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The Battle for Comptroller

by Gail Robinson, Feb 05, 2007
 

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“One of the great strengths of the comptroller’s office,” former State Comptroller Alan Hevesi once said, “is that nobody has any idea what we do.”

While the comptroller usually gets little public and media attention, in the last few months, Hevesi, Governor Eliot Spitzer and Assembly Speaker Sheldon Silver have unintentionally done much to change that. New Yorkers who may have paid little attention when Hevesi oversaw employee pension funds or audited the New York City school system to determine if it improperly spent some of its state aid, did notice when he become embroiled in a scandal involving his use of a state employee as a personal servant to his ailing wife. After months of controversy, Hevesi, fresh from a re-election victory, pleaded guilty to a felony and resigned.

Then, Spitzer and Silver, bolstered by many Assembly members, clashed over who should replace Hevesi. The decision now lies with the legislature, which is debating what to do. And so, as Spitzer announced his new budget last week, the post of the state’s fiscal monitor, who must review that budget and certify that it is balanced, stood vacant.

WHAT THE COMPTROLLER DOES

While the political battle over Hevesi’s successor may seem arcane, the comptroller wields extraordinary authority. With a staff of about 2,400 people, the comptroller has responsibility for managing the state’s assets, conducting audits of local government, approving state contracts, running the state’s accounting system. The comptroller is also the sole trustee in charge of the state's $143 billion pension fund -- making this public official, as some have suggested, in effect the richest person in the world. For this, the comptroller earns $151,500 a year.

The job is so sweeping, with its combination of quite separate responsibilities, that it might make sense to divvy it up into at least two different jobs, says David Birdsell dean of the School of Public Affairs at Baruch College. Most people would think of running the pension fund alone as a full-time job, he said.

In fact, most states do see the comptroller’s job differently than New York does. All states have someone like a comptroller, and in about half the states, that post is called comptroller (although sometimes spelled differently.) In general, the person in the position must determine whether state expenditures are legal and in compliance with the budget. But said Pat O’Connor, manager of the National Association of State Auditors, Comptrollers and Treasurers, New York’s comptroller performs “an unusual number of other functions. I don’t know of any other comptroller that has the authority to audit local entities,” she said. California, for example, has three different agencies sharing the responsibilities given to the comptroller's office in New York.

While the New York comptroller oversees pension funds, most states rely on a board to do that. And many comptrollers, O'Connor said, are appointed by the governor, not elected, although elected comptrollers are more common in big states than small ones.

With so many tasks, every comptroller emphasizes different things. But as sweeping as the office’s responsibilities are, Hevesi expanded them. Following the discovery of staggering financial improprieties in the Rosalyn school system, Hevesi resumed routine audits of all the state’s 832 school districts.

Hevesi also used the office as “a bully pulpit, a kind of forum for an expert outsider’s observations and recommendations on executive and legislative practices with fiscal and economic implications,” said Glenn Pasanen, a professor of political science at Lehman College and writer for Gotham Gazette. In that way the office has been crucial, Pasanen said, in “opening up the too-closed system of governance in Albany.”

Hevesi tended to focus “on certain areas that were tied together by the general theme of good fiscal government,” such as the state’s debt and the public authorities, said Preston Niblack, deputy director of the New York City Independent Budget Office.

THE IDEAL COMPTROLLER

To insure that whoever took on such a range of responsibilities would be qualified to do so, Spitzer, Silver and Senator Majority Leader Joseph Bruno agreed that the legislature would select the next comptroller from a list of finalists approved by an expert panel. That group consisted of three former comptrollers: Republican State Comptroller Ned Regan, Democratic State Comptroller Carl McCall and Democratic New York City Comptroller Harrison Golden.

The governor had wanted “up to five, high-quality, nonpartisan” candidates, Ned Regan has said, adding, “We interpreted that as management experience and financial literacy.”

Goldin agreed: “The candidates we picked had substantial administrative experience and meaningful asset-management experience.”

But others question some of this reasoning. After all, Henry Stern wrote in New York Civic, “What agency or major corporation did Eliot Spitzer run before he was elected attorney general in 1998? Yet he was an excellent AG.”

Other observers see independence and integrity as key. Herbert London, the president of Hudson Institute who himself ran for comptroller in 1994, stressed that integrity was vital for anyone who manages such a huge pension fund. “You want someone you can trust – someone interested in the people of New York, the pensions of New York and the employees of New York,” he said. The best bet, he said, would be to choose someone from the private sector “not contaminated by the usual political process” and who will not be tempted to use the pension fund for their own political advantage.

There is an inherent contradiction in how New York selects its comptroller. “The governor is saying this is a job that requires special skills,” said Gerald Benjamin, a professor at SUNY New Paltz and an expert on state government. “Yet it is a job that is filled by election.” While there have been concerns about conflicts of interest by comptrollers, Benjamin said that, even though many comptrollers have not had extensive financial or management experience, “There never has been an issue that the comptroller is incompetent. They’ve gone out and hired deputies.”

THE CURRENT BATTLE

Under the state constitution, if the comptroller or attorney general resigns, the state legislature, acting as a single unit, selects a replacement. Each member -- state senator or assembly member, Democrat or Republican -- gets a single vote. Given that Democrats are in the majority, Silver, the top Democrat in the legislature, was expected to play the key role in choosing the new comptroller. It was also widely assumed that the new comptroller would be a Democrat – even though many experts, harking back to Arthur Levitt in the Rockefeller administration and Regan during Mario Cuomo’s governorship, believe it makes sense for the watchdog to be from a different party than the governor.

Silver said he would work with the new governor on the issue. And for a while, he did, agreeing to set up the panel of former comptrollers to screen candidates. Eighteen people put themselves up for consideration, including five members of the Assembly, a state senator, local government officials, and a few businesspeople.

It all seemed to be moving along smoothly – and then the panel announced the finalists. They were:

Martha Stark: The only woman who formally applied, Stark is the city’s first African American finance commissioner. Stark, who grew up in Brooklyn, had several positions in the Dinkins administration, worked in the Manhattan borough president’s office and immediately before becoming finance commissioner managed millions of dollars in youth development grants at the Edna McConnell Clark Foundation. As commissioner, she heads up a 2,300-person agency that collects $18 billion a year in tax revenue.

Howard Weitzman: A graduate of New York City public schools, Weitzman was elected Nassau County comptroller in 2001 and re-elected in 2005. In his official biography, he says he has worked with County Executive Tom Suozzi to “bring the country back from the brink of bankruptcy.” Before becoming comptroller, he served as mayor of Great Neck Estates, worked for the accounting firm KPMG, and founded a healthcare financial services firm and mail-service pharmaceutical company.

William Mulrow: A resident of Bronxville, he ran unsuccessfully for comptroller against Hevesi in 2002. He is an investment banker, currently managing director of Paladin Capital Group. He has also served with a number of government agencies, including the New York City Rent Guidelines Board, the Municipal Assistance Corporation for the City of New York, and the United Nations Development Corporation. While many favor the appointment of someone with such private sector experience, others question his connections to Excelsior Racing, which has been trying to win control of state horseracing revenue. Spitzer has been reported to favor Mulrow, who has been identified as a friend of the governor’s. Mulrow has sought to downplay this, saying he is “a 50-year-old guy who only met Eliot Spitzer a few years ago” and “one of many people who did vote for the governor.”

Little to none of the ensuing furor has focused on the merits of these three people. Instead it revolves around the number of people on the list and, most important, the people who are not on it.

Many observers expected the panel to pick five – not three – finalists. In coming up with the three, the panel rejected all members of the state legislature who applied for the post. This enraged many in the body, particularly those who wanted the job themselves. Some charged Spitzer had lobbied the three men on the panel, though Regan denied it. The legislators also argued that the process was stacked against legislators and that none of the panelists when they became comptroller had the kind of experience they now are saying is essential for the job.

THE ASSEMBLY CANDIDATES

Although five Assembly members originally applied for the post, only three still appear to be in contention. (One, Pete Grannis, has left the Assembly to become Spitzer’s environment commissioner; another, Felix Ortiz of Brooklyn, has been largely ignored in the press accounts). All Democrats, the three are:

Thomas DiNapoli: DiNapoli first held public office at age 18 as a trustee of the Mineola Board of Education. Since 1986, he has served as a member of the State Assembly from Nassau County. He chairs the Environmental Conservation Committee. There have been reports that DiNapoli is the favorite of Assembly Democrats – and Silver – for comptroller, but he has denied it. “That’s not my conclusion. We’re keeping it an open process,” he told reporters following last week’s Assembly meeting.

Joseph Morelle: A resident of Irondequoit near Rochester, Morrell was first elected to the State Assembly in 1990. On his official biography, he says he has been particularly interested in economic development issues. Following the panel’s announcement of the three candidates, Morelle, who resigned as chairman of the Monroe County Democratic Committee to seek the statewide office, issued a statement saying he still considered himself to be in the running. If the panel, he said, “made a decision to exclude candidates solely on the basis ‘of their status as state legislators … then it taints the entire process and the transparency and even-handedness that was meant to define it. As long as that question remains unanswered, I remain a candidate for state comptroller.”

Richard Brodsky: A member of the State Assembly from Westchester for 24 years, Brodsky ran for state attorney general last year but dropped out because of illness in his family. As chairman of the Standing Committee on Corporations, Authorities, and Commissions, he has emerged as an outspoken critic of the state’s public authorities. Sometimes considered abrasive, Brodsky told the screening panel that that should not disqualify him from being comptroller. “"I am not unaware that it's been said that I have brought a certain roughness and directness to the (political) process," Brodsky said, but, he continued, that “speaks to a fierce allegiance to the public interest.”

Even before the panelists announced the three finalists, reports began circulating that Silver might want to select someone not on the list. On January 30, Democratic members of the Assembly met for more than six hours to mull their next move: selecting one of the three, uniting behind another candidate, or dividing. If they unite behind a single candidate, he or she would almost certainly get the job; if they fragment, Democrats in the Senate and Republicans in either house could have a role. The Assembly members did not reach a decision and so, for now, the situation remains unclear.

Many believe Silver has few good options. Even if he defied Spitzer and selected a member of the Assembly for comptroller, the governor, who is far more popular than members of the legislature, might come out ahead. He would be portrayed as having tried to challenge Albany cronyism and so he himself would “view this as losing the battle but winning the war,” an anonymous source told the New York Sun. By consenting to the screening panel “Silver agreed to the circumstances where there was the risk of this happening,” said Benjamin. “I don’t see Silver’s way out. The fundamental political point is Silver made a mistake.”

And Spitzer shows no signs of backing down. “There is a list sent up to the legislature. I fully expect that they will choose from among the members on that list. That’s it,” the governor said.

A 'HIGHLY UNDEMOCRATIC’ PROCESS

Such controversy over filling a vacant position is not unprecedented. While no public official has been removed from office in New York State since Governor William Sulzer in 1913, many have stepped down. In 1993, for example, then Comptroller Edward Regan resigned to take a position at Bard College. The state legislature selected H. Carl McCall, a former state senator and a vice president at Citibank, to replace him. McCall went on to win election to the post in 1994 and 1998. A year later, another statewide elected official, Attorney General Robert Abrams resigned, and the legislature chose one of its own, Assemblymember Oliver Koppell (now a member of the New York City Council), to fill out that term. Koppell, though, lost his bid to be elected to the post.

While the legislature chose Koppell “with less fanfare and controversy than usually accompanies the selection of a new village dog catcher,” according to Newsday, McCall’s selection proved controversial. A number of candidates vied for the job. Governor Mario Cuomo threw his support behind McCall. When the Democratic legislature formally adopted that decision, thereby making McCall the first African-American to hold statewide office, Republicans boycotted the election meeting and went to court to block McCall’s selection.

In 1993, the Times termed the whole process “highly undemocratic. No election, no public participation, just a predetermined vote by a heavily politicked legislature.”

The role played by Cuomo and the legislature was particularly troublesome, the paper said. The outgoing comptroller, Ned Regan, the Times wrote “was at his most impressive when he pushed the governor and legislature to reform sloppy and wasteful borrowing practices. Would he have done so if he owed his job to the people he challenged? Not likely.”

What is unusual in the current situation is how long the appointed comptroller, whoever it might be, will serve. Because Hevesi resigned after being re-elected but before serving a single day of his new term, the new comptroller will likely occupy the office for almost a full four-year term without the approval of the state’s voters. Under the state constitution, the next election cannot be held until the next gubernatorial election in 2010.

In contrast, a special election is being held on Long Island this week Tuesday to fill a vacant State Senate seat. Imagine the uproar if the State Senate got to make the choice, instead of the voters, wrote Yancey Roy of Gannett News Service. But voters have no role in selecting the far more powerful comptroller – unless there is a change in the state constitution. And that, wrote Roy, is “not going to happen.”

 


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