Elected Officials and Other People's Pensions—A Match Made in Hell

A blog about business and economics.
Aug. 31 2013 11:48 AM

Elected Officials and Other People's Pensions—A Match Made in Hell

166174670
NEW YORK, NY - APRIL 09: Tight close-up implies shady conduct.

Photo by Mario Tama/Getty Images

David Halbfinger has a great piece in the New York Times about former city comptroller William Thompson's habit of investing pension fund money he was supervising with investment vehicles controlled by fund managers who donated to his campaigns. The fund managers get fees, some of the fees get turned into campaign contributions, and everyone wins.

Everyone, that is, except for taxpayers who ultimately need to make good on pension promises out of their own pockets if the funds' investments don't perform. Alternatively, maybe taxpayers will get fed up and city workers will end up receiving less than they thought they would.

Advertisement

Either way it's bad business. But while this certainly reflects poorly on Thompson, it's worth noting that this is a very systemic problem. Thompson's predecessor as comptroller, Alan Hevesi, moved upstairs to become New York State Comptroller before ending up in jail for corruption related to his management of state pension funds. Academic research on California cities has shown that across the board jurisdictions with elected rather than appointed treasurers face systematically higher borrowing costs than those where it's an appointee. But the Hevesi problems and the Thompson ones (where, to be clear, there's no evidence of criminal conduct) are probably best viewed in this context. There's a range of misconduct from the felonious to the sleazy to the merely inept along which this kind of situation can play out, but "effective stewardship of public funds" isn't likely to be on the list.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Hong Kong’s Protesters Are Ridiculously Polite. That’s What Scares Beijing So Much.

The One Fact About Ebola That Should Calm You: It Spreads Slowly

Natasha Lyonne Is Coming to the Live Culture Gabfest. Are You?

A Jaw-Dropping Political Ad Aimed at Young Women, Apparently

The XX Factor
Oct. 1 2014 4:05 PM Today in GOP Outreach to Women: You Broads Like Wedding Dresses, Right?
Crime

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

Music

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

How Tattoo Parlors Became the Barber Shops of Hipster Neighborhoods

This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century

Moneybox
Oct. 1 2014 8:34 AM This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century To undertake a massively ambitious energy project, you don’t need the government anymore.
  News & Politics
Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
  Business
Moneybox
Oct. 2 2014 9:19 AM Alibaba’s Founder on Why His Company Is Killing It in China
  Life
Outward
Oct. 2 2014 9:58 AM No Word Yet From the Supreme Court on Gay Marriage 
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
  Arts
Brow Beat
Oct. 2 2014 10:04 AM Wearing the Button-Down Shirt of the Boy You Once Loved
  Technology
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Medical Examiner
Oct. 2 2014 9:49 AM In Medicine We Trust Should we worry that so many of the doctors treating Ebola in Africa are missionaries?
  Sports
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?