The long-serving state Comptroller Thomas P. DiNapoli, a Democrat, has a Republican challenger, who says he will prioritize protecting the state pension fund and clamping down on fraud if elected in the fall.
Joseph Hernandez, an entrepreneur and biotechnology leader, said his background has provided him an understanding of budgets, allocation and auditing, which qualify him for such a role. Incumbent DiNapoli will face two Democratic challengers in the primary election in June, Raj Goyle and Drew Warshaw.
Hernandez immigrated to the United States from Cuba when he was 7 years old and later attended the University of Florida. He has earned a bachelor’s degree in neuroscience, a master’s degree in molecular genetics and microbiology and a Master of Business Administration degree in finance and entrepreneurship, according to his campaign website.
“We have a great destiny here because of what this country has provided,” Hernandez said. “We are just giving back.”
Hernandez additionally completed a Master of Science in chronic disease epidemiology and biostatistics at Yale University and is currently working toward a master’s in global health care leadership at the University of Oxford.
He said the role of the state comptroller comes down to two main functions — managing the state pension fund and to audit local governments and state agencies and crack down on fraud. Hernandez said the state pension fund reported a 5.8% return last year.
“That matters because you are investing all of this capital in very low returns,” Hernandez said.
The pension fund, last year, paid out $16 billion in benefits, he said, adding that “effectively, you have to make enough money to support the obligations of the pension fund.” Cities and municipalities then need to make up the difference to make up for this shortfall, Hernandez added.
“That’s very important from a fiscal perspective because now these little counties, these little cities have to make a decision as to whether they invest in the fire truck, upgrade their water treatment plan or they have to contribute to the pension plan,” Hernandez said.
He said part of his plan was to build an in-house investment team focused on areas of growth, like private credit, infrastructure and international investments, which yield high returns.
There is a lot of fraud and abuse in the system, Hernandez added, calling it “institutional complacency.” He said the state government does not audit effectively. The overall state budget, about $260 billion, likely has 15% to 20% fraud, he said, close to about $30 billion.
Hernandez said he would hire an in-house team, called the fraud strike team and made up of forensic accountants. He said these would be people who know how to put financial prosecution files together using AI and data mining tools to “follow every dollar” and ensure there is no duplication of billing or ghost vendors.
“We are going to build prosecution files and hand those to prosecutors,” Hernandez said. “We are going to be really aggressive about it.”
This would be extended to any agencies or municipalities that receive state money, he said.
A third main focus of his tenure as state comptroller, if elected, would be growing investment in New York, Hernandez said. He said he planned to set aside $10 billion, calling it the empire opportunity fund, focused on state investing. He said this would run like a venture fund to bring companies from other states to New York, including artificial intelligence, advanced manufacturing, robotics, aviation and portable nuclear energy.
“We are going to be very proactive about bringing companies here, building their next tax infrastructure and making sure our kids have jobs,” Hernandez said.
The comptroller can deploy capital for investing, he said, to ensure the highest rate of return on the investments.
Hernandez added that the comptroller could play a part in rolling out modern technology. He said it could be beneficial to prioritize technology in outreach to villages, towns, cities and counties, as a lot of financial shortcomings can arise due to a lack of sufficient, modern technology. Hernandez said this could help address problems revealed during audits.
He additionally recently criticized Gov. Kathy Hochul for language in the executive budget currently under negotiation, which would raise the threshold for comptroller review of state contracts to $300,000.
Hernandez said the comptroller approves all vouches, and even the existing about $50,000 threshold is unconstitutional. He said if that threshold is increased, “you have opened the gate to about $3 billion dollars that don’t have any oversight.”
Most voters, whether Republican or Democrat, would likely agree there has not been appropriate oversight in government related to spending, Hernandez said. Speaking with constituents throughout the state, he added, the message was consistent.
“I’ve always been in last place, and I always pulled it off, so I feel good about this position,” Hernandez said.