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party in 1978. William Ellinghaus, the vice president of AT&T and former member of MAC and the Control Board, agreed to chair a New School dinner in honor of Gotbaum. Rohatyn and Carey are feted as celebrities at chic watering holes like Elaine’s. Gotbaum is featured in Scavullo’s latest book. Jack (Bigel) is a friend of Walter’s (Wriston). Barry and David and Jack and Felix and Abe and Punch and Mike and Jay and Max and Tex and Victor and Don and John are all friends. Despite the 1975 legislation empowering the Control Board to police and approve all city contracts, Don Kummerfeld, its executive director, sat in on the 1978 labor negotiations, as did Governor Carey. “I don’t think it’s appropriate for the executive director to be an active participant in labor negotiations when he’s supposed to look at the contract,” whispered one banker, refusing to be quoted by name. Interestingly, Kummerfeld and Carey’s participation evoked not a word of public criticism. In 1978, the legislature extended the Control Board’s life but gave the mayor, as well as the governor, a veto over the selection of its executive director.

Nor has there been any public notice of why municipal labor officials seemed to know the budget better than the new Koch administration officials and thus were able to extract money from negotiators who claimed there was none. In March 1978, Jack Bigel’s Program Planners, Inc., chief consultant to the Municipal Labor Committee, reached into the Budget Bureau and hired Allen Brawer, the staff assistant to the director of the Bureau. “They hired a guy right out of our Bureau of the Budget who gave them all of our figures,” Ed Koch told me, adding that there was “nothing illegal or immoral about it.” Such things are common in Washington, where Defense Department officers regularly join aerospace firms whose contracts they monitored.

But Section 2604 of the City Charter seems to prohibit such switches, proclaiming: “No … employee of the city or any city agency, whether paid or unpaid, within a period of three years after termination of his employment, shall appear before any city agency or receive compensation for any services rendered on behalf of any person, firm, corporation or other entity, in relation to any … matter with respect to which during his employment he was directly concerned, or in which he personally participated, or which was under his active consideration, or with respect to which knowledge or information was made available to him.” The city’s Board of Ethics, which rules on this section of the Charter, was never asked by Mr. Brawer, Mr. Bigel or Mr. Koch for a ruling on the propriety of a former city budget official gifting “all of our figures” to another “entity.”

Mr. Brawer is not alone. Laura Page, once the Budget Bureau’s education budget examiner, now studies—among other duties—the city’s budget for the teachers’ union. She is joined by Joyce Levin-son, once a colleague in the Budget Bureau. The deputy to Al Shanker, head of the teachers’ union, is William Scott, former First Deputy City Comptroller. D.C. 37 lured Bernard Rullman from the Comptroller’s Office; Arthur Van Houten, once the Executive Director of the New York City Employees Retirement System, is now their pension consultant. Basil Paterson, the city’s chief negotiator, used to receive lucrative labor mediation contracts from the same unions he was now negotiating with. In the midst of the 1978 contract bargaining, Anthony Russo, the city Labor Commissioner, told me that he had received a job offer from one of the municipal unions he was negotiating with.

It gets very cozy.

As former antagonists sit together, they come to understand how “complex” issues are. United as they are by a common foe, bankruptcy, they come to believe that all other issues are “manageable.” For good reasons, each party sincerely believed bankruptcy would be ruinous to New York. But, it was often forgotten, avoiding bankruptcy was not just an act of statesmanship. It was also pure self-interest. The unions knew that a bankruptcy judge might abrogate their