>> From WXXI News.

This is Connections.

I'm Evan Dawson.

Our connection this hour is made in a little civics test.

How much do you feel like you know about the role of New York State's comptroller?

Today's conversation is with a candidate for that office.

We pride ourselves on bringing the candidates to you at length so you can evaluate them, so you can interrogate their ideas, and so you can be better informed as a voter.

Now, we often say that one of the elected positions that voters are most confused about is judges.

It's not easy to evaluate judicial candidates, and there are reasonable questions about why judges are running for office on political lines in the first place.

But next down the list, when it comes to voter confusion, is state controller.

In our state, that office has been held by Democrat Thomas DiNapoli for nearly 20 years.

He was appointed by the legislature to fill a vacancy in 2007.

He was elected in 2010.

He's been reelected three times since then.

But this primary season, DiNapoli has a challenger.

So we're going to talk about why New York State needs a strong comptroller.

We're going to talk about how to identify corruption.

We'll talk about how our guest today sees the performance of the incumbent.

And to be fair, the critique is pretty brutal.

In fact, Drew Warshaw says this is not really about a civics test.

It's about a test of whether the controller in the office is doing the job well enough for the people of New York State to know about it.

Drew Warshaw candidate for New York State comptroller.

Welcome to the program.

Thanks for being with us.

>> Thanks for having me, Evan.

>> I'm going to read right from your website in which you sort of I mean, you indirectly blame DiNapoli for some of the biggest problems in the state.

You're right.

The fact that you don't know what the controller does is exactly what controller Tom DiNapoli wants.

Because if you knew, you would wonder what he's been doing the last 19 years.

One of the most powerful yet overlooked offices in New York, the State controller has been held by the same person for nearly 20 years.

It's a position that could actually do something about New York's high costs, and high taxes help solve the affordable housing crisis and make our government more efficient and accountable.

Is that hyperbolic?

Is that overstating it?

I mean, he's not the legislature.

He's not the governor.

He's the comptroller.

Tell me about that.

>> Yeah.

No, I really appreciate you.

Uh, you putting it so well.

And the reality is, this is the most powerful office in government that, unfortunately, no one knows anything about.

One person gets to invest our $300 billion public pension fund that all 3000 municipalities in the state of New York pay taxes into.

We fund it as New Yorkers and one person oversees the quarter of $1 trillion budget, gets to audit anything that touches a state tax dollar, which is basically everything.

If you had urgency and imagination to use that power and to use that money for the working New Yorkers who have less of those things, and that is why I am running to give New Yorkers a choice for the first time in literally 20 years, in a generation, uh, for one of the most powerful positions, not just in New York, but in the entire country.

>> Most of the time, challenging an incumbent in this state, especially in a majority party, is like trying to start a fire in a hurricane.

So, you know, do you feel like this is uphill?

Do you actually feel like this is doable?

>> Oh, well, I wouldn't be doing this if I didn't feel this were this were doable.

I have two young boys and a wife who works and had an incredible job, uh, leading the largest affordable housing nonprofit in the United States.

Uh, so the real reason for doing this, uh, is one, of course we believe we can win.

But more importantly, we believe we could flex the power and the money, the enormous amounts that he has been sitting on for 20 years for New Yorkers, without those things.

Um, whether it is addressing the affordable housing crisis that is not just a New York City problem, but it is an everywhere problem or the lack of investment in our upstate cities, or the high cost of electricity.

That is afflicting, you know, every single utility monopoly across the state.

Um, having worked in affordable housing, having worked in renewable energy for nearly a decade, I bring a unique level of experience to an office that I think, uh, is shouting for some, uh, after 20 years of the same person in the same seat.

>> Talking to Drew Warshaw candidate for New York state comptroller, running in the Democratic primary.

And you can learn more at Drew Warshaw.com.

We'll put a link in our show notes.

Of course, the incumbent Thomas DiNapoli is invited, and we're hoping to have that conversation with him as well on this program soon.

We always invite the candidates for office to this program so you can hear them at length.

And if you've got questions, comments, as always, the show email is Connections at wxxi.org.

We're talking New York State comptroller.

I'm curious to know if our audience feels like they have a good grip on what this position does and what it's all about, or whether you're satisfied or dissatisfied with the current office holder.

It's Connections at wxxi.org.

You could call the program toll free if you like, 844295 Talk ( 844)295-8255.

Join the chat in our YouTube comments.

The chat section there.

Uh, so tell us a little bit about yourself here.

I mean, you've kind of hinted at it a little bit with your background, but kind of give us the brief Drew Warshaw bio for those who who don't know, you drew.

>> Sure.

Uh, was born and raised in New York, uh, spent a career not running for office, uh, but for building the things that I think we need most.

I was blessed to help rebuild the World Trade Center after 9/11, as the chief of staff at the Port Authority of New York and New Jersey helped take a 16 acre hole in the ground.

Uh, that was fraught with peak government dysfunction and layers of bureaucracy that, uh, had left that hole in the ground for too long.

And we got there.

And for the next four years, we were able to turn around that project and fill that 16 acre hole in the ground to help rebuild.

My hometown was one of the greatest things that I've ever done.

Um, was able to spend nearly a decade in the renewable energy sector, building solar farms all across the country, um, and fight the climate crisis and air pollution.

Uh, and then most recently, uh, was lucky enough to lead, uh, the largest affordable housing nonprofit in the country with 1100, uh, people who wake up thinking about nothing other than addressing this affordability crisis and this housing crisis.

And it was there where we needed two things more than anything else, Evan.

We needed money and we needed power.

And I looked over and the same guy had been there on all this money and all this power in the controller's office and not using it for working New Yorkers.

Um, who needed someone in a statewide position like the controllers?

There's only three statewide positions in the whole state to use their leadership and to use the unilateral authority that he has over $300 billion of capital to actually invest that in New York.

And incredibly, we actually looked at his investment performance over the last 19 years and saw that he's actually underperformed his own benchmarks by 39%.

He's paid hundreds of Wall Street bankers $12 billion in taxpayer funded fees, property tax funded fees in the process to generate that underperformance.

Money is going to private equity, not into homes that we can afford.

We can change that.

We just need to swap out one person in order to do that.

>> So is it your assessment that obviously, the nearly 20 years of Thomas DiNapoli you think has been a failure?

But is it your assessment that that failure comes because of I don't want to say corruption, but maybe I'll ask you directly, do you think he's too close to moneyed interests?

Does it look like corruption to you?

I'll start there.

>> Yeah, I think this is.

To me, this is the worst form of corruption.

This is the legal kind.

And, uh, this guy has literally made hundreds of Wall Street bankers, millionaires right under our nose.

You know, we we have literally been played for suckers.

Um, he has paid $12 billion in taxpayer funded fees to 664 Wall Street investment firms.

And their whole proposition is that they could beat the market net of those fees, which sounds great, right?

If they could actually beat the index and pay for their fees, it makes perfect sense.

The problem is they haven't even come close.

And Tom DiNapoli has not just paid them.

He's quadrupled the amount of taxpayer funded fees that he's gotten.

And we calculated how much that underperformance has cost New Yorkers, New Yorkers, because we're the ones who invest in that fund.

And it has cost New York taxpayers $59.1 billion in higher taxes to bail out Thomas DiNapoli and his bankers underperformance.

And when I am New York state comptroller, if you don't do your job for 19 straight years, what happens, Evan, you get fired.

And that is exactly what we are going to do.

We are going to fire the 664 Wall Street bankers who have been made millionaires off of the backs of taxpayers and public school teachers and firefighters and nurses, and we are going to say enough is enough, and we are going to replace them with practically free, diversified index funds, and we are going to earn a higher rate of return at a lower cost to the taxpayers.

And one thing I want to be very clear to your listeners, we have a fully funded pension fund.

We do.

That's true.

And our state comptroller brags about that.

But what he leaves out and what has never been known, and a story that has never been told, is that the pension fund by law has to be fully funded.

That's the law.

So Mickey Mouse could have been state comptroller over the last 19 years, and the pension fund would have been fully funded.

The question is, how does it come from investment income?

Because he's a really good investor.

Well, now we know after 19 years he has not been.

Or does it come from taxpayers and public school teachers and firefighters?

And it turns out over the last 19 years, that is exactly what has happened.

Property taxes have gone up to the tune of $59.1 billion to subsidize, to make certain that the pension fund was fully funded.

And we did on our website, we have a 62 county breakdown.

Monroe County alone, $2.7 billion.

Uh, Erie County, $4.9 billion.

Onondaga another 2.7 in 3 counties alone, uh, upstate more than $10 billion of our tax dollars have funded this underperformance gap.

It is the greatest story that has not been told.

And the public, unfortunately, knows nothing about it, because all they hear is that we have a fully funded pension fund, which is true, but they don't realize it's because their own tax dollars are making certain that it is fully funded.

>> All right.

So just take a step and elaborate a little bit more then on how you're going to do this differently.

Because reading through the proposal that you have.

And by the way, I appreciate the fact that on your website, um, there are specific proposals that people can read through and you call this one the DiNapoli tax here.

You say that Drew's going to stop lining Wall Street's pockets and invest smarter to give billions back to working New Yorkers while earning a higher rate of return for pensioners in the process.

How do you guarantee that?

What are you going to do?

>> Yeah, it's really it's really simple.

Um, we're going to just follow investing 101.

Um, we're going to do what every sensible financial advisor says, which is to diversify across a set of practically free index funds.

We are not going to try and pick the fancy Wall Street investment managers who claim that they could beat the market as long as we pay them billions of dollars of taxpayer funded fees, we're not going to buy that anymore.

We're not going to be played for suckers.

Okay?

So we're going to fire them.

We're going to literally cut out the Wall Street middleman.

We're going to cut out those layers of fees that taxpayers pay $1 billion to every single year for hundreds of bankers to not do their job, and we're going to replace them with practically free, like no fee index funds, a diversified set of index funds that gain exposure to all the asset classes that we need to.

With none of the Wall Street middlemen in between.

Because we do, we do not need them.

And that's the thing I am not saying there is corruption.

I am saying it is unnecessary.

And to me that is the whole point.

We have got to stop letting our tax dollars on fire.

We have to stop funding the pension fund off of the backs of public school teachers and firefighters and social workers and nurses, and 11 million taxpayers across New York.

And you know, the other thing that that, uh, we proposed on the website that you'll see is that that $10 billion from just three counties upstate that have poured in to the the pension fund, these upstate cities aren't even getting that money back.

The state pension funds, not even investing in New York, not even investing in our upstate cities.

And that's why I've called for the largest housing fund in the United States of America, $20 billion that we would invest here in New York into homes that New Yorkers can actually afford while earning a rate of return that is higher, higher, Evan, than the target rate of return of the fund, which if you go to Thomas DiNapoli website is just 5.9%, we could do better than that.

And we can address the single greatest crisis facing New Yorkers.

And that is the fact that our New Yorkers cannot afford to live in New York.

>> So let me make sure that I before we get on to your other proposals here, we're talking to Drew Warshaw, who is running for New York State Comptroller, challenging Thomas DiNapoli in the Democratic primary.

DiNapoli, the longtime incumbent there.

Uh, let me make sure I'm explaining this as best I can here.

So when you're talking about investing public money, your claim is that it's that the comptroller's office is now spending $1 billion annually on bankers fees that we need not pay.

Is that.

>> That's a fact.

Yeah.

That's on his website.

Okay.

>> That's okay.

>> Yeah.

That is that is exactly what's happening.

And he says we have to do that.

>> Okay.

>> So and I say we don't.

>> Yeah, I can't speak for the comptroller.

He'll do that for himself when he comes on this program.

I do suspect he's going to say you're, you're you're confused about something here.

Um, but what do you, uh, what is the best defense of, of how he has set this up here?

I mean, there's no way that Tom DiNapoli is going to agree with you.

>> What he.

>> Said that he's just hosing taxpayers here.

>> What he says is we have to, uh, because that's what everyone else does.

And he points to all these other public pension funds and university endowments across the country, and he says, this is what everyone else does.

So I'm like everybody else.

I don't know what this guy Drew's problem is.

I, I just do it like everybody else.

And what I am saying is everyone else is wrong.

They're getting played for fools by a bunch of Wall Street middlemen.

Salesmen effectively, who are saying that there is something so complicated that we can't possibly understand, that we're going to give them all these fees, literally make them millionaires in the process, off of the backs of working New Yorkers, simply because we somehow don't believe that an index fund, a simple set of index funds, which more and more people are investing in every day, can outperform these geniuses on Wall Street who become millionaires off of Thomas DiNapoli.

And that's that's really it.

And then, you know, the other, the other thing that he'll say is, oh, well, you know, if we just invested in the S&P 500, well, when it goes up that's great.

But when it goes down then you know we're going to lose all our money.

But let me let me just be very clear about that one.

We're not saying we're going to invest all in the S&P 500.

We're saying we're going to diversify across a set of different index funds, fixed income, not just US public equities and so on and so forth.

So that's one and two.

I think it's really important to understand, and we publish this on our website in this report that when the market did worse, when the market crashed in 2008, when it went down later, you know, 5 or 6 years later, when it down, when it went down, most recently during Covid, the pension fund did even worse.

So if he's so worried about that, his own fund actually performs worse in the down markets and that it doesn't perform as well in the up markets.

So we lose either way.

And we're making these bankers millionaires off of our tax dollars for literally adding no value and for sucking value.

And then the worst part is not only do our taxes go up, but then none of those tax dollars come back to our communities because he's investing with all these private equity funds and these hedge fund managers who don't care about Rochester or Buffalo or Syracuse or the Bronx or Brooklyn, they're investing in companies like Palantir, right?

The IT backbone of ice, of Donald Trump's private militia.

They're investing in fossil fuel companies.

That another report of mine showed that is not only killing the planet, but is actually killing our pension fund has lost the pension fund $15 billion.

We keep buying more of these financial losers that, you know, have no real future over the long term.

And of course, New York state is the ultimate long term investor.

Why we don't take that long term view?

Uh, you know, I don't know.

And, and that is why we need a change after 20 years.

>> Well, again, I suspect the comptroller will say, hey, I didn't personally pick Palantir.

I didn't personally pick fossil fuel companies.

We are asking people with more expertise than me to do this.

And I'm not the one who's personally choosing those.

>> Yeah.

And in my mind, he can personally choose not to.

And he is not using that authority that he's blessed with having.

I mean, one person controls that $300 billion.

And if he wants to set up a practically free index fund that does not have Palantir, the IT backbone of Ice in it, he can he could do that tomorrow.

He could do that any day he wants, but he refuses.

And that is the pattern.

He says he can't do this.

He can't do that.

He can't invest in affordable housing because it's against his fiduciary duty.

Well, we did invest in affordable housing in real life, and we earned a higher rate of return than the public pension fund's target return.

So why wouldn't we do that?

You know, this is this is why we have to have a change in mentality and a and we cannot settle for someone who continues to say, well, I can't do this or I can't do that.

I'm here to say, we can.

>> So before we get into housing, which I do want to talk about, I want to jump ahead to point three in your plan, because it's related to how you describe the job of controller.

So when you're walking down the street telling people what you're doing or what you're running for, and they're like, I don't really understand what the controller does, I think.

What did you say?

You said that it's the chief money giver backer.

I mean, what's the what's the shorthand you give for people on what the controller is supposed to do?

>> Yeah, we manage New Yorker's money.

Um, you know, whether it's their tax dollars in the pension fund, whether it's whether it's working, New Yorkers pensions, um, and, uh, whether it's, it's minding our quarter of $1 trillion that we're spending every single year at the state.

Um, or really importantly, managing this unclaimed fund, which, uh, has $20 billion of New Yorkers money in it.

And, you know, you have to jump through a series of hoops to try and get your own money.

You have to go to some website that New Yorkers have never heard of just to get your own money back.

And one of the things that that I have said is we're going to give New Yorkers their own money back, and we're going to do it automatically.

You're not going to have to go to a website you've never heard of.

You won't have to jump through a bunch of hoops to prove who you are.

It's 2026.

You know, my cell phone knows more about my personality than I do.

Surely we can find out where you live and who you are.

And we know your name.

We know how much you're owed.

Other states have done this that have greater urgency about returning money to their own people, and we don't have that urgency right now in a position that could unilaterally do that.

And after 2020 years, I think we should.

>> So I'm going to put a pin in that because I'm going to come back to this idea, this $20 billion in just a second.

Oh, I lost a lost mike from Greece.

He was going to ask about index funds.

Mike, give me a call back here.

We lost the call there and I'll grab a couple of emails in just a moment here.

So on this $20 billion, again, this is not my expertise.

I'm not managing the $20 billion fund here.

And we'll talk to Mr.

DiNapoli to see what he thinks about this.

But Drew Warshaw, who's challenging, says that they're failing to get this back to people.

Okay.

So one of the things that comes to mind to me, drew, when you talk about getting this back and making it automatic, not making people apply for the money that the state is holding that belongs to them, the verification process is, I can imagine it's pretty stringent right now because this could be a ripe pool for scammers.

So if they hear you say you're elected and the new controller, Mr.

Warshaw says, well, you know, we're going to take down those barriers and I'm a scammer.

I'm somebody who's very good at working in tech and I.t.

Do I not see an avenue to to defraud people?

>> Right, right.

And this is exactly Thomas DiNapoli line.

This is this is what he does.

He scares New Yorkers into thinking this can't possibly be done.

We can't possibly fire all these bankers.

We have to pay them $1 billion.

We can't possibly give people their money back automatically, because there would be massive fraud.

Well, why has Illinois been able to figure this out?

Why is North Carolina been able to figure this out?

Why have other states been able to figure this out without any signs of fraud?

The reason is because they have a level of urgency and understanding of technology, and they have modernized their systems, which Thomas DiNapoli has failed to do.

And in 2026, we don't need for you to prove and go through all the hoops and paperwork to say who you are.

We can figure that out yourself.

Again, our our technology.

My phone knows exactly who I am.

It knows my favorite color.

The state comptroller has access to all of this data.

We could just send you your money.

And in the middle of an affordability crisis, we.

It is literally the job description of the State Comptroller to do that.

And since getting into office, the number of unclaimed funds have nearly tripled under his watch, nearly tripled the number that should go down has gone up.

We can quantify the performance.

So just like he has underperformed the market in his investor capacity by 39%, that we can objectively quantify, we can objectively quantify this, that number, that should be zero because it's New Yorker's money has tripled under his watch, and he has not figured out a way to get it back the way many other states have.

And I am not buying this scare tactic about fraud.

I oversaw IT organizations in my career, the data engineering capacity has come a long way since Thomas DiNapoli was first elected to office in the mid 1980s.

We absolutely can do this.

And and let me let me just put it put it one more way.

Let's let's say that there is some amount of fraud.

Let's say that, you know, 1%, there might be 1%, which all these other states have not had that.

But let's just like, let's just go with with the plot, wouldn't we take that trade?

Wouldn't we take in a moment where people cannot afford their rent, they can't afford their groceries?

Wouldn't we take the trade to give back $19.9 billion back to New Yorkers and let's say some there is some amount that gets sort of lost in the wash.

We're holding on to $20 billion because that's what we're worried about.

And this is the exact mentality that we have got to change in Albany when we're so worried about all this, instead of just solving it, instead of just figuring it out, okay, it might, it might be challenging, it might be hard.

So what?

We've done hard things.

I was able to rebuild the World Trade Center after 9/11.

We built solar farms.

When people thought that that was a risky thing, we built affordable, more affordable housing, and we invested one nonprofit, more affordable housing than the Public Pension Fund of New York has done in 19 years.

We can do hard things.

We just need to get a person in that seat who has that experience and has a sense of urgency to go and do it.

>> All right, just briefly before I grab phone calls here, what is an example of something that's in that 20 billion?

What are the kinds of things that is the state is holding on to that people either don't know about or can't get access to?

>> Sure.

So this is everything from a utility rebate.

Um, that didn't, you know, get your way because maybe you moved a health insurance benefit where these health insurance companies, you know, do everything to take our money, but, but somehow they never give it back.

Uh, so money sometimes gets swept up into the unclaimed fund.

Uh, this could be an uncashed check that just got lost in your huge stack of, of, of mail.

Um, this could be an expired gift certificate that, uh, because of consumer protection advocates, it turns out, uh, gift certificates don't actually expire.

Um, and, you know, consumers still haven't unfortunately been educated in that.

Uh, so this, this could be any of those types of monies, uh, that are under your name.

And eventually at some point gets swept up to the New York state comptroller because the theory was if, if a public official had an, a statewide public official had your money, uh, he would be incented to give it back.

And unfortunately, he's done the opposite and he's accumulated it.

And now he's using it to plug budget gaps.

And it's, it's, it's literally malpractice.

>> All right, so, um, did you just say gift cards and gift certificates are not allowed to expire?

>> Correct.

>> I did not know that.

I don't I wonder if I wonder if I'm behind on this.

I wonder if most of our audience knows they literally can't, can they?

Can they diminish in value over time?

>> Nope.

Uh, it is always yours.

And you know, one of the things we did just to help promote it is, uh, we invented a, we, we built a website called Get Your Money Back and y.com to make it as simple as possible to at least find this website because the state controller makes it really hard.

So we just came up with get your money back and why it was a little easier than, you know, w w w dot o s c.gov backslash.

This backslash that.

So if any of your listeners, you know, go to get your money back and y.com, uh, this is a website that will channel you to the comptroller's website.

And I want to be very clear when I'm New York state comptroller, there will be no website, there will be no hoops that you need to jump through.

We will just send you your money back automatically because it is yours.

It is not the state's, it is not government's and it is sure not Thomas DiNapoli.

And we are going to act like it.

>> All right.

Drew Warshaw is challenging Thomas DiNapoli in the primary for New York State Comptroller.

After we take a very short break, phone calls.

If you're on the phone, hang there.

We'll get through all your calls and emails on the other side of this break with the candidate.

Coming up in our second hour, we are preempting Connections with President Trump's news conference.

The president says he will take questions at length about Iran, answering questions about the length of the United States commitment, the possibility of sending ground troops, his threat about a Tuesday night strike and escalated strike on Iran and more.

That will be next.

Our.

>> Support for your public radio station comes from our members and from Mary Cariola center, supporting residents to become active members of the community.

From developing life skills to gaining independence.

Mary Cariola, center.

Transforming lives of people with disabilities.

More online at.

Mary Cariola.

Org and Laurelwood.

Assisted living at the Highlands at Pittsford, an affiliate of University of Rochester Medicine, offering daily support and enrichment activities in a connected residential community.

More at Highlands at Pittsford dot.

>> Art.

To your feedback we go.

Robert and Fairport, first on the phone.

Hello, Robert.

Go ahead.

>> Yeah, thanks for taking my call.

I'm kind of curious why gentleman is running for an office.

He's making over $800,000 a year with the enterprise Community Partners nonprofit.

He's running for a position that pays, you know, a quarter of that $220,000 a year as controller.

I'm kind of curious about that.

And the other thing is investing these monies in, in, uh, you know, affordable housing, that's, that's like venture capital.

If you, if you're going to invest these monies into the index, uh, these are investable for profit companies.

They're not non-profits.

So a couple of these things don't make sense.

>> Thank you, Robert.

Thank you.

Let's, let's, let's hit the first part first.

Go ahead.

Drew.

>> Sure.

I mean, I think if you're sitting on money and you're sitting on power in this moment and you are not using those two things, uh, for working New Yorkers without those things, then you've got to step aside.

And, um, and I was working at this nonprofit and we were operating within a system that's set up to fail because the people in government were fundamentally not doing their jobs.

And, uh, and so we've got to go in and we have to get these folks who are treating these jobs like lifetime appointments, uh, who do not have the urgency and continue to say, we can't do this and we can't possibly do that.

Um, we need people in there who, who say and have the experience to say we can.

And then to your point, and I think that's a good segue to your point about housing.

Um, this is not a venture style investment.

This is one of the safer investments we have.

This is an asset class that has like a 0% vacancy rate that has demand when the economy is growing, that has demand when the economy is contracting, when we're in a recession.

Um, so we can get and we have gotten very steady returns that again, I want to be very clear is higher than the 5.9% target return that Thomas DiNapoli says has published on his website is the job description of our public pension fund.

He says it's to earn 5.9% and we could earn well north of that, much higher than that, and actually address the single greatest crisis facing our upstate cities.

Uh, and down here in New York.

And that is this housing crisis where people cannot afford to live here.

And, you know, you look at Mayor Evans, you look at Mayor Ryan, Mayor Owens in Syracuse, all of these mayors, they have said two things.

One, they have made a lot of promises to address the affordable housing crisis.

And two, they have said that they are out of money.

Right.

And we're not out of money.

We just don't have a person who's sitting on a lot of it to actually invest it thoughtfully.

And in our backyards.

And that is what I am saying we would do, and we would earn a higher rate of return in the process and stop paying all these fees to these bankers who have fundamentally underperformed the market over the last 19 years.

>> All right, Robert, thank you.

This is Andrew and Irondequoit next on the phone.

Hello, Andrew.

Go ahead.

>> Hey, uh, Mr.

Warshaw, are you.

Hey, look, uh, yeah, 5.9%.

That's terrible.

Geez.

I mean, and where's the press?

Why didn't the the.

Isn't the press the fourth arm of the government?

You guys should have been telling Thomas DiNapoli to get it together for a while now.

What the heck's going on around here?

I don't get it.

Anyway.

Affordable housing.

Why don't you guys just get out of the way?

I'm a carpenter.

I'd love to build houses, but you don't need money to build houses.

You just need to give guys like me permits.

And we would build you all kinds of nice little houses that wouldn't cost a lot of money.

But you guys are all you think you want to take it over and be the house builders.

You don't even know how to build a house.

>> Yeah.

Okay, Andrew.

Then go ahead.

Drew.

>> Thank you.

Andrew.

So, uh, I totally appreciate both points.

Uh, you know, on the first point again, I really think, uh, one, it's because we've had literally no competition in 20 years for this office.

So no one has raised this.

And then the second point is we have a fully funded pension fund that our current controller brags about.

And he says he wins all kinds of awards for it being fully funded.

But what he won't tell New Yorkers is that it's the law.

It has to be fully funded, and it's the taxpayers who make sure it is.

So that's that's, I think, why unfortunately, no one has paid attention because, uh, we do happen to have a fully funded pension fund, but, uh, we don't have someone who, who, who levels with New Yorkers to, to explain why.

Uh, and then on the second point, I'm so glad you brought up permitting, um, and I totally appreciate the work that you're doing every day to, to build stuff for a living.

One of the things that we have proposed is to audit the building code of New York State and New York City.

And I imagine you're very familiar with the building code.

And and what do they do, Andrew?

They add requirements every single year.

They add, they add, they add, but they never subtract.

And this code, as I call it, is the silent killer of not just affordable housing, but of anything that touches dirt in New York.

And we can propose a model code and do a literally like show the governor and the legislature show the mayors and city councils exactly what they would have to change to reduce the cost of construction, to make carpenters like you easier to build, to not have to overstuff these houses with things that we don't need that have been built into the, the, the building code by different special interests.

And you know, someone said to me, oh, you, you know, you can't audit the building code.

Of course we can.

The building code touches state tax dollars and that's the job description.

And that's the type of creativity, energy and imagination that we have to bring to an office that unfortunately just has sat, uh, without it for, for two decades.

>> Andrew also was giving a critique of the news media, which I just want to I'll respond briefly on that point.

Andrew.

I think a critique is fair here.

This is a very powerful position.

The comptroller's office, that's why we're having this conversation today.

We're even.

We've invited the comptroller.

He's going to hopefully be on in the weeks to come to talk about his own record and why he wants what would amount to essentially a six term or a fifth official elected term.

So but let me say two things about that.

First of all, to the extent that anyone would agree with Drew Warshaw critique or feel like the comptroller hasn't been covered harshly or hard enough, I think that that's fair.

Now, maybe we would cover the comptroller more often, and maybe you would conclude he's doing a great job.

Maybe you would agree with drew.

That's not for me to say, but do I think that more could be done to scrutinize?

Yes.

I also think there's something else going on.

This is a very sort of technically, there's a lot of technical expertise needed to understand a lot of the work in a comptroller's office.

And that just means that if you're reporting on it, you need to spend more time, just as you would if you're reporting on a very complex medical study.

Headlines are one thing, understanding studies and what they're telling you is another.

Scientific research is another.

So the comptroller's office takes some work, and newsrooms across the country and across the state have been downsized.

And even The New York Times has fewer reporters than they did a generation ago.

And we certainly are doing our best to sort of hold the line on that and doing everything we can not to sort of fall prey to a very different culture of how Americans are consuming news.

But when we choose not to want to pay for news coverage or journalism, this is one of the things you get.

I don't think it's healthy, but I do think it's one of the things you get.

And so I'm not going to give you a pitch here for the sweatshirt I'm wearing today, this wonderful hoodie that I got for being a member myself of WXXI.

That'll be another day.

But I do think it's one of the one of the problems here, Andrew.

But I also think it's fair to say, hey, to the reporters who are still working, let's make sure we're covering big offices.

So I hear you there, Andrew.

>> And the other thing, the other thing I would just.

>> Say is, you know, the public deserves a debate about this.

And I put a 51 page report out that showed my work that, you know, literally shows all the sources, has it as a appendix that's like 39 pages long.

And, um, and DiNapoli basically just says, oh, you know, his, his math is wrong.

I mean, that's his response.

And to me, New Yorkers deserve way more than that.

I mean, I'm, we're talking about a $59 billion tax bill to New Yorkers.

We are talking about making Wall Street bankers millionaires, $12 billion in taxpayer funded fees.

And his only response is, well, he doesn't have his math.

Right.

Well, let's debate it.

I think New Yorkers deserve a debate.

And I've challenged him multiple times to a debate, and he refuses.

He does not want New Yorkers to scrutinize this office.

He does not want them to look under the hood.

Because when you do, these are things you can quantify.

And I appreciate that.

It may not be the easiest thing to quantify, but it's also not that hard.

We're talking about the third largest investor in the United States of America, and no one in the financial capital of the world, in the financial capital of the world, has ever asked and answered the question, how is the third largest investor performed?

How has he done?

And his only metric of success is, hey, I have a fully funded pension fund.

Well, it turns out we have to.

So we're always going to succeed at that.

The question is how much is coming from the taxpayer?

How much is coming from public school teachers and firefighters, and how much isn't coming because you're a good investor.

And it turns out, you know, far too little is coming from investment income because we've paid a bunch of bankers to not do their job.

>> All right, back to the phones we go.

This is Jack in Greece.

Hi, Jack.

Go ahead.

>> Oh.

Hi, Evan.

Thank you.

Uh, very interesting conversation.

A couple of thoughts.

One of the things I would look for first is if you would bear with me, Evan, is, is a little more data.

Uh, talking about numbers, but the first thing is if you talk about property taxes, you're going to get everybody's attention because our property taxes are through the roof.

But what first, if you bear.

I got a couple of questions, if you would, if you could answer.

>> Yeah, no.

>> Go ahead.

One is what percentage of the of our property taxes is tied up in funding for the pension plan?

Because that's a much that would be a much smaller number than my total property tax bill.

Second one is everybody pays fees for financial investments.

I don't care if you're investing in an index fund like the S&P 500, which I do.

I know what those fees are.

They're very low, but you still pay a fee.

So when you start talking about now, if you talk about $1 billion fee per year on a $300 billion investment portfolio, that's 0.3%.

That's not a high fee.

So and the other thing is you can always get.

It's the easiest thing in the world to throw hand grenades on.

I can make more money, but what risk are you undertaking?

You have to pay pension plans.

You have to pay pensions out.

Those funds are, as far as I understand, they're contractually obligated by New York State.

You have to pay those pensions, so you better not be investing in junk bonds and getting 12, 15, 20% a year, because what happens when they go down 40%?

Anyway?

Those are my questions.

>> Okay, so let's work backwards there.

The first claim that I want you to hit is the fees that you've been really going after DiNapoli for, Jack says, look at this $298 billion total controlled portfolio, $1 billion a year in fees.

That's 3/10 of a percent.

That's in line with what people pay all the time.

It's not egregious.

It's not outrageous.

It's not uncommon.

What do you think?

>> Well, I would.

>> Say it's not in line with what people pay all the time.

It's in line.

If you want to pay private equity managers and and hedge fund managers to invest in it, it is like 15, 20 times what you know, what Jack is paying for his, you know, wherever he's, he's, he's investing in the S&P 500 and of course, the state of New York with, with the amount of money we have, it could be practically free because, uh, the, you know, the vanguards, the fidelities of the world, you know, would be begging for that money.

And it's also something that, uh, is not that hard to do that, that we very likely could do in-house.

And when I get there, that's one of the things that, that I want to look at.

But look, one out of every five of your tax dollars is going to fund these bankers.

Uh, that's 20% that, that, that is an enormous amount of money.

Um, and this is one of these sort of secret taxes.

This is why we call it the DiNapoli tax that is just built in.

And mayors, they don't have a choice because as the listener said, he's exactly right.

The pension fund is contractually obligated before they can even pay their utility bill, they have to make sure that the pension fund is fully funded.

That's why it is the law.

Um, and one of the other things that we found out incredibly is that had he just earned the market rate of return for each of his asset classes, instead of trying to beat it with all these fancy private equity managers, 371 by the way, are private equity managers.

He he tripled the amount of private equity managers since he's he has gotten there, um, the portfolio would actually have lower risk, not higher risk.

Had he just invested in the different benchmarks of these asset classes.

So I, you know, we could literally do this at a lower risk.

We could generate higher returns and we could do this at a fraction of the cost to property taxpayers all across New York.

And had we done this, you know, and again, we could just look at the numbers.

Had we done this, we would have saved taxpayers $59.1 billion over the last 19 years.

>> I think he is concerned.

Jack hears you say that you're going to outperform what DiNapoli has done, or that you'll at least get to market average.

And he's been below market.

But Jack says everybody can say that they'll outperform someone financially.

You can't guarantee that you don't know exactly what's going to happen.

And Jack's worried that you're going to end up putting money into what he called junk bonds.

>> Well, we wouldn't do that, uh, because, uh, that we don't need to take risks.

The whole, the whole thing is to generate the, the rate of return that Thomas DiNapoli has been doing.

You don't need to hire 371 private equity managers who are promising all these double digit returns, so long as we give them a gajillion dollars of our tax money, we don't have to hire these fancy hedge funds or these fund of funds and all these, you know, private credit, all these fancy names that that Wall Street has come up with just to get our money, just to just to take us away from these practically free index funds because they know they're under competition.

They have felt the heat of these practically free index funds.

And since the dawn of modern finance, every single time they look at this, they show that these active managers, these hedge funds, these private equity managers do not outperform over any long period of time.

The market average.

And that is all I am saying.

And, and certainly the the folks in Albany are not going to be able to do that.

And we, we we know that they haven't.

And over the last 19 years, they haven't even come close.

So I'm saying, let's give it up.

Let's give up the the idea, the sort of greedy idea that we can somehow know better than the market and pay all these guys who are smarter than everyone else.

You know, we, they're not this since the dawn of modern finance that has been proven.

You know, Warren Buffett famously challenged the hedge fund industry every single year.

He would invest money in the market benchmark.

And he he would challenge their own hedge fund to outperform them over a ten year period of time.

And only one time over decades did someone take up Warren Buffett on that challenge.

And it was a hedge fund and he got smoked.

It wasn't even close.

And that's what I'm that's all I'm saying.

We don't need these middlemen to invest the public's money.

In fact, they're losing the public's money.

And we can do it better and we can do it cheaper.

And we're obligated to as as fiduciaries of the public money.

>> Comparison that comes to mind for me are all the ads that we see.

The stone cold lead pipe lock, sports bettors, this guy's got the bet of the year and everyone should go read McKay Coppins in The Atlantic's piece on how it goes.

When you trust somebody who says they're the expert in betting your money, uh, doesn't work out.

Okay, uh, let me get a couple more questions for you that have come in via email and offline.

Jack, I hope that covered that.

Thank you very much for that phone call.

This is from Pat.

Pat says, does the candidate have a plan to update the tech related to the retirement system?

I'm a retirement member and checking my pension stats is like going back in time.

It's regularly down on the weekends when most of us have pensions, have time to take a look at our accounts.

It's astounding considering the money backing the system.

That's from Pat.

>> U.S.

Pat, it's.

>> Such an important point, and we've gotten outreach from all sorts of, uh, different pensioners who have literally said the exact same thing.

The website goes down all the time.

Um, there was an article, unfortunately, in the Albany Times Union, uh, an investigative report that showed how many pensioners had died before even receiving, uh, their, their full pension benefits and all because we have a state comptroller.

Again, this is what happens when you've been there 20 years.

Um, you get complacent and there's no competition and you don't have a sense of urgency.

So absolutely, we would prioritize modernizing the technology stack of the state comptroller's office to pay pensioners on time and to give people their money back.

When I was talking about giving that, uh, the unclaimed money automatically, that is what I'm talking about.

And we have a state comptroller who literally admitted to a newspaper reporter last year that he doesn't use a computer.

We have a state comptroller who doesn't use a computer in 2026.

So how is he going to be able to prioritize the modern technology that exists off the shelf?

That if we had, we could actually help the 1.25 million public employee beneficiaries who have to go to a website that like, you know, goes down, it's like our health insurance websites, these, these fortune 50 companies.

Somehow, whenever you go to submit a claim, the website goes down or something, something happens.

There's no excuse for this.

And Pat, you're exactly right.

And you're going to get better after 20 years of the same.

We are going to update that.

And that's that's easy.

That's not even the hard part.

Um, and he should be doing that and he won't if we elect him for a sixth term because he hasn't over the last 20 years.

>> All right.

I've got three minutes and two more questions.

So let's try to be tight on these here.

Uh, David in Rochester called in to ask how is drew going to overcome DiNapoli name recognition.

Can you do that in about a minute?

>> Sure.

I guess I would say the secret about that is, uh, and a poll came out just last week, uh, Siena College poll, you could just go go to their website, 63% of New York Democrats have never heard of Thomas DiNapoli never heard of him, 63%.

It's an astronomically high number for any incumbent, much less someone who's been there for 19 years.

So, um, you know, I don't think he has this huge name ID advantage that, uh, you would intuitively think, uh, certainly the polls are not suggesting that he does.

So, uh, you know, we're, we're less worried about that.

We are more worried about the other side of that, that people won't know that for the first time in 20 years.

Uh, there is an actual choice for this, this office.

And it shows like these, uh, that will hopefully get that good word out.

>> And finally, Wendy in the city of Rochester says, sorry if this was discussed.

I missed some of the earlier portion of the show, but she wants to ask the following.

When do we have discussed this?

But I want drew to close in about a minute.

With your exact plan for how you would do this, she says, I have nagged DiNapoli over the last ten years to divest from fossil fuels.

This makes sense since a lot of his retirees are teachers who invested their lives in children.

Since most years, fossil fuel companies underperform the market as a whole, and since New York state is largely out of the fossil fuel extraction business, he has recently taken baby steps.

What would the challenger do?

Less than a minute specifically for Wendy and those who want to know, how do you divest?

Can you fully divest from fossil fuels?

>> You can fully divest.

We will fully divest.

We have a position paper on our website that you can go that makes the financial case to, um, obviously I spent eight years in the renewable energy industry.

I believe in the climate crisis.

I believe that it is killing our planet and polluting our air.

But importantly, it's also killing our pension fund.

And we found out that the pension fund has lost $15 billion.

So I have committed within our first year, which is more than possible to get out of every single one of these, whether it's equity, whether it's fixed income.

These are financial losers.

They used to be 30% of the stock market.

They are now less than 2.8%.

Um, they have no alternative strategy.

They continue to lose us money and Thomas DiNapoli continues to hold on to these stocks for dear life.

And we're going to divest and we will be out of there within our first year.

>> More information.

If listeners are interested at Drew Warshaw.com, that's the candidate's website.

He is a candidate for New York State comptroller, the incumbent running for reelection is Thomas DiNapoli.

He is invited to this program and hope we'll have him very soon.

Drew, thanks for making the time and I hope if you win, come back often here and answer our questions the next time.

>> I will.

Thanks so much for your time and your listeners time as as well.

Really appreciate it.

>> That's Drew Warshaw running for New York State Comptroller.

Um, we're going to take a short break and diverting a little bit from typical plan.

President Trump's news conference here talking about Iran live in just moments.

>> This program is a production of WXXI Public Radio.

The views expressed do not necessarily represent those of this station.

Its staff, management or underwriters.

The broadcast is meant for the private use of our audience.

Any rebroadcast or use in another medium without expressed written consent of WXXI is strictly prohibited.

Connections with Evan Dawson is available as a podcast.

Just click on the Connections link at wxxinews.org.