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Tuesday, August 9, 2011

Hugh Carey, Who Led Fiscal Rescue of New York City, Is Dead at 92

Hugh Carey, the two-term New York governor who helped New York City avert bankruptcy in 1975 by imposing financial controls and made tough choices to cut taxes and balance the state budget, has died, the New York Times reported. He was 92.

New York Governor Andrew Cuomo’s office said Carey died early today at his summer home on New York’s Shelter Island, the newspaper reported.

“Governor Carey led our state during a time of great financial turmoil and pulled us back from the brink of bankruptcy and economic ruin,” Cuomo said in the statement.

A Democrat who served in Congress as a representative from the New York borough of Brooklyn, Carey made financial discipline a priority from his first days after taking over as governor in 1975. Declaring that New York state had been “living far beyond our means,” he told the legislature in his first State of the State speech that “the days of wine and roses are over.”

By then, New York City was already in a fiscal crisis. Within months, banks cut off the city’s access to credit because it had run up a $5 billion deficit by borrowing to pay operating expenses and loans.

As the 51st governor of New York from 1975 through 1982, Mr. Carey led a small group of public servants who vanquished the fiscal crisis that threatened New York City and the state — the direst emergency a governor had faced since the Depression — by taking on powers over the city’s finances that no governor had wielded before and none has wielded since. A liberal Democrat, Mr. Carey reversed the upward spiral of borrowing, spending and entitlement under one of his predecessors, Nelson A. Rockefeller, a Republican who had presided in an era of limitless government promise.

But even after eight years as governor, Mr. Carey remained an enigma. The witty storyteller who could charm an audience alternated with the irascible loner who alienated many of his allies. The brooding, private man, father of more than a dozen children, who mourned the deaths of his wife and, earlier, two sons killed in a car crash, gave way to a man who engaged in an exuberant, very public romance that led to a second marriage. Hugh Carey rose to power as a Democrat outside his party’s machine. He began the 1974 campaign for governor as a recently widowed congressman from Brooklyn, a long shot who was not taken seriously, yet he cruised to one of the most resounding victories in the state’s history.

Yet he spent his final years as governor frustrated. Absent an emergency, he often seemed bored with the job.

The political strategist David Garth, who was one of Mr. Carey’s closest associates, once said of him: “Hugh Carey on the petty issues can be very petty. On the big stuff, he is terrific.”

Mr. Carey’s stature grew in his decades out of office, and he was hailed as a hero by Republicans and Democrats. As he acknowledged, his handling of government finances overshadowed all else he did.

In an interview in 1982 in his last days in office, he said, “The objectives I set forth I’ve achieved in terms of a state that’s respected fiscally, a city that’s now well on its way back to concrete foundations.”

In four terms as governor, Mr. Rockefeller had built a legacy of state universities and highways but also of much higher taxes and enormous debt. The pattern was repeated at the local level; under Mayor John V. Lindsay, a Republican turned Democrat, New York City had to borrow money for day-to-day operations. The 1974-75 recession opened yawning deficits and exposed years of unsound practices.

On Jan. 1, 1975, Mr. Carey declared in his inaugural address, “This government will begin today the painful, difficult, imperative process of learning to live within its means.”

He immediately faced a cascade of emergencies, as various state authorities, New York City, Yonkers, several school districts and ultimately the state itself flirted with collapse.

New York City lay at the core of the crisis. Mr. Lindsay’s successor as mayor, Abraham D. Beame, was taking drastic action, cutting tens of thousands of jobs, but a solution lay beyond the city’s grasp. In May 1975, Wall Street firms refused to sell the city’s bonds, threatening its ability to pay its bills.

Mr. Carey responded with a series of audacious moves to keep the city afloat. He created the Municipal Assistance Corporation to borrow money for the city. He created and headed the Emergency Financial Control Board, with the power to reject city budgets and labor contracts, giving him vast new authority at Mr. Beame’s expense.

In 1947 he married Helen Owen Twohy, the widow of a Navy flier killed in the war whom he had known as a teenager, and adopted her daughter. They had 13 more children together and divided their time between Park Slope and a rambling white house with a wraparound porch on Shelter Island that in time became the family homestead.

Survivors include 11 children, 25 grandchildren and 6 great grand-children.

After the war, Mr. Carey returned to St. John’s, where he finished his undergraduate education and graduated from law school. He then entered the family oil business. His eldest brother, Edward, struck out on his own, creating the New England Petroleum Corporation and amassing a fortune that would help underwrite his brother’s political career.

In 1960, Hugh Carey ran for Congress in a Brooklyn district that ran from Park Slope to Bay Ridge, challenging a popular Republican incumbent, Francis E. Dorn. Though Mr. Carey was not one of its own, the Democratic Party organization backed him because no one else wanted what was viewed as a hopeless assignment. Running in a strongly Catholic district in a year when John F. Kennedy was pulling Catholics to the Democratic line, Mr. Carey squeezed out a 1,097-vote victory.

In seven terms in Congress, Mr. Carey ranked high on the scorecards of liberal groups and adhered to positions like opposing the death penalty even when they were unpopular. But in keeping with the tone of his district, he portrayed himself as a moderate, playing up his support of federal aid to parochial schools.

In Congress he became one of the most influential members of the New York delegation. He sat on the House Education and Labor Committee, which handled most of the New Frontier and Great Society social welfare legislation of the Kennedy and Johnson administrations, and later on the powerful Ways and Means Committee. He played a leading role in trying to save the seat of the Harlem congressman Adam Clayton Powell Jr., who was the target of corruption charges, and in the enactment of federal revenue-sharing with the states.

But Mr. Carey became restless, and he and his wife grew tired of commuting to and from Washington with their many children.

In 1969, he ran for mayor of New York as an independent, angering Democratic Party leaders and prompting predictions of his political demise. But his sons Peter and Hugh Jr., both teenagers, were killed in a car accident on Shelter Island, and Mr. Carey abandoned the race. Another son, Paul, died in 2001.

Mr. Carey considered another run for mayor in 1973 but deferred to a fellow Brooklyn Democrat, Mr. Beame. That year, Helen Carey, who had been treated for cancer three years earlier, learned that the disease had returned, and on a family trip to Ireland, Mr. Carey decided to retire from politics.

In December 1973, however, he saw the political opening he had sought, when Mr. Rockefeller resigned as governor to become vice president under President Ford, leaving Lt. Gov. Malcolm Wilson to serve the year remaining on his term. Democratic Party leaders backed Howard J. Samuels, the president of the Off-Track Betting Corporation, for governor, and Mr. Carey was seen as a long shot. On March 8, 1974, Helen Carey died. Her husband, with seven school-age children still at home, was expected to bow out of the race. But on March 26, he announced his candidacy. Friends said that as much as anything, he needed the challenge to distract him from his grief.

When he said that his brother would spend $1 million on television advertising to help his candidacy, the boast was viewed with skepticism, but Edward Carey spent that and more.

With Mr. Garth as media adviser, the Carey campaign began advertising on television even before the Democratic State Convention. At the convention, with Mayor Beame’s covert help, Mr. Carey barely won enough backing to secure a spot on the primary ballot.

He put nearly all of his campaign funds into advertising, ignoring the maxim that primaries were won with organization, and he won the support of two powerful members of the city’s liberal establishment: former Mayor Robert F. Wagner and Alex Rose, the Liberal Party leader.

In September, he defeated Mr. Samuels with 61 percent of the vote. In November, in the national post-Watergate sweep by Democrats, Mr. Carey trounced Governor Wilson, 57 percent to 42 percent.

“All my life, people have been underestimating me,” Mr. Carey often said. In rising to power, he repeatedly ignored the conventional wisdom and trusted his own judgment, and he would again as governor.

Years later, he told a reporter: “A mentor long departed told me that the greatest gift in political life, in any life, is to view yourself objectively, at arm’s length, to make an assessment of yourself. So whom do I rely on? I rely on myself.

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