New York City Comptroller John Liu and New York City Public Advocate Bill de Blasio, last seen here enjoying the finer things in life thanks to excess campaign funds provided by the City taxpayer, announced last week that their efforts to require Sprint Nextel to disclose political spending had taken a step forward. The Pension Funds holds over 8 million shares of Sprint Nextel with an asset value of over $41 million—in other words, Liu controls a big share of the ownership of Sprint.
Why does Liu care about Sprint’s political spending? As Comptroller, Liu has a fiduciary duty to maximize the benefits to the participants of the New York City Pension Funds—namely, current and former New York City teachers, firefighters, and police officers. As a fiduciary, Liu “must discharge his or her duties … solely in the interest of the plan’s participants and beneficiaries. In the discharge of those duties, the fiduciary must act for the exclusive purpose of providing benefits to participants and defraying the reasonable expenses of administering the plan.” 60 Am. Jur. 2d Pensions and Retirement Funds § 437.
It is unclear how forcing companies to disclose their political giving is “act[ing] for the exclusive purpose of providing benefits to participants.” So who does benefit from this effort? The trustees of the New York City Pension Funds are New York City elected officials and the heads of large public sector unions. These folks could certainly find the political spending of corporations to be very interesting, especially if the corporations are funding challengers to these politicians or supporting candidates who take positions with which the public sector unions disagree. Despite the talk about “transparency and accountability,” knowing a corporation’s political spending makes them susceptible to targeted government retribution or union activism and protest.
Liu and de Blasio should not be using the pensions funds of hundreds of thousands current and former employees of New York City to create an enemies list for incumbent politicians and powerful public sector unions. Perhaps it is time for New York City retirees to remind Liu that, in administering the Funds, his job requires him to keep their financial interests—and not the political interests of New York’s elected officials and union bosses—foremost in mind.