1) Please provide specific examples of your knowledge and understanding of risk and real credit analysis.
• J.J. Ament: I spent 10 years as an investment banker and financial advisor to state treasurers and other CFOs – totally apart from areas responsible for the financial crisis. My clients’ credit ratings ranged from non-investment grade to highly secure. I worked with issuers, investors, credit enhancers, and rating agencies on more than $10 billion of transactions and has never had a single default or any customer complaints. I am an expert on public finance, risk, and credit analysis. Recently, I restructured the credit and risk characteristics of several Mesa State College transactions to lower their costs and increase security.
• Ali Hasan: The State Treasurer’s most important duty is managing the state investments, a $6.3 billion portfolio. Of note, my opponent, J.J. Ament, wants to invest in bailout companies, including CitiGroup, Fannie Mae and Freddie Mac, while I promise to invest in Colorado.
According to 2009 filings on Yahoo Financial, CitiGroup claimed current assets of around $448 billion, yet its current liabilities were around $1.119 trillion, not including around $580 billion in longterm debts. However, CitiGroup has made around $1.374 trillion in loans, with an equity capital of around $152 billion.
CitiGroup had net operating losses of $29.416 billion in 2008 and $16.06 billion in 2009. In addition, the $1.374 trillion loan portfolio has significant real estate mortgage loans and credit card loans, loans that may never be fully repaid. Our current rate of return on CitiGroup bonds range from 1.8 percent to 5.5 percent, which is much too little compensation considering CitiGroup’s financial problems and the risk we take in investing with them.
On the other hand, Moody’s, S&P, and Fitch all issued a AAA-rating or equivalent, this month, to the City of Denver’s general obligation bonds, based on Denver’s lack of liabilities, in conjunction with strong earning power. Historically, Denver bonds have given rates of return above 5 percent with very little risk involved. Thus, as State Treasurer, I’ll divest from CitiGroup and invest in Colorado, giving us bonds that elicit stronger returns and create local jobs.
• Walker Stapleton: As the Chief Executive Officer of a publicly traded real estate company I have managed all of the credit analysis of my company’s tenants and have handled loans for my company with multiple banks. This has given me first hand experience with the credit markets in the private sector. There should be three guiding principles in the Treasurer’s Office for investing the taxpayers’ money. 1. What are the safest, most secure bonds to invest taxpayer money? 2. What bonds offer a liquidity profile that matches the General Fund’s investment objectives and guidelines and 3. What bonds offer the best yield for taxpayer funds?
2) How would you rate your ability to get along with a potential Democratic governor?
• Ament: I am a recognized financial professional with a proven track record of success. I am the only candidate with the securities licenses that would be required if the State Treasury was a private sector position. My obligation as Treasurer will be to sound fiscal and investment policy, not politics, regardless of who controls the governor’s office or the Legislature. During my private-sector financial career, I successfully worked with governors, treasurers, and legislators from both parties. Typically, my political affiliation was unknown and just my financial expertise mattered — expertise that’s desperately needed in the Treasurer’s office today.
• Hasan: Any potential Governor must know that I will loyally abide by Section 33 of Article V of the State Constitution, which states, “No moneys in the state treasury shall be disbursed therefrom by the treasurer except upon appropriations made by law…” as well as the Taxpayer’s Bill of Rights, which states that we “must have voter approval in advance for… any new tax…” In turn, as the State Treasurer, I will mount a Constitutional challenge against any new tax or appropriation that is unconstitutional. As long as the Governor understands this, I expect us to get along just fine.
• Stapleton: I have spent my career in the private sector. In the private sector it is not about partisan bickering or political agendas, it is about maximizing your results. Shareholders in my company couldn’t care less which political party I belong to, only that I bring them a return on their investment in my company. I will bring this results-oriented attitude and agenda to Colorado’s State Capitol, because that has been what I have focused on throughout my career.
3) If elected state treasurer, would you allow the state’s money to be invested in countries with regimes that are contrary to U.S. foreign policy, such as Iran, the Sudan, or others? Would you support the removal of economic sanctions that prohibit such investments of Colorado funds?
• Ament: No. I will not allow Colorado taxpayer money to be used to finance our nation’s enemies. I would also oppose all efforts to remove the economic sanctions that prevent taxpayer money from being invested in Iran and other countries that threaten the U.S. This is a policy area where I and my opponent sharply disagree.
• Hasan: I would not invest Colorado’s state Investments in Sudan, Iran, or any country outside of America, as my plan has always been to invest in Colorado and create local jobs. Regarding foreign policy, I do not advocate for sanctions, as the Peterson Institute for International Economics has proven that sanctions often benefit the targeted dictator, because the lack of outside investment concentrates available capital with the dictator, making the people even more dependent to him. The finer policy would be to arrest dictators like Mahmoud Ahmadinejad and Omar Al-Bashir of Sudan and charge them for crimes against humanity, even if it has to be done forcibly when they are traveling outside of their country.
• Stapleton: I agree with these investment restrictions and would not support their removal. The state of Colorado should not invest its tax dollars with countries where there are state sanctioned human rights violations taking place. As the only candidate in this race that has actually invested other people’s money in the private sector, I would use that experience to find investments that offered secure and profitable returns for Colorado taxpayers.
4) Similarly, are there any organizations or companies with which you would refuse to invest Colorado funds, and what is your position on an all-out ban on investing with companies that have received, or asked for, federal bailout funds?
• Ament: I will make every investment decision using sound, conservative investment policy based on market conditions in place at the time. I opposed the bailout and oppose using it now as justification for additional federal control of private enterprise. Colorado should make its own investment decisions and not be limited to only those institutions who meet Washington’s political approval. Forcing unacceptable risks onto taxpayers and giving foreign banks competitive advantages by banning U.S. institutions who at some point in history received, then repaid, federal assistance is bad policy. Real financial discipline must come ahead of these politics.
• Hasan: Congress approved the Glass Steagall Act in 1933, in response to the Great Depression. Among many measures, the Act made it illegal to operate as both a commercial and investment bank. However, at the urging of Wall Street bankers, Bill Clinton removed the Act in 1999, allowing commercial banks, like CitiBank, to pawn their risky debts as investment bonds, removing the burden debt collection from their books, while making commissions off both debt issuance and bond sale – illegal acts under Glass Steagall. Thus, until Glass Steagall is restored, I will not invest Colorado in bailouts, because giving additional money to bailout companies only perpetuates the problem. The majority of our state investments are invested in bailout entities and my analysis is validated by Bob Shirilla, a former corporate manager, financial manager and past GOP Vice Chair of El Paso County.
• Stapleton: The State Treasurer’s office should be an office occupied by a businessman and not a politician. I have spent my entire career in the private sector seeking profitable investments for shareholders and individual investors. As State Treasurer, I will be accountable to the taxpayers just like I am accountable to the shareholders of the company I run every day. I would only invest in A+ bonds that the state of Colorado can currently legally invest in and I would certainly never promote reckless investments with taxpayer funds.
5) If elected state treasurer you would have only one political appointment, that of deputy treasurer. What kinds of qualifications and financial background would you require for this important position?
• Ament: I know that saving taxpayers’ money requires a staff who knows where expenses and inefficiencies are hidden. The Deputy Treasurer must be familiar with state government operations across departments, should know public sector AND private sector finance, and be unafraid to abandon the status quo. The Deputy cannot be a substitute for the Treasurer’s own financial expertise and knowledge, but should complement those strengths. All Treasury employees (including the Treasurer) should be qualified to hold similar positions in the private sector. Anyone who is unqualified for a private sector financial position, should not hold that same position in government.
• Hasan: None of the candidates for State Treasurer claim a CPA (Certified Public Accountant). In particular, J.J. Ament has no CPA or MBA, giving him little financial credential. As a successful small business owner, I claim a strong record of management — in turn, I will bring a most superior accounting team to the Treasury. My Deputy Treasurer will hold a CPA and proven experience. Under Section 12 of Article X of the State Constitution, a quarterly report issued by the State Treasury that contains inaccurate data could result in a charge of perjury against the State Treasurer. Thus, I take my appointments very seriously, as a wrongful report has grave consequences.
• Stapleton: As the only candidate in this race with both a Master’s Degree in Business Administration and a graduate degree in Economics, I have a unique background to lead the Treasurer’s Office. I also have real world business experience as the only candidate in this race who has served as a Chief Investment Officer and Chief Executive Officer of successful public and private companies. My deputy would most likely have experience in public finance which would compliment my extensive experience in private finance.
6) Your parents have all had successful careers of their own. How has their guidance or wisdom helped you in this campaign?
• Ament: I was born and raised on my family’s farm and ranch in Northeast Colorado. I learned at an early age from my parents, Don and Patty Ament, the value of a hard day’s work and independence. I learned that chores didn’t finish themselves and that showing initiative and taking personal responsibility for behavior mattered. I also learned that keeping your word and earning a reputation for honesty and integrity are important traits in public and private life. Along with my wife, Nicole, we are working to instill these values in our own children today.
• Hasan: My mother and father are my best friends and heroes. They arrived in America in 1971, with $32, a baby girl, and an American Dream. My father always said, “Honesty is the most successful policy.” And my mother, who was a Republican precinct captain in the early 1980’s, took me all over Southern Colorado, knocking on doors for Ronald Reagan. Mom taught me that building relationships with your people is what makes you a qualified representative. In turn, over the last month, I have personally called every Republican delegate, giving honest answers to every question. Building these relationships should serve us well in the convention.
• Stapleton: My parents’ public service is an inspiration to me. My father did it the right way. He had a long career as a successful businessman in the real world and then he served for eight years with distinction as a United States Ambassador overseas. My mother served on the Defense Advisory Board for Women In the Service for many years. Their best advice to me was to find a way to have success in life and then to give something back and that’s exactly what I’m trying to do.
7) What do you see as the role, if any, of God in your ability to serve as state treasurer?
• Ament: I am an active member, along with my wife Nicole, of the South Suburban Christian Church, where I have served as president of the congregation and Nicole has served as a trustee on the church board. Our country was founded with divine guidance, and God continues to bless us every day. I do my best to live in a manner that honors my Christian values. Lessons of grace, compassion, and forgiveness are important in public and private life. You cannot be one person in public and another in private, so I will bring these values to the State Treasury.
• Hasan: I believe in God, His Afterlife, and a Day of Judgment. Thus, the promises I make today will not just be held accountable by voters, but more importantly, by God. As I’ve done in my business, I will keep a Bible, a Torah, and Quran on my desk at all times, which will serve as reminder that I am to be held accountable, and more importantly, that I am not alone. Lastly, we must be reminded that our Rights are given by God, not the Government — thus, I will support any measures to get faith-based instruction into our public schools, as well as displays of the Ten Commandments on public property.
• Stapleton: As a baptized and confirmed member of The Episcopal Church, my faith informs me every single day to treat people equally and to serve in public office with integrity and humility. My faith makes me responsible to answer to a higher authority and it makes me accountable for my actions.
8) Would you agree to open your tax records for the last five years so the public could see how you’ve invested your personal funds?
• Ament: I have disclosed my personal financial holdings using the Secretary of State’s disclosure forms and have nothing at all to hide. I am happy to talk about my personal investing, but before the campaign began I turned over the management and decision-making authority for my personal investments to a third-party financial advisor in order to avoid any conflicts of interest while campaigning for or serving as State Treasurer. While tax returns are not necessarily the best resource for monitoring personal investment decisions, I am not opposed to releasing information from those returns as appropriate.
• Hasan: I have notified my accountant to start preparing my tax returns for public disclosure, should a strong request be made. I have never collected a salary from any banking institution and I’m also proud that I’ve started moving my personal funds out of bailout banks and into American National Bank, a local bank that took no bailout funds.
I encourage my opponents to release their records, especially J.J. Ament, because according to the Free-Press Newspaper (GOP Candidates Square Off, March 4th, 2010), Ament wants to invest State Treasury funds in CitiGroup, despite the fact that his financial disclosure states an income from a major subsidiary of CitiGroup, as well as assets worth more than $5,000 with CitiGroup. Under Section 13 of Article X of the State Constitution, it is a felony for a public officer to make a profit off of the State’s money.
• Stapleton: Sure. I wouldn’t have any problem releasing my tax records, just as long as every other candidate in this race was willing to do the same. I am confident that my tax records would show that I have made a number of successful business investments not only in the U.S. but overseas as well. I think it’s pretty important to have a Treasurer with a track record of success in the business world especially as it relates to a candidate’s own finances and investments.