If He Can Make It There …

As New York’s deputy mayor for operations, Steve Goldsmith faces a daunting set of challenges—running the country’s largest police department, keeping the city safe from terrorists, and erasing a $3 billion deficit. Good thing he was once mayor of Indy.

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Editor’s Note, September 2011: When we profiled Steve Goldsmith in December 2010, we headlined the piece about New York’s deputy mayor, “If He Can Make It There.” Apparently he couldn’t. Read the original article about his brief time there before the shame of an arrest for domestic violence led him to resign.

In a black SUV headed east across the Brooklyn Bridge, Steve Goldsmith powers up his iPad for a few minutes of Twitter between meetings. His driver-bodyguard weaves in and out of the congested traffic, trying to get the deputy mayor to the headquarters of the New York City Fire Department in time for a tour.

Scanning tweets from multiple city heads, Goldsmith smirks as he receives one from Mayor Michael Bloomberg. “The boss is tweeting me about the latest tourism numbers,” he says, then reads the message aloud: “Twenty-four million visitors and counting have come to New York so far in 2010 … what took you so long?”

Several months have passed since Bloomberg named him deputy mayor for operations, putting him in charge of more than 200,000 employees and effectively tasking him with running the largest city in the country, but Goldsmith remains an outsider here. The 63-year-old Republican can’t yet point you to a good restaurant. He hasn’t seen a Broadway show. When the mayor offered him the position as part of a third-term shakeup, Goldsmith had never even lived in the region. The infamously earnest former Indianapolis mayor struggles to recall a single night out since he landed in New York in April.

But in his own methodical way, Goldsmith has been learning this place. As he explains on the ride to the fire department, his 18-hour, 20-meeting days take him across the metropolis. On walks along Morningside Park on the Upper West Side, he sometimes calls the transportation department about cracks in the street. He refers to his meetings with the Solid Waste Management Board as “really exciting.” And always, everywhere, he looks for places to trim. Of all the overwhelming responsibilities of the job—heading the police, fire, transportation, and emergency-management departments to name just a few—wrangling New York’s $3 billion deficit unsettles him the most. “I got a call from another mayor the other day, and he was worrying about his $70 million hole,” he says in his distracted, fast-talking style. “I just laughed.”

Anyone familiar with Goldsmith’s record knows that this position fits him as neatly as his traditional blue suits. While he was never known for his people skills, the national press celebrated his transformation of downtown Indy in the 1990s as “the Indianapolis miracle.” The wiry conservative downsized government here with almost religious zeal. For the past decade, he has been teaching new mayors at Harvard. Few people in the country offer more expertise on how to run a city than Goldsmith.

Running Gotham, though, presents some unique challenges even for the veteran politician. For one thing, the deputy mayor position comes with all of the responsibility of being an executive and none of the celebrity. When his vehicle pulls up to the Fire Department building, the guard at the gate delays it because the man has never heard of him. Ten minutes go by with the SUV idling at the booth.

“It appears that I’m going to have to use my senior city status to get into a city building,” Goldsmith says with deadpan wit. “Will someone tell this guy that he works for me?”

At the age of 12, Steve Goldsmith became the youngest Eagle Scout in the country. He served as president of the student council at Broad Ripple High School. At Wabash College, he edited the student newspaper. After graduating from the University of Michigan Law School, one of the best in the U.S., he ran for Marion County prosecutor—although his opponent, the respected elder judge Andrew Jacobs Sr., made it a long shot.

“All signs were that Steve was going to get beat,” says George Geib, a professor of history at Butler University who served on Goldsmith’s 1978 campaign committee. “But he did something not a lot of politicians had thought of in those days—he appointed a research committee. They looked into Jacobs’ record and discovered he wasn’t a particularly good administrator. Steve saw the wedge, and he acted on it.”

Engineering a colossal upset, Goldsmith edged Jacobs by a few thousand votes. And in a telling sign of things to come, one of his first acts as prosecutor was to downsize his own office. He cut nearly a third of his staff and moved himself out of a big, cushy office into a smaller one. The era of Goldsmith efficiency had begun.

Over the course of the next decade, the brilliant young prosecutor made it increasingly clear in interviews that he wanted to run for mayor. But the beloved Republican Bill Hudnut, who served for four terms from 1976 to 1992, refused to walk away. Hudnut was everything Goldsmith wasn’t—a people person who even dressed up as a leprechaun for the St. Patrick’s Day parade. While Hudnut seemed to gain sustenance from sitting in a cafeteria and talking with everyday people, Goldsmith preferred to work long days administrating behind the scenes. And he hated campaigning.

“Steve would knock on 200 doors a day, but it led to a lot of shaking hands and looking at his watch,” says Mike Wells, president of REI Investments and Goldsmith’s campaign manager in the 1978 election. “A lot of people don’t like that, especially in Indiana. They want someone to sit and have coffee with them for 45 minutes. In Goldsmith’s world, that 45 minutes doesn’t exist.”

As Goldsmith waited in the wings for the city’s top office, a feud played out publicly between him and Hudnut, with the two exchanging barbs in the press. (They had “buried the hatchet,” observed The Indianapolis News about the relationship between the two men, “in each other’s backs.”) When Hudnut finally announced in 1991 that he would retire as mayor, Goldsmith couldn’t step up fast enough. Despite his shortcomings as a campaigner, he sailed to victory in a city that had been pulling the Republican lever for 24 years. And he wasted no time in running Hudnut out of town. “Goldsmith can be vindictive,” says Sheila Kennedy, an IUPUI professor of law and public policy who wrote a book on his administration titled To Market, To Market. “When Hudnut was named head of the Economic Development Council, Goldsmith called and told them if they wanted city money, they would reconsider.”

Once mayor, though, Goldsmith launched an agenda that may be looked back on as the most successful in Indianapolis history. In keeping with his theory that a city couldn’t develop around a decaying core, he transformed the Mile Square into a model for mid-market cities. He negotiated the deals to build Conseco Fieldhouse and Victory Field, keeping the Pacers and Indians in Indy. He courted the NCAA and provided tax incentives to spur the local expansions of Emmis Communications (owner of Indianapolis Monthly), Lilly, and WellPoint. He initiated the Fall Creek Place and Canal redevelopments, moves even his detractors praise. To finish Circle Centre mall, no more than a stalled project and a hole in the ground when he took office, he made personal visits to department-store CEOs and leaned on them to come to Indy. One of the pioneers of privatization, he put city services such as sanitation up for bid. Goldsmith, a notorious micromanager, even redrew the city flow chart so that every line looped back to him. He was known to call unsuspecting IPD officers directly to ask questions about conditions on the street.

Political historians still argue whether those successes were built on innovations or debt, but he became famous nationally for them. The New York Times and other papers came to town to herald the improvements. “Goldsmith has won a national reputation for putting city services out to bid,” praised a 1994 Times article. A Christian Science Monitor piece on Goldsmith later in his term raved: “This Corn Belt capital is emerging from Midwest anonymity into a vibrant, marquee metropolis.” Mayors from around the country, including Rudolph Giuliani of New York, visited to learn from his example. Like most things, though, Goldsmith didn’t leave any of that to chance. Those closest to him recall him hiring a PR firm in Langley, Virginia, to publicize his success.

“He took plenty of criticism because he had a lot of new ideas, and he basically ramrodded them through,” Wells says. “But if you look at the number of major projects he got done in eight years, no other mayor we’ve had compares. Steve stepped on the gas and made it happen.”

At the heart of New York City Hall, a squat 198-year-old building surrounded by the towers of the Financial District, Steve Goldsmith sits in his cubicle munching on a lunch of carrot sticks. Except for a few marble busts along the wall, the large white room bustling with 50 mayoral staff members could be a call center. Behind Goldsmith—so close that he hits it when he leans back—sits the cubicle of Mayor Michael Bloomberg. Both men’s office spaces possess all the grandeur of intern stations.

This is The Bullpen. When Bloomberg arrived in 2002, the billionaire abandoned a showy office in favor of an open room where his staff would have easy access to him. Goldsmith calls it “the democratization of information.” Typically, the two executives banter back and forth about policy or their latest iPad app discovery. (Bloomberg recently introduced Goldsmith to one that uses GPS to tell him not only where he is in the city, but the neighborhood’s history.) On this day, though, Bloomberg is down the hall at a press conference, fielding questions about his controversial position on the mosque near Ground Zero. Unlike 61 percent of New Yorkers, he favors its right to exist—an issue that Goldsmith, who is Jewish, dodges every time he is asked.

Instead the trim deputy mayor nibbles on his downsized lunch at his downsized desk and researches ways to save the city money. “I have a personality defect that I developed in Indianapolis,” he says. “I only know how to work. I exercise at 5:15 a.m., get here about 6:30 a.m., have meetings stacked on top of each other until 8 p.m., and get home about 10 to answer e-mails. Then I start again. No normal person would endorse this lifestyle.

For Goldsmith, who now lives with his wife in an apartment on the Columbia University campus, taking this job was one of the few things he never meticulously planned. After leaving the Indy mayor’s office in 2000, he began teaching at Harvard. His 2009 book The Power of Social Innovation focused in part on innovations in Bloomberg’s New York, and when the mayor came to meet Goldsmith and offered to write a foreword, Bloomberg was actually interviewing him—unbeknownst to the professor. When former deputy mayor of operations Ed Skyler stepped down to work in the private sector in March, Bloomberg offered the position (and its $213,000 salary) to Goldsmith by phone.

“The whole idea of hiring a former mayor to be your chief operating officer is a little odd, don’t you think?” Goldsmith says as Bloomberg whizzes by the door. “I joke that it took me 10 years to get demoted from mayor to deputy mayor. But he’s the perfect boss so far. He takes risks, and he’s totally unafraid to say whatever he thinks is the right thing.”

When Bloomberg introduced Goldsmith at a press conference in April, the mayor touted him as the man to untangle the Big Apple’s enormous administrative thicket while running the agencies protecting its citizens. “Lots of people talk about reinventing government,” the mayor said. “Steve Goldsmith has actually done it.”

A car bomb turned up in Times Square one day later—lighting up the nation’s television screens with a grainy image of a smoking SUV. Although Goldsmith dismisses the impact of that scare, the realities of his job must have been immediately clear. Updates from agency heads he hadn’t even met came streaming into his phone every half-hour. For the next three days, until Faisal Shahzad was arrested for the crime, the entire world’s attention turned to New York. The deputy mayor says he mostly let the police and fire departments handle the emergency. According to him, they already do that very well. But the crisis served as a nerve-jangling “Welcome to New York.”

On less dramatic days, Goldsmith sees his role more as a consultant than as a director. Carving away at that $3 billion deficit consumes most of his time. In May, he discovered 10,000 empty city desks occupying leased space around town, the elimination of which, along with other cuts, will save New York $500 million a year. He is looking hard at the city’s 80 data centers, a number he says he would like to reduce to “between 0 and 2.” And more difficult decisions loom on the horizon. Closing some firehouses, a move that even a decade after 9/11 would be extremely unpopular, may now be on the table.

Doing the popular thing, though, has rarely concerned Goldsmith. A model of an emerging breed of Republicans—what New York Times columnist David Brooks recently called the “austerity caucus”—he joins members of his party such as Mitch Daniels and Chris Christie, governor of New Jersey, who shun grandstanding in favor of number-crunching. For the first time in his public career, he doesn’t have to go out and mine votes. A man who has never lived in New York somehow finds himself totally in his element. He analyzes. He cuts. He makes the trains run on time. To the extent that Goldsmith enjoys anything, one gets the feeling he loves it.

For all his success, Goldsmith never got the three jobs he wanted most. When Dan Quayle became vice president in 1989, Goldsmith talked passionately with his staff about the steps he was taking to ensure that Governor Robert Orr named him to the vacated Senate seat. Some say they never saw that kind of enthusiasm from him before or since. But the job ultimately went to Dan Coats.

The second shortfall came in the governor’s race of 1996. After several promising years as mayor of Indianapolis, Goldsmith should have made a formidable opponent for lieutenant governor Frank O’Bannon. But an ill-timed police brawl, in which drunken cops beat several African Americans downtown, cast a pall on his candidacy. And the grandfatherly O’Bannon, known to greet every person at campaign events, possessed a charm that Goldsmith found hard to muster. “We had a saying in the newsroom,” says political observer Brian Howey, then a reporter for the Fort Wayne Journal-Gazette. “Every person that Frank O’Bannon met was a vote for O’Bannon. And every person that Steve Goldsmith met was a vote for O’Bannon.”

Upon losing the governor’s race and finishing his time as mayor, Goldsmith had a third opportunity at the national stage when President George W. Bush seemed to be courting him for his Cabinet. An early advocate of faith-based initiatives, he advised Bush, even spending the night at his Austin campaign headquarters the night of the disorderly 2000 election. But the Cabinet position never materialized, a disappointment Goldsmith rarely discusses. One explanation concerns his wife, who has suffered from lupus since age 22 and was undergoing chemotherapy at the time; he may not have been in a position to take the job. Others have speculated that Goldsmith’s unilateral executive tendencies troubled Bush. A president who referred to himself as “the decider” might not have meshed well with another authoritarian.

Whatever the case, Goldsmith joined the faculty of Harvard’s Kennedy School of Government later that year, and it appeared that his political career was behind him. Plenty of former mayors make a brief stop at Harvard after leaving office, but Goldsmith found a home there, fitting right in among the intellectuals. From the late ’90s to 2010, he wrote five books on government. The most prominent, The Twenty-First Century City, landed him on Charlie Rose for a 20-minute interview. In op-ed pieces for the likes of The New York Times, he sang the praises of privatization. Founding a blog called “Better, Faster, Cheaper” about urban government, he also participated in the New Mayors Program at Harvard for rookie executives such as Greg Ballard.

And behind the scenes, Goldsmith still advises Ballard to this day. Ballard declined to comment, but Goldsmith says the two talk fairly often by phone. Many see the current mayor’s recent push to privatize the city’s parking meters as influenced by the elder statesman. Wells, Goldsmith’s 1978 campaign manager, goes so far as to call the mayor “a disciple” of the man. Governor Mitch Daniels, too, has pursued an agenda with shades of Goldsmith—most notably leasing the Indiana Toll Road and creating efficiencies at the BMV. Kennedy, who wrote the book on the former mayor’s administration, refers to Daniels as “Goldsmith with personality.” So even if his shortcomings prevented him from scaling the heights for which he was otherwise bound, the brainy ideologue’s presence remains in the political culture here. In some ways, he never left.

Ask the bartenders, shop owners, museum docents, Off-Broadway actors, and cab drivers of New York who Steve Goldsmith is, and most of them will answer with a blank stare. The position of deputy mayor for operations may carry enormous power, but it is of the clandestine variety. Which doesn’t bother Goldsmith at all. “I don’t care if the average New Yorker knows my name,” he says. “Although the cab drivers probably will soon. We’re going to be changing things for them—new designs for the cabs, cleanliness standards, the ability to tweet about the quality of the driver.”

When Goldsmith talks, he tends to speak in outlines. Every answer has three or four components. In sharp contrast to Bloomberg, you won’t find him wandering around City Hall, popping his head in offices and telling jokes. He understands his austere role: to manage the metropolis. For the first time in decades, Goldsmith, who rarely minced words in Indy, must watch what he says in public. His proximity to the mayor’s chair in The Bullpen is such that any slip-up could be, in Goldsmith’s words, “painful.”

During his tour of the FDNY headquarters, the deputy mayor mostly observes. He asks a few questions about the logarithms that determine when an ambulance is sent with a fire truck and the costs involved, but the Central Tracking Center—a new room of perhaps 50 computer screens tracking every engine in the city—seems to satisfy the efficiency expert in him. Goldsmith and the fire commissioner trade jokes about which Manning brother is better, and then a handler politely pulls the deputy mayor to his next meeting.

As Goldsmith and a small group of staffers exit the building and cross the street for a tour of one of the data centers he hopes to privatize, several of the center’s executives stand inside, looking warily through a window. They’re familiar with the deputy mayor’s reputation. They know why he is here. They will greet him warmly and try to sell the place as essential to the business of the city. Only one question remains: Which one is Goldsmith?

Photograph by Peter Ross.

This article originally appeared in the December 2010 issue.

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