Republican candidate for New York governor Carl Paladino on Tuesday blamed Democrat Andrew Cuomo and his policies as President Bill Clinton's housing secretary for the sub-prime mortgage crisis that helped trigger the recession.
The millionaire Buffalo developer said Cuomo initiated policies that helped poor people qualify for adjustable rate mortgages they didn't understand and couldn't afford once rates rose.
Paladino said the defaulted mortgages cost poor families their homes, while other taxpayers lost retirement funds in the ensuing Wall Street meltdown.
Cuomo, who was the federal housing secretary in the late 1990s, didn't immediately comment. The one-term attorney general is considering a run for governor.
Paladino said that as secretary for Housing and Urban Development, Cuomo "couldn't wait to get in front of the cameras at press conferences" to say how he was encouraging the federally chartered mortgage giants Fannie Mae and Freddie Mac "to lower their standards so every American can enjoy having a house."
"He did a terrible injustice to those poor Americans telling them they could have a house they couldn't afford," Paladino told reporters a day after he formally announced his campaign for governor. "He did a more egregious injustice to the taxpayers and the people who had homes as he created the sub-prime meltdown, which resulted in lower valuations."
"He was initiator of a policy that was carried by others," Paladino said, naming Clinton and Republican President George W. Bush. "It turned into a monster ... all in the name of Andrew's political career."
In 2008, The Village Voice reported that there were many starting points of the mortgage meltdown that would soon pummel Wall Street and the broader economy, but "one decisive point of departure" was Cuomo. The "kid from Queens without any real banking or real estate experience was the only man in Washington with the power to regulate the giants of home finance."
Cuomo's office disputed the story then as it does now and points to other research, including an article in Business Week which doesn't blame Cuomo. Cuomo, through his attorney general's office staff, declined to answer questions or challenge Paladino's statements.
State Democratic Chairman Jay Jacobs responded for Cuomo. He called the comments irresponsible reflecting "the new bizarre world of the Republican primary."
Paladino said he will continue to target his campaign at Cuomo, even as former Rep. Rick Lazio and Suffolk County Executive Steve Levy, a conservative Democrat who enrolled in the GOP, are front-runners for the Republican nomination.