The state treasurer's office is making more money on its short-term investments in recent months, and the results have been "phenomenal," Treasurer Dennis Milligan told the state Board of Finance on Tuesday.
Milligan touted these results a day after the Jefferson County Republican Committee called for Milligan's resignation and its chairman, Peter Smykla Jr. of Pine Bluff, said Milligan's actions have been a "betrayal of our confidence and trust."
The Benton Republican and former Saline County circuit clerk, who was sworn in Jan. 13, said Tuesday that his office has made $1.5 million by investing hundreds of millions of dollars of state funds for short periods during the past four months. Before then, the average return on these investments was $36,000 per year, he said.
These short-term investments previously were in money market accounts that paid 0.01 percent interest in recent years. Milligan's office has shifted most of that money into commercial paper and companies' debt lasting up to 90 days, officials in his office said after the finance board's meeting.
The change hasn't created any problems with cash flow, they added.
Milligan told the finance board that his office made about $182,000 in February, $237,000 in March, $419,000 in April and $677,000 in May on its short-term investments. The office benefited from having a larger amount to invest in these short-term investments in May because of income tax receipts and some longer-term investments being called or maturing, he said.
"I know. It's hard to believe," Milligan said about the increased investment returns.
The beneficiaries of these increased earnings on short-term investments include the state Game and Fish Commission and Highway and Transportation Department, he said.
Milligan credited the investment professionals he hired.
"My expectations are even greater," he said.
The office's average monthly balance for commercial paper and companies' debt of up to 90 days, and money market accounts was $736 million in February, $742 million in March, $885 million in April and $1.3 billion in May, said the treasurer's chief deputy investment officer, Ed Garner, after Tuesday's meeting. Garner is a former Republican state representative from Maumelle.
The treasurer's office's short-term investment practices were questioned by the Division of Legislative Audit in 2012 as part of its audit of then-state Treasurer Martha Shoffner. The Newport Democrat, who was later convicted of bribery and extortion, is awaiting sentencing.
In 2012, the division said the treasury held $1.3 billion in short-term cash and cash equivalents, money that was generating minimal returns for the state. The division said the treasury had excess liquidity and could invest its money elsewhere with an increased return to the state.
Milligan declined Tuesday to comment directly on the Jefferson County Republican Committee's call for his resignation.
In his letter to Milligan calling for the treasurer's resignation, Smykla made reference to Shoffner, saying "your campaign promised to bring back trust, dignity, and integrity to a State Office that had been abused by the former treasurer" and that Milligan's "timely departure is necessary for the good of the State of Arkansas."
A copy of Smykla's letter was mailed to Gov. Asa Hutchinson; the state's top-ranking Republican hasn't taken sides in the dispute.
Hutchinson spokesman J.R. Davis said Tuesday that "this is a matter between other parties, and we are not engaged in it."
On March 13, Milligan signed an agreement with Attorney General Leslie Rutledge to pay a $1,000 civil penalty for violating state law by hiring his first cousin for a job paying $63,000 a year in the treasurer's office. He paid the fine and also voluntarily reimbursed the state for Sam Swayze's gross salary of $6,941.62 for the period Swayze worked for Milligan's office.
On April 29, Milligan said he and his deputy chief of staff, Jason Brady, would make a contribution to Brady's old employer to compensate for any costs that it incurred from Brady working as Milligan's campaign manager, after emails indicated Brady had violated his former employer's policies by using the nonprofit's time and resources to promote Milligan's campaign.
When the emails were made public, Milligan said he would send a personal letter to the charitable agency where Brady previously worked, the American Cancer Society Cancer Action Network, along with "a contribution from myself and Jason Brady for any harm this situation has caused their organization."
Ray Carson, a spokesman for the American Cancer Society Cancer Action Network, said Tuesday that "we did receive a personal letter from Mr. Milligan. We have no record, however, of any donation from Mr. Milligan or Mr. Brady during 2015 ... A letter that was dated May 5 arrived in our office via overnight mail on May 14."
Milligan also filed amendments to his campaign finance reports that show a Benton company called Your Ad Team reimbursed $300.80 to Brady for Facebook expenses on March 17, 2014, and $500.17 to Brady for "March Facebook services" on April 3, 2014.
The action came after the Arkansas News Bureau reported in April that Brady, in seeking reimbursement for an expense, told fellow campaign workers in an email that "for job security, my name can NOT be listed anywhere on a campaign contribution report."
Milligan has said that Brady worked with a vendor hired by his campaign to manage "our Facebook page."
Metro on 06/03/2015