In The News

Comptroller Candidate Accuses DiNapoli of Pension Fund Abuse

Jul 27, 2010

Republican Harry J. Wilson showed an early indication Monday of the hard-hitting campaign for state comptroller he plans this year after calling incumbent Democrat Thomas J. DiNapoli’s management of the state pension fund “the largest Ponzi scheme in New York State history.” To read more of this Buffalo News story, click below.

Republican Harry J. Wilson showed an early indication Monday of the hard-hitting campaign for state comptroller he plans this year after calling incumbent Democrat Thomas J. DiNapoli’s management of the state pension fund “the largest Ponzi scheme in New York State history.”

Appearing Monday afternoon on the steps of Erie County Hall, the GOP nominee accused DiNapoli of a “secretive” plan to borrow from the state pension fund to make constitutionally required payments to the same fund — with interest. He also said DiNapoli, whom he regularly refers to as the state’s “unelected comptroller,” is hiding “massive underperformance” of the pension fund while relying on overly optimistic projections of its performance.

The comptroller is the sole trustee of the state’s $120 billion pension fund.

“If you look at where the pension fund should be as opposed to where it is, there is nearly a $50 million shortfall,” Wilson said.

Wilson, whom some observers label a rare Republican with a chance of winning statewide, said the interest payments associated with borrowing as well as overestimated returns on investments will raise taxes on New Yorkers over the next few years. He estimated that while pension obligations now cost the average New York household $500 annually, that will will rise to $1,800 over the next six years even if DiNapoli’s “heroic” assumptions hold.

That amounts to a $1,300 tax increase, he said, because state law requires state and local governments to make up any shortfalls in the state pension fund, and that money is typically raised at the local level through property or other tax hikes.

Wilson also said DiNapoli bases his pension assumptions on an 8 percent return in the market when a 5 percent to 6 percent estimate is more realistic. But he said DiNapoli relies on the higher estimates because of his allegiance to the municipal unions invested in the plan.

DiNapoli campaign spokesman Eric Sumberg would not address any of the specific charges Wilson outlined in Buffalo on Monday.

Wilson said he also understands the comptroller is basing his projections on returns following the 1987 market crash. If true, he said, the Dow Jones industrial average (now at about 10,000) would have to hit 30,000 by 2022, even based on DiNapoli’s “overly aggressive” 8 percent return assumption.

“The easy answer for a politician is to assume the best and not plan for the worst,” Wilson said.

County Executive Chris Collins and Assemblyman Jack F. Quinn III — a Republican State Senate candidate who has made pension issues a campaign priority — joined Wilson for the session to call attention to what they called the dangers of manipulating the pension fund.

“To think Mr. DiNapoli has proposed this borrowing scheme is another example of career politicians pushing tough decisions into the future,” Collins said. “It’s time the generation of today takes care of today’s problems.”

Just days after endorsing Buffalo developer Carl P. Paladino in the GOP gubernatorial primary, Collins made another “rare” statement of political support for Wilson. He said pension obligations are becoming an “unsustainable” part of county finances and Wilson is correctly calling on officials to face up to the problem now.

“It’s a price I would be willing to pay,” Collins said. “Do we pay as we go and be responsible to future generations? Or are we the greedy generation and just push it off?”