Alan Hevesi is one of the leading campaigners for corporate reform in the US, writes Colm Keena.

Lest there be any suspicion otherwise, New York State Comptroller Alan Hevesi points out that he is a "loyal American" and a capitalist.

His father was from Hungary and his mother from Poland and, he says, he might not be alive were it not for the US. "God bless America."

That has not prevented him becoming one of the leading campaigners for corporate reform in the US and he exudes frustration and indignation at the effect the massive corporate frauds that hit the US in recent years have had on ordinary citizens.

Mr Hevesi is the sole trustee of the New York State pension fund, which is worth $110 billion. Conversation with him involves more frequent use of the words billion and trillion than it does million.

He is a major player in the suits arising from the WorldCom and Enron fiascos. He and his Californian counterpart, treasurer Mr Philip Angelides, played a role in pushing a teetering New York Stock Exchange chairman Mr Richard Grasso towards resigning over his controversial pay packet. In other words, he is a significant player on the US scene.

His main point is that corporate malfeasance hurts the ordinary taxpayer and pension holder and that reform is required to prevent further fraud on the scale of WorldCom and Enron.

A Democrat, Mr Hevesi was elected to the position of Comptroller of New York State last year, for a four-year term. He has served two-four year terms as Comptroller of New York City, and is a former academic, lecturing in political science.

During a visit to Dublin this week for an address to the Trinity College School of Economics, Business and Social Studies, he took the time to discuss ethical investments. The $110 billion pension fund he oversees gives him some weight and he uses this to do good where he can, while at the same time seeking a good return. He says the two objectives go hand in hand. "Do good and do well", is how he puts it.

He gives as an example the decision to invest in 16,632 units of social housing in New York. A market rate of return was achieved with a very low risk. Pension funds should not do risky investments, he says. "I will take a market rate of return with zero risk any time."

The fund has been used to build shopping malls and to build sheltered housing for beaten women, and all for a return. It also encourages firms it invests in to pursue fair employment policies. "We believe it is the right thing to do and that there is a bottom line there also."

The fund encouraged Texaco to make a $180 million settlement in a case where it was being sued by Afro-Americans for discrimination. "If it had gone to a jury it would have cost $1 billion."

It was also involved in persuading restaurant chain Cracker Barrel to reverse its anti-gay and lesbian policies.

Sound environmental policies are something it seeks in the companies it invests in. "We are long-term investors and environmental policies save lots of money in the long term."

His take on the US economy during the past decade is one where the huge successes of the Clinton years have been squandered by the Bush administration.

The Clinton years saw one of the greatest economic booms in US history, the creation of 22 million new jobs, and budget surpluses beyond imagination, he says.

President Bush inherited a $5.6 trillion surplus over 10 years and, within two years, had turned it into a deficit. Over 10 years a $5 trillion deficit will be created. President Bush has introduced "unasked for" tax cuts that will mostly benefit the rich - who made huge amounts of money during the boom - and these cuts are being funded by debt. "The $87 billion voted for Iraq will be paid for by debt. This year's $500 billion deficit will be funded by debt."

The origin of the corruption scandals of recent years he sees as being twofold. A change in the US law in 1995 to slow discovery of papers in cases where companies were being sued, created comfort for those involved in malpractice.

Secondly the attempt to match the pay of executives to their performance, by way of stock options, created an incentive for malpractice.

The end of the boom saw executives trying to hide what was happening until they could cash in their stock options. People began to "lie and cheat". Liabilities were left off the balance sheet until the executives cashed in their options and left the company. This is what happened in Enron.

When the truth emerged, the company crashed, tens of thousands of employees lost their jobs, and thousands were left with no pension.

Enron and other early corporate scandals did not bring the issue of corporate corruption to national prominence. Critical mass was achieved with the collapse of WorldCom, which had been guilty of misfilings worth $11 billion. Mr Hevesi wants to seize the moment and introduce the reforms he feels are required.

The end of the US boom came for four reasons, he says:

it had run its time;

the collapse of the tech market;

September 11th (the atrocity has been estimated to have cost New York City $105 billion);

corporate corruption.

Corporate scandals in 2001 and 2002 cost the economy of New York State $2.9 billion, cut tax revenues by $1 billion, and decreased the value of the state pension fund by $9 billion, Mr Hevesi's office has calculated. "The scandals imposed a huge cost on every American," he says.

As the sole trustee of a huge pension fund, Mr Hevesi's office has been and is involved in suits for damages involving literally billions of dollars. The plaintiffs hope to recoup some of the lost monies from the executives who profited from the frauds.

He is frustrated that the law, as it stands, does not allow for the pursuit of those who profited from "aiding and abetting" the fraud, by which he means the lawyers and accountants who helped hide what was going on. Indeed he says the conflict that exists between auditors and "consultants" hired to help companies hide certain facts from auditors, has yet to be resolved.

Massive corporate fraud "can't happen if there is no collusion", he says.

He and the Coalition to Fight Corporate Corruption that he launched in the US in September are pressing for the appointment of truly independent directors to the boards of major companies, with the directors being nominated by major investors such as the fund he represents. He says the idea is encountering resistance from the Securities and Exchange Commission.

He is a capitalist, he says, but not a laissez-faire capitalist. "Laissez faire is where the large eat the medium and the medium eats the small and the small eat their young. You end up with monopolies."

People need to be able to invest in an environment where there is light but effective regulation, he says. He favours effective legislation and points to the civil rights legislation introduced in the US to end discrimination against Afro-Americans. An agency needs to be established that will aggressively enforce the company law rules and which has a boss who reports to the Attorney General who reports to the President.

The coalition includes officials from other US states who manage enormous pension funds, as well as some of the larger US unions. While here this week Mr Hevesi encouraged those involved in the Irish "shareholder community" to become more active and to press for reform where it was thought to be required.

He said the coalition would help where it could. "If you want to join, give us your name."

He is a pessimist in relation to the US economy in the coming years. He believes the current administration will use borrowing to maintain some buoyancy up to next year's presidential elections.

The tax cuts introduced by the administration favour the rich and tax cuts that favour the rich are the least effective in generating economic activity, he says. Sooner or later the trillions of dollars in debt being built up will have to be paid back. "I hope I'm wrong but I'm a pessimist."