Meet one of NYU’s most powerful trustees: Kenneth Langone. Both the NYU Langone Medical Center and Stern’s Langone Part-Time MBA carry his name; the multibillionaire gave the medical school a whopping $200 million in 2008.
If you’ve been following the news closely, you might also know his name from the guest list of a secret GOP gathering to plan high-level corporate involvement in elections this year. In fact, there is strong evidence that shows Langone belongs to a network of prominent business executives and Republican operatives working to advance corporate interests through public policy. He has bankrolled conservative groups that produce Tea Party-style attack ads, tapped his influential circle of connections to both reward and punish politicians, and owned stake in companies that made huge gains from Republican policies. I wouldn’t flatly label him “evil” or unfit for his role at NYU. But it’s concerning that NYU’s favorite trustee has a corporate network peppered with unsavory political associations.
Langone, now 75, was born to a plumber and a cafeteria worker; as an undergrad at Bucknell he worked as a butcher’s assistant and ditch digger. But after getting his MBA from Stern and becoming famous for taking Ross Perot’s data company public, Langone made a fortune by founding Home Depot and making a ton of extremely shrewd investments. He sits on the Board of Directors of Yum! Brands, the world’s largest restaurant company, which runs KFC, Pizza Hut, and Taco Bell, among others. These days he commands about $1.1 billion in assets plus the adoration of dozens of finance nerds maintaining Ken Langone fan sites.
He’s also fervently political and has contributed together with his wife at least $390,000 to campaign funds in just the past four years. Given their wealth and political interest, it isn’t too surprising that the Langones attended the secret invite-only meeting – organized by the Koch brothers — on ‘the threat to free society’ in Aspen last June. Ultra-rich moguls, who stood to make a lot more money by dismantling government oversight, collaborated with conservative media-types and Republican strategists to “plan” for upcoming elections; with enough money and the right spin, average voters could be manipulated to demand corporate goals such as environmental and financial deregulation.
Specialists advised participants on how best to take advantage of Citizens United, the Supreme Court decision last January that ruled that corporations could fund independent political media without restrictions. One such specialist, Karl Crow, has encouraged corporations to not only use treasury funds to promote or oppose specific candidates, but to also pressure employees into voting a certain way. Experts on attack ads and fake grassroots movements presented their ideas, as did Glenn Beck.
In an election season with the most undisclosed secret corporate giving since the Watergate-era, the memo sheds light on the symbiotic relationship between extremely profitable, multi-billion dollar corporations and much of the conservative infrastructure.
It might be alarming enough that Langone was there. But at the same time, it isn’t clear that he supports everything on the Koch agenda. The meeting addressed questions such as, “How can you maximize the impact of your gift-giving?” and “What leveraged opportunities exist on campuses now that make a real difference in advancing liberty?” Does this mean that Langone is using NYU to advance corporate interests? Not necessarily. The $200 million that he gave was unrestricted; NYU will use it to construct a new, eco-friendly hospital.
This is why I don’t want to simply attack Langone; it’s unclear how many lines he’s willing to cross to push a conservative agenda, and how deep in he is with the Koch crowd. For instance, he actually opposed some of the Bush tax cuts, despite the millions of he gained from it, saying, “I would have felt better if you dedicated it to deficit reduction.” I’ve read through a lot of old news articles on Langone and there is nothing I found that directly implicates him in something really damning.
And yet he has so many unscrupulous connections that it’s hard not to wonder about his motives. Langone, along with some other Wall Street Republicans, is a major backer of the American Action Network, which formed just two weeks after the Citizens United decision. The so-called “think-and-do tank” takes advantage of unlimited contributions from corporations to “create, encourage and promote center-right policies.” It won’t reveal its sources of funding, and so far it has mainly put out misleading attack ads against Democrats who voted for tax increases or, say, cap-and-trade. One particularly riveting spot depicts Washington Senator Patty Murray actually walking over people, including a 10-year-old child. You know, treading on them.
Langone is also linked to the Florida election controversy in 2000. He was a director of Database Technologies, which was bought out in 2000 by ChoicePoint Inc., a company he co-founded, when it won a $4 million contract to provide a list of people ineligible to vote. According to a Salon.com investigation, thousands of people – largely minorities listed as Democrats – were wrongfully named on the list as felons and yet never got a chance to appeal. Considering the official margin of victory in Florida was just 537 votes, ChoicePoint may have singlehandedly cost Gore the entire election. Several years later, ChoicePoint gained notoriety again for its lucrative contracts in selling personal data to the government.
You could justify his maneuvers as just “good business decisions” – Langone would, and has, himself. He doesn’t care about the socially conservative agenda; economics are his only concern. Unsurprisingly, he invests heavily in New York politics — he was one of Giuliani’s biggest backers and today is one of New York GOP Gubernatorial candidate Carl Paladino’s main donors. He is such a vocal supporter of huge executive pay packages (several of which he has authorized himself) that his critics regard him as “a living symbol of the excesses of runaway executive compensation.” He is chummy with his chief executives and is extremely well-connected with the highest echelons of Wall Street. He prides himself on his loyalty and is known for spiritedly defending his friends. It’s why Landon Thomas Jr. once wrote in the Times, “In a tough fight, Kenneth G. Langone is a guy you want in your corner.”
When he was director of the New York Stock Exchange (NYSE), which used to be an non-governmental organization (NGO), Langone authorized an incredible $190 million pay package for Richard Grasso, then NYSE chairman and another NYU trustee. That attracted a lawsuit from Attorney General Spitzer in 2004, who claimed that Langone and Grasso not only violated rules limiting NGO executive salaries (i.e. you couldn’t get the tax breaks that NGOs get and still get paid hundreds of millions of dollars), but also misled other board members about the actual size of the pay package. It was a very murky situation – Langone and Grasso denied excess and insisted that everybody signed off on it, while board members say they were kept in the dark about actual figures.
What’s more, a human resources executive said her boss made her hide Excel columns that listed Grasso’s total compensation before forwarding the spreadsheet to the board. Instead of backing down, Langone continued to aggressively defend Grasso’s pay for years, until an appeals court finally dropped the case. He even told Forbes in October 2004, “They got the wrong fucking guy. I’m nuts, I’m rich, and boy, do I love a fight. I’m going to make them shit in their pants. When I get through with these fucking captains of industry, they’re going to wish they were in a Cuisinart — at high speed. If Grasso gives back a fucking nickel, I’ll never talk to him again.”
Langone also maintained that Spitzer was only acting in his own political interest, and saw an opportunity for retaliation when Spitzer started his campaign for governor in 2005. Despite being a Republican, he threw his weight behind Democrat Tom Suozzi, who was Spitzer’s main challenger in the primary. Citizen Action of New York estimated that Suozzi collected over half a million dollars from Langone and his friends. In a speech at the Waldorf-Astoria that December, Langone exalted Suozzi and quipped, “I think this attorney general [Spitzer] made a terrible mistake, because you might say I qualify as a, quote, perfect storm.”
I think, as students, we should be grateful for alumni like Langone. They give generously when few would ever consider giving a nickel more beyond their tuition. A larger endowment means things like better financial aid and student services. But at the same time, Langone’s “good business decisions” are bad for the country; he associates with the group of corporate titans funding harmful political movements purely for business interests. Funding the Tea Party and deceiving voters inhibits progress. What would our administration say?
Hat tip goes to @duncanwrites, who let us know about Langone’s GOP ties.