The relationship between the former Dubai deal maker Andrew Farkas and a US politician has spilled into a major political campaign in New York.
Andrew Cuomo, the attorney general of New York who is running for governor, worked for more than two years on a project in Dubai with one of Mr Farkas's companies to build the region's first mortgage securitisation market.
Carl Paladino, Mr Cuomo's Republican opponent in the race to become governor, last month charged him with taking payoffs from Mr Farkas after joining Island Capital Group in 2003.
"How much was Andrew Cuomo paid for his alleged work in Dubai?" Mr Paladino said in a televised speech. "Why won't he answer the question?"
Mr Cuomo declined to comment.
His time at Island Capital was one of the most lucrative periods in his career. He earned about US$2.5 million (Dh9.1m) while at the company between 2003 and 2006, according to his spokesman, and received hundreds of thousands of dollars in campaign donations from Mr Farkas and his associates.
Mr Cuomo was one of four managers of a joint venture called Emirates National Securitisation Company (ENSeC) that was created to handle the issuance in 2005 of a $350m security backed by Palm Jumeirah mortgages from Tamweel.
His role was as an adviser "in understanding a government's role in public policy around housing markets", a statement from Island Capital said.
The transaction was meant to show such a securitisation was possible in the region.
It was fully backed by cash and was "completely redundant from a financing perspective", said Khalid Howladar, a senior credit officer at Moody's Investors Service.
Mr Cuomo charged expenses to ENSeC throughout the time he worked for Island Capital, including a $8,963.72 expense between October and the end of November in 2003, according to documents. He left the company in 2006 to run for attorney general of New York.
Nakheel bought the entire issuance back from investors in 2007, according to the developer's financial statements. ENSeC later completed several other transactions independently but was shut down as a company last year, according to Dubai World.
"The very structure of the transaction, on its face, demonstrated that the first transaction was not an economic one for Dubai," Mr Farkas said in a statement. "It was intended to introduce the country to institutional investors and to create a template for the creation of a national secondary mortgage system."
afitch@thenational.ae
