League of Women Voters of Ohio Education Fund
	Ohio State Government November 2, 2010 Election
	Candidates Answer Questions on the Issues Treasurer of State; State of Ohio

The questions were prepared by the League of Women Voters of Ohio and asked of all candidates for this office.     See below for questions on Investments, Investment policy, Investment criteria Click on a name for candidate information.   See also more information about this contest. 1. What additional safeguards will you put in place to protect public investments? What are your investment strategies that would safely maximize the rate of return? Answer from Matthew P. Cantrell: I will recommend that state pension funds reduce the portion of non-investment grade securities, and mortgage related securities. I will also seek an independent review of all current and proposed hedging strategies to mitigate risk. Finally, I will recommend that our pension fund long term growth assumptions be reduced from the current 8.00% level, as some states have done. This conservative assumption will give Ohio additional flexibility in future decades if long term growth materializes higher than expected. Regarding strategies to safely maximize rate of return, I believe that it is imperative for Ohio to continuously adapt its investments and strategies to changing market conditions. While it is certainly appropriate to have detailed procedures and laws guiding transactions on behalf of the public, we need to review whether these procedures are keeping Ohio from quickly exiting investments when necessary. Answer from Josh Mandel: Unlike the current officeholder, I will ensure that my staff is comprised of qualified financial professionals--rather than political cronies and friends--and that investment decisions are based on what is best for Ohioans. The state investment scandals showed us all that we must be vigilant about potential abuses of taxpayer dollars. I was involved with the reconstruction of the BWC Investment Fund in the wake of the scandal involving that fund. Being part of the BWC restructuring gives me the experience necessary to recognize that proper safeguards are in place to protect tax dollars and state funds. Answer from Kevin L. Boyce: After becoming Treasurer, I made tough choices to protect Ohio`s tax dollars while growing our revenue. First, I directed my administration to use private sector best practices that have earned $300 million in new investment income for Ohio. Second, I created a historic competitive bidding process for banking contracts that saved Ohioans $19 million. Third, I focused on cost savings, reducing Treasury expenses by 10.6% and taking two voluntary pay cuts myself. Because of this sound financial management, the Ohio Treasury has not lost a single dime to bad 18 investments in the worst economic times since the Great Depression. 2. What would be your investment policy—to invest at a higher rate outside Ohio, or to support Ohio businesses, even though the return might be lower? Please explain. Answer from Kevin L. Boyce: I invest in Ohio every day as Treasurer, helping to create and retain over 55,000 Ohio jobs. The Ohio Revised Code provides discretion to invest up to 12% of our portfolio in Ohio through linked deposit programs, while the remaining 88% of our portfolio is invested almost exclusively in US government obligations. Using my authority, my GrowNOW staff work with banks across Ohio to help businesses get a better rate on their loans, investing almost $200 million in less than two years. We`ve allocated over $200 million for Ohio family farms through AgLINK, a program that helps farmers with loans for their operating needs. We even empower residential homeowners to go green by making home energy efficiency updates more affordable with EcoLINK. Answer from Matthew P. Cantrell: The vast majority of Treasury assets are currently invested outside of Ohio, and a considerable portion of pension fund assets are invested outside of the United States. The Treasurer of State has a fiduciary and legal responsibility to properly invest taxpayer dollars while mitigating risk. I reject any proposal which compromises this responsibility, including an ―invest in Ohio‖ initiative. Such an initiative will only benefit the politician seeking publicity, not the taxpayer. Answer from Josh Mandel: The Ohio Treasurer`s office has tools to encourage business growth in Ohio that are not being properly utilized by the current officeholder. I plan to do a complete review of existing programs to identify ways to improve them, including an expansion of the linked deposit program in order to make capital more readily available for businesses and job creation. Additionally, I want to be an economic policy leader in creating a more business friendly tax and regulatory environment in Ohio. I will continue to fight for the consolidation of state government agencies, reducing the size of the state workforce, and eliminating unnecessary regulations and bureaucracy. 3. What criteria would you use to select among equally qualified investment vehicles? Answer from Kevin L. Boyce: Challenges with toxic assets like Lehman Brothers should serve as a warning for all public servants. The second criteria would be the liquidity of the assets. Finally, we must ensure that, within the bounds of prudent fiscal management, we are maximizing the rate of return for Ohioans. For 12% of our portfolio that may be invested in Ohio via link deposit authority, our foremost criterion remains safety of the public assets. Second, we look for the ability of the farmer, small business or, in the case of EcoLINK, household, to support the creation and retention of Ohio jobs. Finally, we continue to look for opportunities to grow our link deposit programs to serve even more Ohioans. Answer from Matthew P. Cantrell: I do not believe that it is possible for two investments to be ―equally qualified.‖ While two bonds may have the same credit rating, or two assets may have the same historical rate of return, this does not make the investments ―equally qualified.‖ There are an infinite number of variables and factors to consider when analyzing such a decision. The challenge is being trained to see the big picture, to formulate a strategy, to be firm in the strategy, yet flexible enough to adapt when conditions or facts change. For these reasons, I believe it is crucial for the Treasurer`s office to perform independent modeling and research to compliment any third party analysis or ratings. Answer from Josh Mandel: The State Treasurer`s ultimate responsibility is to protect Ohio`s public dollars. In doing so, the principles of Safety, Liquidity, Yield must be followed, and in that order. Given the current condition of the State`s finances, only the safest investments can be made with the state`s money, while keeping the portfolio liquid as needed. As State Treasurer, I will identify opportunities to make prudent investments to maximize returns while focusing on protecting public dollars and the ensuring appropriate liquidity is established. Responses to questions asked of each candidate are reproduced as submitted to the League.  Candidates' statements are presented as submitted. Word limits apply for each question. Direct references to opponents are not permitted. The order of the candidates is random and changes daily. Candidates who did not respond are not listed on this page.