Source: The News Journal

Lawmakers on the Joint Sunset Committee support several of Delaware Treasurer Chip Flowers’ ideas to increase transparency for a volunteer board that manages the state’s $2 billion investment portfolio, the committee’s chairman said Wednesday.

Flowers, who has faced criticism from fellow Democrats over his dealings with the Cash Management Policy Board, addressed the committee Wednesday to pitch reforms.

He called for requiring annual or biannual financial disclosures for members, prohibiting members from giving political contributions, limiting terms and adding more elected officials to the now nine-member board.

In January, Flowers advocated for many of those changes while lawmakers debated a bill to limit his control of the state’s investment portfolio. House lawmakers narrowly defeated amendments to the bill that would have required financial disclosure and implemented term limits for board members. The full bill passed and was signed by Gov. Jack Markell in February.

After the meeting, Flowers said he thought there was a different view.

“I think it’s a feel-good moment. There is nothing concrete except the fact that we have people on record saying they’d be supportive of it,” he said after the meeting. “Before we had a hearing today, people were opposed to all of these concepts.”

Sunset committee co-chair Rep. Gerald Brady, D-Wilmington West, said after the meeting that he and committee members support requiring board members to submit financial disclosures and prohibiting them from making political contributions.

Sen. David Sokola, D-Newark, said during the hearing that making the board’s processes more open and transparent is a good thing.

“If for no other reason, it gives the public more confidence,” Sokola said. “There are clearly opportunities for playing games and for conflicts to occur.”

Flowers has previously contended that, at times, he has to wade through “uncomfortable” situations with the board and potential conflicts.

But lawmakers on the committee do not appear as supportive of term limits or adding elected officials to the board, Brady said. The board includes five gubernatorial appointees, two members of Markell’s cabinet, the state controller general and the treasurer himself.

“Continuity of flow is key,” Brady said.

Adding elected officials creates further impediments to the board’s operations and adds an obstructive political dynamic, he added.

Sokola said several of Flowers’ ideas were good, but adding more elected officials and imposing term limits were not.

“It’s one of these situations where the structure is important, but I think the results are more important,” Sokola said, “and we have a system that has given us for the last 14 years a AAA bond rating for the state.”

John Flynn Jr., chair of the management board, said he doesn’t oppose the idea of frequent financial disclosures or prohibiting political contributions. But he asked the committee not to just single out the cash management board.

“If it is appropriate for any of these points to be addressed to the cash management board, they are also appropriate to be addressed to all of the financial boards,” he said.

The Sunset Committee is expected to issue a report on the policy board along with recommendations in May.

Flowers said requiring financial disclosures would be a “huge” victory and just getting term limits on the table is a major accomplishment.

“Sometimes conflict is good. I know in Delaware, everyone likes to get along and sing Kumbaya. But at the end of the day sometimes you need conflict to flush the issues out,” Flowers said. “We all got through it and we’re all going to be fine.”

To view the original article, please click here.

To view State Treasurer Chip Flowers’ message about “Standing Up for Financial Reform,” please click here.

To view announcement, please click here.

Press Release – February 19, 2014
Delaware State Treasury

Dover – Today, during the Treasury’s annual budget hearing before the General Assembly, we released the Fourth Report on the Delaware State Treasury which highlights numerous accomplishments of the office – including, increasing our state investments by over $44 million, protecting our state portfolio and reducing investment fees by over $400,000 annually! The Report, initiated during my time as your State Treasurer, highlights the important work done by our office on your behalf. By standing up for change in Delaware, your Treasury proposed and promoted innovative ideas that benefited you. To view the Report, please click here.

By Chip Flowers, Delaware State Treasurer

Since assuming office, theTreasury has stood for proposing change to improve the financial condition of Delaware. Often, this change has come at a heavy price – criticism that inhibits the acceptance of innovative ideas that can propel Delaware forward. Let me take a moment to explain why it was important for the Treasury to stand up for change.

First, we stood up for changing our state investments. The Treasury increased our state portfolio by more than $43 million during my term and despite a volatile economy, we had positive returns 30 out of the last 37 months. By significantly reducing costs, rewarding performance among our state’s new diverse group of investment managers and establishing benchmarks, the Treasury improved our $2 billion portfolio (of which only about $650 million to $800 million is invested long term) without increasing risk. The Treasury’s record shows our portfolio, if used properly, can be an invaluable asset.

We stood up for protecting our money. The Treasury took actions to protect our portfolio at a time when policies required the Treasury to require collateral for our money only after a bank showed signs of trouble – which would have been too late. We changed the system to protect our money before a bank found itself in trouble. Today, our portfolio is protected and collateralized.

Finally, we stood up for you. The Treasury stood up for the honest way by advocating for financial disclosure, full transparency and term limits for those on our Cash Management Policy Board responsible for managing our portfolio. These are basic principles that are commonly accepted as the norm in the modern era and without question, benefit the public.

The price of standing up for change is high. As you know, falsehoods about me and the Treasury continue, despite the facts. Condescending treatment by certain leaders against those challenging the status quo remind me of my adolescent days when the stronger kids would try to intimidate and bully those who stood apart from the pack, because they chose to follow a different path. This is not the way our government should operate. It is time for a new era in Delaware where change and innovative ideas are met with a listening ear and open mind.

We recognize and are mindful of the contributions of those individuals who developed institutions and processes. However, we must not be so blinded by our past that we are unable to see the need for change to improve our future. Critics constantly remind people that before I became your State Treasurer, Delaware managed its money and operated the same way for more than 30 years. Imagine all the technological innovation that has transpired during the past 30 years (the personal computer and the Internet were mere ideas on a drawing board). Resisting change and harkening back to the glory days of the 1980s shows how not “letting go of the past” has crippled the First State.

This does not mean the Treasury, in its effort to stand for change, will not make mistakes – all agencies administered by the hand of man are subject to error. Rather, it means the Treasury, in advancing change, is willing to accept scrutiny and adversity if it means we have a chance to improve our financial condition. I spent more than $200,000 of my own money campaigning for this office and gave up my first-year after-tax salary for two young people to work at the Treasury, because my strong commitment to public service runs deep.

I choose to stand up for those principles that speak to the problems that keep our state from fulfilling our true economic destiny. I choose to stand up for change so your children will never have to endure similar treatment in proposing ideas that will improve Delaware. If we are to succeed, the next generation of Delawareans must be given an opportunity to propose innovative ideas and a chance to improve our state without paying a price for standing up for change.

Positive Returns 30 out of last 37 months

FOR IMMEDIATE RELEASE: February 5, 2014
CONTACT: Ms. Kelly Callahan at kelly.callahan@state.de.us; 302-672-6702

DOVER, Del. — State Treasurer Chip Flowers announced today that the Delaware State Treasury
(Treasury) made over $43 million in the state investment portfolio during the past 37 months – surpassing the Treasury’s target of $40 million. The announcement noted that while the markets were volatile in January, the Treasury made a historic $6.7 million during the month, the highest recorded market gain for the portfolio during Flowers’ tenure.

Upon releasing the news, State Treasurer Flowers stated, “The Treasury has been and continues to
perform at a high level. During my time as State Treasurer, we reversed declining returns in our state portfolio and had positive returns 30 out of the 37 months of my tenure. By rewarding merit among our state’s investment managers, we created a low-risk, performance-based environment that benefits Delawareans. In short, your Treasury exceeded the highest expectations and made millions.”

Treasurer Flowers also expressed his gratitude to the Treasury staff, the new diverse group of state
investment managers, and the Treasury’s independent investment advisor, Credit Suisse, for their expert advice and outstanding work.

Last week, the General Assembly passed legislation that granted complete control of the state portfolio to the Cash Management Policy Board (the “Board”).

As part of today’s announcement, Flowers commented, “Though the record of the Treasury’s plan shows that our strategy has made millions for Delawareans, we will close the books on the Treasury’s record performance and will adhere only to the strategies set by the Board going forward. I encourage the Board to adopt the recommendations of Credit Suisse, address conflicts of interests, require financial disclosures of its members and continue the Treasury’s plan of rewarding merit among our state’s investment managers. We wish them well.”

Flowers went on to note, “I am proud that the Treasury has served the People of the State of Delaware by showing through change, we can improve our state’s finances and make millions. In these challenging economic times, we will continue our record of proposing innovative ideas and solutions to better the First State.”

For additional information about the Delaware State Treasury, you can visit www.treasury.delaware.gov, send an email to statetreasurer@state.de.us, or call 302-672-6700.

Source: Delaware State Treasury

On January 15, 2014, Delaware State Treasurer Chip Flowers proposed the “Honest Way” Amendment to Senate Bill 151, which is aimed at eliminating corruption in managing Delaware’s finances and ensuring public input into the management of the state’s $2 billion investment portfolio.

Senate Bill 151, which is proposed by Governor Jack Markell and his administration, would give the unelected Cash Management Policy Board (the “Cash Board”), comprised mainly of the Governor’s appointees, the ability to allocate the state’s $2 billion investment portfolio without rules, protection or oversight from the Treasury or the People of Delaware. Senate Bill 151 would also exempt the unelected Cash Board from laws requiring public input on the Cash Board’s decisions on Delaware’s money.

The bill also eliminates critical safeguards that are designed to protect Delaware money from corruption and undue influence. Also, the legislation would force the Treasury to allocate Delaware’s money to banks, not based on independent expert advice or merit, but on the advice of the unelected Cash Board who may have a personal or financial interest in the chosen banks. State Treasurer Flowers and the Delaware State Treasury oppose Senate Bill 151 without the inclusion of the Honest Way Amendment.

Proposed by State Treasurer Flowers, the “Honest Way” Amendment adopts the following four (4) key features into the operations of the unelected Cash Board:

Financial Disclosure. Under the Honest Way Amendment, those serving on the unelected Cash Board would need to disclose their financial interest like other public elected officials. It is important that members of the Board do not have any conflicts of interest when managing the state’s $2 billion investment portfolio.

Political Contributions. Under the Honest Way Amendment, the unelected Cash Board members would be prohibited from giving political contributions to those key elected officials involved with the state’s finances – specifically, the Governor, Treasurer, Speaker of the House and Senate Pro Temp and any individual seeking to hold those offices.

Term Limits. Under the Honest Way Amendment, the unelected Cash Board members would serve a maximum of two four (4) year terms. This would ensure that the Board doesn’t abuse and amass more power than those elected officials selected by the People to manage the state’s finances through the ballot box. Some of the current members of the Board have been serving since 1980.

Open Government. Under the Honest Way Amendment, the unelected Cash Board must be subject to open government and public oversight, no exception. The very reason why we have open government and public oversight laws is to prevent individuals from acting inappropriately.

Support State Treasurer Flowers and the Delaware State Treasury in restoring integrity in our government by supporting the Honest Way Amendment!

CLICK HERE to view a video clip of the press conference where Treasurer Flowers Proposes the “Honest Way” Amendment.

To view the Honest Way Amendment on the Treasury’s website, please click here. If you have any comments or questions, please do not hesitate to contact your Delaware State Treasury at (302) 672-6700 or visit treasury.delaware.gov.

Source: Delaware State Treasury

The Delaware Economic Index for January 2014 provides key economic and financial data about the First State over the past 60 days. To view the complete Index, please click here. If you have any comments or questions, please do not hesitate to contact your Delaware State Treasury at (302) 672-6700 or visit treasury.delaware.gov.

Source: newsworks.org

While Brandon Stokley is best known for catching passes for the Baltimore Ravens, the veteran wide receiver helped Delaware students score a touchdown in “Financial Football” this afternoon.

Stokley joined Delaware Treasurer Chip Flowers for the statewide launch of the financial literacy game at Christiana High School in Newark.

Financial Football was developed by a Visa and NFL partnership with Delaware as a way to get students thinking about building credit, saving money and planning for the future.

“I think the earlier you learn, the better off you’ll be, especially when you start making money and you have to start planning for the future,” said Stokley. “The things you learn now will help you better when those obstacles come in your way and those situations arise out of nowhere. You know what to do with your money.”

Stokley explained to students that even if they make millions of dollars as a star athlete someday, it’s easy to make the wrong decisions and lose it all quickly.

Since NFL players only get paid during the season, Stockley said the key is learning to make it last.

“I’ve seen over and over where guys get their checks and by the end of the year they’re broke,” he said. “It’s a lonely feeling to have all that money and then it’s gone.”

The Financial Football curriculum is taught at the high school level and comes with a computer game for classes to play as they learn. A group of business and marketing students at CHS tested the game, with Stokley and Flowers serving as team captains. They answered questions about credit, bank accounts, applying for student loans and saving strategies.

“I was impressed with the knowledge that they showed when I was sitting in the back,” said CHS Principal Noreen Lasorsa. “I’m not necessarily sure I would have been able to answer all of those questions, I think it’s a testament to our marketing and business department of the work they’ve done with our students.”

Lasorsa explained that students who choose business and marketing as their career pathway in high school take introductory courses, and the game helps students better relate the information they’ve learned to their everyday life.

“A lot of our students come from low income homes so they’re out in the workforce as well,” she said. “They’re full-time students and part-time at work and some of them are full-time and contributing to the finances of their homes,” she said.

Flowers said Financial Football is part of a statewide effort to get more Delawareans to make better financial decisions.

“Financial education is important and our economic well being in Delaware is tied to it,” he said.

Source: Delaware State Treasury

The Delaware Economic Index for September 2013 provides key economic and financial data about the First State over the past 60 days. To view the complete Index, please click here. If you have any comments or questions, please do not hesitate to contact your Delaware State Treasury at (302) 672-6700 or visit treasury.delaware.gov.