Comptroller Candidate from Scarsdale Calls Out DiNapoli

State Comptroller Tom DiNapoli (D) has been pulled into an ongoing investigation into pay-to-play practices by his predecessor involving the state's $130 billion pension fund, and the Republican he's likely to face off against this fall, Scarsdale resident Harry Wilson, said Friday that DiNapoli needs to open up about his involvement.

 "The attorney general's office is now looking into incidents that occurred under Tom DiNapoli's watch, and he needs to come out and talk about it," said Wilson spokesman Bill O'Reilly.

DiNapoli spokesman Robert Whalen said the comptroller has spoken at length about alleged corruption under his predecessor, disgraced former comptroller Alan Hevesi, and also pointed to a set of reforms DiNapoli has rolled out since he was chosen by the State Assembly to replace Hevesi.

The saga began in 2007, when Attorney General Andrew Cuomo (D) began investigating claims that officials who worked for Hevesi, also a Democrat, were steering business to investment firms that contributed to his campaign.

That would've been bad enough, but the investigation soon unearthed a culture of corruption at the office of the comptroller, who is the state's chief fiscal watchdog and the sole trustee of the pension fund.

In one of the more bizarre twists, former "Mod Squad" star Peggy Lipton was being driven to chemotherapy appointments by an on-the-clock state worker. Lipton's close friend Jack Chartier, a Hevesi staffer at the time, had allegedly arranged the chauffeur services. 

Coincidentally, Hevesi got caught up in his own chauffeur scandal after it was revealed that he had directed a state worker to take his disabled wife on Manhattan shopping sprees.

Hevesi was reelected in 2006 despite the scandal, but was forced to resign that December before pleading guilty to a felony. He has since been barred from ever holding public office again.

State law grants the Assembly the power to appoint a new official in such cases, so they chose DiNapoli, who was an Assemblyman at the time, though he has no background in finance. Former Gov. Eliot Spitzer and a panel of experts, including former comptrollers, opposed the appointment.

According to an April 15 New York Times article, DiNapoli met with "a prominent investment executive" and officials from political consulting firm Global Strategy Group shortly after taking office. Soon after, the comptroller agreed to a $15 million investment contract with the executive.

Global Strategy was at the center of the pay-to-play scandal, and just last week it was announced that Cuomo's office had reached a settlement with the firm. Now members of Wilson's campaign are calling on DiNapoli to talk about the meeting.

"What we are seeing is politically-connected firms and individuals feeding at the trough of hard-earned public pension dollars," said Wilson campaign manager Chapin Fay.

"DiNapoli has an obligation to let the public know about his role in the meetings in question, his thinking behind the decision to make the investments under investigation, and about any other politically-connected placement agents his office may have met with and accommodated."

But Whalen, the comptroller's spokesman, said the controversy is smoke and mirrors.

"That meeting was a brief meet-and-greet, and no business was discussed," he said, adding that the executive in question had already garnered a contract from Hevesi.

The executive "requested additional funding, which is not uncommon, and after the normal review process, an additional $15 million investment was made. The transaction was found to be in compliance with the normal protocol."

DiNapoli is not accused of any wrongdoing and has not been questioned by Cuomo's office, but the fact that he's been drawn into the investigation underscores the scope of the inquiry and the unelected comptroller's vulnerability this fall. He released a statement while the ink on the Times article was still wet.

"As the Attorney General's investigation has revealed, I inherited a mess. But it is a mess that I have fixed," he said. "I have thoroughly and methodically evaluated and reformed the operations and investment policies of the pension fund."

Those reforms include a ban on placement agents – like Global Strategy – and an executive order that prohibits investment firms from seeking pension fund contracts for two years after making political contributions. DiNapoli also set up an independent commission tasked with reviewing the operations of the comptroller's office. 

O'Reilly pointed out that the meeting highlighted by the Times article took place before the reforms were enacted.

Wilson, a former hedge-fund manager, is the only Republican looking to run against DiNapoli.