Filed under: Blogs, Economy, Politics, Progressive | Tags: Alabama PACT, PACT
PACT was marketed as a way to pay for a contract. Intentionally and systematically. There are still official descriptions out there that say it’s a way to prepay college tuition. Exhibit A. I ‘m proud of that one. Normally, I would cross-post it, but I’m out of steam.
I have enough additional evidence for at least two more posts on the marketing. It just piled up on me while I was trying to get a grip on the organization and finance and politics. Important to get all this evidence where we can see it, and it’s something to do while I am working on pulling the timeline together.
Hoping I’ll be able to catch up with e-mail and Facebook and pay a visit to Save Alabama PACT soon.
Also hoping to get to the point that I can pay more attention to what friends and bloggers who are on my regular reading list are up to.
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, PACT
This list includes every organization I have been able to locate that is directly connected to the Alabama Prepaid Affordable College Tuition Fund. I’m not attempting to list all the responsibilities of each organization here. Just explaining the relationships between them.
The Alabama Legislature
Creates the PACT program by passing Alabama Code Section 16-33C (pdf) into law into 1989. The law has been amended several times since then, notably in 2001.
The PACT Board of Trustees
Established by the statute to oversee PACT. Chaired by the State Treasurer, who has responsibility for the day-to-day administration of the fund. The board selects the custodian, records administrator, advisor, and managers listed below by advertising requests for proposals and following the state process bid/proposal process.
The Custodian
Bank of New York Mellon. Holds the fund’s assets and maintains transaction records of trades.
The Records Administrator
HDI Solutions of Auburn, AL. Maintains account information records of transactions between contract holders and the fund.
The Investment Advisor
Callan Associates. Assists the Board of Trustees in the selection of investment managers and provides investment guidance.
The Investment Managers (Investment Policy pdf, appendix B, beginning on p. 13.)
Rhumbline – Russell 1000
CS McKee – Large Cap Value Equity
Intech – Large Cap Growth Equity
Earnest Partners – Small Cap Value Equity
Turner Investment Partners – Small Cap Growth Equity
Acadian Asset Management – International Equity
Principal Global – International Equity
Western Asset Management – Core Plus Fixed Income
Sterne Agee – Passive Fixed Income ( listed in the Q&A pdf on the Official PACT web site, but not listed in the investment policy. This was first noted by Havealittletalk).
Tenth manager? I’ve seen at least one reference to ten managers other than the one Havealittletalk notes, and I will note it when I locate it again. I am not sure whether this is an error, or whether we should be asking about a tenth manager.
There are also:
State Treasury staff who work on PACT
An Actuary
An Auditing Firm
Board of Examiners’ Reports
Next
This is only a skeleton. I have a lot of information that I’ve picked up from public documents — pages and pages of links — to organize.
My next step is to put together a timeline from 1995-present. Things you will see on that timeline:
1. Amendments to the law that created PACT, and the passage of other laws that might be relevant.
2. Hirings/Firings, including the ones havealittletalk notes, and more that I have located.
3. Activities of the managers and custodian, to the extent they can be ascertained, during that time, that might have some bearing on the situation.
4. Documented statements from public officials.
5. Any relevant information I can glean from these documents (all pdfs), which I suggest you archive by using the File/Save Page As command.
2006 Financial Statements and Actuarial Report
2007 Financial Statements and Actuarial Report
2008 Financial Statements and Actuarial Report
I have a few other odds and ends, too. I have piled up quite a bit of information from fragments here and there. Organizing, archiving, and getting it into readable format it is slow going.
I believe I can add quite a bit to our knowledge of some of the issues Havealittletalk is continuing to bring to light, and to our knowledge of some of these private firms.
I am following the coverage of other news and the development of Save Alabama PACT with great interest. I am pressed for time this week, but I will continue to blog this at Correntewire, to update my PACT Project page, and to offer comments as I am able to do so.
Cross-Posted at Left in Alabama
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, PACT
Havealittletalk demonstrates why it’s a good idea to educate yourself about people you’ve never heard of when you’re looking into a situation like this:
A former member of the PACT board was appointed despite the fact that he had been convicted of a felony involving the theft of public funds.
I wasn’t able to get much writing done this weekend, but I did have a chance to do a lot of thinking. My next step is to provide the best list I can of all the public and private organziations who have some role in managing the PACT fund.
Once I am done with that, my plans for this week are to provide an easy-to-read chart that will allow us to see how many times each section of the enabling law has been amendend, and when the amendments were passed.
After that, my plan is to put together a timeline that will show us, in chronological order, when each of the following took place:
1. Changes to the law.
2. Changes to official PACT documents.
3. Hiring of private firms contracted to manage the money.
4. Changes to the way the fund’s assets were allocated. I have at least one financial document for each year going back to 2004, and a few earlier documents as well.
5. What various public officials were saying while all these changes were being made.
I’ll also do what I can to help with efforts to communicate with the Legislature, and write about the efforts that others are making on that front.
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, Kay Ivey, PACT
A very good question from Countrycat:
Alabama Treasurer, Kay Ivey, says she wants to save the PACT program. Why then, is she proposing legislation that gives the board the authority to dissolve it?
Read the whole thing and watch the video. At the very least, it seems that Ivey is talking out of both sides of her mouth.
When you call your legislators today, be sure and tell them that it is not acceptable for for the board to have authority to dissolve PACT. Only the Legislature should have that authority. Why? Because the Legislature set the program up to begin with.
If the board is given the authority to dissolve the program, I have no doubt that it will only be a short time before you start hearing Ivey saying that there is just no way to save the program. And you should be aware that having her make such statements would be a good way to start a run on the PACT fund, and then blame the participants for its failure.
I agree with Countrycat that this is likely an attempt to deprive PACT contract holders of leverage:
It appears that Ivey’s preferred scenario is the “worst case” option. Or maybe she just wants to be able to use dissolution as a bargaining chip to force her real preferred option down the throats of the parents: “Oh, you don’t like what we’re planning? Guess we’ll have to dissolve the PACT!”
So keep your head in the game and communicate clearly with your representatives in Mongomery.
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid College Tuition Program, PACT
State Representatives and state Senators. Use this zip code finder if you are not sure who represents you in Montgomery. Numbers for some Senators.
Tell them the state must honor all PACT contracts.
Tell them that political football with the college educations of 50,000 Alabamians is not acceptable.
I’ve had a bit of success diggining for some documents over the past couple of days, and hope to have a bit more today. I plan to do some serious writing late in the weekend and early next week.
Filed under: Economy, music, Politics | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, PACT
Because you can never have too much of the Pogues.
Working to get a post or two on PACT together now.
Havealittletalk has uncovered some interesting things about what Kay Ivey does with her summers. This past summer, for instance, she was a panelist on the “Treasurers Innovation Roundtable” at the National Association of State Treasurers conference, which was held at a swanky resort in Maine. And guess what the topic was?
I’ll let the program tell you:
“Hon. Kay Ivey, Alabama: Achieving Accountability with Strategic Planning”
I find the word “innovation” striking in this context. For years, mortgage-backed securities and credit default swaps were called “innovative” financial products. Of course, a couple of months after Ivey attended that conference , the Bear Stearns hedge funds collapsed. I haven’t heard anyone using the word “innovative” for those financial products since then.
I don’t see much evidence of strategic planning with PACT. It looks more like they took the money and gambled for short-term profits to me. And I don’t see how you get to accountability through strategic planning. It looks like an unintentional non-sequitur to me.
The way you achieve accountability is by maintaining a high degree of transparency.
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, Alabama Prepaid College Tuition Program, PACT
From Patti Lambert, via Facebook:
Event: SAVE Alabama PACT! CALL YOUR LEGISLATOR RALLY!
“Call you legislator Friday – LETS show our VOICE to Montgomery!”
What: Rally
Host: SAVE Alabama PACT!
Start Time: Friday, March 27 at 8:00am
End Time: Friday, March 27 at 5:00pm
Where: Phone
This might help:
State Representatives and state Senators. Use this zip code finder if you are not sure who represents you in Montgomery. Numbers for some Senators.
Tell them the state must honor all PACT contracts.
And do call Rep. Holmes Alvin Holmes of Montgomery. Tell him filibusters are unacceptable on this issue.
And stay tuned for Left in Alabama for more on the board meeting.
Filed under: Economy, Politics, Progressive | Tags: Alabama PACT, Alabama Prepaid College Tuition Program, PACT
I picked up these links this morning, and just didn’t have an opportunity to post them until now.
The Huntsville Times reports a very interesting statement from State Senate Majority Leader Zeb Little [emphasis added]:
State Senate Majority Leader Zeb Little of Cullman, also sitting in on the editorial board meeting, said while it is important for the Legislature to be aware of the problem, “the worst thing we could do would be to overreact and make a quick, bad law.”
Little said one solution may be to take the PACT program away from Ivey, who is a potential Republican candidate for governor in 2010, and give it to Retirement Systems of Alabama Chief Executive Dr. David Bronner.
a la Rob has some interesting thoughts on the PACT situation, along with discussion of other happenings in Mongomery today.
Forbes carried a story ahead of the board meeting by Phillip Rawls of the Associated Press. It mentions the lawsuit; but this snippet caught my eye:
But copies obtained by The Associated Press show that its assets fell from $899 million on Sept. 30, 2007, to $431 million on Feb. 28. Its future liabilities for tuition for all participants were estimated at $933 million as of Sept. 30, 2008.
Good idea to compare this information to the numbers reported at the board meeting today.
Filed under: Economy, Politics | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund
Countrycat has the preliminary report from the Alabama Prepaid Affordable College Tuition board meeting in Montgomery today. A large crowd of PACT contract holders attended the meeting.
The board unanimously rejected dissolving the program. The plan is to keep the program with modifications.
“These include: close enrollment (no new contracts until current contract holders are secure); take $1.3 million from a state scholarship fund to help secure PACT (I’ll have to look up the details on this); and ask for legislative assistance with funding.”
Lt. Governor Jim Folsom Jr. stated unequivocally that PACT is going to survive, and that the legislature will fix the problem.
Callan Associates spent several hours presenting information about the state of the investments, including the annual actuarial report and auditor’s report. According to Callan, the program’s actuarial deficit is now $481.3 million. In September of last year, it was $306.2 million, up from only $19.7 million in September, 2007.
State Treasurer of Kay Ivey attempted to insist that the board be given authority to dissolve the program (currently only the Legislature has that authority). The other board members and the crowd hated that idea, but she was persistent. Video of that exchange to come.
Further details at the link; I’ll post more information as soon as it is available.
Filed under: Blogs, Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund
No way to know how many people will make it, but I’m staying tuned to Left in Alabama.
A few quick links to get you through the day. Included:
Talking accountability and AIG with Dean Baker at FDL
Tammy Bruce Calls the Obamas “trash.”
Even more things that are sure to enlighten and enrage you at The Sideshow.
Bonus Youtube – ends abruptly, but oh-so-sweet while it lasts:
Filed under: Economy, Personal, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid College Tuition Program, PACT
I want to wish everyone who is going to Montgomery good luck and a safe trip. I am grateful for the hard work everyone has done up to this point to draw attention to the PACT issues and resolve them.
Many opinions have been offered on this. I am in agreement with those who have argued:
PACT participants are contract holders, and the only acceptable outcome is for those contracts to be honored.
If anyone is able to get a first-hand account, photos, or videos from the meeting, I will be thankful for the reports. I will do what I can to attract attention to them.
I do not think it is good for anyone to have a protracted debate or a political fight about whether or not the contracts will be honored. I hope the board will clear this issue up at the meeting, and that the Legislature will follow up quickly as appropriate.
Regardless of the outcome of the board meeting, I think there is still plenty of work to do on this issue for anyone who wants to do it. I am planning to continue devoting a significant amount of my research and writing time to PACT. I will also continue to reach out to other people who are working on it.
Once we see what happens tomorrow and do what we can to shine a spotlight on the meeting itself, I’ll post my next steps in a diary here. I will update the PACT page , or add additional pages to the sidebar, and post diaries with new information at Left in Alabama as necessary.
I’m back to my 8-5 life now. That means back to blogging mainly in the evenings. I won’t be able to respond to communication or turn out posts as quickly as I have been for the last 10 days or so, but I am still paying attention to this. Still willing to devote a large part of my blogging time to it. Still trying to answer many of the questions we’ve raised.
I am hoping for a large crowd and a good decision at the meeting.
Cross-Posted at Left in Alabama
Filed under: Economy, Politics | Tags: Alabama, Alabama PACT, Banksters, Corporatism, Jamie Dimon
Jamie Dimon can’t understand why so many people hate corporate America.
That would be the same Jamie Dimon that some other geniuses who probably also don’t understand the hatred of corporate America are floating as a replacement for Geithner at Treasury.
Dimon is also two-time winner of the Corrente Bankster of the Day award, btw.
Real life stuff to deal with now. And anxiously awaiting news of the Alabama PACT board meeting tomorrow. If you are planning to go, you’ll want to read this discussion of some important open meetings issues.
Filed under: Community, Economy, Politics, Progressive | Tags: activism, Alabama, Alabama PACT, Alabama Prepaid College Tuition Program, PACT
Much better and more complete contact information than I’ve got, including phone numbers for most board members, is here.
And check out this phone list, too. Looks like state legislators to me.
You’ve got one day — TODAY! to call or e-mail these people and tell them to to hold up their end of the deal.
So. If you’re concerned about what’s going to happen on Tuesday, better get it done.
Filed under: Economy, Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid Affordable Tuition Fund, PACT
Sending letters is a good idea. I think calls, e-mails, and faxes are, too.
So here is some information I rounded up in case anyone would like to use it. A few words of advice:
1. Be polite, but be firm and to-the-point.
2. Let your officials know that you expect them to find a way to honor all PACT contracts.
3. If you think some of these people have been doing a good job on this issue, let them know you apprecate it. But be sure and get #2 across.
I pulled this information from official websites.
State Treasurer Kay Ivey
Telephone: (334) 242-7500
Fax: (334) 242-7592
Email: alatreas@treasury.alabama.gov
Lt. Governor Jim Folsom, Jr.
Phone: (334) 242-7900
Fax: (334) 242-4661
Contact page with staff information and e-mail form.
More numbers and e-mail for board members and state officials.
It’s a good idea to contact your state Representative and state Senator as well. Use this zip code finder if you are not sure who represents you in Montgomery.
E-mail address from the official PACT website:
alapact@treasury.alabama.gov
Want better coverage of this issue?
Here are some newsroom contacts:
And again, if you’ve seen people doing some good work already, let them know it!
If you have contact information for other officials or news organizations, leave it in a comment and I will post it as soon as I find it.
You have one day before the board meets to make your voice heard!
I looked for ways to contact Dr. Fitch and Mr. Byrne, but the best I can do in that department is point you to the contact pages for the Alabama Commission on Higher Education and the Alabama College System. - see that “more numbers for board members” link above for Dr. Fitch’s and Mr. Byrne’s phone numbers.
Filed under: Politics, Progressive | Tags: Alabama, Alabama PACT, Alabama Prepaid College Tuition Program, PACT
I posted the numbered comments on Facebook last week, and promised do do a better job elaborating in it. I’ll go point-by-point and provide specific links to explain them. I am happy someone asked for this, and I should have done it sooner.
Here’s what we’ve accomplished so far.
1. Done a better job covering the meeting in-depth than any news organization, either inside our outside the state, and posted several videos from the meeting.
Meeting coverage part1, part2, part3, part 4 and part 5. There’s more than 15 minutes of video scattered through those five posts. You can go straight to youtube for the video if you’d like to use it. Critique of the way the meeting was handled. Plus, I’ve posted a other things that used the material in these posts and linked to them.
Combine all this with items in #2 below, and I don’t see how any news organization has produced more or better coverage of this issue.
2. Analyzed the investment strategy to see what the problem is.
Basic analysis. Elaboration and some other issues.
Excellent series making a valiant effort to investigate how the money was managed. Now into its seventh installment. Just scroll down to part one and read them all in chronological order. Or follow these links:
My PACTs and Their Fictions
Part 3: Clueless Kay. And the Caymans
Part 4: DIY Investigative Journalism
Part 5 : Hitting Bedrock, or Why This Isn’t an Investment Plan
Part 6: What $3,926,219 Buys These Days
3. Covered the possible effect on the governor’s race.
Here, and it’s been an off-and-on topic of discussion practically any time we’ve mentioned Ivey, Folsom, or Davis.
4. Proposed solutions, and stated unequivocally that people who paid into PACT must get what they have paid for.
I was a bit hasty with that first part and worded it poorly. We had a discussion aimed at proposing solutions, and apologies if that was misleading. I was in a hurry when I posted it at Facebook. I have been in a hurry for three weeks now. There is plenty of evidence in the comments threads over at Left in Alabama that we are very concerned about finding a solution.
Unequivocal statement in boldface. I consider the first blockquote here to be unequivocal as well. I blockquoted it as a way of endorsing it. And plenty more of that in the comments threads and in the other stuff we’ve written over the past 3 weeks.
5. Attracted a lot of attention, including from some people in D.C. and other parts of the country.
I think it is fair to call this a lot of attention.
