When the Press Vetted Geraldine Ferraro
By Ralph Blumenthal

Representative Geraldine A. Ferraro, Democrat of Queens, in 1984. (Photos: Sara Krulwich/The New York Times)How do you vet a veep? Carefully, very carefully. Or so Senator John McCain may have learned. Disclosures about his hastily selected running mate, Gov. Sarah Palin of Alaska, seem to have caught his Republican campaign for the White House off-guard.
Whether or not Mr. McCain did his due diligence remains to be seen – is there a news organization or Democratic opposition researcher not rummaging through Ms. Palin’s life? – but the perils of a cursory background check for the White House are unquestionable.

Just ask Walter F. Mondale, the first major party nominee to put a woman on the national ticket.

Almost a quarter century ago, in the 1984 presidential campaign, Mr. Mondale, the Democrat, who had been Jimmy Carter’s vice president, a United States senator from Minnesota, and Minnesota’s attorney general, made history by selecting Representative Geraldine A. Ferraro of Queens as his running mate to challenge the reelection of President Ronald Reagan and Vice President George H. W. Bush.

It was a debacle for the Democrats, who were whipped 59 to 41 percent, winning only Minnesota and the District of Columbia. While many factors contributed, questions about Ms. Ferraro’s finances – and how much Mr. Mondale really knew about his No. 2 — clearly became a distraction to the ticket.

No two White House races are quite alike, of course, and Ms. Palin and Ms. Ferraro are not to be equated because of their sex. In fact, Ms. Ferraro was by far the better known public official. Arguably, that makes the failure to fully examine her record the more egregious. Or perhaps the need to scrutinize the more obscure Ms. Palin was all the more urgent. Take your pick.
Either way, the unraveling of the Ferraro campaign under relentless questions that kept surprising her party’s leadership may be a tale worth reconstructing in any national political season.

Already two years before the 1984 election, Ms. Ferraro, then 46, a former Queens prosecutor serving her second term in Congress, was tagged as “a comer,” tough on law and order with strong feminist credentials and close ties to the Democratic national leadership, including the House speaker, Thomas P. (Tip) O’Neill Jr., and Senator Edward M. Kennedy, both of Massachusetts.

She was married to a real estate investor, John A. Zaccaro, who had an office in Little Italy, and they had three children, ages 15 to 20.
In the days before the Democratic presidential convention in San Francisco in July 1984, Mr. Mondale mulled his prospects for running mate, including several historic choices. There was Tom Bradley, the first black mayor of Los Angeles. There was Henry G. Cisneros of San Antonio, the first Hispanic mayor of a major American city. There was Dianne Feinstein of San Francisco, the city’s first female mayor. There were Senators Lloyd Bentsen of Texas and Gary Hart of Colorado. And there was Representative Ferraro.

Ms. Ferraro and former Vice President Walter F. Mondale.Mr. Mondale’s reported preference was Gov. Mario M. Cuomo of New York. Mr. Cuomo demurred, recommending instead Ms. Ferraro. Mr. Mondale seemed then to lean to Ms. Feinstein, cooling to Ms. Ferraro when she was quoted as saying that the standard-bearer would make a choice based on politics. But after drafting his acceptance speech attacking the Reagan Administration as hostile to the middle class and deciding that Ms. Ferraro exemplified the family virtues he was defending, Mr. Mondale settled on her.
How wisely, and after how much investigation, became a volatile issue later.
He had called his selection of a running mate “the most important decision I will make as the Democratic nominee.”

Yet James A. Johnson, the Mondale campaign chairman, said later that aides had spent only 48 hours studying the Ferraro family finances.
Michael Berman, the campaign treasurer, flew to Queens to meet with Mr. Zaccaro, while John R. Reilly, a Washington lawyer who was heading the search for a running mate, interviewed Ms. Ferraro in San Francisco where she was making a speech on foreign policy.
Essentially, Mr. Johnson said, Mr. Reilly asked her, “Is there anything in your background we ought to know about?” Mr. Reilly flew back to Washington convinced there was no problem.

But there was.

On July 11, at home in North Oaks, Minn., with three senior aides still breathlessly unsure who would get the nod, Mr. Mondale phoned Ms. Ferraro in San Francisco and asked, “Will you be my running mate?”
The next day, four days before the opening of the convention, Mr. Mondale stood with Ms. Ferraro at the State Capitol in St. Paul, and introduced his choice to the world: “I looked for the best Vice President and I found her in Gerry Ferraro.”

Making history had its first awkward moments. Was he supposed to hold the door for her? Could the running mates exchange even chaste celebratory kisses? They settled on a side-by-side hug with one arm, waves with the other.

More serious questions soon emerged.

Two days after the convention, The New York Times reported that that Ms. Ferraro’s financial disclosure form filed with the House listed her as an officer and stockholder of her husband’s real estate and insurance business, P. Zaccaro Company, with holdings of under $15,000. She listed other assets of up to $140,000 in savings, and income from savings and securities of up to $100,000. But under an exemption that allowed members of Congress not to list assets of a spouse if they derive no economic benefit from them, she did not list Mr. Zaccaro’s assets. Yet she had described herself as her husband’s business associate. Wasn’t that a contradiction?

The campaign had no comment, promising a fuller disclosure in the weeks to come.

Mr. Zaccaro, then 51, also stayed silent but research showed that his company, founded by his father, Philip, in 1935, owned or managed at least 21 residential and commercial properties in Manhattan. City records showed 106 building code violations, most minor, but some serious, with tenants complaining of poor conditions in some of the apartments. Among his warehouse tenants, a block from his office, was Star Distributors, which law enforcement officials called a major distributor of pornography linked to organized crime. In response, Mr. Zaccaro said he would look into it and, if necessary, take “immediate action” to break the lease.

Other revelations followed. Mr. Zaccaro had been fined $750 by the Federal Election Commission for questionable loans of $110,000 to his wife’s 1978 Congressional race, way over the $1,000 limit. Her children, it turned out, contributed another $24,000, only $3,000 of which was legal. Mrs. Ferraro had paid back the money but where it came from raised other questions. In one case, she raised money by selling her half share in a property to a Zaccaro family partnership. (She later failed to disclose the fine in a New York State application for extension of an insurance-brokerage license.)
In August, Ms. Ferraro said she would release her tax returns, but that her husband would only release a tax statement, not his full returns. She tried to make light of it, saying, “The reaction was, ‘Gerry, I’m not going to tell you how to run the country, you’re not going to tell me how to run my business.’” Then she added a quip that would come to haunt her: “You people married to Italian men, you know what it’s like.”

With the first rumblings of disquiet out of the campaign, Ms. Ferraro met with colleagues on Capitol Hill to reassure them that her finances were in order. But one Republican, Representative Dick Cheney of Wyoming, called for an investigation.

Republicans, sensing a “genderless” issue that would not alienate women voters, piled on, demanding that Mr. Zaccaro disclose his finances as well.
Meanwhile The Times, casting doubt on Ms. Ferraro’s claim of separation from her husband’s assets, reported that she was in fact closely linked to Mr. Zaccaro’s real estate business and finances. She practiced law from his office and ran her campaigns out of it – he was even her campaign treasurer and he and his business associates played a key role in financing her first run for Congress. She directed realty companies he owned and they jointly purchased a $200,000 condominium in St. Croix in the Virgin Islands.
By Aug. 18, with the campaign growing increasingly nervous, Mr. Mondale insisted his aides had vetted the couple’s finances and that everything seemed fine. “As the Presidential nominee I’ll take responsibility for my running mate,” he said. “She is fully complying with the law.”
The same day, however, The Times reported that while Ms. Ferraro had previously listed herself as owning one share of stock in P. Zaccaro Company, it had only issued two shares, so she was a 50 percent partner, as well as an officer. The Times also found that in 1958, while Mr. Zaccaro was working there for relatives and engaged to Ms. Ferraro, the company and a top executive were indicted on charges of inflating billings to the city for repair work and stealing $56,384. It later pleaded guilty and made restitution and the executive paid a $2,000 fine in lieu of going to jail.

Also that day, Ms. Ferraro’s press secretary said that the couple owed about $60,000 in back taxes from 1978, an error reportedly discovered by accountants reviewing the couple’s tax returns that Ms. Ferraro said would at last be released Aug. 19. With that, she appeared on the ABC program “This Week” saying she had nothing to hide and voicing confidence that all questions would be answered.

Now it was that the Mondale campaign chief, Mr. Johnson, acknowledged for the first time that aides had failed to properly scrutinize the finances of Ms. Ferraro and Mr. Zaccaro. He pointedly declined to say whether Mr. Mondale was troubled.

The six years of tax returns, released in a mass dump that sent news reporters into a frenzy, answered many questions but raised others. They put Ms. Ferraro’s net worth at $760,000 and her husband’s at $3,020,000, with a $53,459 debt to the Internal Revenue Service for underreporting the 1978 property sale that went to pay back the illegal campaign loans. They also showed that for the last five years, the couple, while filing separately, shared a combined gross income of about $175,000 a year, paying about 40 percent of that in federal, state and local taxes.

Ms. Ferraro’s filings showed several thousand dollars in income from one of her husband’s companies that she had failed to report to Congress. And Mr. Zaccaro’s individual returns did not include some partnership filings which would have presented a fuller picture of his holdings.
The next day, Aug. 22, Ms. Ferraro finally met the press over the issues in a manic news conference in a hotel ballroom at Kennedy International Airport. For two hours, she parried questions, delivering a spirited defense of her dealings and disclosing that she was resigning as an officer of P. Zaccaro Company.

She conceded she had told her husband “it doesn’t look so hot” when she heard he had repurchased a Manhattan property she had sold to pay back the illegal campaign contributions, although she called it “perfectly legal.”
But she declined to elaborate on a puzzling transaction that The Times had brought to light from Mrs. Ferraro’s campaign finance filings: two loans of $100,000 and $75,000 to the couple’s company from an estate that Mr. Zaccaro was managing for an 84-year-old nursing home resident, Alice V. Phelan. The propriety of the borrowings had been questioned by a court-appointed referee.

Finally, Ms. Ferraro said she may have stoked the whole controversy over her finances by promising too much disclosure “but I ended up delivering, didn’t I?”

Ms. Ferraro and Mr. Mondale in Chicago, October 1984.Mr. Mondale thought so. He telephoned her with congratulations and later called a news conference of his own to say he was proud of her. “Most of the rumors, in fact, were totally unfounded, and she stood the test,” he said.
But three weeks later, new questions erupted. The Times reported that the first $100,000 Mr. Zaccaro had borrowed from the Phelan estate had been lost in a bad property deal. Had it succeeded, Mr. Zaccaro stood to share, with two partners, a $1 million commission and ownership of five Queens apartment buildings worth at least $12 million.

Mr. Zaccaro repaid that loan and the other $75,000 with interest. But Judge Edwin Kassoff of State Supreme Court in Queens, faulting Mr. Zaccaro for a conflict of interest, removed him as trustee. Ms. Ferraro, though a business partner of her husband, disclaimed any knowledge of the loans at the time.
What made the transaction explosive was an allegation, in a lawsuit growing out of the abortive deal, that a mortgage application for the five buildings fraudulently inflated the sale price from $12 million to $15.5 million. It is a federal crime to knowingly submit, or conspire to submit, false financial information to a federally chartered bank.

The purchaser of record was to have been a business associate of Mr. Zaccaro’s: John DeLorenzo, a real estate developer who owned a building at 330 East 43nd Street in Tudor City that Mr. Zaccaro managed. In the lawsuit, Mr. DeLorenzo claimed the contract had been altered by Harold Farrell, a real estate financing consultant working out of the Zaccaro office who had been disbarred over his role in the huge New York State Liquor Authority bribery scandal of the 1960’s.

Mr. DeLorenzo, it emerged, was under investigation by the Manhattan district attorney, Robert M. Morgenthau, over an improper $550,000 loan from the $26 million credit union of the Port Authority of New York and New Jersey that was used to help purchase the Tudor City building. Federal examiners had discovered the loan and the credit union then said it had been granted improperly because Mr. DeLorenzo was not a member. Investigators were trying to determine if Mr. Zaccaro had played any part in obtaining the loan.
As the investigation proceeded, Ms. Ferraro in October amended her House financial statements for the last six years to correct some misstatements and omissions – what she called “sloppy errors” by her accountant.

On Oct. 4 The Times reported that Mr. Zaccaro and the counsel to the Port Authority credit union, Ronald Harnisch, had been slated to share a $100,000 commission for the loan for the Tudor City property sale.

On Oct. 22, with Election Day, Nov. 6, looming and Mr. Mondale mostly mum about the financial trials of his running mate, Mr. Morgenthau’s office began calling witnesses to the grand jury to testify about any involvement of Mr. Zaccaro in the credit union loan and the falsified mortgage application.
On Jan. 7, 1985, with defeat of the Mondale-Ferraro ticket now history, Mr. Zaccaro pleaded guilty to a single misdemeanor charge of scheming to fraudulently obtain financing for the multimillion-dollar Queens real estate deal. Under an agreement with prosecutors, he paid the maximum $1,000 fine but escaped a possible year in jail.

Ms. Ferraro issued a statement saying in part: “Today’s events bring an end to the difficult period my husband has endured stemming from my historic candidacy.”

So was the press scum when they went after Ferraro? I thought they only went after Conservatives?

Amazing how Republicans love to whine of the press just doing their job of trying to keep our govt honest. We all know that's a difficult and nearly impossible job.

Do they ever go overboard? Of course - especially now with 24 hour news channels, but that doesn't mean they should just believe everything a political campaign puts out there.