(Sean Whaley/Nevada News Bureau) – Republican state treasurer candidate Steve Martin said today the Democratic incumbent is playing politics by delaying a discussion involving an unprecedented $50 million investment loss until after the Nov. 2 general election.
Martin, a member of the state Board of Finance which oversees the investment policies of Treasurer Kate Marshall’s office, said a meeting of the board scheduled for Oct. 12 has been cancelled and rescheduled for Nov. 9, a week after the election.
Martin said he anticipated the October meeting would include a discussion of potential changes to Nevada state law to clarify how to write off the $50 million Lehman Brothers loss, which occurred in September 2008 when the financial services firm filed for bankruptcy protection.
“Essentially there won’t be any more discussion at the board with regards to what was lost, how it was lost or the write off of the interest over 4.5 years (until after the election),” Martin said.
Martin, a certified public accountant from Las Vegas, is challenging Marshall, an attorney from Reno, for the treasurer’s job.
Steve George, chief of staff to Marshall, said Martin is the one playing politics by continuing to focus on an issue that has been publicly discussed and resolved. All of Martin’s questions have been answered but he continues to raise the Lehman Brothers matter for political gain, George said.
Martin said he believes politics are involved in the delay of the Finance Board meeting. The less said about the $50 million loss, the better for Marshall, he said.
The investment loss, some of which may yet be recouped, has resulted in lost interest income to 170 different state agency accounts and programs, from the cash-strapped Millennium Scholarship to the state self-funded health insurance plan, Martin said.
Martin said he continues to have questions about the plan to write off these interest income losses to the agencies and programs over a 4.5-year period. He also cited a September letter from Robin Reedy, chief of staff to Gov. Jim Gibbons, expressing the need for the treasurer’s office to provide more information about the write off.
It isn’t the first time Marshall has avoided a discussion of the loss, he said. In July the treasurer’s office got an attorney general’s legal opinion saying the issue was not within the purview of the Finance Board’s authority after Martin asked for a discussion of the issue.
“And I think it just shows a lack of transparency,” he said. “Frankly, trying to hide the fact that they lost the $50 million, the less said the better they are.”
George said Nevada’s Lehman loss was only a part of $3 billion in losses to states, counties and municipalities across the country when the firm filed for bankruptcy.
Marshall has said there was no warning ahead of time the firm would file for bankruptcy.
George said the October Finance Board meeting was cancelled after board members were queried and there were no items for discussion. Gov. Jim Gibbons is chairman of the board and sets the agenda, not the treasurer’s office, he said.
George provided a copy of a July 2010 letter sent to Reedy that he says shows that every question raised by Martin about the issue has already been answered. The issue was also fully discussed at the Finance Board’s July 12, 2009 meeting, he said.
Martin did not join the board until later.
“The Board of Finance has been involved in this from the beginning,” George said.
George also noted that both legislative fiscal staff and the state budget director were made aware of the plan to write off the loss over 4.5 years.
“Steve Martin seems to want to keep pushing this issue, funny enough close to election time that he keeps pushing this issue, which is a nonissue,” he said.
Martin has claimed that Marshall should have known about the Lehman collapse before hand, but has acknowledged his own clients lost money in the 2008 financial meltdown, George said.
“So I’m a little surprised his clients lost money if he had all the answers,” George said.