffalo economic development headquarters to restore the region.
The Paterson administration, though, defended the group, noting it is not the only voice the governor is listening to and that several of its members are with companies that have offices across the state.
“This group is not the end-all and be-all when it comes to this process,” said Errol Cockfield, a Paterson spokesman. He said the governor is discussing the needs of upstate with upstate leaders.
The panel’s focus seems to have morphed. Originally, reports said it was created to help find a new person to take over as the downstate economic development co-chairman, vacant by the departure of Patrick Foye. Now the group’s charge is to submit a list of finalists for Paterson to consider for a single statewide economic development chairman, which would change the upstate and downstate structure adopted a year ago. The upstate chairman, Daniel Gundersen, is based in Buffalo.
But the panel’s main focus, Cockfield said, goes beyond personnel matters. “They’ve been asked to advise the governor on how Empire State Development should address the economic development challenges of the state,” he said.
Panel has downstate appeal
The panel’s members, some of whom have donated to Paterson’s campaigns in the past, are:
• Jean-Pierre Garnier, the outgoing chairman of GlaxoSmithKline, the British drug company with a U. S. base in Philadelphia. The French-born executive is an adviser to the fund that makes investments for Dubai, the Middle East emirate.
• Sidney Holmes, a bond lawyer at Winston & Strawn in Manhattan, whose clients have included the New York City Industrial Development Agency. Holmes, who went to Hofstra Law School with Paterson, was nominated last year to be a commissioner with the Port Authority in New York.
• Jeffrey Immelt, chairman of the board of General Electric. The mega-company, which has seen many of its innovations take place in upstate New York, is based in Fairfield, Conn.
• Anne Mulcahy, chairwoman of the board at Xerox. Based in Norwalk, Conn., the company for years had called Rochester home.
• Samuel Palmisano, chairman of the board of IBM. The company is based in Westchester County.
• Ivan Seidenberg, chairman of Verizon, the telecommunications giant based in Manhattan.
• Jerry Speyer of the international real estate development firm Tishman Speyer, based in Manhattan. Forbes puts his net worth at $2.1 billion.
• Fred Wilpon, chairman of the New York Mets, of which Paterson is a big fan.
• Sanford Weill, the former chairman of Citigroup who had a much-publicized run-in with former Gov. Eliot L. Spitzer in 2003 during Spitzer’s reign as attorney general. Spitzer helped block Weill from being head of the New York Stock Exchange.
Weill appears to be most involved with the endeavor, sources say, and he is leading the effort to end the upstate/downstate cochairmen structure.
The concerns about the advisory panel’s composition have run the gamut. The state’s Farm Bureau, noting that agriculture is the state’s No. 1 industry, urged Paterson to name someone from its community.
“While Empire State Development should rightly focus on the larger, ‘best-bang- for-the-buck’ business development opportunities, the agency shouldn’t continue to overlook the collective largest employer in upstate — small-to medium-sized businesses and farms,” John Lincoln, the group’s president, wrote Paterson recently.
Upstate business groups take little comfort in words from the Paterson administration that the new panel won’t be the only and final voice that will have the ear of the governor, who comes from Manhattan.
Upstate wants representation
Others say Paterson appears to be on a fast track to fill the new economic development statewide chairman’s post, and that he is doing so on advice from a body of top corporate executives who are not representative of New York’s broad array of businesses.
They note, for instance, that universities are increasingly becoming a key link to improving the upstate economy, yet there is no one on the panel from academia. Nor is there anyone whose daily job it is to try to bring jobs to New York, such as the dozens of economic development agencies across the state.
“Don’t make this unilateral move without talking to the business leaders from upstate,” Frank Elias, of the Mohawk Valley Chamber of Commerce in Utica, urged Paterson. “Downstate is a very different animal than upstate.”
The head of the New York State Economic Development Council, which represents public and private job-creation entities across the state, said the original idea behind the new Paterson advisory panel was to help him find someone to lead downstate economic development efforts.
“But if the purpose of this panel is broader than simply picking a downstate chairman, then we would have concerns that broader representation from upstate and from the economic development community are absent,” said Brian McMahon, the group’s executive director.
