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Tuesday, 2 April, 2002, 10:53 GMT 11:53 UK
Bloomberg probed over 'conflict of interest'
New York City Mayor Michael Bloomberg
Mr Bloomberg was elected mayor last year
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By Leslie Goffe
BBC World Business Report
New York City mayor Michael Bloomberg's honeymoon with the city appears to be over.

He has been unfavourably compared with the previous mayor Rudolph Giuliani in the press and his poll ratings are slipping.

I think he recognises he owes New York a lot because he made his fortune here.

David Bliss
Management consultant
Now a government committee has begun investigating whether there is a possible conflict of interest between his public role and his private business.

When he became mayor in January he must have known that questions about his private business interests, the $10bn (6.95bn) media company that bears his name, would soon follow.

Mr Bloomberg, who is reportedly worth $4.5bn, didn't have to wait very long.

Councillors concerned

New York City councilwoman Yvette Clarke, who sits on the rules, privileges and elections panel, says she and others are keenly awaiting the verdict of the committee and will in the meantime be keeping a close eye on mayor Bloomberg.

"We are going to be vigilant," she said.

Bloomberg website
Links between Bloomberg and Merrill Lynch are thought to be under investigation

"You know we were given a certain level of comfort that should any conflicts arise with his business dealings with respect to the City of New York we would be alerted to that and that we would speak to that as a Council with all deliberate speed."

The government committee investigating possible conflict of interest is said to be looking at a number of areas, including the Bloomberg company's ties to investment bank Merrill Lynch.

The bank was Bloomberg's first big client and owns almost a quarter of the company.

This special relationship could present a problem both for the Mayor and for Merrill Lynch.

Though the bank has been a leading underwriter of city municipal contracts for many years, any new business that it wins from New York could be scrutinized.

Already wealthy

Past scandals in City government have generally involved those who've come into office with little money, and have peddled their influence there to enrich themselves later on.

Being fantastically wealthy prior to winning office should, says management consultant David Bliss, work in the mayor's favour.

They are much fussier with poor people and will excuse him because of his vast wealth

John Dyson, former deputy mayor

"When you see Michael Bloomberg, who has created a $10bn enterprise through his own efforts, he's not coming to the mayor's office to get rich," he said.

"I think he recognizes he owes New York a lot because he made his fortune here. This is not a petty larceny thing where you bring a product in from your company or something."

Rich favoured?

But that is exactly the problem, says a former official of the Rudolph Giuliani administration which preceded mayor Bloomberg's.

John Dyson, a former deputy mayor, claims he was blocked by the conflicts of interests board from bringing wine from his personal vineyard to official functions.

He believes that mayor Bloomberg - having installed at City Hall flat screen computers his company uses known as Bloomberg terminals and given his daughter a job - is a beneficiary of double standards that favour the rich.

"So while they were much fussier with poor people they will excuse him because of his vast wealth," said Mr Dyson

"The City collects gifts from all sorts of people, and the idea that I would have been promoting my wine by giving it seems bizarre. Some of the things they might ask him to do might be more difficult."

The committee investigating possible conflict of interest in Michael Bloomberg's public role and private business is expected to deliver its ruling in a few weeks.

If a serious problem is uncovered it could, though it is considered unlikely, mean the mayor may have to sell his business if he wants to continue at City Hall.

See also:

01 Jan 02 | Americas
Profile: Michael Bloomberg
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