N.Y. Mayor-Elect Finds City on a Financial Cliff

Although he spent $50 million on TV ads telling New Yorkers to support him for mayor, businessman Michael Bloomberg rarely told voters why he wanted the job. That changed on election night.

As the Republican media mogul faced cheering supporters, he said he was moved by the presence of former Mayor Ed Koch and Gov. Hugh Carey on the dais. They had saved the city from fiscal ruin in the 1970s, Bloomberg said, “and now I want to do that too.”

He’ll have his work cut out for him as the popular Mayor Rudolph W. Giuliani leaves office in seven weeks and New York wrestles with the greatest financial crisis in its history.

Hours after an intense mayoral race ended, New Yorkers woke up Wednesday to a new leader who couldn’t be more different from Giuliani: Bloomberg, 59, is the richest unmarried man in New York, worth $4 billion. And what he lacks in basic political experience he makes up for in business smarts.

The successful owner of Bloomberg L.P.--a financial news company with 8,000 employees--Bloomberg is the latest in a growing number of American executives who have bankrolled their own campaigns. This was one of the reasons why he won a stunning upset victory over Democrat Mark Green.

Few would have predicted it weeks ago, because Democrats hold a 5 to 1 registration edge over Republicans here, and Bloomberg himself never seemed to gain traction with voters. He seemed awkward and uncomfortable on the campaign trail, finding it hard to make small talk with voters and struggling with impromptu comments on the stump. Many attribute his victory to a wave of last-minute TV spots in which Giuliani endorsed him.

Still, Bloomberg’s core message to New Yorkers--”I’m a leader, not a politician”--seemed to resonate. His business acumen was “exactly what voters wanted in their next mayor, instead of traditional City Hall skills,” said John Mollenkopf, a political analyst and social historian at City University of New York.

Like former Los Angeles Mayor Richard Riordan, Bloomberg is taking office in the aftermath of a great urban trauma. But the Big Apple’s mayor-elect faces even more daunting challenges. Because he is a political unknown, observers can only guess how he’ll deal with a host of problems--including a $4-billion deficit, contentious labor negotiations, rising unemployment and how to rebuild lower Manhattan after the World Trade Center attacks.

“I think he’ll reach out to various communities and surprise everyone with his skill,” said political consultant Joseph Mercurio, who was not aligned with either side in the race. He predicts Bloomberg will display “a rapid learning curve.” But others say that the mayor-elect, whose short fuse and contempt for critics is legendary, may be temperamentally unsuited for what some call America’s second toughest job.

“He’s used to getting his way behind closed doors, not negotiating with labor leaders and other politicians,” says New York political science professor Fred Siegel. “I’m hopeful he’ll surprise us and grow in the job in a big way. But on a personal level, as a New Yorker, I’m concerned.”

Some say Bloomberg has always been a determined, can-do manager who inspires people to do their best--just the kind of leadership New York needs, says Sheldon Fine, an attorney and lifelong friend. Political enemies will underestimate him “at their peril,” he said, “because once Mike sets his mind on a goal, he pursues it full time, with total energy.”

Yet others point to a darker side of Bloomberg, which surfaced in the campaign, involving three sexual discrimination lawsuits filed against him by women who previously worked for his media company. All alleged that he presided over a workplace that did not respect women.

Bloomberg has denied all the allegations. One case was settled by him without any admission of liability, a second was withdrawn, and the third was dismissed and denied on appeal, spokesmen said.

Bloomberg also committed a series of verbal gaffes on the campaign trail, saying that sanitation workers had more dangerous jobs than police officers and firefighters, and suggesting that the Lord’s Prayer was not a Christian prayer.

But none of this seemed to matter in an election where the city’s future was on the line. Few voters said they were bothered by Bloomberg’s personal behavior, according to a flurry of public opinion polls in recent weeks.

Neither were they concerned that he had switched registration from the Democratic to the Republican Party to enter the mayoral race. Bloomberg’s victory showed that there is a future for GOP candidates in New York politics who combine Giuliani’s tough stance on law and order and fiscal restraint with progressive positions on issues such as abortion, gun control and gay rights. In the end, Bloomberg’s campaign did a better job of promising to unify New Yorkers than Green’s, and that won over many undecided voters.

“There’s more that unites people here than divides them now,” said Mitchell Moss, a political science professor and Bloomberg consultant on election night. “The next mayor of New York City understands that.”

Bringing people together may be one of his best skills, said Richard Kahan, a colleague who worked with Bloomberg on several charities.

“Michael knows how to motivate people and attract smart employees, which will be hugely important for New York’s government,” Kahan noted. “And he brings credibility to the table, which is very important for businessmen. You need someone at City Hall who can convince them to stay in New York and not to leave, that things are going to get better over the long haul.”

The next mayor must also convince average New Yorkers that he can relate to them, and this may be a tougher hurdle, according to political observers.

Bloomberg has homes in London, Bermuda, Colorado and suburban New York’s Westchester County, in addition to a $6-million Manhattan townhouse. He has given $300 million to charity in the last five years.

But in other ways, the new mayor says he can connect with everyday New Yorkers. He was born in Medford, Mass., into a middle-class family; his father was a dairy accountant. He attended public schools and was admitted to Harvard’s Business School, where he began a lifelong interest in communications technology.

Although Bloomberg became a managing partner at Salomon Brothers, he was fired in 1981 when the firm was taken over by the Phibro Corp. He described the event as a turning point in “Bloomberg by Bloomberg,” his 1998 autobiography.

Armed with a $10-million golden parachute and a $30-million investment from Merrill Lynch & Co., he founded a media company built around “the Bloomberg Box,” an electronic device that simultaneously allows customers to buy and sell stocks, track business news, research companies and surf the Web.

There are an estimated 153,000 Bloomberg boxes worldwide, each of which cost $1,640 a month, generating more than $200 million a month in revenue.

Bloomberg also runs a financial news service, plus separate Bloomberg TV and radio networks.

He built his empire through a combination of low-cost pricing strategies, bold investments in markets that were hungry for financial news, and a keen instinct for synergy, labeling many diverse media products with his name.

He has also put a high premium on employee loyalty, by eliminating physical partitions in the office and reducing job titles. Baffling many pundits, who had predicted that his company would die a quick death, Bloomberg created a new benchmark for the marketing and delivery of financial data in the Information Age.

“Take a look at the original ideas he used to create his companies,” said Kahan. “That, I think, is what you can expect from him as mayor.”