Following back-to-back election losses for Nassau county executive, Tom Suozzi had by all accounts settled into the plush afterlife of a fallen New York politician.
After his first defeat in 2009, he worked as an advisor to Democrat-friendly investment bank Lazard, a consultant to James Dolan’s Cablevision empire, and an attorney with a six-figure gig at the politically wired law firm Harris Beach.
In 2014, months after his second defeat, Suozzi became an angel investor in a startup hatched at Nassau County’s legendary biology research institute, Cold Spring Harbor Laboratory.
Suozzi would later resurrect his political career and become a US Congressperson in 2016. That move came with financial disclosure requirements — but a New York Focus investigation has uncovered that Suozzi failed to provide an accounting of his stake in the startup, called Clarapath, until contacted by this reporter.
Further, after his electoral resuscitation, one of the House district’s most powerful stakeholders, the Northwell Health system, became one of Clarapath’s biggest boosters: piloting Clarapath’s technology at its facilities, investing millions into the company, and even leading a recent round of fundraising. As a consequence, Clarapath’s valuation has exploded — and so, experts said, has Suozzi’s potential payout when he decides to finally sell his shares.
Even in his years out of office, Suozzi remained Democratic royalty. His father was a state appellate judge and the ex-mayor of Glen Cove, a job that Suozzi himself occupied from 1994 through 2001, before he sat in the powerful county executive chair for the eight years prior to his ouster.
Suozzi had a long relationship with Cold Spring Harbor Laboratory. He gave his second-ever State of the County address at the facility in 2003, and his administration provided substantial financial assistance to the lab during his tenure as county executive.
In 2011, under the guidance of US Senator Chuck Schumer, venture capitalist Mark Fasciano helped establish an investment fund focused on launching companies out of Long Island’s longstanding research institutions. Fasciano was a member of the Long Island Regional Economic Development Council and had served on the transition team for then-incoming governor Andrew Cuomo.
State corporation records show that only days before Suozzi sank $28,000 into Clarapath, Fasciano registered an entity called MF Clarapath LLC. Around this same time, according to his LinkedIn, he became Clarapath’s first CEO.
Fasciano did not respond to repeated requests for comment. Neither did Clarapath’s current CEO, Eric Feinstein, nor the company’s media team.
At the time Suozzi and Fasciano climbed aboard, Clarapath was a nascent company formed three months prior in Delaware. It didn’t apply for a patent on its proprietary product, which seeks to automate biopsy procedures, until five years later, in June 2016. It didn’t register to do business in New York until seven months after that.
By that point, Suozzi was in Washington.
In his first financial disclosures as a candidate and newly minted congressman, Suozzi placed the value of his investment in Clarapath in the $15,000 to $50,000 range.
But in ensuing years, he declared the value as “undetermined” or “none” — even though he sank an additional $250,000 into the company in early 2021.
He assessed the company as worthless at the time of his exit from the House in 2023 for an ill-fated gubernatorial run, and then as “unknown” again when he returned after the fleeting, madcap tenure of George Santos.
In the meantime, Clarapath had formed a partnership with Northwell Health — the most powerful force in Long Island’s political economy.
As one of Clarapath’s primary investors and partners, Northwell piloted Clarapath’s signature device — called SectionStar — in its facilities long before it hit the open market. In July of this year, a Northwell subsidiary led a fundraising round that reaped $36 million for Clarapath.
The first record of their partnership dates to late 2018, when the hospital chain’s publication Doctoring described how they were, at the time, developing SectionStar together.
Quoted at length was Eric Feinstein, then investment director for Northwell Ventures, one of the medical network’s for-profit subsidiaries.
By January of the following year, when Suozzi was starting his second term, Feinstein had moved over to become Clarapath’s new CEO. In a press release celebrating a $32 million fundraising round in which Northwell participated, Clarapath named the hospital system as one of just two of its “research and clinical customers” — even though SectionStar had not yet received Food and Drug Administration approval.
“You know the phrase, ‘the military-industrial complex?’ There is a hospital-industrial complex, and it’s intimately intertwined with our political system.”
—Bill Hammond
Northwell then led the round that brought Clarapath’s total fundraising to $75 million this past summer. Today it controls three of Clarapath’s nine board seats (not including the one held by Feinstein), giving it the largest presence of any institution. The two are entwined enough that, on his new company’s website, former CEO Fasciano asserts that “Clarapath is now part of Northwell Health.”
Northwell wields massive influence in Long Island affairs: With more than 80,000 employees and nearly $17 billion in annual operating revenue, the healthcare empire is the largest private employer not just in the region but in the entire state.
“This is not your average hospital,” said Bill Hammond, senior fellow for health policy at the Empire Center for Public Policy think tank. “This is a goliath of the healthcare world. It would be very hard for an official on Long Island not to have a relationship with them.”
Hammond noted that Northwell’s expansion over the past generation — adding 23 hospitals and 850 additional facilities — owes much to its political savvy: CEO Michael Dowling served as a top official in late Governor Mario Cuomo’s administration and as a confidante to former Governor Andrew Cuomo, sitting on the scion’s Medicaid Redesign teams and other executive panels.
Northwell has also hired an array of former politicians, including John Flanagan, the former Republican Senate Majority Leader; ex-Nassau County legislators Kevan Abrahams and Josh Lafazan; one-time Nassau County Comptroller Jack Schnirman; and retired Suffolk County Executive Steve Bellone.
Besides recruiting so many people with political connections, Hammond said, Northwell further amplifies its influence through the Greater New York Hospital Association trade group and its allies in organized labor.
“You know the phrase, ‘the military-industrial complex’? There is a hospital-industrial complex, and it’s intimately intertwined with our political system,” Hammond said. “Between the hospitals and the big healthcare labor unions, it’s almost like a fourth branch of government at this point.”
Northwell told New York Focus it was “not aware of any communications with Representative Suozzi in connection with its decision to invest in Clarapath.”
It did not answer questions about when it became aware of his stake in the startup, or what protocols it has in place to deal with how its actions might impact the private finances of public officials.
“If you allow gigantic nonprofit institutions that are completely reliant on public funds and private insurance to have for-profit arms, that’s an invitation for self-dealing.”
—John Kaehny
John Kaehny, executive director of the good government group Reinvent Albany, characterized the Suozzi/Clarapath arrangement as “sleazy” but legal. Northwell Ventures and similar profit-seeking subsidiaries nested within tax-exempt hospitals are also lawful — but he called them “absurd.”
“If you allow gigantic nonprofit institutions that are completely reliant on public funds and private insurance to have for-profit arms, that’s an invitation for self-dealing,” he argued.
“That can be very complicated when you have elected officials, and all kinds of public officials, that have dealings with the nonprofit end of the hospital — maybe even getting them money — and then have separate dealings with the for-profit end for their own personal enrichment.”
Kaehny pointed out that New York spends the most per capita on Medicaid of any state in the nation, which he attributed to its hospital-oriented model of care. Northwell, like other hospitals, also receives assistance from the state Dormitory Authority and other state grants.
And as he left Congress for his ill-starred bid for governor, Suozzi obtained a $2 million federal earmark for a Northwell-run geriatric center. It was among the largest he obtained during his first stint in the House — matched by $2 million he secured for Cold Spring Harbor Laboratory for its “Next Generation Artificial Intelligence Center for Advanced Cancer Diagnostics.” (There is no evidence any of these funds supported Clarapath.)
“Congressman Suozzi has always fought like hell for countless municipalities and not-for-profits in his district,” Kim Devlin, Suozzi’s campaign advisor, told New York Focus in an emailed statement.
Meanwhile, the value of Suozzi’s stake may only swell as he sits in Congress over the years ahead.
Clarapath’s valuation has exploded during Suozzi’s time in federal office: In 2021, financial services firm LXL Capital estimated the company’s worth to be between $96 million and $144 million. After the fresh $36 million fundraising round this past July, LXL pegged Clarapath in the $216 million to $324 million range.
Nicole Bradberry, managing partner of the startup consultancy Sunflower Health Advisors, told New York Focus that an early shareholder can get bought out in a fundraising round, or if a larger firm acquires the entire company.
Even if future fundraising rounds diminish the percentage of a firm an angel investor controls, the company’s overall valuation grows — and so does the early stakeholder’s eventual payday.
And the biggest possible cash-out comes if the startup becomes a publicly traded company.
“Obviously the reason you go in so early is because that’s where the big payoff is,” said Bradberry. “The earlier you’re in, the bigger the payoff.”
Suozzi’s repeated failure to assign a dollar figure to his investment provoked questions from D.C. watchdogs contacted by New York Focus, just as Clarapath’s ties to major district stakeholders raised eyebrows among New York good government advocates.
House members typically decline to provide a value only for certain classes of unrealized assets, said Virginia Canter, chief ethics counsel for Citizens for Responsibility and Ethics in Washington: intellectual property rights, benefit plans they can’t yet access, or royalty deals for upcoming books.
Canter acknowledged that estimating the worth of a company that isn’t publicly traded can be difficult, but argued that Suozzi should be able to obtain a figure from Clarapath. Or he could simply report the money he put down.
“You’d think a company that gets a $36 million investment” would come up with a way of assessing its own value, she said.
Canter suggested that the House Ethics Committee should flag the report and ask for clarification, though she noted that Suozzi would not be in violation of any rules unless he willfully disregarded that request.
In response, Suozzi’s office shared an email it received from the House Ethics Committee, which the congressman contacted after New York Focus reached out. Its guidance largely echoed Canter’s: Provide a good-faith estimate of the fair market value or report the amount invested.
The congressman’s team maintained that Suozzi has complied with all rules, but added that he would soon update his filings to reflect the money he has put into Clarapath to date.
“As a private citizen, in 2014 Tom invested in a healthcare startup working to make biopsies more accurate and faster,” campaign advisor Kim Devlin wrote in a statement. “While the company is private and still a start-up and the value undeterminable, he amended his recent financial disclosure report to make an estimate of the value of the investment.”
Suozzi’s resulting amended disclosure shows an estimated value of $250,000 to $500,000 for his stake in Clarapath, with a note adding that the actual value is “undetermined.”
This is not the first time the Democrat has faced scrutiny over missing disclosures. In 2021, the nonprofit Campaign Legal Center filed a complaint against Suozzi with the House Ethics Committee for not legally reporting his stock transactions.
Even after the referral, Business Insider found Suozzi continued to improperly document his portfolio maneuvers.
Still, the Ethics Committee dismissed the complaint, pointing to a lack of proof that these lapses were “knowing and willful.” By then, Suozzi had failed in his bid at the governor’s mansion, during which time he also failed to submit a complete report on his personal finances to New York state authorities.
He would not do so until late 2023, after Politico flagged the omission while Suozzi made his return run for the House.
Again, he faced no penalties.