The battle for New York state comptroller is shaping up as the biggest pension-related race in the Nov. 2 election, with the winner becoming sole trustee of a $124.8 billion pension fund that's been the focal point of state and federal allegations of kickbacks over investment business.
Incumbent Thomas P. DiNapoli, a Democrat, is claiming Republican challenger Harry Wilson, a former partner of Greenwich, Conn.-based hedge fund Silver Point Capital LP, is a Wall Street insider, naming him “Hedge Fund Harry.” Mr. Wilson has painted Mr. DiNapoli as a political insider, calling him “Albany Tom.”
Mr. DiNapoli took over as comptroller in 2007 from Alan Hevesi, who resigned in December 2006 after pleading guilty to using state employees to chauffeur his disabled wife. On Oct. 7, Mr. Hevesi pleaded guilty in New York State Supreme Court to accepting nearly $1 million in gifts in exchange for approving $250 million in investments for the $124.8 billion Albany-based New York State Common Retirement Fund from 2003 to 2006.
Mr. DiNapoli has focused his campaign on his ban on pay-to-play practices and using placement agents at the pension fund.
Mr. Wilson is attacking the pension fund's performance under Mr. DiNapoli. Mr. Wilson's campaign literature states the fund underperformed its own target return by $50 billion during the past three years. An “honest” accounting of pension assets would reveal a funding shortfall of $30 billion to $80 billion, he charges.
Mr. DiNapoli said in a telephone interview that Mr. Wilson is “throwing out numbers not based on reality,” adding that the New York State Common Retirement Fund was one of the best performing funds in a study by the Pew Center on the States. Mr. DiNapoli said the system's 2010 annual report indicated the plan currently has a roughly 94% funded ratio.
Mr. Wilson also recommended creating an investment committee to serve in an advisory role. Mr. DiNapoli responded: “After what we've been through with (Mr.) Hevesi, I'm open to a thoughtful discussion” about an advisory committee.