The only qualifications a person in Arkansas needs to take responsibility for the management of $3 billion of the state’s investments are to be an eligible voter and be able to win a statewide election.
Arkansas isn’t the only state with that standard. It’s one of 36 states that allow voters to choose the state treasurer. A dozen states either have legislators or the governor - and sometimes both - choose the treasurer. Two states, New York and Texas, have folded the treasurer’s responsibilities into those of the state comptroller, who is elected.
Deciding whether an elected official is qualified for a leadership role is a tough question, said Jonathan Lawniczak, executive director of the National Association of State Treasurers in Lexington, Ky.
“In terms of that, it’s whatever qualifications the voters decide,” Lawniczak said, pointing out that a treasurer’s duties vary widely from state to state and require different kinds of expertise. “Each state treasurer does different things. Since each office is different, it would be hard to put together a list and say: ‘Well, this state says you need [to be a certified public accountant] but this state doesn’t,” he said.
Martha Shoffner, who resigned as treasurer last week, was a licensed real estate agent and a former state representative. She worked as an assistant to the state auditor from 1991-93 and was elected treasurer in 2006 and re-elected in 2010.
The man appointed Wednesday by Gov. Mike Beebe to fill out the 19 months remaining on Shoffner’s term is a longtime state employee with years of experience with finances and budgets.
Charles Robinson, 66, of North Little Rock, retired in 2007 after working 34 years in the Legislative Audit Division, including 28 years as legislative auditor. Robinson has an accounting degree from Arkansas Tech University and a master’s in business administration from the University of Arkansas. He’s also a member of the American Institute of Certified Public Accountants and the Association of Certified Fraud Examiners.
Shoffner, 68, resigned May 21 after being arrested by U.S.marshals on May 18, accused of accepting cash payments in exchange for directing a share of the state’s investment business to one broker. The arrest followed an investigation into bond sales approved by Shoffner that auditors said potentially cost the state hundreds of thousands of dollars in lost income.
R. Kinney Poynter, a certified public accountant and executive director of the National Association of Auditors, Comptrollers and State Treasurers, also based in Lexington, Ky., said elected officials responsible for investing on behalf of a state often don’t have the expertise to make investments.
However, states typically have detailed investment policies, he said. “The staff, who work for the treasurer, I think that’s where it’s really incumbent that they have the skills and the knowledge to oversee a portfolio of that size.”
Debbie Rogers, Arkansas’ chief deputy treasurer, said there are no specific job criteria in place for treasurer’s office employees responsible for overseeing state investments.
But, she said, that will change with a new state law, Act 1088 of 2013, which expands the state Board of Finance. Act 1088 gives the board responsibility for setting “minimum standards of expertise and experience” for those hired to deposit or invest state funds. The board also will hire a “chief investment officer” to work with the treasurer to handle state funds. There are “no specific job requirements in place right now,” Rogers said.
“In the past, the state treasurers have examined the persons that they are considering for that and taken their qualifications and experience into account for that. But to say that we have job descriptions and requirements for each position, at this time, we don’t have that,” Rogers said.
Autumn Sanson, chief investments officer for the treasurer’s office, earned a finance degree from Arkansas State University. She began working for the state 13 years ago and took her current post seven years ago.
On Wednesday, Sanson said she feels very comfortable in her role, given her time in the position and knowledge of the state’s investment needs and ability to work with the brokers used by the state.
“To me, in my opinion, you need to justify why you put a person over the amount of money we invest in this office,” Sanson said. Experience in finance or banking would be an asset, she said.
However, Sanson said, the treasurer made the final call on investments.
“Sometimes, what I felt like was the best interest of the office, she disagreed with that at the time,” Sanson said. “It’s not ultimately my call unless that’s given to me, and it was not.”
Jay Barth, a political-science professor at Hendrix College in Conway, said that when the state constitution was written in 1874, various state government positions were far less specialized than they are today, meaning that the government needed talented people, but not necessarily specific expertise in top-level posts.
Barth said it would be “tricky” to place specific job qualification criteria in the constitution for an elected position. He said it would be easier to do if the position was filled by appointees rather than elected. He pointed out that specific criteria for other critical state positions, such as director of the Department of Finance and Administration, the Department of Higher Education and the Department of Correction, are all spelled out in law.
“The bigger question is whether these positions should be elected at all,” said Barth, about the treasurer, auditor, land commissioner and secretary of state.
Matt DeCample, a spokesman for Beebe, said that while “it’s not something that he’s out there looking to crusade to do,” the governor wouldn’t oppose a push to make positions such as treasurer appointed rather than elected. Stephen Sheppard, a law professor at the University of Arkansas School of Law in Fayetteville, said that when a constitution is drafted, no one is alert to every crisis that might pop up.
“Arkansas, like most states, has no particular qualifications” for constitutional office positions, said Sheppard. “Generally, more qualifications are assessed for trade oversight like the Milk Board than for constitutional officers. There is an irony there.”
Front Section, Pages 4 on 05/30/2013