Chief of N.Y. Home Loan Bank Is Political Pro

Alfred A. DelliBovi is piloting his Ford Explorer through the working- class neighborhood where he grew up, in the Astoria section of New York's Borough of Queens. He pulls to a stop in front of Western Queens Community Hospital.

"This is what we do," says the president of the Federal Home Loan Bank of New York, pointing to the hospital's west wing, which has had a $3 million renovation under the bank's Community Investment Program. "These areas need banking services and capital, and we are here - through our members - to serve them."

This is the image of his bank, and of the whole Federal Home Loan Bank System, that Mr. DelliBovi wants to project. In fact, the drive through Astoria is standard procedure - it's even known in congressional circles as "Al's tour."

That's Al DelliBovi.

As a businessman, he has made the New York bank the most profitable of the 12 Federal Home Loan banks.

As a politician - a veteran of the federal bureaucracy and the New York State Assembly - his connections and savvy have made him a major player in Washington.

And as a man acutely aware of the value of good public relations, Mr. DelliBovi knows a good story like the Western Queens Community Hospital when he sees one, and is not bashful about using it to his advantage.

In three years at the helm of the New York bank, Mr. DelliBovi has become the most visible - and most controversial - of the Home Loan bank presidents.

He has made life difficult for Rep. Richard Baker, the Louisiana Republican who's trying to restructure the Home Loan Bank System. Mr. DelliBovi also has blocked repeated attempts by the Federal Home Loan Bank of San Francisco, the system's biggest, to cut its massive payments on thrift bailout bonds.

And this year, with Rep. Baker's legislation still in the works and with hints from some quarters - mainly House Banking Committee Chairman Jim Leach - that the Home Loan Bank System has moved away from its mission of providing low-cost mortgage funding, Mr. DelliBovi's profile is sure to rise higher than ever.

Not bad for a former high school teacher.

Mr. DelliBovi cut his political teeth in the federal bureaucracy and the New York State Assembly, to which he was first elected in 1971. During his eight years in the state Legislature, Mr. DelliBovi served on the banking, insurance, and economic development committees, experience that serves him well in his current position.

But perhaps more important, the day Mr. DelliBovi was elected to the state Assembly was the same day Alfonse M. D'Amato became town supervisor in Hempstead, N.Y. Mr. DelliBovi helped gather the votes needed to get the New York Republican on the ballot for his successful 1980 Senate bid. The two have been friends for 25 years.

"One of the reasons we are friends is because I don't ask him to do things that are unrealistic," Mr. DelliBovi says. "I know how he thinks."

His House connections are tight as well - an important fact, with 12 House Banking Committee members representing districts that fall within the New York bank's territory.

"He has a very good dialogue with members on both sides of the House Banking aisle," says Rep. Rick Lazio, R-N.Y. "He's a savvy player, has excellent insider skills, and he's recognized widely throughout New York and Washington."

Some observers say close ties to Sen. D'Amato, chairman of the Senate Banking Committee, allowed Mr. DelliBovi to derail a deal for revamping the way Resolution Funding Corp. interest is allocated among the Home Loan banks.

Mr. DelliBovi persuaded Sen. D'Amato to accept the Refcorp changes only if House negotiators agreed to a provision raising the current limit on advances to commercial banks by 10% to 40% of outstanding system advances.

The condition forced Rep. Baker to pull the plug on the negotiations. With Refcorp and the loan-limit problems solved, according to one of Rep. Baker's aides, there would be no reason for the bank presidents to support his bill.

"We had the support of the other bank presidents on Refcorp, but DelliBovi made it difficult," the staffer says. "He was looking for a way to make us capitulate to what he wanted."

Mr. DelliBovi says that chances for comprehensive modernization legislation anytime soon are slim, so "incremental improvements are better than nothing."

"I'm a legislator, and the most important question in the legislative process is what is do-able," he says. "I'd rather take the slices of the loaf and be nourished along the way than wait for the whole loaf and starve."

While Mr. DelliBovi insists he supports broad system modernization legislation, some say all signs point in the opposite direction.

"He made it very clear that he did not want a bill," says an industry lobbyist. "He was essentially saying, 'Why let Baker and Leach fool around with the system when I can go to D'Amato?'"

Mr. DelliBovi realizes that a number of necessary changes, such as the limit on advances to commercial bank members and Refcorp, can only come about through legislation. But he makes it clear that he is the only one who knows how to run his "company," and all indications support this view.

"They always have five or six new members each month," says James Butera, a lobbyist with Butera & Andrews. "A lot have arrived since Al got there - it's an indication of an effective marketing program.

"Joining the Home Loan Bank System is a big investment, but the New York bank pays a good return," Mr. Butera adds.

Since 1993, the New York Home Loan Bank has ranked among the top three banks in dividend rates to member institutions. And according to Federal Housing Finance Board data, it was on top of the heap as of last year's third quarter, with an average dividend rate of 7.98%.

"We try and make money here - that's just part of the culture we've built," says Mr. DelliBovi, whose pay totaled $256,800 last year plus bonuses. "Our members expect liquidity, but they're also going to get a return on their investment that's at least comparable to a one-year Treasury note. That's part of the deal."

This approach has made the Home Loan Bank System a target of congressional criticism. Rep. Leach in September slammed the Home Loan banks for sinking more money into short-term Japanese bank products than into advances.

Yet the New York bank has a higher percentage of advances to investments than any of the 11 other Home Loan banks. Thus it appears Mr. DelliBovi has managed a balance that has eluded some of the other Home Loan bank districts.

"These 12 Home Loan banks are a business, and they need to be run as such," he says, insisting that the mission of providing low-cost mortgage funds to members is being maintained as well.

Ask Mr. DelliBovi whether he's been able to straddle the political and financial worlds, and he says, "I've managed to use my business skills in politics, and my political skills in business."

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