The Second Treasurer’s Debate (Democratic Version)
(Edit: I’ve fixed the title since the first debate was in Sussex some weeks ago.I’m sorry for the mistake.) Tuesday night was a debate sponsored by the Society of Professional Journalists between Chip Flowers and Sean Barney. Unfortunately, I could not go, but a friend was there and provides this Guest Post of the proceedings:
Last night Widener Law School and the Society of Professional Journalists hosted a debate for the Democratic candidates in the State Treasurer’s primary race. The forum was moderated by WDEL’s Al Mascitti and featured incumbent Chip Flowers and his primary challenger Sean Barney. Both men set the tone of the debate early on in their opening statements with Treasurer Flowers emphasizing his central message of the $44 million dollars he has made on the state’s portfolio and the fact that he has stood up to the establishment in Delaware in doing so. Barney countered by saying that Treasurer Flower’s term was not only unproductive, but that it was counterproductive, and claimed that the $44 million was an historically low figure. Barney also took issue with Flowers using the figure on billboards and other campaign materials, saying that is sets a dangerous precedent for Treasurers trying to one-up each other by continuing to try and push returns higher and higher eventually leading to big losses due to a lack of focus on security. Flowers stated pride in the returns and that we shouldn’t shy away from measures of success and that he was proud of the work he’d done despite the establishment trying to stop him.
Transparency
The debate was 90 minutes and it went quickly with, as WDEL characterized, “traded barbs.” The conversation substantially revolved around the relationship with the Cash Management Policy Board, legislative actions taken in the last four years, and the role of the Treasurer. It started with a discussion on financial disclosure and transparency and HB 381. While both Barney and Flowers agreed that financial disclosure for the Board is important and should be expanded, they disagreed on why. Barney suggested that the intent of the proposal from the Treasurer was more a function of political retribution against a Board the Treasurer calls corrupt rather than good governance. Flowers asserted that the establishment killed good legislation that he fought for for three years.Both also agreed that an elected Treasurer was important because it offered accountability in a way that an appointed one would not. Barney emphasized the recently weakened role of the office, and said he hoped to regain trust with the General Assembly and the public so that some of the powers formerly held by the Treasurer, might be restored. He noted that the Treasurer stopped staffing the Board and caused the legislature to move the requirements to staff the office from the Treasurer to Department of Finance and he would like to see that reversed. Flowers said he doesn’t feel that the powers of the Treasury need to be expanded but said that the reason that his office stopped staffing the board was because they would rather have the Executive-controlled OMB deal with minutes and staffing.
Cash Management Policy Board
Unsurprisingly one of the hottest topics of debate was the Cash Management Policy Board. The Treasurer maintained his position that the Board was not only ineffective, but were not working in the best interest of the taxpayers and was actively trying to undermine him, even going as far as to call the conduct of the board “disgusting.” Flowers referenced an incident when he came into office and there were hundreds of millions of dollars tied up in a failing bank that the members of the board didn’t want to pull. Flowers said that he removed the money from the failing bank and insisted that any state asset be collateralized. He cited that incident as an example of the type of leadership he brought, standing up to the establishment.
Barney insisted that the model was effective and it was irresponsible to try to remove safeguards and consolidating power in the Treasurer, citing examples of Detroit and Arkansas where Treasurers have been indicted for corruption when given sole control of the portfolio. Barney then challenged the Treasurer on past claims that the members of the board were corrupt, saying that it was the lowest type of political rhetoric, and that if the Treasurer had evidence of corruption on the board, that he had a duty to report it to either the Attorney General’s Office or the Public Integrity Commission. Much to the surprise of those in the room, the Treasurer responded that the appropriate authorities had been notified and that an investigation was underway. Whether or not that’s true, no one really seems to know.The issue of whether it was the Board or the Treasurer who was investing the state’s $2 Billion portfolio was also raised. Despite having previously testified in front of the General Assembly that he had always followed the guidelines of the Board, the Treasurer told the audience that he had invested the portfolio in opposition to the Board and was due credit for the returns of his term. The truth of whether or not Flowers actually invested according to the board is still unclear.
The most contentious moment of the night when Barney said Flowers wasn’t giving the office his all as a fulltime Treasurer, citing his law firm’s website where Flowers is still listed as a Managing Member. Barney claimed that legal ethics dictate that Flowers would have to be substantially practicing to have his name attached to the firm as a public official. Flowers forcefully claimed that he was indeed a full time Treasurer but never addressed the issue of the legal ethics other than to say that Barney only recently passed the bar.
Both candidates closed by thanking Widener and the Society of Professional Journalists and shook hands after finishing what was the most hotly contested public forum between the two thus far in the campaign.
Did any of you go? What did you think of the debate?
Thanks for this. I was wondering how it played out, the the only thing I’ve read so far was the Chip Flowers FB page where he refers to himself in the third person.
This was the second debate by the Democrat candidates for treasurer. The first was last month at the Sussex County Women’s Democrat Club in Georgetown. The candidates provided in-depth answers to questions about the Cash Management Board, the lack of a substantial code of ethics, tenure of board members and the relationship between the Office of the Treasure and the Govenor. Mr Flowers felt a truly effective Code of Ethics needs to be statute-based. Mr. Barney leaned more to a cooperative agreement forged by the Cash Management. There was also discussion about board members appointed since 1979 and who represent the major financial institutions that the state uses.
The debat lasted more than an hour and was lively and friendly.
Each month until the Election, candidates will be making presentations and take questions from the floor. For a schedule of meetings and designated speakers, contact President Rhonda Tuman, at rtuman@me.com.
I really wish I could have gone to this — mostly I was working late, but could have gone to part of it. This:
…strikes me as strange. Flowers entire project over his career in the Treasury has been to expand the powers of the Treasury. He is in the hot water that he is in because he can’t just claim new powers and he can’t manage the process to get those powers the traditional way. And then there is the staffing of a decision-making board. It is a very weird move to say he doesn’t want to do that, since staff can be really key to shaping the agenda of a board.
My mistake, apologies. I will fix the title and text now. Thanks for making the correction.
If you want to be technical, this was the first debate held outside Jesusland.
In reading Cassandra’s friends account I picked up something that I really hadn’t grasped before… This whole battle is over the “old way” being upset with having “it’s way” being adjusted….
I was surprised in video clips released, how much Barney agreed with Chip… My take was perhaps 4 times he said…”if that is true, then I would certainly agree”… then change to personalize his method of attack along the lines of: “but if it comes from you it cannot be good, which is why I need to be treasurer”… or something close to that….
The establishment is rattled.. So Flowers just being in office is scoring some good points… The big guns, and you know who they are,( the ones who cater to the establishment here in Delaware), have all put their prestige on line to take Flowers down….
It was in Cassandra’s piece above, perhaps because the way it is worded, I was able to recognize the language that always comes from that small group working out of a building on Orange Street, whose philosophy at least, seems to be underwriting the Barney campaign….
So, my prediction will be that now Barney’s campaign will leave the high road and move into the personal baggage realm quickly, primarily to distract his ties to the same ole, same ole philosophy of: … we just need to leave the old folks alone… And that Chips will go global, and take upon himself, the mantle of the Humble Man taking on our Gotham City full of evil Corporations…..
It could be an interesting race just for the information that will be forthcoming about these guys on the Cash Management Board who have much to hide… I think after this race, the old way is doomed, no matter who wins after this campaign is over…. If they were me, right now they are rethinking their support and consider cutting Barney adrift, now understanding they will lose either way through the disclosures if this campaign heats up….
Just sayin’.
“The big guns, and you know who they are,( the ones who cater to the establishment here in Delaware), have all put their prestige on line to take Flowers down….”
No, they haven’t. They don’t like Flowers, but if he wins they’ll just continue to let him crush himself.
Invoking “the establishment” in a bunch of missteps that the current Treasurer simply won’t be accountable for pretty much makes you complicit in making sure that accountability by government officials is a joke.
And it is an insult to the people who really are trying to take on “the establishment”.
But I’ll stipulate that “the establishment” is a good way to get folks who would otherwise be at the forefront of better government accountability and behavior to pull the wool over their own eyes here.
Cass: It works pretty well on the stump, though, with Chip running against a former Markell adviser. Chip’s problem is that not many people will see him on the stump.
Have heard the debate and having one of my questions aired by the moderator and responded to by both, it is abundantly clear to me that the Cash Management Board, unelected, cronies of the current and previous establishment state leaders and having at least several conflicts of interest, is wrong for Delaware and Flowers argued for change to this crony corporatism while Barney merely echoed that there might be a problem there but with little passion or conviction.
↑ ↑
I’m resting my case now.
@Geezer — I don’t doubt that it works well with some folks on the stump. “The man is keeping me down” is an appealing message to folks who aren’t informed about the issues or stakes or the sheer incompetence that this is meant to paper over.
The “taking on the establishment” argument is a red herring.
The Chipster got elected on a platform that had nothing whatsoever to do with taking on the establishment. In fact, it had nothing to do with the Treasurer’s office. (As an aside, listen to Cher Valenzuela talk about her vision as Delaware’s treasurer. It’s the same cockeyed vision that Flowers ran on.) All of the CMPB problems were in place before he was elected. All of it. I don’t recall hearing about them during his first, and likely only, campaign.
“Taking on the establishment” is a convenient and populist vehicle to deflect attention away from his own failings. Completely, shocked that people like Pete Schwartzkopf, yesterday of Al Mascetti’s show, seem to be buying into this diversion. Don’t confuse the legitimate need to remedy the CMPB with Flowers as treasurer or as a candidate. Two different subjects completely unrelated to each other.
Barney needs to put his big boy pants on. Quickly. His lack of a clear vision for the office is just as disturbing as Flower’s visions of grandeur. His lack of passion and purpose is unsettling and it plays right into the criticism that he is a no more than shill for the establishment. I don’t understand his strategy for running against Flowers. Engaging Flowers directly, especially in the forum of a public debate, is a fundamental mistake.
Stan Merriman you hit the nail on the head
You can now watch the latest debate:
https://www.youtube.com/watch?v=qk9K-1q_DVY.
I agree with Stan too.
And those of us who took notes when Sean Barney gave his presentations months ago at the DEM committee level will be having some fun sorting out what he said then and how much his platform has morphed into the Flowers campaign platform.
Also, I was hoping Mascitti would be able to podcast his chat with Kowalko yesterday . John corrected the record on how the Joint Sunset Committee bill on disclosure, (which establishment Senator Poore refused to endorse) failed to make it out of the House Administration Committee. Hint. Pete Schwartzkopf.
HB 381 – adding an annual financial disclosure requirement by defining CMPB members as “public officers” – never got a floor vote, which was odd, if that is the right word here, considering that the same requirement was enacted in this same 147th General Assembly for the Public Advocate (SB 104) and others (SB 105)…..bills that came out of this same Joint Sunset Committee.
Don’t get me wrong, should he win, Barney has a great resume and will be a credit to the Party and state. But, IMO, the best run government is where there is a tension sometimes between the finance arm and the executive arm. An environment where the finance arm, in this case the only option, the Treasurer, can counter ideas on the use of public funds and yes, sometimes publicly criticize. This does not seem to be built into the Treasurers job description but Flowers appears to be playing that role in the absence of another watchdog/friendly critic. I like and admire that and I think such exchanges serve the public interest. Especially given that in this small state everyone seems to know or be related to all the others ! This fosters cronyism and patronage, not a good thing for government.
The Governor did us a disservice, IMO, by stripping the investment responsibility away from the elected Treasurer and handing it over to an unelected body. Then, primarying his critic, sadly using a willing and talented young staffer whom I hope has a promising political career here.
Preach Nancy and Stan. I was getting tired of Cass defending the establishment because of her dislike of Flowers. Where did she come up with this… “The man is holding me down” stuff.
If that were the case, liberals would never be able to fight back against the banks, the corporations, or the political elite, as she would classify us in the same manner. There’s nothing liberal about that. Maybe she’s to close to the politicians now. She’s starting to sound like them. lol
The treasurer’s office is no more a “finance arm” of the government than I am a hairy-assed baboon. The office should be abolished and its functions folded into the Department of Finance.
That said, I will vote for the non-crazy, non-egotistical and non-jackass candidate in the race. In the Democratic primary, that means Barney. If Flowers makes it to the general, that means Simpler. If it’s Flowers vs. Valenzuela, I’m crying in the voting booth.
@SW: If it’s Flowers vs. Valenzuela, I’m crying OUTSIDE the voting booth, too.
the best run government is where there is a tension sometimes between the finance arm and the executive arm
Stan, the thing to do is to figure out how this office works in relationship to the rest of Delaware’s government. The Treasurer’s office finances nothing. It manages the state’s check book really. And if the progressives here were looking for more than just dogwhistles, we might be calling for this office to be eliminated since it has no real purpose.
This does not seem to be built into the Treasurers job description but Flowers appears to be playing that role in the absence of another watchdog/friendly critic.
Actually, he isn’t. He isn’t doing any watchdogging, especially since that isn’t his role. Delaware’s cash accounts are managed in accordance to statute. One that I have posted here on the regular. And the usual progressive suspects never read because that might rob them of their dogwhistles. If you want to change how Delaware’s cash accounts are managed, you get that change the usual way — you get the GA to make those changes. Flowers has never asked the GA (or the Governor, for that matter) for the authority to do what he claims will be better for the rest of the state. All he does is proclaim from on high that he is entitled to do this. Which is plain wrong by any plain reading of the statute.
More of the usual bullshit from the usual suspect:
Liberals fight back against banks, corporations and the political elite all of the time. Chip Flowers — by your own definition — can’t be a liberal since he isn’t fighting against anything other than his own megalomania.
And if it is Flowers v Valenzuela, I’d think that the argument to abolish this position and put it back in the Finance Department where it belongs might get alot more interest.
Perhaps Delaware needs to re-define the financial management of the State treasury by replacing the Treasurer (I presume by constitutional amendment?) with a Controller. This position in many states and large municipalities is empowered not only to manage the checkbook but provide fiscal policy making, debt oversight and investment management. As I read the State auditor task list it is confined to traditional auditing work and some watchdog oversight for fraud and abuse, needed but far short of fiscal policy making.
People who know how Delaware works understand that there are four entities dealing with some aspect of state finances – the Department of Finance, the Office of Management and Budget, the Treasurer’s Office and the Auditor’s Office. The latter should stand alone as an independent oversight and auditing body. The others should be merged, with one top official appointed by the Governor and confirmed by the Senate, just like all the other Cabinet members. We should stop this ridiculousness of electing someone to sign paychecks while pretending they have an actual job.
I wouldn’t expect someone to understand this who thinks Texas is a model for progressive leadership and doesn’t even read his own blog’s posts, however.
The tasks you list are mainly spread out between OMB and the Department of Finance. There are places with a Comptroller that is empowered to audit pretty much anything including financials and is meant to be a watchdog office. I think that the Auditor is meant to do that kind of watchdog role, but the effort there has been pretty lax.
Cassandra, with much due respect, you’ve exactly made my point. Fiscal policy, including debt policy and management in the hands of unelected departments ? Thus the merit of Controller/Comptroller elected in states like California. As for SussexWatcher’s usual insulting, arrogant responses, you also failed to read my blog post where I mentioned municipalities and financial management. I have some knowledge of Houston, a very progressive Blue city as are all major cities in Texas, which has a Comptroller office which provides the very counterpoint to the very powerful Mayor I am arguing for in the management of the city’s $5 Billion budget, 2.5 times the size of Delaware’s.
“Flowers referenced an incident when he came into office and there were hundreds of millions of dollars tied up in a failing bank that the members of the board didn’t want to pull. Flowers said that he removed the money from the failing bank”
If there is even a grain of truth to that story we have a penny in the fusebox.
I’m leaning for Chipman.
Chippie’s story about “hundreds of millions of dollars tied up in a failing bank,” which the cash management board would not move, sounds as fanciful as Tracy Woodson’s claim that “racist death threats” kept him from running against Jack Markell in 2002.
http://cpg.stparchive.com/Archive/CPG/CPG05172002p017.php
This is usually called the Executive Branch. Here, those things are in the hands of the Executive and (to a lesser degree) the GA. Maybe that needs to change, but you know how that gets done? By getting the GA to change the law (and probably amend the Constitution). It certainly does not change because Chip is getting his pout on because he thinks he is entitled to do stuff that neither the law of the Constitution provide him any authority to do.
No one’s talking about one of the big things that Chip is trying to sell himself on. We’re losing sight of what we’re really talking about. This isn’t the Treasurer versus the Evil League of Evil. The Cash Management Policy Board was created in the late 1970’s after the collapse of Farmer’s Bank which nearly tanked our economy and the FDIC had to bail us out. The legislature, the body ultimately which has the authority to invest the portfolio (think, budget powers), created the Board. The purpose of creating the board was to diversify the state’s portfolio and put an emphasis on security so we wouldn’t go bankrupt again. It’s worked. We made it through the 1980s and 2008 and kept our AAA rating and were able to pay our bills.
The Board, its composition decided by the Legislature, is composed of the Treasurer, the Secretary of State, the Secretary of Finance, Comptroller General, and five appointees from the Governor’s Office and confirmed by the Senate. The responsibility of the Board is to set the safeguard guidelines by which a number of investment managers, not the Treasurer, invest the money.
The Treasurer serves a coordination function: he makes sure there’s enough money in the bank to pay our bills by coordinating with the Managers. It’s important, but it doesn’t drive the returns. It minds the store. The managers compete against each other to maximize returns, while still adhering to the Board’s guidelines for safety.
Treasurer Flowers asked that we do away with this and return to the 1970’s. He tried to dissolve the Board through a Constitutional Powers argument. This would mean all the power would then consolidate back into one office. The Attorney general disagreed, the legislature disagreed, the Treasurer pushed back and promised to take this fight into the Courts, then the Legislature acted and clarified the Powers–which really shouldn’t have ever needed clarifying.
Now, if there’s a person on the Board who is a bad actor and abusing his position, then we definitely need to address that. I see Barney asked in the debate and Flowers said that it’s been referred to the proper authorities. Good. I hope such people are removed, they do us extreme harm. But from my vantage point I see only person on that Board whose actions have had the potential to place us in fiscal danger: Treasurer Flowers.
Hey Rufus – that comment by Flowers is just more proof of his utter incompetence and bold face lies. Talk to anyone with a finance background and they will advise you that the State has a custodial bank – the Bank of New York Mellon – that they utilize for “safekeeping” and “custody” so that none of the managers who manage the portfolio actually hold the securities they are trading.
What that means is that even if every single investment bank the State invests with all went under on the same day, so long as the custodial bank is still standing, the State wouldn’t lose a dime. Those assets are all held on a trust platform and are not held on the respective banks balance sheets. No risk of loss. Just more lies. And scare tactics that he uses trying to convince people he is Delaware’s savior.
Even funnier – Flowers has absolutely ZERO discretionary control over the State’s portfolio whatsoever. What that means is that the banks who the Cash Board chooses to manage the money have complete and total discretion to invest the money however they see fit so long as their investing complies with Cash Board guidelines. Which, when considered, makes Flowers claims that “he” is “making millions for Delaware” an absolute bold face lie. Anyone surprised? I think not.
But hey, lies and sensational stories of the world lining up against him have become the norm for the People’s Treasurer. Such a clown, it would be laughable if it weren’t so damn sad.
Anyone, please give the name of the failing bank. I haven’t heard of a bank in the last years failing in Delaware. Maybe I missed it.
Here, for inquiring minds, is a list of federally insured banks that failed dating back to 2010:
http://www.fdic.gov/bank/individual/failed/banklist.html
None in Delaware. Outside Washington Mutual, you’ve likely never heard of any of the failed banks.
If the State’s investments were truly held in a failing institution, then why are we only now hearing about it? He should be forced to disclose the name of the bank.
Future Miller Analogies question:
Jeff Christopher = Inherent Constitutional Powers of Sheriff
Chip Flowers = Inherent Constitutional Powers of _________________
@RunVC79- I’ll take your word for that but someone needs to publicly challenge that claim then. Without a challenge from Barney, the less informed (like me) are left to assume there is some truth to it.
As far as the failing bank, I assumed he was referring to Wilmington Trust pre-merger.
Many thanks to RunVC79 and painesme for bringing alot of good information to this thread.
Sean’s problem is he asks no follow up questions. Example, after calling the Treasurer out for still being the managing partner at his firm, Chip responding by saying Sean was attacking his credibility. Follow up question, are you still practicing law at your firm? The same thing with the failing banks, follow up Sean could have pressed for the name so all Delawareans could have the same information that may have personal investments in that bank. Sean didn’t do a great job showing he was different from the same old establishment we keep hearing about.
Cassandra, I agree. These two post certainly have enhanced my understanding of the role of this body and hits relationship to the treasurer. Much appreciated.
In 1992, Sher called herself Sher. Where do you get this stuff? “She calls herself Sher to sound plausibly Hispanic”.
I think the Latino community appreciates her choosing to join them by marriage. That is a lot more than most of her critics have done.
“I think the Latino community appreciates her choosing to join them by marriage.”
Yeah, about as much as it appreciated Richard Korn joining it by marriage.