Sunday, June 02, 2013
My Sunday Feeling
I do a little work for a non-profit. They station me at a desk in the conference room. Last week I shared my space with auditors. They were there performing the yearly audit that all non-profits have to go through. I remember spending much quality time with auditors when I was the President of the Board of the local women's shelter.
Now, my current boss is a straight up kinda gal. And the Executive Director over at Women and Children First is as well. And still, the auditors had questions. It's their job. Sometimes stuff looks funny. Expenditures sometimes don't get readily tied down to justifiable business reasons. People forget to write stuff down. It happens. When the business is run by straight up people, explanations are found. Corrective measures are taken if needed based on the auditors' recommendations and things roll on until the next year when it happens all over again. Complete and total transparency will cure a lot of problems while you are getting audited.
For those of you who don't know the lady in the mugshot, this is Martha Shoffner who recently resigned as the Arkansas State Treasurer after she was charged by the Feds with extortion under something called the Hobbs Act. It is alleged that she was caught taking a cash payment concealed in a pie box from an informant wearing a wire. The informant is widely suspected in the media to have been employed as a broker with a small investment shop over in Russellville, Arkansas with whom the Treasurer's office did a substantial amount of business.
Shoffner's troubles began with-guess who?-the auditors when she couldn't provide them with a reasonable explanation-or any explanation really-why her office a) did so much business with this firm and b) as to whose idea was it to sell some bonds prior to maturity which resulted in a 700k hicky to the State's portfolio.
Now, that's all I am going to say about the criminal case. She has the right to defend herself and her guilt or innocence will be determined by the jury. As it should be.
What I am going to talk about is how it makes absolutely no sense for a 3 billion dollar investment portfolio to be managed by somebody whose only qualification is to win a statewide election. Arkansas has too many Constitutional elective offices that serve very little useful purpose other than to give politicians a seat to warm until they are term limited or are elected to something else. One exception to this general rule was Jimmie Lou Fisher who was Shoffner's predecessor in office. She brought the Treasurer's office into the 21st century. I love Jimmie Lou. But it's a low bar.
The State Auditor doesn't audit a damn thing. The Land Commissioner sells property for the delinquent taxes. The Lieutenant Governor presides over the Senate and causes headaches for the Governor whenever he leaves the State. The Secretary of State at least is in charge of corporate filings and voting. At least that's something. The state would be better off if the people would abolish these nickleshit offices that haven't been particularly relevant or even needed since the Depression. We would be better off to put these offices under the aegis of the Governor who would appoint presumably qualified people to run them.
I'm not the first person to suggest this. Indeed, the press has been bristling with similar suggestions. But this would take a constitutional amendment. And Arkansas being Arkansas, there would be grumblings that this would put too much power in the hands of the Governor . So it will probably never happen.
OK. Here's a second thought. Raise the salary in some of these offices. Take the Treasurer's office. The taxpayers pay the person in that job $54,000. To manage a portfolio of 3 billion. This is insane. No wonder the Martha Shoffners of this world run for these rinky dink offices. In her case, she needed the money and secondly there is no economic incentive for a person with expertise in the investment business to want that job. For example, I don't know how much money the man that manages what passes for my portfolio makes per year. But I bet it is at least about 5 times what the Treasurer's gig pays. Indeed, I make more money than that office pays. And I'm semi-retired. Under these facts, it is a miracle from God that something like the Shoffner mess hasn't happened before now.
According to an article published last Sunday in the Arkansas Democrat-Gazette, Shoffner had trouble paying the rent for an apartment in downtown Little Rock. Her present difficulties are not just a scandal. Or a tragedy, although personally I refuse to see a tragic dimension to selling your office for rent money if indeed that turns out to be the case.
It's an embarrassment to the State of Arkansas. Sometimes you really do get what you pay for.