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Pigeon and Golisano: Men who changed the state Senate

July 14, 2009

By Frank Parlato Jr.

Lately, the public has heard a lot about how G. Steven Pigeon and B. Thomas Golisano overthrew, temporarily, the Democratic majority in the state Senate.

Politics, people say.

The media reported it, but perhaps failed to explain the bottom line.

Pigeon and Golisano

(Left to right) B. Thomas Golisano and G. Steven Pigeon.

The billionaire Golisano once said, "I like to get to the bottom line. I don't like to hear a lot of words. The great advantage to it is that people will get the feeling they know where they stand. I find it to be very effective in negotiating. If you say fewer words and mean them, people don't get illusions that you're saying one thing and mean another."

There is a lesson in that.

In New York, the president of the Senate, like the Assembly speaker, is elected by the members. Both have more power than all other members put together.

In New York, the governor, with the Assembly and Senate presidents -- "three men in a room," literally -- decide policy for the state, making other senators and assemblymen all but eunuchs.

The president of the Senate can remove a senator from his fancy office and give him a closet, take away his furniture and his funding, take him off committees, take way his stipends. A senator couldn't get a bill on the floor unless the president approved it.

Nothing was left to the conscience of the senators.

Pigeon and Golisano, like it or not, decimated the power of the Senate president. That's the story. Thanks to them, there may be a Senate that debates and votes based on conscience.

For 40 years, the Republicans ruled. During the last decade and a half, Joe Bruno as president was dictator at large for all 62 members of the Senate. Like it or not -- this was Albany.

Last fall, Golisano invested $4.4 million into supporting candidates who pledged reform.

His longtime political consultant Pigeon aided him.

Democrats won key races and snatched the majority from Republicans by a slim 32-to-30 margin.

After the election, Golisano and Pigeon helped broker a deal that made Malcolm Smith of Queens the new Senate president. They planned he would be the reform leader where every senator had a voice.

Smith instead became one of three men in the room.

Under Smith, the Senate adopted a pork program that saw 90 percent go to Democratic districts. And in the most highly taxed state in the nation, Smith planned to raise taxes -- to aid New York.

Golisano went to Smith to negotiate. Oddly, Smith paid scant attention to Golisano, preferring to fiddle with his Blackberry.

Golisano said once of negotiation, "You've got three choices. You can say yes, you can say no, or you can counter. Please don't bother me with anything else. Just tell me the bottom line: Yes, no or counter."

Smith played with his Blackberry.

"There are three facets to negotiation," added Golisano. "Time, information and power. You try to get as many of these on your side as you can. Sometimes you don't have time on your side. Sometimes you don't have knowledge. Sometimes you don't have all the power, but the more you have on your side, the better off you're going to be."

He left Smith with his Blackberry. He knew that with the thin Democratic plurality, it would take but two Democrats to join Republicans to oust Smith. Perhaps Republicans would commit to reform.

Republican state Sen. George Maziarz, of Newfane, an amazingly affable man with unusual intelligence, is better known in Niagara Falls than the senator who represents the city, Antoine Thompson. To the people of Niagara Falls, George is their representative.

With the Democratic takeover of the Senate, Western New York was targeted to pay more of New York City's needs than ever before.

Maziarz joined Pigeon and Golisano, securing the aid of Republican Sens. Dean Skelos of Rockville Center and Tom Libous of Binghamton. These five planned to overthrow Smith.

To effect the plan, Pigeon lured two Democrats -- Sen. Hiram Monserrate of Queens, under indictment for allegedly slashing his girlfriend with a piece of glass, and Sen. Pedro Espada Jr., who is being investigated by the Bronx district attorney and the Attorney General for alleged improprieties.

On June 8, in Senate chambers, these two Democrats, with three Republican senators who led their 27 Republican cohorts, took Smith by surprise.

Pigeon and Golisano looked on from the balcony.

Republicans introduced a resolution naming Espada president of the Senate and Skelos its majority leader in a novel power-sharing arrangement. Democrats stormed out, lights were turned off, closed-circuit TV was stopped, guards threatened to lock the door.

But Espada, Monserrate and 30 Republicans held together to enact new rules, including imposing six-year term limits for Senate leaders, the equal distribution of allocations, and significantly, the right for all senators to have equal access in bringing bills to the floor.

Monserrate soon returned to the Democrats, causing a 31-31 stalemate that shut down the Senate for a month. Then, with Pigeon behind the scenes, Espada decided to go back to the Democrats in return for sharing leadership in a new Senate. He would become majority leader. Smith would be president, but with weakened power. They pledged to make the Senate a true legislative body. Espada named Pigeon his chief counsel.

The days of punishing minority-party senators and rewarding those in charge with disproportionate allotments are perhaps gone. The days of more power for individual senators, term limits for committee chairmen and the end of the "three men in a room" has perhaps arrived.

Pigeon and Golisano did it.

Of Golisano, some suppose he is a lumbering billionaire, out of his league with the erstwhile sages of Albany. He ran for governor thrice, spending $92 million of his own money as his name recognition and net worth rose.

He bought the Buffalo Sabres, partly to prevent the franchise from leaving Western New York. He donated hundreds of millions to charity. He founded the Independence Party. And he founded Paychex, the largest payroll-services company in America.

The story of that belies the notion of Golisano the blunderer: At 29, Golisano was a salesperson working for EAS, a payroll-processing company in Rochester. Most of the payroll processors in the late '60s served large companies exclusively. Golisano, however, realized that most American businesses had fewer than 100 employees. He suggested to EAS that they do payroll processing for small companies. He envisioned EAS would procure payroll data by phone, then do payroll-tax returns, a daunting task to small employers. And they would price it so small employers could afford it. EAS said no. In 1970, Golisano resigned and started Paychex -- with $3,000.

He created a new industry -- efficient payroll and employee administrative services for small businesses.

"My business plan was simple," he said. "I put on a piece of paper, if I had one client, 10 clients, 100 clients, this is what my revenue would be, and this is what my expense would be. I said if I could get 300 clients in Rochester, I could live happily ever after. It took five years to get 300 clients."

After year four, however, Golisano started encouraging people to join the business. Over the next four years, 17 partnerships and franchises evolved in 22 cities.

"It demanded," Golisano admitted, "a financial investment on my part, most of which I borrowed from the bank."

His father had struggled to sell macaroni products out of a truck. His mother made drapes in their basement. He was used to doing without luxury. He was plowing back everything into the company, not enjoying the benefits of what he had accomplished.

"I was more enamored with growing it than enjoying the fruits of it. To me that was the fruit: growing it."

Most of the partners were young men who, at Golisano's behest, borrowed money to get started. By 1978, Golisano came up with the idea of consolidating, becoming employees and shareholders of one company.

"I asked them to merge and told them that one day there would be a large payout. It was a trauma to some. They were independent. But all 17 said yes."

The formula for their respective stock was based on the number of clients and the size of their territory. The lowest partner got 1-and-a-half percent of the stock. Today that's worth about $100 million.

"In the new corporation, however, I had to promote some and demote others. There was a lot of bitching and complaining," he said.

That was until 1982, when ADP, then the largest payroll company in America, made an offer of $20 million.

"When they made that offer -- our confidence level went up," he said. "Everybody said, 'Instead of selling, let's go public.'" Paychex did, in 1983, and made the partners who stayed, along with Golisano, fabulously wealthy. When Golisano retired in 2002, Paychex had a market valuation of $13 billion, with 500,000 clients.

These facts do not indicate a dullard unable to compete with Malcolm Smith.

Consider a placard in Golisano's office: "It's all in the presentation."

He said, "I'm a firm believer that how you present information -- the confidence you display, the presentation skills you utilize, the style and manner for which you present information -- is as important, if not more important, than the content, because people have a tendency to remember the presentation more than the actual content."

His presentation was pretty good to the Senate.

"Nobody likes to be disappointed," he said. "Everybody likes to be pleasantly surprised. The more you do that in your day-to-day activities or interrelationships, the happier everybody is. It's a good philosophy to live by: under-promising and over-delivery."

This week, the Senate is expected to lead the reform Golisano and Pigeon delivered.

Although the content hasn't yet been fully reported, ultimately, the bottom line is that it might make New Yorkers quite pleasantly surprised.



  Copyright © 2008 Frank Parlato Jr.