The Adrian Flannelly Show
Irish Radio Network USA
Adrian Flannelly caught up with Tom DiNapoli as he returned from a trip to Ireland. Mr. DiNapoli is the Comptroller of New York State and as such controls and directs the fourth largest governmental budget in the United States.
Adrian: I am delighted to welcome – may I refer to you, Comptroller, as Doctor Thomas DiNapoli?
Tom: (laughs) Well, Adrian, some folks have been using that as the way to address me but you and I are old friends so we’ll keep it Tom, that’s fine. (both laugh)
Adrian: Of course, receiving a doctorate from the University of Ulster in Doire – that doesn’t come easily but many would say that you actually, you deserve it – but I do want to start perhaps with an item and one that is creating great worry for Northern Ireland in particular and how Brexit will affect Northern Ireland. Being in Ireland for a week I am sure that you heard those concerns many times.
Tom: Oh, many, many times over. And you know the whole Brexit debate has obviously been occupying many, many peoples’ attention but however, when I think it plays out, certainly when you talk about The North of Ireland, that’s the one place within the United Kingdom where there is an actual land border and you see just how seamless that border is right now especially being you know in the west and Doire just at the university where I received that honorary degree, and thank you again for mentioning that, you know at Ulster University – upwards of twenty percent of their faculty reside in Donegal in the Republic of Ireland and so they travel back and forth every day – students as well. And then when you add in the merchants in Doire really being a regional capitol for that part of the island you know the impact, if you have to now have anything approaching a hard border or re-institution of customs – all of that could get us back many years in the past, as you know and to the extent that those customs posts were certainly flash points for you know the time of The Troubles it really is of great concern. You know on the positive side, everyone talked about the need for a friction-less border. How you achieve that in the context of the negotiations I don’t know if that’s going to be simple but I do think the – it’s certainly in the interest of the Irish government as well to see that that happens and the Irish government obviously has an important and continuing role with the EU so – so openness on the UK side and help from the Irish government and certainly you know the folks on the ground in Northern Ireland to explain the importance of there being minimal disruption to economic activity and you know populations traveling back and forth – I mean that is the hope and you know I had the chance to be briefed by Secretary for Northern Ireland, Brokenshire, and you know certainly heard his words, that that’s the goal, is to make it as frictionless as possible a border and certainly that needs to be achieved. Otherwise, we’ll be going backwards there, economically and so many other ways.
Yes. My guest, friends, is Comptroller of New York State, Tom DiNapoli, who manages one hundred and ninety-two billion pension funds. He also of course audits the spending practices of all New York state agencies. Let me ask you, Tom, about the concerns, real concerns now, with respect to American companies investing in Northern Ireland and the threat that maybe a lot of companies might keep their powder dry to see how Brexit actually shakes out.
Tom: Adrian, it’s such an important question and you know while the jumping off point for my visit to The North certainly started with the invitation to receive that honorary degree from Ulster University it really presented the opportunity for me to go there, my third time going to The North, to get a first-hand feel, for me to be able to respond to that question you just posed. So it is in some ways you know a dilemma because when you go there you see the great progress that has been made. You see the entrepreneurship. You see the start-up companies and the hosts, particularly in the tech areas, and certainly we wanted to see first-hand the money that we’ve invested and targeted to The North, how it’s been put to work and so we met with our investment partners – we met with some of the companies who actually benefited from New York State Pension Fund investment in The North – so that economic progress and energy is still absolutely there and not been dampened at all by you know, by the Brexit vote and you know the start of negotiations. But there is still that practical question: What will be the outcome of those negotiations and does it make sense to hold back you know additional investment until all of that sorts out? And I guess this conclusion that I came back with, you know to The States, was that too much progress has been made in The North – there has been this you know pent-up, delayed entrances into the workforce of very talented, educated people who, now that the peace process is, by and large holding together, can devote their energies to productive and gainful employment and we don’t want to, in any way, slow that down. So you know my feeling, when I came back, and what I said to our investment people is: Although there is still some big political questions to be worked out on Brexit what’s happening there in The North of Ireland is not something that we should in any way be shy about continuing, to want to support, and want to invest with so I’m hoping that we can do additional investment there and you know my sense having been there? Yes, there are important questions to be resolved but our money is certainly put to good use and purpose there in The North and we want to continue to be part of having that peace process hold together.
The key is ensuring economic opportunity in all communities and certainly for the Catholic community, for years of discrimination, for that to end is important and even now you know in the Protestant communities you’ve got some working class neighbourhoods similar to the dynamic here in the US that you know with manufacturing sector you know in some cases contracting you know some folks and those neighbourhoods feeling a little left out so if anything we need to be continuing that partnership, continuing that investment, making sure that on the ground all communties participate in economic growth and we’ll have to rely on the good judgment of those negotiating on Brexit that they don’t do anything that’ll put that in reverse.
Adrian: Let me ask you about the process and how you choose which investment funds and how are those analysed?
Tom: Well, it’s an important question because obviously you know our fiduciary responsibility is to the New York State Pension Fund. We want to be sure that our pensioners, our retirees that are retired now and active public employees who look forward to being retired at some point, that their interests are served. So you know we have a very diligent process and a very thorough review of any investment opportunity as you know we’ve talked about on your show in the past my connection in this area began when Martin McGuinness, the late Martin McGuinness, and Ian Paisley visited me and said you know we’re starting a new chapter in Northern Ireland and we very much need to see economic transformation on the ground for all communities and that must include investment from overseas including the US, including US pension funds. And you know it took us a bit to get there because, of course, after they visited we had the global financial crisis and a lot of our investments were slowing down but we kept a determined effort and how we handle the investments, Adrian, is that we have two investment partners on the ground there in Ireland – Crescent Capital and Kernel Capital – so these are investment funds that have offices there in Ireland, including in The North, and they have their investment team on the ground and they then source the opportunities for us. So if there is a start-up company, let’s say a technology company that’s starting up or an established business that’s expanding, they will present their business case to our investment partners who are over there and it is our investment partners then who we’ve allocated money to who will make the decision on where to invest the money and we’ve allocated now thirty million dollars specific to The North. We have investments all across Ireland, and certainly a lot of that is public equity, but this thirty million dollars is targeted to The North through our two investment partners who source the deals for us and it really has been focused on start-ups, on new ventures and the language is very clear in our papers and that is that equal employment opportunity must be respected. We don’t want to see any community left out as has been the case in the past.
Adrian: Right, And of course, that goes back to the MacBride Principles…
Adrian: …which many would like to think you know belong in the past and just go moseying on hoping that that would be forgotten however that becomes very much a part of not just your own funds, New York State Pensions Funds, but it becomes a marker also for inward investments, you know, particularly from the US, there’s no skirting of that and many would assume that your pension investment from New York State clearly signals that this is the way it is – this is the way it’s going to be.
Tom: Adrian, I’m so glad you said that because MacBride has been such an important part of the transformation there, Yeah, but as you know Northern Ireland still is connected to a history – and a history that’s not always been a positive history and you know a reminder of that: You know the week we were there included the you know July Twelfth, where you have the marches, the Orange Order and the bonfires. I don’t think I’ve ever seen a bonfire built as high as some of what you know was being reported and although you know I wasn’t in Belfast that day, I was in Dublin that day, you know certainly, thank God, there’s not the violence perhaps that there had been in past years associated with those marches but when you see that in some communities they seem to want to build bonfires bigger and higher than ever – you know, there still is a ‘residual, if I can put it that way, issue there that is still, still a challenge. We still have to overcome that which is why when I think of great advocates like Inez McCormack who you know who says that the answer is for all communities to benefit from a peace process and from economic growth – we need the keep that in mind and certainly that starts with the MacBride Principles and all that’s enshrined in that.
Adrian: What effect in investment does the reality that the Northern Ireland Executive – you know that it’s just in limbo there somewhere – and what effect does that have you know again for American companies and those who want to invest in Northern Ireland – is that as much of a negative as it’s being painted?
Tom: Well again, Adrian, a very important question and part of why I wanted to go there and really see what’s happening up close. There’s no doubt that the stalemate continues although there seemed to be a very clear message from everybody we spoke with that September becomes the key month for resolution and to get the government back, you know back in a working order. You know again, my sense is that there’s so much that’s happening on the ground that’s positive that in spite of you know political stalemates, you know in terms of forming the Executive, or the unanswered questions we talked about with regard to Brexit, that markets and the economy is still marching forward regardless. So you know having met many times with Martin McGuinness and just always being incredibly impressed with his leadership and skill, you know to what extent does the loss of a towering figure like Martin you know impact on all of this? That was one of the questions that I had. But I have to say I came away with a you know renewed sense that even though Martin may not be there anymore, unfortunately he passed, but the spirit of what he tried to accomplish is certainly still there. I heard that from the Sinn Féin representatives that we met with. Obviously, on the DUP (Democratic Unionist Party) side, they’re in an interesting position given their role now with the British government but I don’t think anybody benefits from a continued stalemate. Nobody seemed interested in having direct rule be re-instituted – I don’t think that’s anything that the British government wants as well. So I think that you know the answer is: We look with concern and we observe what’s happening but in terms of investment we shouldn’t stop our commitment to be invested there because there’s still great things happening in Northern Ireland and entrepreneurship is continuing so I have to have faith in the new leadership on both sides that they’re going to be guided by what made it work in the past, as imperfect as it might have been, but at least having a government up and running and I think it’s obviously in the interests of the British government and the Irish government as well – they need to play an impartial role but behind the scenes you know I know that they’re very concerned with getting it back on track so I think we need to look to September as the month where, hopefully, this will all get sorted out.
Adrian: We happened to be in Ireland – I was in Ireland the same week as your good self, sir – not as busy as you were – did you ever actually challenge whoever is doing your schedule you know that the number of meetings that you’ve had, not only in Northern Ireland but down, it’s really a tough schedule. I do want to ask you though about the attitude on the street – perhaps you didn’t get as much of a reaction as I did – but there is genuine concern on the island of Ireland about our own political mess here and it is the first time, I think, in my career here that I met so many people who are concerned, again, about America – about the economy, about all of the nonsense going on in Washington and the lack of getting anything done a midst all the circus that is there – did you find that those, they who are concerned about investment in Northern Ireland, that they’re actually quite nervous about what is going on here?
Tom: Yeah, I mean the straight answer is ‘yes’. You’re right, we were in a lot of official meetings and not as much with you know discussions out in the community but you know, when you’re in another country for a week you do interact with a lot of folks whether that’s in a you know in a taxi ride or at a restaurant and many people, with curiosity and concern, you know inquired about you know what I thought, obviously, being from the ‘other side of the aisle’ it was a little easier for me to say that you know I can’t explain it. And I have to say that you know many people feel a particular affinity to the Clintons given the role that Bill Clinton played you know in the peace process so you know I think it would be fair to say, not in a partisan way but more in a personal way, that you know many folks were looking forward to the Clintons – Hillary Clinton being elected and the Clintons playing a prominent role again. But look, it’s reflective of a world situation now – they’ve got their over there, the unexpected vote with Brexit and we had an unexpected outcome with the presidential election – and I think the overall sense though, from a European perspective, is America has been an important leader and you know, putting aside the specific policy issues, are we entering a phase where America is going to pull back from that leadership role on the world stage? And I think that’s the bottom line concern that I heard is that you know we still need America to be engaged in all the issues that are our there and that’s a concern that we have in this country as well: What is going to be our role as a global leader moving forward? And it’s not clear what that role is going to be.
Adrian: In many of the reports, not just on this trip but on previous trips, to have the Comptroller of New York State be so supportive of the peace process in Northern Ireland somehow – and there are some who say that in fact that investment say on the island of Ireland is somewhat overshadowed by your clear support of the peace process in Northern Ireland.
Tom: Well you know, we have, we have a lot of money invested all across Ireland – so you know over two hundred million dollars in public equity funds, private equity funds, you know and you know we benefited from the resurgence of the economy broadly. But you know being a public fund you know I do think we have a largely responsibility in addition to making money, you know getting that bottom line benefit of doing some good things and you know I’ll never forget that day when Ian Paisley and Martin McGuinness walked into my office and I said: Well, that’s an interesting coupling – and maybe we’re onto something here so we can target – ’cause I keep saying to our investment people: There are great opportunities in Ireland all across the island but let’s not lose sight of the fact that there’s a particular need in The North and we must have targeted investments in The North as well as across the island and if we look hard enough we’ll find as many great opportunities in The North as we will anywhere else in western Europe when we look for investments opportunities. So you know, and being there, the other thing that struck me is that many people said in The North: You know, we’re glad you came – we don’t get as many US elected officials coming and focusing on us perhaps as we had in the past. So I felt that we did the right thing in going over there and certainly it will not be my last trip to The North.
Adrian: And you don’t even have to remind us of that because again, going back a decade, again your role in supporting the peace process in Northern Ireland and in particular the message that that sends to other investors from the United States, they’ve got to be able to look and say: You know, if the Comptroller of New York State feels safe in investing pension funds in Northern Ireland the, you know it must, you’re in a very public position whereas your support for Northern Ireland and the peace process has to you know – this has to do with the bottom line…
Adrian: …and I think to that end you know it has worked out alright despite all the turmoil that is taking place around the world. Let me ask you about, as you see it, the relationship between the Irish government and Northern Ireland, with or without the current Executive.
Tom: Yeah, yeah. Well we had meetings in Dublin as I told you earlier. And look, the Irish government is going through a transition as well so we’re all going through transitions these days, Adrian. Look, the Irish government, obviously, is looking with great concern about what’s happening in The North you know on many levels. My view is that the Irish government is going to be essential to negotiating a Brexit agreement that will work in the best interests of The North. Obviously, Ireland is a key player in the EU and while there may be some in the EU that want to negotiate with a heavy hand as a way, in a sense, to publish – not publish – punish I mean – punish Britain for this move in a way that would be hurtful, economically, to the United Kingdom including Northern Ireland in a way they would not understand the importance of minimising disruption in Ireland between North and South. I think as a way to send you know a message for other states not to consider exiting the EU. There could be a desire to be a very tough negotiator. I think the Irish government is going to be very key to ensuring that the EU recognises that putting aside all the issues, the big issues about Brexit, there’s a uniqueness about the border between North and South that requires a different strategy when you’re talking about negotiating Brexit and the impact on Northern Ireland and I think that’s where the Irish government is going to play a key role, a very helpful role, in making sure that the outcome will be very protective of all that is good about the economy in The North and keep it going in the right direction because they understand how important that is even to their own economy. You know there really is such a seamless border at this point and especially in a place like Doire you know – it really is one region there – you know between Donegal and Doire that greater region is all seamless in terms of the economy and you know the number of people who live in the Irish Republic but work in Doire – you know we saw this at the university and elsewhere – so I think the Irish government’s going to play a key role in ensuring that that is understood. On the EU side, and my hope is that on the UK side, and that’s my sense in talking with Secretary Brokenshire, that they realise that as well. So I’m hoping however the results of the bigger issues about Brexit when it comes to Northern Ireland it has to be dealt with differently meaning circumstances have to be recognised and I think the Irish government’s going to be very helpful in that regard.
Adrian: And also you have not just Doire and Donegal but you have all the border counties there that are very reliant upon stability and again it’s unthinkable to imagine that a hard border, you know, would be you know re-instituted however, there are many bumps in the road…
Adrian: …between now and then and I think that – I know that my listeners and many of the people that we’ve met – know the significance of your trips to Ireland and I know that this one was rather special. You know looking at the – many of the photos and pictures and television coverage and all the rest of it – it seemed like you had no problem at all, Tom DiNapoli, in adjusting to the garbs and it was a very special time, you know?
Tom: (laughs) It was. And I have to say particularly when we were in Dublin our dear friend, Barbara Jones, who we gave a great send-off as she completed her tenure as Consul General here in New York, she was very helpful in opening doors for us to meet with some of the key Irish leaders and that was a privilege. And for me to reconnect with Gerry Adams who I hadn’t seen in a bit you know – that also was a special moment. And you know Martin’s successor, heading Sinn Féin The North, very impressive person – Michelle O’Neill – you know it was really just a great, great trip in terms of reconnecting with people who I’ve known and some new players who’ve come on the scene which gives me a great deal of hope and confidence that even with those bumps that you identified, Adrian, that it’s all still going to move in the right direction.
Adrian: And you know again we might also mention the influence of Máirtín Ó Muilleoir – he’s very much involved again in making sure that the investment and that the inward investment in Northern Ireland does not just slacken off – if anything, it’s going to grow.
Tom: He’s an incredible leader and I’m so glad you mentioned his name. He was very kind. He actually drove and got there during the ceremony where I got the degree at Ulster University and turned around and went right back home. And then when we were in Belfast he arranged for me to meet with a new crop of entrepreneurs; some attached to the university sector, others in the business sector and we explored new possibilities for investment in some new areas. And Máirtín is really reflective of that, of that next generation of leadership, both business and political – he does both and does it so beautifully – he obviously had a very important role as finance minister in the last Executive I certainly expect that when they get the Executive back on track that Máirtín will play a key role once again. And he is in New York, as you know, regularly, and what he does to really keep the issues alive and strong for us to understand in America what’s going on there and certainly to be a very important leader there in The North. You know, any community would benefit from having a leader like Máirtín Ó Muilleoir. He’s just, just – he is a force of nature. I don’t know how else to describe him.
Adrian: Yeah. Well again, Doctor Tom DiNapoli, I just wanted to say that the coverage – and believe me, in Ireland in the summertime it appears as in fact it does here – that everybody’s first order of importance is to take some time out. I think that your trip was very timely and much appreciated and that again contributing to stability at a time of uncertainty is something that you have perfected – so congratulations, again, on your doctorate and…
Tom: …Thank you. Thank you. It was wonderful. And you know of course, my biggest challenge was keeping Pat Doherty on schedule so we didn’t miss any of those meetings – but he’s just been a great asset in giving me guidance on all the issues relating to Ireland.
Adrian: As he has done most of his life but there are those who say that even though Pat Doherty is not in charge of your schedule that he kind of – that he’s responsible for most of it. He doesn’t want you, he does not want to have a day for shopping or to bring home something…
Tom: …And he didn’t! I have nothing to declare, Adrian! I just have my honorary doctorate – that’s all I have! (both laugh)
Adrian: That was it! But that was -it was great to bring that back to Mineola as well…
Adrian: And again, for a great number of our listeners who assume that the Comptroller of New York State more than likely came from, you know, a big city out of a huge political circle – it’s no harm to you know and then to reflect on: Public school kid you know from Mineola in Long Island, becoming the Comptroller of the State of New York. Again, it does give us some kind of understanding though you know about how your grassroots bringing-up has you know pretty much been to the forefront in your own career and development.
Tom: Oh thank you, Adrian, for putting it that way. And I always say, especially as I’ve gotten older I’ve come to appreciate, perhaps later than I should have, so much of whatever success I have is a tribute to my parents and you know so much of what we achieve in life is directly related to our families and how we were brought up and the values instilled in us and I was very fortunate to have two great parents, unfortunately they’re both gone now, but I know at moments, like when I received that degree and had a chance to give a speech at the graduation ceremony, I know my folks were looking down and saying: Alright, you done good, kid – and that’s a nice feeling.
Adrian: It is indeed. Okay, Doctor Tom DiNapoli… (crosstalk)
Tom: Thank you, my friend. Bye-bye.
Adrian: Okay. (ends)