* From a Tom Cross press release. Pay special attention to the last two paragraphs…
Over the last five months, State Senator and candidate for Illinois State Treasurer Mike Frerichs has delivered stinging criticism directed at the office of the Treasurer’s investment portfolio, specifically Illinois’ investment in other states and overseas. Frerichs has countered with his own plan of investing exclusively in Illinois investments, although he has not outlined how that plan would work or how it would meet the statutes restricting investments by the office of the Treasurer.
Yesterday on WGN Radio’s “Sunday Spin with Rick Pearson”, Republican candidate for Illinois State Treasurer Tom Cross outlined the perils of Frerichs’ “insiders only” investment strategy, pointing out that it would likely result in lower returns for Illinois taxpayers as there will be limited competition and a closed market for over $13 billion of investment. In addition, Cross added that with Illinois’ past record of corruption and graft, particularly within the role of state investments, limiting Illinois’ $13 billion exclusively to investments within the state greatly increases the potential for fraud and corruption.
“We need to be working for taxpayers to receive the greatest return for their hard-earned tax dollars while minimizing risk,” said Cross. “Like every other person who has a 401k, we are going to look across the US and even globally to secure a good return and a safe return for every tax dollar we invest.”
Frerichs’ criticism of overseas investments also is at odds with his past voting record. As a Senator, Frerichs has supported overseas investments , but now as a candidate for Treasurer, Frerichs is leveling harsh criticism at the Treasurer’s global investment strategy.
One country that would be singled out under Frerichs’ plan is Israel. The office of Treasurer currently has $25 million invested in foreign bonds, all with the country of Israel.
More than 80 states and municipalities in the United States currently invest in Israel bonds. Last month the state of Ohio invested over $47 million in Israel bonds. Today, an Israel Bond with a 10 year maturity pays nearly 1.4% above the U.S. Treasury rate for the same length. Since the introduction of the bonds in 1951, Israel has never missed or defaulted on a payment.
The North Shore is a crucial battleground area. Mark Kirk did well there and won statewide. Bill Brady fared poorly and lost. The area’s 10th Congressional District always features candidates attempting to outdo each other on pro-Israeli policies.
We’ll see how Frerichs reacts to this, but right now I’d say it’s a smart political move by Cross.
However, I personally would rather see more of the state’s money invested right here, even if it brings a slightly lower immediate return.
…Adding… There seems to be some confusion or deliberate spin in comments. Frerichs wants a blanket policy. He didn’t “single out” Israel. That’s just Cross’ rhetoric. It works, though, as comments clearly show.
*** UPDATE *** From the Frerichs campaign…
- Yesterday the Tom Cross campaign launched an untrue and unfounded attack on Sen. Frerichs and his support for continued Illinois investment in Israel Bonds.
See the statement below from state Sens. Daniel Biss and Ira Silverstein and state Reps. Lou Lang and Sara Feigenholz on behalf of Treasurer Candidate Mike Frerichs, in response to a release yesterday from the Cross campaign that erroneously suggested Mike wants to end state investments in Israel. Here is the full audio clip from the radio interview, where it’s clear Mike said nothing like that. The relevant section starts at about 7:30:
In fact, Mike supported I-Bonds as chief co-sponsor of this bill with his Jewish colleagues last year: http://ilga.gov/legislation/billstatus.asp?DocNum=1571&GAID=12&GA=98&DocTypeID=HB&LegID=72631&SessionID=85
“Mike Frerichs is among the most outspoken and vocal advocates for the State of Israel in the Illinois General Assembly. He was a strong supporter of the bill that would allow for significant new investment in Israel Bonds, and supports the policy that keeps Illinois pension funds from investing in businesses that adhere to the economic boycott of Israel. As State Treasurer, he will work to strengthen the economic ties of the State of Illinois to Israel. This policy will create jobs here and advance the interests of our chief ally in the Mideast.
At a time when the State of Israel is in armed conflict, fighting for its survival and its security, it is unfortunate that Tom Cross has decided to use Israel as a political pawn in the race for State Treasurer. Not only is he wrong about Mike Frerichs, but Mr. Cross has degraded the political process by resorting to twisting of facts for his own personal political gain.”
…Adding More… The breakdown of Treasurer Rutherford’s investment portfolio is here.