Edward M. Kresky, 88; Calmed Fiscal Panic

The cause was heart disease, his wife, Mary, said.

Mr. Kresky, a former aide to Gov. Nelson A. Rockefeller, was among the first appointments made in June 1975 to the newly formed Municipal Assistance Corporation, a money-borrowing state authority cobbled together that spring by the Legislature and Gov. Hugh L. Carey to calm a spreading, and mostly justified, panic in the financial markets about the city’s solvency.

The new corporation, which would soon be known as “Big Mac,” was authorized to borrow billions of dollars to pay the city’s short-term debts, keep services going and restructure the financial burden it had accumulated over decades. In hopes of quelling the panic, the state packed the board with financiers of the highest standing on Wall Street. Further reassurance came in the form of a novel financing proposal made by Mr. Kresky.

 The plan was to sell bonds on the tax-free municipal bond market, even though investors were risk-averse by nature and repelled by the city’s crisis. Mr. Kresky, who headed the municipal bond department at his banking firm, Wertheim Company, became the M.A.C.’s unofficial ambassador to those most important, and skittish, of Big Mac’s customers.

At Mr. Kresky’s suggestion, the M.A.C. secured its loans, and overcame market fears, with a guarantee considered fairly unusual at the time: M.A.C. bondholders were promised that city sales tax revenues would be used to pay them first, before any other city expense was addressed. Eugene J. Keilin, the authority’s executive director in the 1970s and ’80s, said Mr. Kresky had seen the strategy applied successfully in other municipal crises, though not in one of such magnitude.

Serving on the board for 12 years, the last eight as vice chairman of the M.A.C., under Felix G. Rohatyn, Mr. Kresky was also a kind of point man in the state capital, drawing on his experience there under Governor Rockefeller as he negotiated for legislation to keep the M.A.C. afloat, said Mr. Keilin.

By 1987, when Mr. Kresky resigned from the M.A.C., the authority had sold more than $4 billion in bonds. The city was on the mend, though Big Mac would borrow a total of $10 billion before it was shuttered in 2008.

“They were a brain trust, the most intelligent finance minds of their time,” said Mitchell Moss, a professor of urban policy and planning at New York University who has studied the history of the M.A.C. “When they were appointed, remember, the term ‘investment banker’ carried an aura of great integrity and respect.”

Edward Mordecai Kresky was born in Brooklyn on Aug. 15, 1924, one of three sons of Henry and Celia Kresky. His father was a physician. After graduating from Erasmus Hall High School, he attended Cornell University, but left to serve with the Army in Europe, as an infantryman during World War II. He later completed his course work for a bachelor’s degree at Cornell and received his Ph.D. in political science at New York University in the 1950s.

Mr. Kresky was twice a deputy to William J. Ronan, the former dean of the graduate school of public administration at N.Y.U.: first when Mr. Ronan was named Governor Rockefeller’s chief of staff in 1959, and later when Mr. Ronan was made chairman of the agency that was a precursor of the Metropolitan Transportation Authority.

Mr. Kresky is survived by his wife, who worked in the Rockefeller administration as an intergovernmental assistant; their daughters, Ann Banegas and Susan Gallwey; and five grandchildren.

Donna E. Shalala, the secretary of health and human services under President Bill Clinton and now president of the University of Miami, served with Mr. Kresky on the M.A.C. board in the 1970s, while she was teaching political science at Columbia University. Like many of the others on the board, she said, Mr. Kresky was defined by his generation.

“They were all from a generation of financial leaders who grew up in New York,” Ms. Shalala said. “In the crisis, the reason they were able to calm the rest of the financial community wasn’t just their expertise. It was because they clearly loved the city. They had a real passion for it. They were going to save it.”

Article source: http://www.nytimes.com/2013/01/31/nyregion/edward-m-kresky-88-calmed-fiscal-panic.html?partner=rss&emc=rss