Meet the Upstart Candidate Running in NY for What May be Among the Most Powerful Offices in the Country

Drew Warshaw recently left the affordable housing association he led to run for a position most have never heard of and can barely wrap their heads around: the New York State comptroller’s office.

The position, currently held by a 20-year Democratic incumbent for a sixth term, is quietly one of the most powerful in the entire country, unilaterally controlling the investments of a $298 billion public pension fund. This makes the controller the third largest investor in the United States. And that number represents the retirement security of teachers, nurses, sanitation workers, and public sector employees across New York State.

Warshaw says money has been mismanaged over the past two decades. The campaign estimates that just over 650 Wall Street bankers and investment managers received more than $11 billion in fees for managing the state’s investments, and because those investments underperformed, taxpayers were forced to pay about $59.1 billion in higher property and income taxes to ensure the pension fund was fully funded, which it must be under state law.

In short, as Warshaw says: “This cycle represents the greatest transfer of wealth that no one knows about. »

Warshaw’s solution? To fire bankers, take pension assets out of private equity and hedge funds and into a diverse set of virtually free, low-cost index funds. If that sounds like a radical change, it’s not. Most public pension fund shares are already held in index funds, and New York would not be the first state to adopt this type of simplified, passive approach.

For a time, Nevada’s public employee retirement system was run by one man. Steve Edmundson’s strategy: invest in low-cost, low-risk funds, then literally do nothing for years. This approach has matched or surpassed other states that hire teams of fund managers to make more complex investments.

So not only could Warshaw’s plan improve the bottom line for New York state public servants, but it could also serve as a model for reform in other states. U.S. public pension funds hold approximately $6 trillion in assets. Warshaw could reaffirm that private equity should not get a dime.

Beyond this flagship proposal, Warshaw is pushing for a number of other revolutionary reforms. He wants to divest the fund from fossil fuel assets, companies like Palantir that support the Trump administration’s anti-immigration enforcement apparatus and the surveillance state, and foreign governments — including Israeli bonds, in which New York currently holds a record $368 million.

In the meantime, he aims to invest more on affordable housing – committing $20 billion in retirement capital to permanently affordable housing in New York State, which would be the largest affordable housing fund in the United States. It would tackle the rising cost of electricity bills by challenging the regulated profit margin of utility monopolies, which is currently guaranteed by state regulators. He plans to use the office’s power to audit New York’s building codes and reduce the high cost of construction, and audit the New York Department of Financial Services to address soaring property insurance costs.

Oh, and then there’s free money. Over the past 20 years, New York state’s unclaimed funds pool — money owed by banks and other businesses to consumers that eventually becomes the responsibility of the state comptroller — has exploded, from $7.2 billion in 2006 to more than $20 billion today. This is all a state in the country owes to its people. Right now, if you want to receive the money you’re owed, you have to proactively search your name, file a claim if you’re eligible, verify your identity, and wait for the check to be mailed to you. Warshaw would cut out middlemen and send money automatically using data and information technologies that have already proven successful in other states.