Welcome to Politics Bites, where every afternoon at It's A Free Country we bring you the unmissable quotes from political conversations on WNYC. On today's Brian Lehrer Show, comptroller candidates Thomas DiNapoli (D) and Harry Wilson (R, C) faced off over experience, values and the role of the comptroller in state government.
"The hedge fund world is the least transparent, least regulated of all the financial services sector, and I would suggest the kind of risky behavior that that part of our financial world is known for had a lot to do with the meltdown that we are still paying the price for. Just making a lot of money on Wall Street is not a qualification for being a good comptroller," DiNapoli said.
Having profited from investments in subprime mortgages, Wilson has a "different set of values" than most New Yorkers, he said.
DiNapoli waved off the suggestion that having a finance or accounting background is important for the job of comptroller, arguing that while managing the public employee pension fund is an important part of the job, the office has other responsibilities.
The comptroller needs to make sure that contracts are being paid, payroll is being handled, audits are being completed, unclaimed funds are being handled, the oil spill fund is being administered, and the pension fund is being invested and benefits paid out, DiNapoli said.
He trumpeted the office's role as chief auditor, saying he'd made examining the books at the MTA and the state's Medicaid payments a priority. He audited every school district in the state, he said.
Audits shouldn't be motivated by political ideology, DiNapoli said, but should focus on areas of greatest potential impact, taking a close look at areas where the bulk of taxpayer money is spent.
Vigilance and transparency are the lessons to be learned from the fall of former Comptroller Alan Hevesi, who plead guilty last week to pay-to-play charges involving how investment contracts for the pension funds were awarded, DiNapoli said. DiNapoli was appointed comptroller by the state senate after Hevesi resigned in 2007 amid a different scandal. Once in office, DiNapoli banned the use of placement agents, middle men who lobbied the Comptroller's Office on behalf of investment funds.
"The public needs to look carefully at who the candidates for comptroller are. And the comptroller who is serving needs to be sure that there's appropriate checks and balances and transparency to make sure that something like that could never happen again," he said.
Harry Wilson painted his opponent as a political appointee and someone who would use the post for political ends, not as professional financial manager for the state.
Wilson defended his career on Wall Street by saying he invested in companies, which is what the comptroller does with the pension funds, and that his role with the Obama administration in the bailout of General Motors was "the most successful turnaround in American history." His finance background is an asset for a state struggling with a budget crisis, he said.
"I worked to restructure broken companies, which is why I am running for New York State comproller — to help restructure the broken operations of New York State," he said.
Wilson volunteered to work on the General Motors bailout out of patriotism, he said.
"I felt that we needed more people of talent in public life, that I had a really deep skill set to offer and I felt it was important to do that and I felt my country was more important than my party...I really just focused on the fact that we had these very deep needs and I felt I could make a difference," Wilson said. Taxpayers are on track to win back their investment in Detroit, he said.
Responding to criticism from DiNapoli that he opposed the Obama administration's financial reform bill, Wilson said he was against the bill because it "stymied" parts of the financial sector without going far enough to address root causes of the financial collapse.
The bill failed to adequately confront reckless debt-to-equity requirements, didn't address Fannie Mae and Freddie Mac's role in the secondary mortgage market, and then did nothing to correct the lack of responsibility evidenced by rating agencies and investment banks, Wilson said.
DiNapoli's attacks against him show the current comptroller doesn't understand the financial system, Wilson said.
"He politicizes everything without dealing with substance," he said of DiNapoli. "I would argue there is a professional way and a political way and Mr. DiNapoli's entire approach in the last three and a half years is a political way because he spent 24 years as a politician in Albany," Wilson said.
Wilson said audits need to focus on the biggest areas of state spending, starting with Medicaid — particularly, reimbursements to facilities for long-term care.
He criticized DiNapoli for not investigating Medicaid and other expenses more aggressively.
Wilson would use the office to identify and recommend particular spending cuts for state agencies and programs, a departure from how the office is now used, he said. DiNapioli called this plan beyond the constitutional role of the office. A comptroller as pruner is just what the state needs, Wilson said.
"I think the fact that this state has shown a complete inability in any level of government to demonstrate the ability to identify improvements in fiscal operations, I think that is sorely needed in Albany."
Wilson did not endorse Republican gubernatorial candidate Carl Paladino, or any other candidate for statewide office.
Discussing the pay-to-play scandal that Hevesi plead guilty to last week, Wilson questioned why it took DiNapoli two years to ban placement agents from the office and said he would also ban trial attorneys from doing business with the comptroller.
Listen to the entire conversation on The Brian Lehrer Show.