Bill Thompson Takes on The World…Kind of…. (11.03.08)
Maybe the biggest blow to Wall Street goes to the collective ego that exists there. Walk along Broad Street and you can feel the swagger. In the locker room of my gym, the conversation is almost always about who wears what suits to meetings. Apparently some hot shot finance guy last week took two ties and knotted then into one – so as not to look as though he was wearing the same tie two days in a row. Innovation. Ego. It is where men of all backgrounds, and women, come to stake their claim. Today, many of those egos are bruised.
Fund managers are taking a big hit with this crisis. Why do we care so much? Most of our pensions and 401Ks are tied to investment funds. Fund managers choose what companies in which to invest, and they do not like to be second guessed. But maybe this is a good time to take a second look at where money goes.
Enter New York City Comptroller Bill Thompson. Thompson oversees the pensions for roughly 640,000 city employees. He doesn’t tell fund managers what to invest in, but he is a fiduciary, as well as the city’s financial watchdog. So when Thompson saw that some funds were investing in companies that were doing business with governments that were hostile to the United States, he raised the issue.
Thompson is quick to point out that his goal was more about putting pressure on fund managers to take greater care in where they choose to invest, and less about divestment. Companies like Halliburton and General Electric are very large, and it’s easy for their investment arms to reach into unseemly waters.
The New Yorkers that rely on Bill Thompson to oversee their pensions are firemen, police officers, emergency services workers, and many others. We are not far removed from 9/11, and we live in and around the threat of terrorism still. “How do I look at firefighters and police officers, and say that we are doing business with these regimes, because we can make money?” explains Thompson. He is absolutely right.
This kind of work does not come without companies pushing back. In the end, Thompson’s goal is to see that these pensions earn money and are financially robust. So when companies with very wise financial experts say that investing in a certain place is a good idea – a fiduciary like Thompson does not wish to muddy the water. But there are boundaries, and Thompson has used his office to draw a very patriotic line in the sand.
The comptroller seemed far less interested in politicizing this issue, which is surprising since he is running for mayor. In places where you do not often read about city officials, such as in right-of-center policy books, Thompson gets accolades for his work on raising this issue. More content to let news magazine programs, like 60 Minutes, get most of the exposure in ‘outing’ companies, Thompson is most concerned with these companies not looking for loopholes in which to get out of doing what is safe for the country, not to mention patriotic.
I also spoke with Mr. Thompson at length about housing issues, but that just does not fit in this particular column and I will expand on that another time.