Still primed for public life, ex-Pa. Treasurer Torsella reflects on pensions and bipartisanship

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)

Though he may be out of office, former Pennsylvania state Treasurer Joe Torsella still thinks he has much to offer the state of Pennsylvania.

Torsella, of Montgomery County, spoke to the Capital-Star in his last week on the job. The former deputy United Nations ambassador did not give any hints to his future in public life, outside of a hope to stay in it.

“I like to think my career shows that I gravitate to public service,” Torsella said. “I am by no means done with that.”

But he did look back at the last four years with pride as state treasurer. While the office cannot unilaterally cut checks, it does manage directly and indirectly, more than $100 billion in commonwealth funds — including the pension funds for state teachers and bureaucrats.

It’s a position that, while elected in partisan races, doesn’t always lend itself to partisanship — or integrity. The last elected state Treasurer before him, Rob McCord, ended up resigning amid  scandal. 

But looking at his single term, Torsella pointed to his record to argue he’d done his part to restore public trust in the position, while working with both parties to change Harrisburg.

For example, as treasurer, Torsella piloted a program — now statewide — to provide every Pennsylvania child with $100 in a tax-free college savings account. 

He also found ways to push back on Wall Street using the commonwealth’s accumulated common wealth, as he’s said. That includes shareholder actions against Facebook to oust CEO Mark Zuckerberg, as well as actions against pharmaceutical giants Gilead for overpriced coronavirus drugs.

Torsella also was at the center of a burgeoning bloc of hedge fund and private equity skeptics on state pension boards. He has publicly criticized Wall Street firms for charging too many fees for too little gain.

Torsella also co-authored a bipartisan legislative report that estimated Wall Street firms had taken $5.5 billion from the state over the past 30 years.

Pension officials have countered that private equity investments pay off, and provide a way for the fund to grow its assets hurt by bad policy, underinvestment, and losses from the 2008 crash.

But public dissension, particularly about investing tens of millions of taxpayer dollars in ways that are hard for the public to understand, Torsella argued, was good.

For example, Torsella and his allies on the Pennsylvania School Employees Retirement System received push back from teachers when they pushed for a new travel transparency policy this year.

But a new policy was eventually adopted. Two weeks later, the pension also unanimously voted to dump $2 billion from hedge funds that, while promising steady returns in uncertain times, underperformed during the COVID-19 pandemic.

“We got as wet as everyone else,” Torsella said at the time. He added: “This absolutely, categorically should make us mad.”

Such an anti-Wall Street stance can risk running afoul of teacher’s unions who see the bets as a way to ensure steady retirement payments. But Torsella had a message for Democrats who worry that diving into pensions fights could antagonize teachers or their unions.

“When we care about an institution, we need to be honest about its strengths and its weaknesses,” Torsella said. “And when we pretend that this misguided romance with Wall Street for so many years had resulted in good things for those beneficiaries, we are not doing them any kind of service.”

Torsella did not try to fit these actions into any kind of ideology. He was quick to point out that Republicans joined him in both endeavors.

“We have found common ground, in a divided time, around things where the political label is less important,” Torsella said.

He added that “there’s space for overlap” with new Republican state Treasurer Stacy Garrity despite the different party affiliations.

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