One Small Step

Pension Reform Agreed Upon,

But Will the Promises Be Kept?

By Henry J. Stern
October 28, 2011

The city's antiquated pension system has long been in need of streamlining and updating. The agreement reached yesterday by Mayor Bloomberg, Comptroller Liu and leading labor unions provides hope that 2012 will be a year of pension reform, but such hopes have previously arisen and been dashed on the rocks of political reality.

New York City employees have different pension plans, all under the management of the City Comptroller: the Employees' Retirement System (NYCERS), the Teachers' Retirement System (TRS), the Police Pension Fund Subchapter 2, the Fire Department Pension Fund Subchapter Two, and the Board of Education Retirement System (BERS). Each pension fund is financially independent of the others and has its own board of trustees, which include city officials and relevant union leaders. In general, the city and the unions have roughly equal authority over the funds.

Sometimes the city and union leaders work jointly on pension matters, while at others they are in disagreement, a difference largely based on the relationship between the mayor and the comptroller at the time.

Historically, the city's mayors and comptrollers have been at odds more often than they have been united. The comptrollership has been used as a stepping-stone for mayoral candidates and under those circumstances it is not uncommon for the mayor and the comptroller to disagree on issues.

The last comptroller, Bill Thompson, left office in 2009 after a close but unsuccessful effort to defeat Mayor Bloomberg's bid for a third term. The subsequently disgraced and convicted Alan Hevesi sought the mayoralty in 2001, but ran a poor fourth in the Democratic primary, losing to Mark Green, Freddy Ferrer and Peter Vallone, who all lost to Bloomberg.

Liz Holtzman was defeated for reelection as comptroller in the 1993 Democratic primary by Hevesi, who raised integrity issues against her. She never ran for mayor, but was defeated as the Democratic nominee for U.S. Senate in 1980 by Al D'Amato and in the 1992 Democratic Primary for Senate by Robert Abrams. Her predecessor as comptroller, Harrison J. Goldin, made a bid for the office in 1989, finishing fourth in the Democratic primary behind Richard Ravitch (3rd), incumbent mayor Ed Koch (2nd) and David Dinkins, the eventual mayoral winner. Goldin had succeeded Abe Beame, the only comptroller in City history to ascend to the mayoralty since Consolidation in 1898.

It is one thing for public officials to disagree on a policy issue, a frequent occurrence, but another to be in chronic dispute on questions of investment and expenditure of public funds, in situations in which the outcomes can result in financial gaps of millions of dollars in return on investments. The hydra-headed current system leads to such results.

The relationship between third-term mayor Mike Bloomberg and first-term comptroller John Liu has been particularly chilly. Although they cannot run against each other in 2013 they clearly have different visions as to what the city should do in the interim.

Liu has been in full-fledged campaign mode for the 2013 Democratic nomination for Mayor from the day he took office 22 months ago. His initial act was to publicly decline a mayoral invitation to lunch on his first day in office, which, though not substantial, set a tone of antagonism over a non-issue. There are other issues, great and small, where the two men have differed. One chronic bone of contention deals with the comptroller's issuing reports faulting the conduct of a mayoral agency. The press asks the mayor to respond, and he generally does.

Whatever justification for a particular dispute it seems clear that the mayor and the comptroller are often on opposite tracks in their judgment of the city's financial crisis and the way for it to dig itself out of the mess. The mayor sees the solution as based on reducing expenses and increasing renevue with an economy that gets better, while the comptroller believes the city can survive the recession by continuing to spend as it has done in the past.

Of course, all this may change in the next few months, since new economic data is constantly arising and influencing the stock market, corporate earnings, and tax receipts. The financial situation may improve, or deteriorate.

The tentative agreement reached yesterday between the mayor and the comptroller will require considerable fine-tuning in addition to approval by the State Legislature in Albany. It is by no means complete and dispositive of the main issues that have arisen. It does indicate a desire to reach common ground and the recognition that the city's urgent and continuing fiscal troubles require more savings to be made without endangering the pension system.

Some watchers believe that the decisions announced yesterday are not real, but a paper gloss over a more severe situation designed to buy a few months breathing room in which city and state officials will work out a more comprehensive reform. Of course, if the financial situation improves over the next several months to the extent that these measures will not be fully required, so much the better.

The working agreement announced yesterday will require the relinquishment of some authority by the comptroller, who now possesses almost plenary authority in making investment decisions for the $120 billion that remains in the city's pension accounts. It is a rare for public officials to spontaneously limit their authority in any way, unless they are required to do by law enforcement or other external authorities.

Liu has been under fire in the press in recent weeks for alleged fundraising irregularities, including taking campaign contributions from certain donors under the name of others in order to increase the amount of matching funds he would receive from the city's Campaign Finance Board. If he made concessions as the result of current political weakness, it remains to be seen whether he will adhere to them when his own situation improves.

It should always be remembered that every high political office is but a few steps from the grand juries' chambers in the county court houses. The higher one rises in the system, the more vulnerable one is to accusations of various types of misconduct.

The trouble is, as we say in Rule 32, that some of the charges are likely to be true.

A Train Wreck Named Desire

Anthony Weiner Self-Destructs

After Twenty Years in Politics;

Turns Out We Didn't Know Ye

This afternoon we watched Congressman Anthony Weiner's four-minute swan song, in which he showed the skills he had honed over twenty years as a public official. The Council Center for Seniors in Sheepshead Bay was crowded with over a hundred reporters and 40 TV cameras, a larger media scrum than he had ever assembled while he was politically alive. It made more than one viewer wistful for what Weiner might have been able to do for New York if he had had his head screwed on right.

Unfortunately, beneath his "YAVIS" exterior (Young, Attractive, Verbal, Intelligent and Successful) there lay a nest of aggression and insecurity so deep that the Congressman propelled himself into a prolonged and repeated pattern of personal behavior which is completely inconsistent with acting as a tribune of the people in a democracy.

Who can say what any of us have in our minds? Mostly, we wisely keep our thoughts to ourselves, particularly if they are socially or politically unacceptable. For an elected official to engage in reckless conversations with numerous strangers, while identifying himself to them as a Member of Congress, a substantial part of his mind must have wanted to be discovered and for the charade to end. When last month he inadvertently pressed 'reply to all' and set off the firestorm which devoured his career, he was possibly, at one level or another, opting out of a lifestyle which, to say the least, papered over a conflicted brain.

Although he was no genius, Weiner was a smart, diligent and basically moderate politician. He had the potential to be the outer borough middle-class successor to the Manhattan aristoi. He had difficulties with his staff, but that is not unusual when intense, demanding and self-important public officials employ decent, honorable people at modest wages who are unprepared to calibrate their lives to their boss's ambitions. That is putting it in a kindly way, but today is not the day to jump on a man who has just departed a life that he may find more precious than his own.

Weiner first ran for Mayor in 2005, and adroitly dropped out, leaving the thankless task of taking on Mayor Bloomberg to Fernando Ferrer. He was considered a likely candidate in 2009, but deferred to Comptroller Bill Thompson after the Mayor and City Council extended term limits. One line I recall being bruited about in those days, less than three years ago, is that Mayor Bloomberg was reportedly willing to spend $100 milllion on his campaign, of which $20 million could be spent on "oppo research", digging up dirt on his rivals. That was far more than would have been needed to discover Congressman Weiner's indiscretions, so the rest of the $20 mil could have been spent on enough media to ensure that all New Yorkers could consider the fruits of the negative research.

Probably the Mayor didn't threaten to do that, just as Marie Antoinette never said: "Let them eat cake." But if enough people say you said it, or think you said it, or think it reflects your views, it can lead to a one-way ride on a tumbrel.

The teachable moment that emerges from this personal tragedy and public farce is that, with many people who we think of as leaders, emotion can overpower reason, and people can and do perform incredibly self-destructive acts. When one such person gains access to a weapon of mass destruction, our civilization will be at stake. We should do our best to minimize that possibility.

Bertrand Russell (1872-1970) said in 1962, "Since Adam and Eve ate the apple, man has never refrained from any folly of which he was capable." Lord Russell, who won the Nobel Prize for literature in 1950 and was regarded as a brilliant philosopher and mathematician, was forbidden to teach at the City College of New York in 1940 by a lower court decision which objected to his views on sex outside of marriage. Mayor LaGuardia refused to appeal despite pleas from Albert Einstein and John Dewey, among other individuals considered wise. LaGuardia was running for a third term (which was then allowed by the City Charter) in 1941. Russell was an avowed atheist, which gave offense to many believers.

Anthony Weiner's self-destructive behavior was not a threat to world peace. It was a ticking time bomb, but he and those who love him, are the only victims. Nonetheless, it should be a wake-up call for those seeking an honest, rational, perceptive and moderate candidate to run for Mayor of the City of New York in 2013, which is not as far off as people may believe.

Those interested should be judged on their character and achievements, rather than their promises, intrigues, race, religion, gender or sexual orientation. The same principle that forbids discrimination on those bases should also forbid favoritism on the basis of what is called "identity politics". The amount of money that each man or woman has already collected from those who hope to benefit by their election should not overwhelm merit as the basis for choice between candidates.