New York City's First Black CFO Wages War on Debtors. He Brushes Aside Talk of Mayoral Bid
When charismatic lawyer and former Board of Education President William Thompson was sworn in as New York City's first African American comptroller, the excitement among city residents was palpable. Thompson was sworn in by his father, a judge, who alluded to the possibility of one day swearing in his son as the city's second African American mayor, following former mayor David Dinkins. Tongues began to wag immediately as residents and pundits wondered aloud whether the city's brand-new chief financial officer would cut short his tenure for a mayoral bid in 2005, or whether he would serve out his term as comptroller.
The speculation continues unabated, but Comptroller Thompson refuses to be drawn into any discussion of his political aspirations beyond his current post. There is scant reason for all the talk, he says. Instead, he prefers to focus on his job as comptroller, defining his three major areas of responsibility as oversight of the city's budget; functioning as CEO for the city's pension systems; and, most important, having the authority to audit and find fiscal savings for the city.
"Too many people look past where they are and look at where they want to go. The best thing I can do now is to focus on this job and do a good job. If you don't do the job now, you won't get the chance to do another."
Unapologetically imbuing his tenure with that philosophy, Thompson has been an aggressive activist for the city's residents, fearlessly conducting audits that successfully unearthed funds owed to the city. In the same spirit, he established the true fiscal impact of last September's terrorist attacks on the city and took on state agencies�mainly the Metropolitan Transit Authority (MTA)�about the completeness of their budget disclosures. This energetic and direct approach to saving the city money has led him to recover outstanding money from shocking sources.
In an audit released in January, for example, the comptroller showed that the New York Mets owed the city $3,381,816 mainly from underreported revenue and overstated deductions between April 1, 1996, and December 31, 2000. Based on a 20-year lease agreement secured in 1985, the baseball team is obligated to pay the city the greater of either an annual minimum rent of $300,000, or a percentage of revenues from gross admissions, concessions, wait service, stadium advertising, parking and a portion of cable television receipts. The agreement allows the Mets to deduct all sales taxes, as well as portions of the payments they make to Major League Baseball, before calculating rent payments to the city.
"We found the Mets underreported revenue by $18,363,226 and overstated deductions against revenue the team was entitled to take by $27,766,408," Thompson says. "Further, the Mets have failed to satisfy a portion of a prior audit assessment totaling $83,186."
According to the comptroller's findings, the Mets underreported $13,475,218 in advertising revenue, $4,870,964 in concession and wait service revenue and $17,044 in Skybox revenue. In addition, the Mets deducted $47,411,806 from their reported revenues to Major League Baseball, instead of the $19,645,398 to which they were rightfully entitled.
By then, Thompson had already uncovered even more startling figures owed to the city by much larger companies. The discoveries led him to reiterate his swearing-in pledge of May 2002. "When I took office I vowed to be a fiscal activist. I am following through on that pledge through my audits and my financial analyses and I look forward to generating additional revenues for the city, particularly during this time of great fiscal need," he said, after revealing more than $7.6 million that AOL Time Warner owed the city in cable fees. The cable giant promptly agreed to wipe out the debt in a lump-sum payment.
Similarly, by making the results of an audit public, he forced the New York Yankees to agree to pay $367,321 it owed the city. He also found that Toto's South Shore Country Club, Ltd., on Staten Island, failed to report an estimated $1,829,320 in revenues in its gross receipts statements to the Department of Parks and Recreation. That brought the club's debt to the city to $256,872.
Declaring that the MTA has a "credibility problem," the comptroller has undertaken an audit of the agency. He acknowledges, however, that since the audit will take four to six months, the results will not be available before the MTA goes through with its promised fare hike and service reductions. Echoing the sentiments of city residents, he contends the MTA's budget is confounding. "For them to say they have a $3 billion deficit and not explain it is inexcusable. Something is wrong," he says.
Thompson takes his oversight role as seriously as he does his campaign for a healthier local economy. Earlier this year he convened an economic forum at the Federal Reserve Bank to exchange creative ideas about tackling the economy. More important, he says, he wanted to "establish dialogue [and] make people as informed as they can be about New York City's fiscal economy and budget."
Exploring ways to exchange new ideas not only is helpful but also is important now more than ever, with the city's unemployment rate above 8 percent, compared to the national average of 5.6 percent, he says. For this reason, and because of his background as a former Board of Education president, the threatened cuts to education hit a nerve with Thompson. Governor George Pataki's appeal of the state Supreme Court's decision that the state systematically shortchanged the city's schools in funding was particularly disturbing, he says.
"I agreed with Justice Leyland Degrasse's decision and was relatively shocked when the governor appealed it," he says, adding that he was just as shocked "when the appellate court decided that our children only need an eighth-grade education." Calling the governor's recent additional cuts to education "counterproductive," he says he will be "disappointed" if the cuts go through for the City University of New York.
He is cautious when it comes to the overhaul of the city's public school system advocated by Mayor Bloomberg and Chancellor Klein. "Changing the structure is interesting," he says, pointing out, however, that "people should not look at the change of the structure as improvement."
Thompson applauds the new focus on education, especially after the administration of Mayor Rudolph Giuliani who, he says, was not a fan of public education. However, effective change will only take place when the system provides "better support for teachers," and when principals are given the latitude to hire and fire staff, he says.
Thompson expresses confidence in the path he has embarked on since he entered office and vows not to waver from it. He takes great pride in having "established the credibility of this office," he says, citing it as one of his most important accomplishments to date. He is equally proud of the fact that when he and the mayor disagreed, "we still provided oversight and established the office as being professionally aggressive."
The report entitled "One Year Later: The Fiscal Impact of 9/11 on New York City" is yet another source of pride for his office. The purpose of the report was to show how the city was suffering and "to say to the federal government, �you need to help us'," he says.
At a time when the city's economy is woefully soft and jobs are hard to find, residents and other city officials have taken note of the tactics of the city's new comptroller. Brooklyn resident Michelle Sandy, 33, says she is impressed with what she has seen so far. "Comptroller Thompson has been doing an excellent job," she says. "The fact that he is not showing any favoritism to any organization when he conducts audits shows that he has integrity and that he takes his job as comptroller very seriously." Still, it would be helpful if the comptroller's office found a way to "point professionals to industries that are hiring, so that people can make better [career] choices," she says.
Bronx Borough President Adolfo Carrion lauds Thompson's audit results and targeted agencies, particularly the ongoing audit of the MTA that played a role in that agency's decision to refrain from closing some of the token booths in the Bronx. When the economy contracts, "the poor working families and moderate-income families get hit first," Carrion says.
According to the comptroller's figures, some 148,000 jobs have been lost in the city since 2000. The Bronx bears the brunt of the loss with an 11.1 percent unemployment rate, against 7.7 percent in Staten Island, 7.6 percent in Queens, 9.0 percent in Manhattan and 9.9 percent in Brooklyn. Thompson says he is committed to boosting the stability of small businesses, as well as large companies, so that they will remain in the city and provide jobs.
Where does he go from here? He intends to continue seeking sound investment opportunities for the city's pension systems, and oversee audits and the budget to find more money owed to the city. So far, he has saved the city millions in settlement costs through a prelitigation initiative, and has committed millions more to build affordable housing in low- and moderate-income neighborhoods.
While he insists that talks about a future mayoral run are "premature," conventional wisdom suggests that a run for mayor is not unthinkable. Thompson turns 50 this year and has enjoyed an illustrious career in public service. He was appointed Brooklyn's youngest-ever deputy borough president in 1983 and served four consecutive terms as president of the N.Y.C. Board of Education. Most important, he has remained true to his word as a "fiscal activist."
By Carmen Brown