Politics on the Hudson

Continuing his push to reform the state’s scandal-scarred pension fund, Attorney General Andrew Cuomo introducing a bill today that would remove the state comptroller as the sole trustee of the pension fund and replace it with a board.

The issue has been discussed for years because New York is one of a few states that do not have a board overseeing its pension fund, which is valued at $116.5 billion. But the debate has become more pronounced since Cuomo’s investigation into a sweeping pay-to-play scandal involving former Comptroller Alan Hevesi, who resigned in 2006.

Current Comptroller Thomas DiNapoli has defended the current structure and has instead sought to tighten rules governing the fund’s investments.

But Cuomo said the system hasn’t worked. His investigation has already led to four guilty pleas of influential investors and politicians who benefited illegally from the fund. On Tuesday, former Liberal Party chairman Raymond Harding pleaded guilty to receiving at least $800,000 in kickbacks for his political ties to Hevesi, who has not been charged.

“For decades, the state pension fund has been weakened and corrupted by the sole trustee model,” Cuomo said in a statement. “The model has allowed pay-to-play to flourish in a system meant to protect the retirement accounts of thousands of hard-working public employees.”

Senate Democratic Leader John Sampson, D-Brooklyn, and Senate Banking Committee Chairman Brian Foley, D-Suffolk County, are backing the legislation. But it’s unclear whether DiNapoli, Gov. David Paterson or the state Assembly will support it.

Cuomo said a 13-member board would oversee the fund, with six members appointed by the governor, attorney general, Senate president, Assembly speaker and the minority leaders in the Senate and Assembly.  The other six members would be selected by the board. The comptroller would chair the board.

The legislation would also ban investment firms from using placement agents, lobbyists, or any other third-party intermediaries to work with the pension fund—which has been a key problem discovered in Cuomo’s investigation. The bill also bans investment firms from doing business with a pension fund for two years after it makes a campaign contribution to any board member.

DiNapoli recently imposed a similar ban on campaign contributions.

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