Tuesday, May 5, 2009

Randall Edwards puts himself before his job

From the Oregonian:

State officials were slow to catch and even slower to put a stop to risky investments by managers of the Oregon College Savings Plan that resulted in tens of millions of dollars in losses to students and their families, documents obtained by The Oregonian show.

E-mails between the state treasurer's office and OppenheimerFunds provide new details of how officials reacted as $1 billion in college investments plummeted to $744 million in less than a year. Nearly 107,000 people are saving for college for their children, grandchildren and others in the state plan.

But communications obtained under Oregon's public records law show that state officials weren't closely monitoring the fund and didn't take action to stem the bleeding until it was too late. For months, they relied on assurances from OppenheimerFunds that the money was well-managed.

The e-mails and records also show a friendly relationship between OppenheimerFunds and state treasury staff, including buying meals at top Portland restaurants. After the fund's problems were made public in The Oregonian, OppenheimerFunds furnished the state with "talking points," and a state official gave the company a "heads up" about a pending state investigation.

The article is long but it is a great one. Randall Edwards invested in a bond fund with a 1.64% expense ratio while a comparable bond fund with Vanguard charged .10%.

It also includes this lovely kick back for Edwards:

A nonprofit asks OppenheimerFunds to sponsor an event honoring Treasurer Randall Edwards for his "commitment to financial literacy in Oregon." Plan executive director Michael Parker writes there is "certainly no obligation."