In the melee of Albany life over the last year and a half, Tom DiNapoli—himself the cause of an unusual amount of excitement and attention around the office of comptroller when he was selected—quietly set out to change the course of his office.

On July 8, he joined City Hall and The Capitol  at the law offices of Arent Fox for an On/Off the Record breakfast to discuss the Open Book Initiative, the economy’s effect on pension investments, how his own political philosophy informs his approach to the job and what might make him rethink his own self-imposed campaign finance restrictions.

What follows are selections from the tran scri pt.

Q: Your Open Book Initiative put 113 state agencies’ budgets and 60,000 contracts online. Why do you think this kind of transparency makes government function better?
A: Well, part of it has to do with accountability, and accountability starts with information. And, too often, for Albany and state government it’s been too mysterious a process about how money is spent, how decisions are made. … As we continue to be in a time of financial challenge, to put it mildly, where tough choices have been made this year, will have to be made next year by the Legislature and the governor, we need to get more information out there, to democratize the process so that people at the grassroots level can see how their tax dollars are being spent so they’re better equipped to give feedback, input, recommendations to their state officials as they’re making those tough choices, so they can be more involved in the process of state government.

Q: You criticized state budget spending almost as soon as the budget was finalized. How much worse is the situation now, three months later?
A: It’s still early, so we can’t give a judgment yet as to whether those revenues are being realized or not, but we do know that going into next year’s budget, conservatively, there’s going to be another $5 billion budget gap, and over the next three years a cumulative gap, again conservatively, of $21 billion. So we still have this problem in New York, and it’s not a new problem, it’s just, we feel it a little more in these difficult times, where we’ve made commitments to spending on programs and many of them are very worthy and ones that we would like to see happen, but we don’t have the revenue to sustain it. … We need to start preparing for what is obviously going to be more than a one-year challenge for us, and I think that means the budget process for next year is going to be as contentious, if not more, than this year—probably tougher choices than we had this year, without the pressure of an election coming around the corner. That somehow has a way of people coming up with decisions rather quickly.

Q: How has the current economic situation affected the performance of the pension fund investments?
A: We’re valuing our numbers right now. … But the long and the short of it is, this has been a tough year. We are still going to end up ahead of our peers. So I think that it shows that we’re on the right track. The real question becomes, if this is going to be a sustained challenge in terms of getting the rate of return that we’d like to get, at what point will that have an impact in terms of driving up contribution rates—something we’d like to avoid. We probably need to work with our legislature next year. People don’t realize that New York State operates under a legal list system, so there are limitations by statute on where we can put our investment dollars. As I mentioned, the strong performers have been private equity and real estate. Those are still going to categorize as alternative investments. And we have a statutory cap on how much we can put there, we’re getting close to that amount. We may need to go back to the Legislature and the governor and suggest raising that cap so we can put more money into those categories to continue to be ahead of the curve, as far as our pension fund.

Q: You are a committed Democrat. How does your political philosophy inform the job as comptroller, whether through the auditing or the investments?
A: That’s an interesting question. You know, it is by definition a partisan office at the end of the day. With the comptroller’s office, one thing I enjoy about it is that it is viewed as the office in state government that needs to be above the partisan fray as much as possible. And that actually fits pretty well with my personal style of leadership in terms of how I conducted myself in the State Assembly. … So this position, I think, enables me in an institutional way to continue that style of leadership. When we get a call for an audit, from a Republican or a Democrat, if on the merits it is an audit we should pursue, we do it. We do audits on local governments all across the state. Some of them are Democratic. Some of them are Republican. It’s not done in a partisan way. … If we are viewed, or I am viewed, simply as someone who’s carrying a partisan agenda, I have no credibility as the independent watchdog. The fine line, of course, is that I am still a Democrat, as you point out, I do have to run for this office and no, it’s not a non-partisan election. And it won’t be a bi-partisan endorsement. The two-party system will at least produce some opposition. So there is that fine line to walk. But I’d like to think my time in the Legislature has helped me learn how to walk that fine line in a responsible way, and I’m going to continue that.

Q: About a month ago, you proposed a program of self-imposed campaign finance restrictions that significantly cut the maximum contributions you would accept. Others, like Andrew Cuomo, have resisted self-imposed limits. Are you more willing because you are anticipating being spared a tough challenge in 2010?
A: When you look at the limits for statewide office, you’re talking between primary and general, on excess of $50,000. That’s a lot of money to get from one person or from one source. The other challenge, though, is that I think we are coming to a time—and you used the example of someone waking up and spending $10 million, if someone had $10 million to spend, I’m not sure they’ll spend it to be comptroller—but it’s possible. It’s possible. It does get to the issue of whether high office in this state and in this country should only be the purview of people who have $10 million lying around and can self-fund their campaigns. As a middle-class person with neither a family estate, nor a big family bank account or a big personal bank account—and I’m not alone in that regard—it seems to me that having some kind of a system of matching funds, where you raise a certain amount of money and then you have some public dollars put in, would be a way to level the playing field and encourage people to participate in the process. And that would be the kind of reform I’d like to see. That’s not happened so far. …

I am confident we’ll be able to raise enough money, even with our limits, and be able to win in 2010. That’s just a basic faith that I have. I also want to point out that we did put, in our self-imposed limits, a caveat that if at any time we need to reevaluate those limits to keep the level playing field intact, we would. I don’t anticipate a need to do that. But if the $10 million person sitting in this room decides they want to run, and we’ve got $5 million and we want to reevaluate, we will. I don’t anticipate that that’s going to be the issue, and I am hoping, not expecting it, but hoping before 2010 there will be some campaign finance reform. Governor Paterson has put forward some proposal. Governor Spitzer was close at one time, it didn’t quite happen. We’ll see what happens after the next elections this November. And I know it’s an issue New Yorkers would still like to see Albany address, so hopes spring eternal that there’ll be some statutory changes that will also help keep it a level playing field.