Seeking a second term, Pa. Treasurer Joe Torsella says he wants to rebuild faith in public institutions

By: - October 18, 2020 8:27 am

Pa. State Treasurer Joe Torsella this year became the first Democrat since 1994 to lose reelection to state-level office in Pennsylvania. (Image via Pa. Treasurer’s Office/Pittsburgh City Paper)

By Ryan Deto

PITTSBURGH —  Pennsylvania state Treasurer Joe Torsella has a pitch for the Keystone State. Well, two pitches. The Democratic incumbent treasurer from Montgomery County is running for re-election this year, so he obviously is asking Pennsylvanians for their vote. But he also understands how dysfunctional Congress has been, and how that is mirrored on the state level in Harrisburg.

With that in mind, Torsella’s other pitch is simple: pay attention to the state row offices like treasurer, attorney general, and auditor general, and not just during election years. They can accomplish a lot for Pennsylvanians.

“I’m trying to make an argument as dysfunctional as Washington is, and even the dysfunction that state capitals have, you can still get a lot more done,” Torsella said.

Last year, Torsella’s office sued several large financial firms for allegedly inflating bonds prices, and the companies settled with a payment of nearly $400 million to Pennsylvania. He also celebrated the creation of a statewide baby bond program, which he championed.

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Beyond state reforms, Torsella has also taken to using the state shares he manages to pressure large pharmaceutical companies to lower their COVID-treatment drug prices, and led a group of state treasurers in calling for Facebook CEO Mark Zuckerberg to resign as board chair of the tech giant.

All of these initiatives trace back to Torsella’s belief in the positive power of government. In an era where most politicians campaign on just how anti-politician, anti-establishment they are, Torsella is trying to instead restore trust in large, government-run institutions that are often the only things that can effectively fight corporations, combat economic inequality, and root out complex corruption.

“That is part of the reason the integrity issue is important to me,” Torsella said. “That is only something that large institutions can do.”

When Torsella was first running for state treasurer in 2016, he knew the office had a lot of power, but was mostly focused on bringing back some normalcy. Since the 1980s, three state treasurers have faced criminal indictments involving bribes and/or illegal campaign contributions.

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“It can have a powerful purpose if someone has the right lens,” he said. “You are the guardian of the literal two-word common wealth of the one-word commonwealth. But, I did not think about this when I was running. At some point along the way, I thought, ‘I can use their wealth to protect their interests,’ and I got more assertive about that.”

Torsella grew up in Berwick borough in Columbia County in Northeastern Pennsylvania. He studied economics and history at the University of Pennsylvania, and then studied American history as a Rhodes Scholar in the U.K. Upon returning, he started his career in politics by serving as a deputy mayor under then-Philadelphia Mayor Ed Rendell.

As part of the Rendell administration, Torsella described the city’s financial turnaround as “taking control of the government and restructuring it for effectiveness,” according to Buzz Bissinger’s book A Prayer for the City.

After working under Rendell, Torsella ran the National Constitution Center, a nonprofit dedicated to increasing awareness and understanding of the U.S. Constitution. In 2011, he was confirmed to serve as the U.S. Ambassador to the United Nations, after being nominated by then-President Barack Obama.

(Pa. Treasury image)

It’s easy to see why Torsella is bullish on selling government and large institutions as a force for good. And this feeling has only intensified as he has watched many Pennsylvania communities deteriorate over the years. For example, Torsella spoke positively about his childhood in Berwick. But the borough has been losing population since the 1960s, and its current poverty rate is around 20 percent.

Berwick’s story is like many former industrial and prosperous Pennsylvania towns and is currently struggling to regain its former glory. This kind of decline can lead to community ties breaking, and trust in institutions faltering.

“One of my most strongly held beliefs, and a lot of what is really ailing us now, is a deterioration in all the ties of community,” Torsella said. “So many different forces have severed us one from another, people are just at sea, the economic hardships become the driver.”

He says this goal of rebuilding a sense of community is what guides his decision-making in watching over the commonwealth’s money.

Last December, 13 large financial firms agreed to settle with Pennsylvania after Torsella sued them for accusations of inflating the price of bonds issued by Fannie Mae and Freddie Mac. He won, bringing the total amount paid by financial firms accused of price-fixing of bonds issued by government-controlled companies to $386 million.

“The government bonds case is huge,” Torsella said. “I have been told by people that watch this stuff more, they have never seen an outcome that happened that quickly.”

Torsella also is proud of the creation of Keystone Scholars, which provides a $100 investment to all children born or adopted in Pennsylvania, and that money can be used for expenses associated with most trade schools, vocational programs, community college, and universities.

And Torsella also has made efforts to use Pennsylvania’s purse as a bully pulpit. The state invests more than $33 billion on behalf of state taxpayers, and as such, owns a significant amount of shares in some influential companies.

Last year, Torsella’s office sought to use those shares to speak at the Facebook board meeting and led a call, with five other state treasurers, for CEO Mark Zuckerberg to remove himself as chair. Torsella said then that Zuckerberg had too much power over the publicly-traded company as both CEO and board chair. He said Pennsylvanians were directly under threat by Facebook’s actions (or inactions) thanks to multiple efforts by Russian companies to influence Pennslyvanians in the 2016 election.

“It’s about standing up when we think Pennsylvanians are being taken advantage of,” Torsella told Pittsburgh City Paper in 2019. “We use the power of the purse when we can.”

More recently, Torsella pressured pharmaceutical giant Gilead to lower the cost of its COVID-treatment drug, remdesivir. The drug, which received about $70 million in U.S. government funds during development, costs patients between $2,300-3,100 for treatment. According to the Institute for Clinical and Economic Review, remdesivir only costs approximately $1 per vital to produce.

“There are other tools we are going to use,” Torsella said of these moves to use shares to pressure large companies.

Torsella said he is just trying to stick to advice his wife Carolyn gave him about his career. She told him, “Work where you are planted, and not wishing you were someone else.”

“Linear plans seem to work out pretty badly,” Torsella said. “For a lot of people who had the ABCDEF plan, it blinds you to the opportunities you have.”

However, his general election opponent, Republican Stacy Garrity, has criticized Torsella for looking to the future and not the present. Torsella’s name has been floated for a potential bid for higher office in 2022, such U.S. Senate or governor, especially after U.S. Sen. Pat Toomey, R-Pa., announced he would not seek re-election or run for governor.

“Joe Torsella is welcome to run for whatever position he wants, but he should be open and honest with Pennsylvania voters,”  Garrity said in an Oct. 5 statement.  “He should commit to fulfilling his term as a state treasurer if he wins, or he shouldn’t run at all.”

Torsella defended himself against these kinds of attacks, which are fairly typical for people holding Pennsylvania row offices. But he isn’t exactly shutting the door on another run for a larger office.

“People tend not to believe this, but I ran for this office because I want to hold this office. I am running for this office now because I want to hold this office,” he said. “Having said all that, I love public service, and if there is an opportunity, I am gonna think about the place with the most impact. Right now, that is treasurer.”

Other candidates for state treasurer this year include Green Party nomineee Timothy Runkle and Libertarian Party hopeful Joseph Soloski.

In the end, Torsella falls back on his education in American history as motivation to drive his desire to rebuild public institutions.

“The founders used to talk about the ‘British Constitution’ as a major issue. What they meant by that word was a set of norms and institutions, not an actual document,” Torsella said. “The norms and institutions that you have to have for a functioning republic. We need norms and culture to back up those documents.”

Ryan Deto is a reporter for Pittsburgh City Paper, where this story first appeared. 

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