Q: You've been treasurer now for 12 years. How does your election by the state Legislature differ from a general election ?
A: Well, I think it's difficult to get elected the first time.
Once elected, so long as your party stays in power in the Legislature, then your chances of having longevity are pretty good. As long as you've done a good job, they keep you there.
I think the one thing that is somewhat troublesome is the conflict dealing with your ability to criticize the Legislature. Can you then tell the Legislature what you think they should do?
You've got to be careful. I don't think they need you legislating for them. They've elected you to run the treasurer's office, which I've tried very hard to do. So basically with the Legislature, unless it affects the treasury, I don't get involved unless they ask me.
My primary responsibility is to the state's credit rating, the issuance of bonds, and the investment of the moneys. Not only do I borrow the money, but I invest the money, and run the abandoned property program, which has been very successful in Maine and is one of the leading abandoned property programs in the country.
Q: Are the rating agencies looking at the big picture enough or is there more that they need to be doing?
A: I think they're doing a better job now than they were a year or two ago.
We had some serious concerns that whenever a region or a state within a region had real problems - like Massachusetts did a few years ago - that the rating agencies were beginning to treat all of the states in that region with a tainted brush.
But they have to protect the bondholders, and they've got to be able to look at their crystal ball and know what's going to happen a year or two from now, and that's almost impossible. Those who are unhappy with the rating agencies haven't dealt with them as long as I have. I have pure confidence in them.
State officials have to understand the business, how to deal with the agencies, what their procedures are, what they think is important, and have constant contact with them.
In specific answer to your question, I think they are now beginning to look at everything in the broader, bigger, long-term picture and not just worrying about what happened in the last three months or what might happen in the next three months.
Q: What's the best part of Your job?
A: I get to meet a lot of people. You try to have your little department contribute to the welfare of the state. It's interesting, it's exciting, and you get to travel.
I also enjoy dealing with Wall Street. Sometimes it's even fun.
As you know, there are two ways to sell bonds, either competitively or negotiated. Well, we had our biggest note issue we've ever had, $170 million, so I did a negotiated competitive deal where I selected eight underwriters and called them all into a room and said to them, "Here are the rules and here's who's going to be in it, and how many can be in it," and all the factors other than the price and then said, "Okay, now price it."
Well, there's a big difference with eight underwriters sitting in the same room, writing their bid down that minute.
So somebody bids 62 cents! Which was way, way under what a one-year spread should be.
You know, that was fun, because I out-dealt the dealers. That made me feel good. They didn't feel that good about it, though.
Q: Do you see spreads continuing to contract?
A: Depends on volume. I began to feel a little bit that all the refundings were beginning to spread the investment bankers as thin as they could get.
The reason spreads are coming down is because there were not enough bonds issued for the expanded investment banking houses.
Now, conversely, if the time ever comes when their capacity is being stretched, they're going to say, "Hey, we can only do three deals, and if you want a $6 spread, you do it somewhere else."
Q: Do you foresee doing any more deals this year?
A: Yeah, what we're doing now is the advance payment of some debt that's on our books the state makes annual payments to us on.
If we can get the Legislature to approve it, we'll issue bond anticipation notes soon and we'll have a deal in January paying off the Bans and also incorporate any new money that we need.
It won't be a very large deal, though. It'll probably be, with the refunding and new-money portion, at the very most maybe $40 million.
Q: What advice would you give treasurers in other states as to how to handle their office during tough times as well as how they might handle it in good times?
A: I think that one thing they have to do is not to overreact. Go slow in anything you do because the pendulum swings both ways and it will come back.
I think it's important during good and bad times for treasurers to be in closer contact with the rating agencies.
If you just wait to see them when you're going to do a bond issue, it's too late.
Sometimes decisions to drop your rating or to keep it the same is really on a razor's edge, so to speak, and I think that it's helpful to be in close contact.
Q: How do you see the relationship between treasurers'and governors'offices, especially with so many treasurers deciding they want to be governor?
A: I don't know. In Maine it's a little different. I think in states where you're elected by the legislature, or appointed by the governor, it becomes a little bit more difficult.
I think in states where the treasurer is elected by the statewide election, they come in more contact with the electors.
When I first became state treasurer, I don't think anybody talked about any treasurer who became a governor.
But people now are more concerned about the fiscal health of their state and they tend to think that your training and your background as the treasurer - if you've done a good job and kept your nose clean - that you will make a good chief executive.
And for the most part, they have. Ann Richards of Texas is doing a good job. Kay Orr, [R-Neb.], did a good job. And Roy Romer [D-Colo.] is doing a good job.
Q: Is that worrisome to yon, though? If I was looking for a treasurer, I think I would rather have one who wasn't going to have his or her decisions motivated by politics.
A: I think that's a valid observation, although you'd have to assume that most people are going to do the best job they can. But remember, treasurers are bound by statute.
I don't think there's a higher office than treasurer. I want to be treasurer for life. I think that's the highest office you can obtain.
I never will run for higher office. With me, though, it's a combination of age and the price you have to pay.
The price you pay for running for office means you have to be out every night. And my priorities are not that I want to be governor, or senator, or caucus person enough to give up the time that I have left. I'm 65 years old.
Q: So you plan to stay?
A: I want to be treasurer as long as I live and I hope to live a long life.
It's a job. I need a job to pay my bills. You know, treasurers don't have golden parachutes. Treasurers have lumps of coal tied to their feet.
