ALBANY - A 20-page report on the state's $179 billion pension fund has reignited a long-simmering feud between Gov. Andrew Cuomo and Comptroller Thomas DiNapoli, the state's chief fiscal watchdog.
DiNapoli took to the radio Tuesday to issue a fiery defense of his office's management of the retirement fund, blasting a report Monday from the Cuomo administration's Department of Financial Services for being "embarrassing for its lack of professionalism."
The normally mild-mannered DiNapoli criticized the state agency for not giving his office ample opportunity to respond to the highly critical report, which repeatedly faulted DiNapoli for over-relying on private hedge-fund managers charging significant fees while providing poor returns.
"I'm going to stand up for the pension fund, even when people attack it," DiNapoli said on "Live From the State Capitol with Fred Dicker" on WGDJ-AM in Albany. "I'm going to defend my staff when they do the right things. And in this era where we need more transparency and accountability in state government across the board, my office is uniquely set up to do that job."
He continued: "These kind of side ambushes are not going to distract me from that mission, as well."
Cuomo and DiNapoli -- both Democrats -- have repeatedly clashed in recent years, often following DiNapoli audits of various Cuomo administration entities.
Last week, DiNapoli was critical of the oversight of the state's procurement regulations -- which is at the heart of corruption case involving former Cuomo aides and upstate developers. On Tuesday, he questioned why the Financial Services report mentioned his push for greater contracting oversight, suggesting someone outside the agency wrote that section.
"We all know we need more accountability and transparency and oversight when it comes to procurement in this state," DiNapoli said, alluding to federal corruption charges brought last month against a former top aide to Cuomo and others involved in state economic-development projects. "We've learned that the hard way recently."
The state's pension fund is used to pay out benefits to retired state and local government employees across New York.
DiNapoli is the sole trustee of the fund, meaning his office is in charge of investing to grow the fund and reduce the amount of money governments have to pay into it.
Monday's report from the Department of Financial Services took DiNapoli to task for its use of hedge-fund managers to oversee some of the pension fund's investments.
For the most-recent fiscal year, the fund paid $150 million to private hedge-fund managers overseeing $8 billion in assets, according to the report. In all, the report claims manager fees and under-performing hedge funds add up to $3.8 billion lost in the past eight years.
"Hedge-fund managers continue to reap hundreds of millions of dollars in fees, regardless of their performance, which is a rip-off at the expense of pensioners," Financial Services Superintendent Maria Vullo said in a statement Monday.
DiNapoli said the report is filled with inaccuracies, promising that his office will issue a "thoughtful, detailed response" in the coming weeks.
His office claims the Department of Financial Services didn't allow it to see the report until five minutes before releasing it to the media. With most audits, the audited entity is given a chance to respond in the report itself.
DiNapoli defended his office's management of the state pension system, noting it is often ranked among the most fully funded public retirement funds in the nation and has avoided issues that have plagued New Jersey, Illinois and other states.
"I'll channel my inner Michelle Obama: They go low, we go high," DiNapoli said. "And I'm not going to change from that."