In New York state, the role of the comptroller is especially powerful because whoever runs the office is the sole trustee of the state’s $280 billion pension fund, one of the largest in the country.
For the past 14 years, Tom DiNapoli, a Democrat from Long Island, has been at the helm of the office, so this November, it’s his race to lose.
But under DiNapoli, the pension fund has been in relatively good shape.
The New York State Common Retirement Fund’s investment return for the state fiscal year ending on March 31, 2022 was 9.51%. The fund is considered one of the better run funds in the nation. Additionally, every three years, the fund is required to undergo an independent Fiduciary and Conflict of Interest Review. The review most recently performed by Kroll LLC, found the fund “continues to be a leader amongst its peers for management and operational transparency.”
But DiNapoli has a challenger this year with an impressive resume.
Paul Rodriguez is running for New York state comptroller on both the Republican and Conservative Party lines. This comes on the heels of an unsuccessful bid for New York City comptroller in 2021 in which he earned 59,251 votes on the Conservative Party line.
According to Ballotpedia, Rodriguez is a veteran of Wall Street. He’s been a financial advisor to affluent individuals and business owners. Currently, he is “a nonprofit development professional at a major New York City religious institution."
He told Capital Tonight he comes from a very humble background.
“I was born here in New York City, Queens, to working class parents. I was mostly raised by a single mom, here; in Puerto Rico which is where my family is from; as well in Roswell, Georgia near Atlanta,” Rodriguez told Capital Tonight. “It gave me a very good perspective in terms of the way people view things, not just in New York City.”
Rodriguez, who survived testicular cancer, has a wife and three children.
After working his way through college, Rodriguez landed at Salomon Brothers as an equity research analyst, the beginning of two-and-a-half decade career on Wall Street that included stops at both Merrill Lynch and UBS, among other notable firms. His career path took him from emerging markets to developing markets, to credit analysis and corporate banking.
“Many of these [positions] oftentimes, involved a lot of volatility or distress, which prepares me well for the job of comptroller for New York state, right now,” he said.
DiNapoli is considered an activist investor who, after the murder of George Floyd, called on corporations to conduct racial equity audits. He has also urged corporations to divest from fossil fuels and adopt LGBTQ-friendly positions.
When asked if he would continue such an investment strategy, Rodriguez said no.
“Frankly, I believe that it’s irresponsible and unethical for any public official to use the value of the pension fund, and the power that comes with that pension fund to push whatever personal, political agenda they have,” Rodriguez said. “Primarily, the reason for that is that politics and public opinion changes with time.”
Rodriguez explained that, as a fiduciary, the comptroller’s primary responsibility is to invest in “those things that are ethical and prudent for the objective of maximizing returns while minimizing risk for the pensioners.”
When it was pointed out to him that DiNapoli, too, believes that his primary responsibility is the fiduciary health of the pension fund, Rodriguez said mixing fiduciary responsibility and politics doesn’t always work well in practice.
As an example, Rodriguez mentioned divestment from Russia.
“What [Russian President Vladimir Putin] did was simply prohibit [foreign] investors from selling their shares on the Russian market,” he said. “As a result of that, we now have about half a billion dollars at the state level and probably another $300 million at the city level, that virtually has no value on our books because we can’t sell it.”
“[The job] shouldn’t be about virtue signal political leanings. It should be about doing what’s best in terms of prudence and in terms of ethics,” he said.
Rodriguez was especially critical of DiNapoli for what he called “turning a blind eye” to a billion dollar contract that may be awarded to a donor to Gov. Kathy Hochul, another Democrat.
According to the Albany Times Union, Medical Answering Services (MAS) of Syracuse was awarded a bid to run New York’s medical transportation service. The company was engaged to do the job in the past. While MAS submitted the lowest bid, another company that bid, Modivcare, issued a protest arguing that the New York state Health Department never conducted an actuarial review of the bid submitted by MAS.
The contract has yet to be delivered to the comptroller’s desk for his review, according to the comptroller’s communications director, Jennifer Freeman.
"Once submitted, our contract experts will determine if the contract was awarded fairly and in accordance with the law. We'll also carefully examine the merits of the bid protest. This office is known for its professionalism, independence and non-political approach to getting the people's business done," Freeman said.
But according to Rodriguez, the problem with the contract is symptomatic of a broader issue. He claims DiNapoli is not an aggressive enough watchdog for taxpayers.
“When [DiNapoli’s] attitude, that he recently stated in an interview with Ben Max, that he doesn’t view his job as in any way questioning whether certain contracts are awarded, and certain donations made from those contract recipients there could be a connection with them…you’re basically saying that in your audit and investigation activities, you’re not willing to look any deeper. And I, who spent most of my career as an analyst, have learned that you do need to look beyond the numbers,” Rodriguez said.
Here is the transcript from that interview.
BEN MAX: There’s been real questions – again in this election year – about how Governor Hochul is fundraising massively for her campaign for Governor … How are you monitoring those decisions and how the Governor is treating access to government from contracting and campaign donors and those emergency powers? Is there anything that you want to see changed related to the emergency powers that would help your office have better oversight of some of what’s happening?
TOM DINAPOLI: My view has always been that emergency powers should be used very sparingly and very limited. What we’ve seen is a trend that began in 2010, 2011 with the prior Governor and unfortunately, to an extent, continued with this Governor is that as part of the budget process, the normal review, what we call the pre-audit of the contract review, that the Comptroller’s office had typically had was taken away. We think that’s a mistake because having an additional set of eyes look at these kinds of contracts is helpful in terms of protecting taxpayer interest….What I will say Ben, what we don’t do because you get into this whole issue of how we fund campaigns, and I always have been of the view that New York, we have way too generous limits per contribution. If it’s not an actual abuse, it certainly has the appearance of compromise that we have to be concerned about. So, I’m glad that this the last election cycle at the state level where we won’t have public financing. Now I know that public financing isn’t perfect, some people get in trouble for that system as well in New York City. But I think that’s going to be an improvement and if it’s a legal contribution, we don’t look at, and it would be hard to – get to motive. So, if someone makes a legal campaign contribution that’s permissible under the law, there’s nothing in state law that precludes them from getting a contract.
In response to Rodriguez’ comments, Communications Director for Comptroller DiNapoli Jennifer Freeman sent the following emailed statement to Capital Tonight:
"Under State Comptroller DiNapoli's leadership, state government has been held to a higher standard for oversight, accountability and transparency. Across the board, Republicans and Democrats at all levels of government have called on this office to review critical matters in their communities and at the state level, because they have trust in State Comptroller DiNapoli and his team. Mr. Rodriguez is just wrong and misstating information. Politics and political donations cannot influence our decisions.”