Here’s a prime example of how things really work in Albany.

Right around 8 p.m. last night – just as Capital Tonight’s Kaitlyn Ross was preparing to go live from outside the Senate chamber with me back at the studio – a major argument broke out right behind her between Assemblyman Vito Lopez and Micah Lasher, the Bloomberg administration’s in-house lobbyist.

Fortunately, our camera was rolling.

It’s a little hard to hear, but you can just catch Lopez dropping the f-bomb multiple times and yelling at Lasher: “Don’t (expletive) lie to me…don’t lie to politicians…I don’t think Shelly would like that. All right? Don’t lie.”

Also present for the blowout were two of Lopez’ fellow Brooklynites: Sens. Carl Kruger (Finance Committee chairman) and Martin Malave Dilan (Transportation Committee chairman). Lopez heads the Assembly Housing Committee and is also chairman of the Brooklyn Democratic Party.

Senate Democratic Conference Leader John Sampson (also from Brooklyn) heard the commotion and came over to investigate with his communications director, Paul Rivera, in tow. The group then realized, somewhat belatedly, that they were on camera and dispersed.

Lasher confirmed the fight was over a bill to significantly expand the Loft Law, which passed both houses and was headed to Gov. David Paterson for a signing until Bloomberg yesterday released a letter calling for the governor to veto it. (Bloomberg had some unusual allies in this effort, including the Working Families Party, and Reps. Jerry Nadler and Nydia Velazquez).

Bloomberg and Lopez are normally allies, as Maggie Haberman noted yesterday, but the two were split over this particular issue. Lopez and Dilan sponsored the Loft Law in their respective houses.

At the end of the day (or, more aptly, the middle of the night), a deal was reached on a chapter amendment. According to Lasher, the Assembly, Senate, Bloomberg administration and governor’s office all signed off on the deal at about 11:30 p.m.

It excludes 13 of the city’s 16 industrial zones from the Loft Law expansion and also dramatically increases the maximum allowable fine for violating the law from 41,000 to $17,500, which the city hopes will encourage landlords not to be scofflaws.

“I have enormous respect for Chairman Lopez and sometimes allies argue,” Lasher said. “I hope that we can continue to consider him an ally in passing important housing legislation, and we are very glad we were able to reach an agreement.”

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