TOP STORIES A-Rod Ad declines, exec and rent turmoil plague new rules –Greg David boss at Daily News says partial PAGE 2 decontrol ® is a disaster How GOP’s losses Page 11 could translate into more clout for leader Joe Bruno VOL. XXII, NO. 43 WWW.NEWYORKBUSINESS.COM OCTOBER 23-29, 2006 PRICE: $3.00 PAGE 3 Bloomberg’s top investigator 16 NY firms digs out corruption Elevating the in city government caught in THE INSIDER, PAGE 12 Hypochondria help; Guggenheim city burn centers New director brings focus options net underutilized HEALTH CARE, PAGE 17 back to flagship museum Revenue Service or a trip to a fed- Well-dressed exec during tough time for nonprofits Executives lose jobs, eral penitentiary. companies face “The fact that so many New from drug company BY CLAIRE WILSON York companies are involved taking over big penalties in shows just how prevalent backdat- at Liz Claiborne the solomon r. guggenheim museum’s anticipated backdating scandal ing was,” says Howard Silverblatt, face-lift gets under way in the spring. Happily, problems a market analyst at Standard & PAGE 33 with the structure of the iconic Frank Lloyd Wright build- Poor’s. “Every company I know of BY AARON ELSTEIN is doing some sort of investigation, ing are less serious than anticipated. The sprucing up will even if it hasn’t been disclosed.” BUSINESS LIVES cost just $27 million, money the institution already has in the stock option backdating The scandal gained force two the bank. RENTING–FOR NOW scandal sweeping Silicon Valley weeks ago, when Andrew Mc- For Director Lisa Dennison, the news came as a relief has ensnared more than a dozen Kelvey, the founder and chief ex- Would-be last month. She’s been dealing with the headaches associ- New York area companies. ecutive of Monster World- buyers ated with diagnosing the patient—including specially de- Five top executives wide Inc., resigned so he anxious have already lost their jobs, could devote his attention over signed scaffolding surrounding the famed museum—since 14% she stepped into the top job just over a year ago. and more will probably be OF OPTION to investigations by the market shown the door in the GRANTS U.S. Department of Justice can’t Replacing windows hasn’t been her only focus.The com- between 1996 coming weeks. A growing and 2005 were and the Securities and pull the ing restoration could serve as a metaphor for the tidying up number of companies are backdated Exchange Commission. A trigger she’s done in the executive offices during the year, which in- being forced to restate few days later, Kobi Alex- PAGE 31 See REFOCUSING on Page 27 years-old financial results and are ander, the former chief executive facing potential seven-figure pay- of Comverse Technology Inc., ments to regulators and aggrieved was charged with attempting to shareholders. Executives are bribe a witness who was on the AT DEADLINE scrambling to hire lawyers in at- verge of testifying about the com- tempts to ward off the Internal See NY FIRMS on Page 30 WALL STREET IS BOLSTERING ITS SUPPORT of Democratic candidates as the mid-term congressional elections near. Investment News reports in Wooing Heavy-hitter today’s edition that 51% of the campaign contributions made by securities firms so far during the 2006 election cycle of video on the Web went to Democrats, up from 48% in 2002, according to the are to sell now or keep growing the Center for Responsive Burgeoning indie value ourselves.” Politics. Within the financial holdout earns spot in So far, Heavy is opting to re- services sector, Wall Street’s main independent—at least until Democratic tilt is something young men’s hearts its own Google comes along,pock- of an anomaly. GOP candi- ets bulging with cash. And why dates have received 67% of not? Heavy’s revenues and its price insurance industry and 63% of BY AMANDA FUNG tag are soaring by the nanosecond. banking category donations. Now that YouTube has gone cor- google’s acquisition of money- porate, Heavy ranks as the largest EXECUTIVES FROM TAVERN ON SHAKING THINGS UP: losing video-sharing site YouTube independent video-entertainment THE GREEN are in talks to Guggenheim Director Lisa for $1.65 billion may have opened See WOOING on Page 30 launch restaurants in Las Dennison has restructured the people’s eyes to the outra- Vegas and Atlantic City.The development department and geous prices that buyers will plans to add curators. first Tavern outside of pay to get their hands on the See AT DEADLINE on Page 2 latest Web phenoms. But buck ennis that’s old news at Heavy. The Manhattan-based video Web site has been fend- COMINGNEXT WEEK ing off suitors for months. A report on the BUSINESS OF LAW “We get approached explores how President Bush has been weekly by companies of all good to the ACLU’s ledger. Also, why sizes,”says David Carson,co- firms feel pressure in good times. founder and co-chief execu- NEWSPAPER tive of Heavy. “Our choices PLAYING THE HEAVY: The site draws 12 million viewers. AT DEADLINE Continued from Page 1 head of Citigroup’s global Manhattan will open in equities division; Robert Moore, December in Wellington, Fla. who led the bank’s U.S. equities Chief Operating Officer division; and Billy Heinzerling, Michael Desiderio, who is who oversaw the global prime spearheading the expansion brokerage and stock lending effort, says he is also interested teams.The firm subleased 8,900 in starting establishments in square feet at 52 Vanderbilt New Orleans, Hawaii and Japan. Ave., at East 45th Street. Cushman & Wakefield Inc. NEW YORK CITY’S FIRST CHINA represented the tenant and TRADE MART will open in June. GVA Williams represented Grandland New York Expo accounting firm Marks Paneth Center, a Fujian-based & Shron, which holds the lease. company, purchased a 120,000- square-foot building in East DIVERSION MEDIA TODAY Elmhurst, Queens, to house LAUNCHES TRAVELISTIC.COM, a approximately 200 merchandise Web site featuring 1,000 videos showrooms and provide support of travel destinations around the services for wholesalers. world. Most of the videos are Grandland, which was recruited clips of licensed programming by the New York City from broadcast and cable Economic Development Corp., television networks. Diversion, a is set to begin construction on Manhattan startup launched MARC KRAMER says the $46 million project in the last year, spent $1 million to the Daily News is doing next month.The trade mart is create the site. Diversion better than most other expected to create 700 jobs. was founded by Nicholas newspapers. Butterworth, former chief MORTGAGE DELINQUENCIES IN executive of MTV’s online buck ennis THE NEW YORK AREA rose music network. through Sept. 30 this year to 2.08% from 1.82% of all loans at THE RESULTS ARE IN ON 2006 the start of 2006, according to a MAGAZINE GROWTH, and shelter report from Equifax and titles were the year’s fastest- Moody’s Economy.com. On growing category, according to ‘Daily News’ pressed Long Island, 2.68% of the new edition of The National mortgages were in default.The Directory of Magazines. Mirror- national average is 2.33%. ing the real estate boom of re- New chief achieves mixed results in tough market cent years, the number of maga- THREE FORMER CITIGROUP zines focusing on the home EXECUTIVES have leased office increased to 210 titles, or a 90% BY MATTHEW FLAMM space near Grand Central for a gain over 2005.The biggest new corporate advisory firm. losers were the lifestyle category, when newspaper circulation figures come out next Monday from the Audit Bureau of The principals of the firm, which declined by 40%; enter- Circulations, the Daily News will defy the nationwide downward trend and report a slight CapRio Administration, are tainment, down by 39%; and increase in its numbers.That’s the good news. Robert DiFazio, who was co- general interest, down by 37%. ■ The bad news is that advertising revenue for New York’s hometown paper is down 4% through August, according to TNS Media Intelligence. Even more troubling, ad revenue for CORRECTION archrival the New York Post rose 5%, continuing an upward trend. The Crain’s list of the area’s largest construction companies in the Oct. 16 issue incorrectly The News still collects close to double the ad revenue of the Post. Even so, for News Chief identified 2005 companywide revenues as 2006 companywide revenues. Executive Marc Kramer, those numbers have to hurt.The longtime newspaper executive, who left The New York Times in January to join the tabloid street fight, has launched borough THIS WEEK IN CRAIN’S See DAILY NEWS on Page 29 33 REAL ESTATE DEALS------------------8 GREG DAVID ------------------------------------11 THE INSIDER------------------------------------12 Schools reach overseas to WEEK IN REVIEW ----------------------- 14 sizes across the city are racing to opportunity to study abroad. An- NEIGHBORHOOD Colleges go abroad build facilities overseas, create joint other incentive is the need to reach amid security fears ventures with foreign schools out to a broader market in an era JOURNAL------------------------------------------16 abroad, and expand long-running when security concerns have made it REPORT: at home; foreign student and faculty exchange pro- more difficult for foreigners to come rivals seize chance grams to locations ranging from In- here to study. HEALTH CARE-----------------------------17 dia to Ghana. While local schools have long Eroding numbers SMALL BUSINESS ------------------- 25 BY SAMANTHA MARSHALL had some international presence, until the terrorist attacks of Sept. THE WEEKS AHEAD ----------------26 many academics say the current ex- 11, the city annually hosted an new york university’s name will pansions are unprecedented, with ever-increasing number of foreign CLASSIFIEDS ----------------------------------28 soon be a misnomer.