DENVER The race for state treasurer will decide who gets to invest $6 billion of Colorado taxpayers money.
The incumbent Democrat, Cary Kennedy, says voters should return her to the job because she made money on Colorados investments even as Wall Street collapsed.
Her Republican challenger, Walker Stapleton, faults Kennedy for a lack of private-sector investing experience and her inattention to the risks of inflation. Colorado could have done better, he said.
I think shes maintained the status quo, Stapleton said.
The mix of bonds Colorado owns hasnt changed much since Kennedys Republican predecessors were in office, he said.
Not true, Kennedy said. She pulled out of a $2 billion investment with Morgan Stanley because she was worried that a third of the states investments were with a single bank. She made the change in late 2007, before the banking crisis.
Ive managed the states finances in one of the most challenging investment periods of the last 60 years, Kennedy said. I have been very conservative and disciplined in managing taxpayer money.
She turned down offers of higher returns for investing in derivatives or other risky ideas that backfired on many fund managers in 2008, she said.
Although inflation now is very low, Stapleton believes high inflation rates are on the way, and they will devalue the investments Kennedy has chosen, he said.
Kennedy said she already takes inflation risks into account, and if prices start to rise, the state can move into higher-return bonds.
A CEO and a school advocate
Stapleton holds out his private-sector experience against Kennedys career, which has revolved around the state Capitol.
(Treasurer) is not a politicians job. I have not spent a day of my life inside government, and she has not spent a day of her life outside government. Thats a huge difference, he said.
Stapleton has been the chief executive officer of Sonoma West Holdings since 2005. The small publicly traded company owns two light industrial parks in northern Californias wine country. It made a $1.9 million profit in 2009 from leasing space to tenants, which are mostly wineries.
Stapleton made $395,000 in salary and bonuses, according to the firms filings with the Securities and Exchange Commission.
Before Sonoma West, he was in charge of business development for Live365.com, and he worked in investment banking in the late 1990s. He also currently works as a real estate investment consultant in Denver.
Kennedy says her background is better suited to managing taxpayers money.
Its just a different type of investing, she said.
Kennedy began her career in former Gov. Roy Romers budget office, and she played a leading role in two of the states biggest ballot issues of the last decade.
She worked at the Colorado Childrens Campaign and wrote Amendment 23, which sets minimum funding for public schools. She was an adviser to Andrew Romanoff when he was speaker of the House, and she helped write Referendum C, which suspended the Taxpayers Bill of Rights for five years.
Without Referendum C, she said, the state would be an additional $750 million in the hole this year, on top of the $1 billion problem it has already.
Stapleton opposed Referendum C.
A difference in style
Beyond the nuts and bolts of investing, Kennedy and Stapleton differ on how the treasurer should act.
Stapleton believes the treasurer should be a critic of the Legislature and prepare his own analysis of how bills would affect the states bank accounts. He faults Kennedy for not speaking out against bills pushed by Gov. Bill Ritter and other Democrats.
I am not going to be a yes person in the treasurers office, Stapleton said.
Kennedy has used the post to continue her advocacy for public schools. She helped craft the Building Excellent Schools Today Act, which provided the states first investment in public school buildings. The school in Silverton got a BEST grant for remodeling.
She helped write a similar bill for colleges, which used money from gas drilling to pay for construction. Fort Lewis College used a grant to finish its biology building.
Stapleton has a famous family and comes from mixed political blood. His upbringing will help him work with Democrats and Republicans, he said.
His great-grandfather was Ben Stapleton, a Democrat who was Denvers longest-serving mayor. His mother is first cousin to former President George H.W. Bush, making Stapleton second cousin to President George W. Bush.
His father, Craig Stapleton, was co-owner of the Texas Rangers with the younger President Bush and served as Bushs ambassador to France.
Kennedy is quick to point out Stapletons connections.
Its the Bush family that provides his support base around the country, Kennedy said.
Kennedy actually had raised more money than Stapleton as of Sept. 20 $711,000 to $552,000.
Most of Stapletons donors live in Colorado, although he has attracted donations from the Bush network, including $500 from President George W. Bush himself.
Stapleton has put $214,000 of his own money into the race. Kennedy has received $10,000 in donations from the Service Employees International Union and Colorado Wins, a state employee union.