29 May Politicizing Pensions Doesn’t Pay
The picture at the top of this piece is both hilarious and telling. Most observers will note that it does two things. It demonstrates the ineptitude of New York City politics and politicians, and, by extension, it shows how close the city is to electing a bona fide leftist, a member of the Democratic Socialists of America, the organization that just endorsed the murder of Sarah Milgrim and Yaron Lischinsky. Anyone who can make Andrew Cuomo – the guy who literally killed hundreds of grandmas during the pandemic – the obvious “default” choice in any election is, almost by definition, a disaster waiting to happen.
The picture does something else, though, as well, something far more immediately relevant to capital markets and the fiduciary responsibilities of those who manage assets for others.
You see, the third person in that picture, the person polling at an astounding 0%, is one of the most aggressive and unapologetic violators of fiduciary duty in the public eye today. Like the rivals he trails by 54 and 46 percent, respectively, this candidate has more than demonstrated his unfitness for office. And like the others, this candidate has shown that he will put ideology over principle and the people. The primary difference between them and him is that he’s not quite smart enough to understand that the policies he’s embraced are both destructive and recognized as such by his constituents. He had a plan to make himself the mayor of NYC, in other words, a plan that involved abusing public assets and the public trust. The people of the city saw through that plan and have rejected it roundly, providing a warning to all those, in and out of politics, who would presume to follow that same blueprint.
An outside observer might look at Brad Lander’s education and experience and wonder how, exactly, he became the “manager” of anyone’s “assets.” He has masters’ degrees in anthropology and urban planning, after all, and spent most of his professional life working in non-profits that purported to advocate for “affordable housing.” In 2009, however, Lander saw a chance to change his profession and, by extension, to change the way public funds are used. His representative on the New York City Council, Bill de Blasio, ran for higher office (Public Advocate), and Lander used the opening to jump into politics himself, winning the seat de Blasio vacated. He served three terms there and then, in 2021, after a quarter century in the public sector, decided to become an institutional investor – well…kinda. Lander ran for and won the office of Comptroller of the City of New York, making him the man ultimately in charge of some of the biggest public pension funds in the country.
From the very start of his term in office, Lander has put politics above returns in handling the quarter of a trillion dollars-plus belonging to more than three-quarters of a million New York City employees and retirees. He made net-zero and decarbonization a priority for the pension funds and has consistently campaigned for ESG and sustainability more specifically. His climate transition plan for the pension system reads almost like a parody:
Climate change poses systemic and material risks to the global economy, to the City of New York, and to the investment portfolios of the New York City Retirement Systems. Rising tides and temperatures are already leading to lives lost and billions of dollars in damages and economic disruption. How investors finance climate transition now will substantially determine how many lives and dollars we protect in the decades to come. A just transition to a low-carbon economy also presents significant investment opportunities in renewable energy, energy efficiency, and other climate solutions….
New York City is among the first cities in the nation to commit to achieving net zero greenhouse gas emissions in its public pension funds by 2040…. NYC’s Net Zero Implementation Plan is a roadmap toward decarbonization across NYC’s portfolios and the global economy.
Every investor is exposed to climate risk, but no single investor can protect themselves from it. That’s why investors must take action together. With aligned action, we can limit global temperature rise, saving lives and investment value. Without aligned action, we will likely burn up millions of lives and trillions of dollars.
In his first year in office, Lander demanded that the SEC create and implement a mandatory corporate climate reporting rule. He sent a letter to BlackRock CEO Larry Fink (of all people) demanding that Fink do more to honor his commitments to sustainability. And he signed a letter insisting that Republican state financial officers quit trying to undermine ESG. That letter also reads like a parody:
The blacklisting states apparently believe, despite ample evidence and scientific consensus to the contrary, that poor working conditions, unfair compensation, discrimination and harassment, and even poor governance practices do not represent material threats to the companies in which they invest. They refuse to acknowledge, in the face of sweltering heat, floods, tornadoes, snowstorms and other extreme weather, that climate change is real and is a true business threat to all of us.
In his second year in office, Lander announced that he would use the pension system’s proxy votes to demand corporate decarbonization and focus on the energy “transition.” In his third year in office, Lander announced that he would be running for mayor. Later, after Donald Trump was reelected and while every private asset manager and bank was announcing its withdrawal from every global climate alliance it had joined, Lander moved in the opposite direction, making his opposition to Trump known by having the NYC Pension System join the Net-Zero Asset Owners Alliance.
This, then, was Brad Lander’s plan: to use the city’s pensions and its employees as political cudgels, to wield them as wildly and as frequently as he could to make it clear to the world that he is, was, and ever shall be, a true defender of truth, justice, and sustainable investments. Returns be damned.
And the New York City voters have rewarded him for this effort by refusing to reward him.
Look at that picture again. Brad Lander has used the NYC pension system specifically to promote himself and his worldview. And as a result, nobody wants to vote for him. Literally NOBODY. They’d much rather vote for a real-life socialist or a guy who was forced to resign his last public office for sexually harassing multiple women and who is currently under investigation for his disastrously deadly COVID policies.
A hundred years ago, Dick Tracy famously used to say that “Crime doesn’t pay.” For the most part, that remains true. Much to Brad Lander’s chagrin, however, crime appears to pay better than politicizing a public pension system just to satisfy your own ambitions.
