Hillary vs. What's His Name Actually, it's Rick Lazio, who's off to a solid start in the New York Senate race. Now if he could just get his hands on some of Rudy Giuliani's money...
By Jeffrey H. Birnbaum

(FORTUNE Magazine) – Congressman Rick Lazio (whoever he is) ought to have no chance whatsoever in his New York Senate race against Hillary Clinton, one of the best-known women on earth. But New Yorkers never like to simplify when they can complicate--think of the drama that led New York City mayor Rudolph Giuliani to pull out of the race. This latest episode of who wants to be an Empire State Senator is certain to have more colorful twists than the Taconic State Parkway in October.

To start with, everyone involved hates everyone else. Nearly half the state can't stand Mrs. Clinton, either because she's a carpetbagger or merely because she's Mrs. Clinton. That gives almost anyone a chance to beat her, even this fellow Lazio. On the Republican side, the Giuliani camp despises the Lazio camp, which is headed not so much by Lazio as by two Bigfeet--Governor George Pataki and ex-Senator Alfonse D'Amato, both of whom Giuliani also dislikes. That will make everything from fundraising to getting out the vote more difficult for the 42-year-old Lazio. Furthermore, upstaters don't like downstaters, and suburbanites distrust them both. So all that talk about the importance of issues is just talk. Hillary vs. Lazio will be a center-ring smackdown with some fascinating--and nasty--sideshows.

The biggest early fight will be about money. Giuliani raised $20 million and has $9 million left, all of which the lightly funded Lazio could use to compete against the superfunded First Lady. But insiders say Giuliani probably won't relinquish more than a few million dollars. The law dictates that he must return to donors nearly $3 million that was earmarked for the campaign after May 30, when Giuliani was to officially become the GOP's nominee. He also has to pay "wind down" costs. Other than that, Giuliani can do pretty much what he pleases, short of putting the money in his own pocket or giving more than $1,000 directly to the Lazio campaign.

He can donate it to charity (no way!); he can refund what's left to donors (yeah, sure); he can keep it for a future race (governor? Senator?); he can spend it himself on behalf of Lazio (highly unlikely); or he can give it to state and/or national Republican Party committees to dish out to Lazio. The National Republican Senatorial Committee is trying to elbow its way to the front of the line for the last option and will take advantage of every (legal) loophole if it gets the cash.

Giuliani says he'll help Lazio and, in fact, will include a letter with the $3 million he's required to return asking those donors to give the money to Lazio. One clued-in Manhattan moneyman doubts other assistance will come easily. "The people around Giuliani aren't eager to help the Pataki-D'Amato operation win a Senate seat," he says. Yet if Giuliani wants a future in the GOP, he can't stiff Lazio. No matter what Giuliani does, Lazio will have to spend precious time grubbing for dollars and may have trouble persuading the Hillary haters who gave to Giuliani to do the same for him.

The big picture doesn't favor Lazio either. The once potent Republican vote-getting machine in Long Island's Nassau County is broken and can't be relied on to deliver. Registered Democrats outnumber registered Republicans by roughly two million, and the state will probably go for Al Gore at the top of the ticket. With Giuliani out of the race, New York City labor unions (such as health-care workers and public employees) that might have been conflicted in a Hillary-Rudy race are now free to turn out for Hillary. So are the grateful residents of the city and the suburbs, who can walk Manhattan streets without fear of mugging; they won't thank Rick with their votes the way they would have thanked Rudy.

On the other hand, some of Lazio's supposed shortcomings might not be so serious. For instance, he won't remain obscure for long in a race against the nation's most polarizing candidate. Nor is he the Gingrich robot that Clintonistas want to portray him as. "It's very hard to make him a Gingrich Republican," says Jennifer Duffy of the nonpartisan Cook Political Report. "He sits on the 50-yard line consistently." He's moderate on most social issues and conservative on fiscal ones. Even Democrats praise him. Says New York Congressman Jerry Nadler: "He's someone I can work with--a decent fellow." He may well win the endorsement (and appear on the ballot line) of the Republican, Conservative, Independent, and Right-to-Life parties. That translates to votes. Additionally, upstaters like Lazio far better than they like Giuliani. Anyone from New York City is as much a carpetbagger there as Hillary is. Lazio has said a million times that he's a native of Long Island. Expect to hear it several million times more.

Lazio seems affable even as he wields the knife. His senior strategist is the very able Mike Murphy, a guiding mind behind John McCain's Straight Talk Express. Most important, Lazio has come from behind before. In 1992 no one in Congress was better liked than Democratic Representative Tom Downey. At 43, he was an 18-year veteran of the House en route to becoming chairman of the powerful Ways and Means Committee. But a brash young guy named Lazio seized upon the scandal of the year (which involved check writing at the House's own bank) and made Downey seem arrogant and out of touch; Downey lost in a major upset. Lazio will try to pull off the same miracle this year with a different big-name Democrat. No one believed he could be a giant killer in 1992, and he shouldn't be counted out now.