By Dan Amira and Kevin Roose
The New York City comptroller's office is, objectively, an
enormous step down from the governor of New York. Many New Yorkers, in
fact, are probably only vaguely aware of its existence. That could
change if Eliot Spitzer has his way. Despite only deciding to enter the
race for comptroller this weekend, Spitzer has already alluded to an
expansive vision for the position. “It is ripe for greater and more
exciting use of the office’s jurisdiction,” Spitzer told the Times; in an interview with CBS This Morning,
he said, "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."
What is Spitzer planning? Well, as comptroller, he would have
oversight of the city's five public pension funds, which hold the
retirement money of teachers, police officers, firefighters, and other
public employees. They're big piles of money — about $140 billion in
total — and managing them would give Spitzer the ability to be a huge
pain in the ass for anyone else hoping to get a piece of the pension
pie.
The New York City comptroller isn't a Wall Street regulator — at
least not directly. And Comptroller Spitzer would have only a fraction
of the official prosecutorial power that Attorney General Spitzer had.
But in some ways, he'd be more influential. Rather than simply suing
banks for the same misdeeds as every other regulator, Comptroller
Spitzer could play favorites with Wall Street, deciding which banks are
given city contracts, which are subjected to higher auditing standards,
and which are eligible for perks like the use of tax-exempt bonds to
construct new headquarters. He wouldn't be making these decisions alone
— there are boards for these sorts of things — but he could certainly
make his presence felt.
In his old Slate column, Spitzer wrote in
support of using the leverage of pension over private-equity firms to
push for stricter gun control. As comptroller, he'd be able to flex that
moral muscle in any number of other situations. He could declare, for
example, that the city would no longer invest in funds that owned shares
of tobacco companies, casinos, or food chains that used GMOs. These
powers have always existed among managers of large pension funds, but
they're rarely used. Spitzer, though, seems to relish the chance to
bring them back into vogue. The size of New York's pensions means that
it "owns the market," he said in another interview with WNYC this morning.
Spitzer could also bring back some of his old prosecutorial zeal,
going after corporate executives and boards when they screw up.
Interest-rate-rigging banks, crooked consultants, overpaid chieftains
like Spitzer's old nemesis
Richard Grasso — all of these types could come under the comptroller's
microscope. Again, these powers have long existed but rarely been
exercised effectively. (It took current comptroller John Liu three years to sue BP for the losses he claimed city pensioners suffered from the 2010 Deepwater Horizon spill.)
One person who would fear a Spitzer-led comptroller's office is
JPMorgan Chase CEO Jamie Dimon. Earlier this year, Dimon narrowly
survived a vote to keep the bank's CEO and chairman roles consolidated.
Spitzer said this morning that he'd try to split the roles, effectively
putting Dimon out of half of his job. And while Liu pushed for (and
failed to get) the split, Spitzer's savvy media techniques and penchant
for spotlight-grabbing could prove more effective. (Conceivably, they
could also enrage banks to the point that they refused to do business
with the city.)
Liu, though deserving of credit for his investigations into
CityTime and 911 cost overruns, has been an erratic enforcer, going
after entities as disparate as the board of Cablevision, the Central Park Conservancy, and the Department of Education's high-school match process. There
has been no coherent theme to his tenure — no motif of cracking down on
certain corrupt industries or bad actors. Spitzer has signaled that he
intends to change that and make the comptroller's office a sort of
shadow enforcement agency that will use its broad pension oversight
powers to take on the city's most entrenched and powerful capitalists.
That's good news if you like scrutiny of large financial firms, and bad
news if you're a banker.
Comptroller Spitzer would be equally unwelcome news for Mayor
Weiner, Mayor Quinn, or whoever replaces Mayor Bloomberg next year. He
told the Times that,
as comptroller, he wants to become "the primary voice of urban policy —
what works and what doesn’t work. It’s understanding that the audit
power of the office is not just to figure out how many paper clips where
bought and delivered, but to be the smartest, most thoughtful voice on a
policy level."
It may be a lofty vision, but Elizabeth Holzmann, the city's comptroller from 1990 to 1993, says it's not impossible. "The comptroller's office can have a very important impact on policy, and should have one," says Holzman. "Can it have the primary one? You know, it depends on the energy level, the goals, the ambition of the person in that position."
Comptrollers are, inherently, closely involved in city policy. In
addition to investing the city's public pensions, they are tasked with
auditing, vetting, and investigating pretty much anything the government
spends money on. And because many comptrollers use the post as a
stepping stone on the way to higher office (Spitzer presumably
included), it's typical for them to act as a thorn in the mayor's side. But someone who aims to be the primary voice of urban policy doesn't sound like a mere nuisance to the mayor. He sounds like a direct competitor.
Mitchell Moss, the Henry Hart Rice professor of Urban Policy
& Planning at NYU's Wagner School, agrees that Spitzer could
transform the office. "This is a job which has a potentially vast
capacity to influence the day-to-day life of government," says
Moss. Simply based on his prior time in office and "the nature of his
persona," Spitzer would be "much more aggressive as a comptroller than
we’ve seen in recent history," Moss says.
"He came to the job of attorney general and redefined it," Moss
adds. "He made the attorney general of New York into a national figure.
And he would be a formidable presence locally and nationally as
comptroller."
If anyone could pull it off, it would be Spitzer.
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