In Sunday and Monday’s Oregonian, back-to-back front page stories by reporters Les Zaitz and Ted Sickinger attacked Oregon State Treasurer Ted Wheeler for alleged ethical and managerial lapses. Using extensive innuendo (and occasional ignorance of investment management and state law) they imply that the crew at Treasury is mishandling state resources and doing its best to hide information from the public. Nothing could be further from the truth.
It is a critical part of our democracy to have a press that forces government to answer to the citizenry. As individuals we cannot check on government agencies and our elected officials. We depend upon the free press to do this for us. At the same time it is a responsibility of the press to avoid false accusations and the creation of scandal where none exists. When this is done it damages both the credibility of the press and the reputations of those citizens working on our behalf.
Oregon is lucky to have Ted Wheeler as State Treasurer. He is both highly competent and extremely ethical. The campaign by the Oregonian distorts his performance and the integrity of the Treasury staff. In fact, the Oregon Treasury is a model for transparency and accountability and the investment decision-making process is characterized by a system of rigorous checks and balances to protect taxpayers and public retirees. Treasury employees are subject to the highest ethical and financial disclosure requirements of any public employees in Oregon and yet they are paid less, and in some cases much less, than their national peers.
Furthermore the Oregonian campaign of innuendo puts at risk millions of dollars of tax payer money. The investment results for Oregon are among the best in the country and the state’s credit rating was just upgraded by Standard and Poor’s. The Treasury manages $74 billion. If their performance drops by only one tenth of one percent the annual cost to us taxpayers is $74 million. If the Oregonian’s campaign causes good investment managers to leave Treasury or makes it difficult to recruit new talent, we could be exposed to even greater potential losses.
Let us remember how this all started. The Oregonian uncovered expense account discrepancies at Treasury just as Ted Wheeler was taking over as Treasurer. This was a case where the press was serving the public interest. Ted then issued new guidelines for his investment officers and called for an audit. The ethics commission got involved and then cleared 5 of the 8 investment officers they were investigating. The other three are providing additional information on a total of $450 of expenses. However, this has resulted in legal expenses that now exceed $200,000. The Department of Justice cannot provide legal support for these individuals so outside counsel was hired. The Oregonian implies that this is wasteful spending on Treasury funds.
I would suggest everyone ask themselves if they would continue to work for an organization where they did not get legal support when they believed that they complied with that organization’s policies. Why not just leave and work for private firms for more pay and less hassle? Remember that in the balance is $74 million per 0.1% of asset performance. While public employees do have to account to the public, private employees would never have to endure such public attacks or legal exposure over trivial discrepancies. Was the prior policy appropriate? No, but don’t attack Wheeler for what he inherited or staff that followed the then existing policy.