The fundmaster

Black Enterprise, Oct, 1998 by Matthew S. Scott

NEW YORK STATE COMPTROLLER H. CARL McCALL IS LEVERAGING PENSION FUND DOLLARS INTO FISCAL ACTIVISM

THE SQUINT THAT SOMETIMES wrinkles his brow could easily be mistaken for a scowl, but H. Carl McCall is far too confident to be angry. These days, he strides soulfully and carries a big stick known as leverage; and in the world of politics, leverage is one of the most powerful forms of currency. And Carl McCall has been on quite a spending spree.

McCall, the sole trustee of the more than $107 billion New York State Common Retirement Fund (NYSCRF), is using the strength of the fund to command the attention of corporate giants like Texaco and Columbia HCA. "When I call up and say I'd like to talk to the CEO of a company and he looks on his screen and sees that we own more than 1 million shares of his stock, he says, `How soon can we talk?'"

How soon indeed. Since 1993, when the state Legislature chose him to replace Republican Edward V. Regan who retired in midterm, McCall has quietly elevated a relatively low-profile position in state government to a visible seat of activist power. By using a series of economic development and community investment programs, precedent-setting legal actions and backroom negotiations, he has leveraged his role as New York State comptroller into that of a power broker, influencing corporate decision-making, as well as state and local government policies--all for the benefit of New York State workers, retirees and their communities.

If you scoff at the notion that a position some see as only "head bean counter" could actually become a political force, consider this: he has confronted corporate America on the issues of diversity and corporate citizenship, and as the sole trustee of the NYSCRF, he has almost doubled its value to more than $107 billion--an accomplishment that will keep it fully funded far into the future. And more than that, he's poised to indirectly play an even greater role in improving the fortunes of African Americans everywhere. McCall is making the case for what we will call fiscal activism--the practice of aggressively using sound financial principles to safeguard and achieve civil rights for American citizens. Note that fiscal activism not only benefits African Americans, but also persons of any race, religion or sex. But at a time when more people are becoming less inclined to defend affirmative action, McCall has used fiscal activism to achieve affirmative action's desired effect--showing that inclusion ultimately enhances bottom-line profits.

But to continue wielding such influence, McCall must get himself reelected on November 3. In 1994, he beat the odds to become the first black elected to statewide office in New York. He also happens to be the only current Democratic statewide office holder. With New York's popular Gov. George Pataki pushing for a Republican sweep to help him ascend to national office, McCall is under tremendous pressure to remain the lone bright spot in New York's shaken Democratic leadership. He faces little-known challenger Bruce Blakeman, the presiding officer of the Nassau County legislature. Blakeman, 42, was handpicked by Nassau GOP boss Joseph Mondello and is backed by Sen. Alfonse D'Amato. Although he has raised little more than $170,000 to McCall's $4.9 million, Blakeman is counting on Jewish voters and Gov. Pataki's coattails to mount a campaign to unseat McCall. He has begun by falling in lockstep with Pataki's philosophy of government and casting McCall as "the last vestige of the liberal Mario Cuomo years." To defeat Blakeman, McCall will have to galvanize civil service workers, state pension fund members and black voters on the strength of his record of managing the fund.

FUND MANAGEMENT METTLE

Shuttling between offices in the Alfred E. Smith State Building in Albany and on Third Avenue in New York City, McCall oversees some 2,200 employees, half of whom conduct numerous scheduled audits of city and state agencies. He uses an inviting, approachable demeanor to meet with fund managers on Wall Street as well as with people who wish to do business with the state. His 6-ft.-4-in. frame can often be seen wading through crowds, shaking hands at regular appearances in the community to promote state programs and services, such as locating unclaimed funds or encouraging citizens to save and invest.

His daily schedule has heated up even more lately, due to his reelection campaign. Earlier this year, McCall garnered enough political support to flirt with running for governor of New York State, arguably one of the most powerful political positions in the country. The fact that his candidacy for governor could even be considered tells something of McCall's political influence--influence that's rooted in his management of the second largest state pension fund in the country. "I never lose sight of the fact that I have 880,000 public employees of New York State whose retirement depends on this fund," says McCall. "That's foremost in my mind when I make any investment."