The fundmaster

Black Enterprise, Oct, 1998 by Matthew S. Scott

Some say McCall's intervention is political in nature. In fact, in March of 1997, New York City Mayor Rudolph Giuliani went so far as to bar state auditors from the offices of several city agencies because he felt the state comptroller's audits were intended to embarrass him during his reelection campaign. "This comptroller is the most highly partisan political comptroller in the history of this state," Giuliani charged. The mayor's actions forced McCall to sue the city for access to the records of six city agencies. Maintaining that his office is responsible for auditing more than 1,600 local governments, as well as state agencies and public authorities, McCall won a court decision in May to proceed with the audits. Although the Mayor called the ruling "political," McCall asserts that his office has commented on both Republican and Democratic budget proposals and other matters, always with the aim of trying to produce the highest return for the city, state and pension fund members.

In August of 1997, he took the unusual step of suing 11 executives and directors of Columbia/HCA Healthcare Corp. after it was disclosed that several of the company's business practices were under federal investigation. The news of possible fraud at the company caused its stock to drop considerably--a spiral that significantly decreased the value of the 2.6 million shares that the state pension fund owned. "Basically, we believe that the people who were directors of the company mismanaged the company and enriched themselves at the expense of us shareholders," says McCall. "Since we owned a major chunk of the company, we took advantage of federal laws that enable us to sue Columbia/HCA to get back the value that we lost and get back the assets we think they inappropriately gave to company executives." McCall says that 20 other large pension funds have joined him in the suit, which is also attempting to force the company to install internal controls to prevent future fraud and deception. The suit is still winding its way through the courts.

MOTIVATING THE MASSES

It's aggressive actions such as these that show the strength of fiscal activism as a policy worth pursuing. But how can this type of power be transferred to African Americans and their communities? The potential is there, but most people, regardless of race, don't realize it because most don't understand the type of influence they can have over their pension fund.

When Charles Jenkins retired in 1989, he didn't think much about investing or his pension. After working 22 years as a New York City bus operator, he figured his pension "would be guaranteed for the rest of my life--just like Social Security."

So much for guarantees. When talk about the Social Security system collapsing began a few years ago, Jenkins, 63, began to worry. "I often wonder if it's possible that the mayor could come up with some sort of angle so the city didn't have to pay us anymore," says Jenkins. "This is where guys like McCall would come in -- if ever there was a time when they would try to take my pension away." Now Jenkins is active in a local retirees group that monitors the state pension fund and Carl McCall's performance.