How do you make a case against an incumbent when most people don’t know his job description?
That’s the challenge facing Diana Irey Vaughan, a five-term Washington County Commissioner and the Republican challenging incumbent Pa. Treasurer Rob McCord.
Thursday, she unveiled a detailed policy platform that she says will put Pa. on the right track to deal with its growing pension burdens.
The Treasurer’s most important job is managing Pa. financial assets, and the biggest piece of that is the state pension fund.
The essential criticism Irey Vaughan offers is that Pa.’s pension obligation has only grown during McCord’s tenure. That’s a problem inherent in the system as more and more pensioners retire. But McCord is making it worse, she says.
Her paper points to a New York Times article from April 2012 which compared the pension management of Pa. and Georgia:
The $26.3 billion Pennsylvania State Employees’ Retirement System has more than 46 percent of its assets in riskier alternatives, including nearly 400 private equity, venture capital and real estate funds.
The system paid about $1.35 billion in management fees in the last five years and reported a five-year annualized return of 3.6 percent. That is below the 8 percent target needed to meet its financing requirements, and it also lags behind a 4.9 percent median return among public pension systems.
In Georgia, the $14.4 billion municipal retirement system, which is prohibited by state law from investing in alternative investments, has earned 5.3 percent annually over the same time frame and paid about $54 million total in fees.
“It’s no wonder Pennsylvania continues to make big bets on alternative investments,” her campaign says. “Rob McCord is a former venture capitalist, private equity investor and investment broker. He is managing the state’s resources as if he were still managing a risky Wall Street venture capital portfolio.”
McCord campaign spokesman Mark Nevins said Irey Vaughan was not credible on fiscal issues.
Just today, the Washington County Observer-Reporter reported that the County faces a $5 million budget shortfall, despite a 3.5 mill property tax increase supported by Irey Vaughan
“Diana Irey Vaughan is a career politician who voted to increase her own pay while raising taxes on Washington County residents. And this is what happens when a career politician tries to come up with a plan for an important office like the treasury – you get a plan with no credibility,” Nevins said. “This plan has no business sense.”
“She sees everything through a political lens because that’s all she’s ever known. Treasurer McCord, by contrast, is a business leader. He sees things from a business perspective. In these difficult times, we can’t risk letting a career politician take control of the treasurer’s office.”
McCord boasts that he’s helped earn $1.4 billion in revenue for the state as a return on investments made during his tenure. He also notes that Pa.’s college savings program is now 98 percent funded, up from 70 percent when he took office. The office of Pa. Treasurer is also far more efficient under his leadership, he says. He’s cut his office budget by 22 percent, reduced workforce by 19 percent, and reduced overtime hours by 73 percent.
More accomplishments are spelled out on his campaign’s website.
As if campaigning for an obscure office isn’t already tough, she’s at a huge disadvantage when it comes to fundraising. At the end of the most recent reporting period in September, she had about $26,000 on hand to McCord’s $2 million.
Obscure candidates typically must ride the coattails of the top of the ticket; in this case, Barack Obama v. Mitt Romney. Add in a few TV ads for McCord, and Irey Vaughan has a steep uphill climb. Without a significant surge in the GOP’s favor between no and election day, she is a long shot.
What does it mean in the long run? McCord is the first name mentioned as possible contenders for Governor against Tom Corbett in 2014. At least Republicans can take heart in the fact that any campaign cash McCord is forced to spend this year is money he won’t have next cycle.
Here’s Irey Vaughan’s full plan: