The Sun-Times Editorial Board sent candidates for city treasurer a list of questions to find out their views on a range of issues facing the city. Peter Gariepy submitted the following responses (the Sun-Times does not edit candidate responses):

Who is Peter Gariepy?

He’s running for: City Treasurer

His political/civic background: Ran for the 2018 Democratic nomination for Cook County Treasurer. Past involvement includes volunteering as treasurer of the West Town Special Service Area, treasurer of the East Village Association, Associate Board Member for the Center for Economic Progress, and the Associate Board of Christ The King Jesuit College Preparatory School in Chicago’s Austin neighborhood.

His occupation: Certified Public Accountant

His education: Fordham University (Bachelors in Public Accounting and Masters in Taxation) and Northwestern University (Masters in Civil Engineering)

Campaign website: peterforchicago.com

Twitter: @GariePeter

Facebook: facebook.com/GariePeter

Are the city’s funds invested in a sufficiently safe manner, while getting the best returns? How would you improve the city’s investment practices?

Peter Gariepy: Yes, the city’s funds, under the leadership and stewardship of Treasurer Kurt Summers, are invested in a sufficiently safe manner and generating a solid return. The office under Treasurer Summers has grown annual earnings to $109 million from $48 million four years ago while establishing and expanding a commitment to investments that are conscious of their environmental, social and corporate governance (ESG) impact. As a firm believer that investments can do well and do good at the same, I would continue this forward-looking and thoughtful practice advanced by Treasurer Kurt Summers that has increased both the impact of Chicago’s dollars and the return to taxpayers.

Through the city’s investment portfolio and the Chicago Community Catalyst Fund, I will draw on New York City’s 1983 decision to use city funds for economically-targeted investments into the neighborhoods where the taxpayers came from and where many of the pensioners lived. Of the funds currently under New York’s economically-targeted investments, one is the $6 billion AFL-CIO Housing Investment Trust, which only invests in projects that utilize 100 percent union labor. Since 2002, New York’s $1.2 billion investment in the AFL-CIO Housing Investment Trust has generated a total of 34,500 affordable housing units in New York City. There is no reason the City Treasurer of Chicago cannot similarly partner with the organized labor to responsibly invest in the growth of Chicago’s affordable housing stock and safeguard the investment of taxpayers.

I will establish a formal policy within the Treasurer’s Office to invest in projects and funds that meet goals (developed in concert with Chicago’s labor community) for Responsible Contracting. If elected, I will lead the City of Chicago’s $8 billion investment portfolio to create and strengthen union jobs while generating a return for Chicago’s taxpayers that should be put toward the city’s $28 billion pension deficit. As Treasurer of the City of Chicago, I will invest in organized labor to meet the commitment Chicago has made to organized labor.

Additionally, I will increase the number of MBE owned broker-dealers doing business with the treasurer’s office. Currently, 48 broker-dealers conduct approximately $15 billion in annual trades for the office’s $8 billion portfolio. If elected city treasurer, I will make sure that by the end of my first term the office is regularly conducting business with a roster of qualified vendors who more accurately reflect the diversity of Chicago’s population. While firms with majority LGBTQ ownership or leadership do not currently fall under Chicago’s Minority and Women-Owned Business (M/WBE) Certification Program, I will expeditiously work with the Certification and Compliance Division of the City of Chicago’s Department of Procurement Services to make certain LGBTQ vendors are adequately represented within the list of firms doing business with the city treasurer’s office.


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The city treasurer is an ex officio member on the boards of all the city pension funds. How would you view your responsibility in ensuring the boards are following the most efficient investment policies?

Peter Gariepy: As city treasurer and an ex officio board member of the four city pension funds, my foremost duty is to the taxpayers who are legally and morally responsible for the $1 billion annual pension payment needed to meet actuarial projections that will balloon to $2.13 billion by 2023. Thus, it is in the interest of the city pensioners whose livelihoods depend on their respective fund’s performance and the taxpayers whose taxes will be impacted by any underperformance of the funds, for each of the four funds to pursue low-cost investments with little-expected volatility, while exploring opportunities for cost aggregation among common services required by more than one fund when appropriate.

Additionally, I would move the Municipal Employees’ Pension Fund to add a board seat for a retiree representative. Currently, the Municipal Employees’ Pension Fund is the only one of the four city pension funds without a board member elected by the fund’s retirees. As the largest of the city pension funds, it is imperative that the fund’s retirees have a seat at the table.

What is the appropriate working relationship between the treasurer’s office and the mayor’s office, and between the treasurer’s office and the City Council?

Peter Gariepy: The city treasurer is an independently elected official who is first duty is as a fiduciary to voters of Chicago whose tax dollars are overseen by the treasurer. It is the treasurer’s responsibility to communicate regularly and transparently with the city council and the mayor so that opportunities or risks regarding the city’s portfolio, the Chicago Community Catalyst Fund, one of the city pension funds or asset management practices within city government are addressed in a way that best serves the public.

Would you accept or have you accepted campaign donations from financial firms that do business with the city?

Peter Gariepy: No, I have not accepted, nor do I plan to accept campaign donations from financial firms that do business with the city treasurer’s office. For any contribution made by someone whose business with the City of Chicago is not under the scope of the treasurer’s office, I would, of course, abide by the Chicago Governmental Ethics Ordinance, which imposes a cap of $1,500 per a calendar year on contributions to a candidate for City elected office.

What are your thoughts on a proposal to create a municipal-owned public bank?

Peter Gariepy: Banks may only be chartered by the federal government or a state government. Therefore, given that a municipal-owned public bank would first need to make its way through Springfield, I support the continued analysis of HB0107, the Community Bank of Illinois Act. Introduced by Representative Mary Flowers in January 2015, the bill states that the state-wide public bank would be operated by the Illinois Department of Financial and Professional Regulation (whose director is appointed by the governor) and discusses the guaranty of deposits, limitation on loans made by the bank, the bank’s role as a clearinghouse, confidentiality of records, electronic fund transfer systems, and other operational issues.

One of the most unforgiving aspects of the proposed state bank is the projected $9.8 billion minimum capital requirement (assumes capital to asset ratio of 10%). The bank’s deposits would be guaranteed by the full faith and credit of the State of Illinois, rather than the Federal Deposit Insurance Corporation. Additionally, staffing the bank with 100 new positions is projected to cost more than $11.5 million annually. On January 10, 2017, the General Assembly adjourned without appointing a day to debate the bill further.

To create a municipal-owned public bank, Chicago would likely necessitate a capital requirement between $3.5 and $4 billion. Given the city’s current and forthcoming financial challenges and the encumbrance of future tax revenue, along with the fact that the bank’s deposits would be solely guaranteed by the full faith and credit of the City of Chicago, it is logical to conclude that the minimum capital requirement would be monumental and imprudent in light of the city’s far more pressing commitments to its pensioners, public schools, civil servants and residents.

It has been mentioned that should Illinois legalize recreational marijuana; a public bank could reap a financial windfall to the benefit of taxpayers. Unfortunately, that claim is not valid as proven by the States of Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington, and the District of Columbia; each of which has legalized the recreational use of marijuana and not a single one has established a public bank. While at first glance, a publicly owned bank could do business with whomever it pleases, the infrastructure undergirding our financial system is federally regulated, and without access to that infrastructure, much of the public bank’s marijuana-driven benefit is negated. The lack of a public bank has not materially hindered the generation or collection of marijuana-related revenue for the states mentioned above. While it is inconvenient to deal in large sums of cash, that has not stopped the states, the dispensaries or the customers — and it is clear that this is an issue that would inure to the benefit of all interested parties with a policy change at the federal level.

For meaningful progress to provide access to commercial banks for marijuana-related funds, federal leadership must remove marijuana’s designation as a Schedule 1 drug under the Controlled Substances Act. Congressmen Ed Perlmutter (D-CO) and Denny Heck (D-WA) are actively building support for the SAFE Banking Act, which could address the problem and allow money from legal marijuana businesses into federally regulated banks.

The Bank of North Dakota, founded in 1919 to provide financing to the state’s agriculture industry, is the only public-owned institution of its type in the United States, and while all options for Chicago’s financial health should be routinely and thoughtfully examined. At this time, the funds necessary for capitalization are not available, there is no need driven by potential marijuana-related business, nor does there appear to be an appetite from the General Assembly to advance a public bank at the state or municipal level.

There are no easy answers to difficult problems, particularly to the challenges facing the third largest city in the United States. For Chicago to fulfill its obligation to its pensioners and its citizens, its city government must be served by serious individuals who are aware of the facts and willing to make difficult choices within the bounds of financial and political reality.

Should the city’s investment portfolio be carbon-neutral by 2020? Please explain.

Peter Gariepy: I would like to see Chicago’s investment portfolio be carbon-neutral by 2020. While Treasurer Summers has responsibly moved the city’s portfolio toward this worthy goal, it is essential that the next treasurer make all decisions with taxpayers and pensioners at the forefront of his or her thought process. With a foremost duty to the taxpayers of Chicago, I will request quarterly meetings with the city council and the mayor to discuss the projected financial impact that maintaining the 2020 target will have on taxpayers and on the city’s ability to make its rising payments to the city’s four pension funds. I hope that reaching a carbon-neutral portfolio by 2020 remains possible and with no financial concession to taxpayers or pensioners, but any shift in investment policy must be done for the good of the public and with the awareness of the city council and the mayor.

Chicago was the first city to join the United Nation’s Principles for Responsible Investment. Will you maintain that? Please explain.

Peter Gariepy: Yes, I will maintain Chicago’s commitment to the United Nation’s Six Principles for Responsible Investment (PRI) because the pursuit of a financial return and an investment’s positive non-financial impact are not mutually exclusive goals. Among the PRI’s objectives is that annual financial reports integrate environmental, social and corporate governance (ESG) metrics, standardized and set by tools such as the Global Reporting Initiative (GRI). I believe an organization’s bottom line and long-term viability is directly related to its impact on issues such as climate change, human rights, and corruption; thus the standardized disclosure of an entity’s efforts on those fronts is necessary to assessing and projecting performance.

Outgoing Treasurer Kurt Summers established a $100 million investment fund for neighborhood projects. He also set up a system, as part of making investment decisions, to evaluate companies as good corporate citizens on environmental and social issues. How would you expand, shrink or maintain those programs?

Peter Gariepy: I applaud Treasurer Summers’ effort to invest funds generated by the City of Chicago into the neighborhoods of our city that have historically received an inadequate level of investment.

Private funds can amplify the impact of dollars invested under the next treasurer’s leadership by thoughtfully selecting investments in Opportunity Funds that fall within Chicago’s approximately 130 Opportunity Zones. Created by 2017’s Tax Cuts and Jobs Act, Opportunity Funds allow investors to defer an unrealized capital gain for a tiered amount of time if the unrealized gain from a previous investment is put into a fund that supports an under-resourced geographic area designated by each state’s governor as being in need of investment. By combining taxpayer-funded investments from the city treasurer’s office with private dollars, we will mitigate investment risk to taxpayers while supporting the creation of a tangible economic benefit for Chicago neighborhoods hungry for investment.

New Market Tax Credits will remain an essential tool to incentivize private investment in Chicago communities in need of investment. Part of 2000’s Community Renewal Tax Relief Act, the New Market Tax Credit program offers a federal tax credit for investments in businesses and real estate development within financially distressed communities. These credits represent another proven avenue for the treasurer’s office to partner with private investors to invest Chicago’s money where Chicago needs it most.

Under the leadership of Treasurer Summers, the city’s portfolio has grown from $48 million to $109 million while reaching environmental, social and corporate governance (ESG) metrics that surpass the average of all other investors measured by the same ESG portfolio scoring system.

Additionally, Treasurer Summers took steps to invest Chicago’s dollars in Chicago when he deposited $20 million into Chicago’s last black-owned bank, Illinois Service Federal, since renamed GN Bank. Under my leadership, the treasurer’s office will continue to deposit funds in financial institutions that invest in communities most in need of financial support. To be among the depositories considered, institutions must have a Community Reinvestment Act (CRA) rating of “satisfactory” or “outstanding.” The treasurer’s office will follow best practices set forth by the Government Finance Officers Association by performing a quarterly bank review of all current and potential banking institutions to ensure that those banks and credit unions in which Chicago has invested, are regularly investing in Chicagoans across the socioeconomic spectrum.


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