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Tom Allon

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Political Contributions: Out of Comptrol?

Posted: 03/29/2012 11:05 am

The troubling saga of New York City Comptroller John Liu's campaign fundraising operation is symbolic of what is wrong with our political system today and of the corrosive influence that fundraising has on our elected leaders.

The comptroller of New York City is its chief financial officer, who safeguards billions of city employee pension dollars and is also the primary watchdog of a $67 billion city budget. The comptroller must be financially purer than the driven snow; any financial taint or distraction and the city's whole financial standing is at risk.

So, the two recent indictments of people close to Liu's campaign -- a major fundraiser and his treasurer -- have understandably raised questions about his ethics and abilities as a financial manager.

The key point is whether the comptroller's performance now will be motivated by his obligation to perform a public service job effectively or his desire to raise as much money as possible for his political campaign for mayor in 2013. Much will depend on whether he can either clear his name quickly or whether the public will find out that he knew of his treasurer and fundraiser's allegedly illegal actions and simply made it part of "doing business."

Before Liu's campaign indictments surfaced, he and the mayor agreed to try to consolidate pension fund boards and operations, potentially saving the city a billion dollars. In a tight fiscal era, where key city services face future cutbacks, this savings is crucial. But with Liu's ethics cloud, this reform has gone nowhere. Has Mayor Bloomberg lost confidence in Liu's ability to put his job before ambition?

Earlier this week came reports that Liu was "promoting" three key people in his office, after there has been significant turnover in the past year. Is the comptroller spending valuable taxpayer dollars to dole out raises to stop the brain drain from his office?

Liu has made two very dubious decisions recently: hiring two pension managers from Jon Corzine's disgraced MF Global and, as reported in the New York Post recently, awarding city pension money to scandal-scarred State Street Corp.

Is this another example of the political quid pro quo that is so prevalent in politics even in these difficult economic times? Liu gives money to Wall Street and then Liu expects donations accordingly.

Have the comptroller's campaign needs negatively affected his approach to his job? Will that approach to his political career continue to compromise his decision-making abilities and make him an ineffective public servant over the next 21 months until his term ends? Former Mayor Ed Koch, The New York Post and the New York Observer have called on Liu to resign, but the comptroller is ignoring any critical drumbeat.

Here are four suggestions for what could be done for the good of New York City and its taxpaying residents:

The mayor or council speaker should step up and call for hearings to investigate whether Liu, the city's chief financial officer, has so badly breached the public trust that he cannot perform his job anymore. This is what leaders do when one of their colleagues is twisting in the legal winds and when their performance is impacted.

Speaker Quinn, as the leader of the city's legislative body, can instruct her finance committee to hold hearings on Liu's actions. Transparency here will inform the public whether the comptroller can continue in his post or should step down so we can elect a more effective comptroller to safeguard our pensions and budget.

If Liu is cleared by council hearings and the U.S. Attorney's office, then he can retain his post and once again serve New Yorkers.

Liu could also do the honorable thing and admit that he either did know, or should have known, what his 25-year-old treasurer was doing and step down. He should not let Jenny Hou, an inexperienced and loyal young woman, take the fall and sacrifice her future because of his quest for higher office. A real leader, especially a financially savvy one, knows where the buck stops.

John Liu is entitled to the presumption of innocence -- ethically and legally. We must balance that with New York's need for a comptroller who is not so compromised by his own ambition that the office of comptroller becomes functionally vacant in terms of effectiveness.

These recommendations allow Comptroller Liu, Mayor Bloomberg and Speaker Quinn to put the public interest above personal interest and political comfort, without denying Liu his presumption of innocence. The question is: Will our three top officeholders put the city above those narrow interests and comforts?

Tom Allon, a 2013 N.Y. Liberal Party and Democratic candidate for mayor, is the president and CEO of Manhattan Media.

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