Perhaps only in New York City can a local race for city comptroller become a national media event.
The campaign is a David vs. Goliath match, to see who will be NYC’s next CFO. On one side is Scott Stringer, the 5’7” ish, bespectacled Manhattan borough president. He’s the kind of candidate you might see on a Saturday morning doing a meet and greet at the local farmer’s market. On the other side is Eliot Spitzer. A titan who rose to fame as New York attorney general – the “Sheriff of Wall Street” – but later fell like Icarus. His moves are more often accompanied by television crews. The matchup represents a trend in politics and media, where a candidate’s personality is the driving force behind the storyline, and the storyline sometimes overshadows what’s at stake.
Because this is such an important race for New York City’s future, we’re breaking down the major issues at play in this 2013 comptroller election.
What is exactly does a comptroller do?
NYC Comptroller might be the most important city position you never hear about. The comptroller directs a staff of 700, and is charged with overseeing $140 billion in pension fund money – which is a pile of cash about equal to the annual revenue of Apple or General Electric – and auditing city agencies with combined budgets of almost $70 billion. Bill Thompson, the former comptroller, almost beat Michael Bloomberg for mayor in 2009, losing by 5 percentage points, and is running again this year. John Liu, the current comptroller, is also in the NYC mayor’s race. The chance to run the comptroller’s office attracts ambition, with good reason.
Overseeing the pension fund money means protecting and growing the savings of 600,000 teachers, police officers, and current and past city employees. It requires navigating egos and having a keen eye for corruption. The funds themselves aren’t managed by the comptroller alone, but rather by a 58-member board, appointed by labor unions and other officials. (The average for a corporate board is 9.3 members.) That big pool of money, managed by committee, is what investment managers drink fees from.
“Municipal finance has historically been a cesspool of conflicts of interest — investment firms help fund the campaigns of officials who dole out underwriting assignments, and the revolving door swivels rapidly,” writes Daniel Gross, global business editor at Newsweek.
The second major responsibility of the comptroller is to be the city’s auditor. The office is required to perform financial audits of City transactions and can help recoup taxpayer funds. It’s also required to perform an audit of “some aspect of every City agency at least once every four years.” In June, Comptroller Liu’s office issued an audit of the New York City Housing Authority’s initiative to improve customer experience and dinged it for delays in development and implementation. NYCHA overall is a $3.1 billion operation. That’s a lot of taxpayer money and bureaucracy to look through.
Where do Spitzer and Stringer stand?
On pension funds. The two candidates have different central messages. Spitzer has pledged to use the office’s oversight of pension money to push activist investing and corporate responsibility – for example, steering clear of investing in gun manufacturers or ensuring they’re living up to strict background checks.
"This is going to be an office — if I'm lucky enough to win — where we can do so much in terms of shareholder power, in terms of corporate governance, in terms of protecting pensions, in terms of making sure the city's money is invested well, spent well," said Spitzer.
However, it could be an uphill battle. Bloomberg’s piece, “Spitzer Faces Limits on Playing Sheriff Again as Comptroller,” lays it out well. The gist is that managing the funds as a member of a larger board makes any unilateral action predictably difficult.
Stringer is focusing more on costs. He’s pledging to slash the fees the office pays to investment managers, as a means of bringing down costs, while preserving benefits. He also says that his own views on corporate responsibility parallel Spitzer’s.
On auditing. Stringer’s ideas have been specific on this topic. He recently pledged to create a new bureau within the comptroller’s auditing unit that would help oversee the $15 billion in federal funds that are coming to the city following Hurricane Sandy. The proposal for a Sandy Tracker is to ensure “that every tax dollar devoted to returning families to their homes and getting business on their feet is spent wisely and efficiently,” said Stringer.
Spitzer’s message is more global. He’s pledging to reshape how the office is used, and not only perform financial audits of city agencies, but also measure how well the effectiveness (or ineffectiveness) of government policies. Doing so would stretch the comptroller’s current authority.
What’s at stake?
This is just a small set of the issues the next comptroller will be facing, on behalf of eight million New Yorkers. It’s a heavy responsibility for which any candidate should be able to answer a slew of questions: What do you think are the most important characteristics the next comptroller should have? What qualifications do you have to help oversee $140 billion in assets? What approach or strategy would you take to auditing city agencies? What outside the box ideas do you have for representing New Yorkers?
Eliot Spitzer is joining PolicyMic for an Open Mic discussion on Tuesday. He'll be responding directly to your questions and comments. Tune in here.