A bill was placed on the docket to change Delaware Law.  It was supposed to slip through the last minute when no one was watching.    That is Blevins SB 151 regarding the Treasury…   Since it was a surprise, a lot of hoopla as been thrown  in the fire by pundits reacting to the impact of first impressions.   In their defense that was all they had to go on…

Due to time constraints this investigation will take a series of small steps, probably spread across Delaware’s official blog circuit, with help from Starkey of the News Journal…

But to back up the word coup in my title,  I first want to show you how the original language was written then show you how it looked with the changes after SB 151.  Of course this was stated as necessary to keep the state treasure in line, a ploy that El Som and Cassandra seem to have swallowed hook, line and sinker.

First the original bill:

For those who follow along (you all are great) here is the passage number  Title 29; 2716(a)(2)

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(1) Require as a condition to any deposit of such funds in any state or national bank or savings and loan institution that such deposits be continuously and fully secured by direct general obligations of or obligations the payment of the principal and interest on which are unconditionally guaranteed by the United States of America or other suitable obligations as determined by the Board;

(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis; and

(3) Require that temporary clearing accounts as well as major disbursement accounts be established in a bank or banks whose principal office is located within the State.

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That was the original piece of legislation.  Patty’s bill seeks to amend the section 2 of that piece, the embolden area.  From SB 151…

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(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis as defined by the Board.; It shall be the responsibility of the Board to approve the selection of each of the said financial institutions by a majority vote of the members of the Board. The Board, by a majority vote of its members, shall be responsible for setting the policy as to the allocation between short and long term investments and the allocation of funds to the respective financial institutions selected through the open and competitive process; and

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Notice a “lot” of new language. In the synopsis this was sold as a clarification of the responsibilities of the board and the trimming of the responsibilities of the Treasurer. Instead, in what is now typical Markell modus of operandi, this if more of a surreptitious law-change than a clarification.

Previously the directive was this should be done in on an open and competitive basis. The previous directive specifically states this further down: 2716 (e)(1)

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The investment of money belonging to the State shall be made by the State Treasurer in accordance with policies established by the Board and subject to the terms, conditions and other matters, including the designation of permissible investments relating to the investment of the money belonging to the State,

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It is obvious to all that the existing law separates the Treasurer specifically out from all other board members when it comes to the investment of the state’s finances.

And that was really all existing code says in regards to the investment portfolio of the state’s money.

But, the new law, the one proposed by Blevins titled SB 151, makes HUGE changes. Now the board must make that decision. The board which according to Title 29; 2716(c)(4):

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The Board shall meet as often as shall be necessary to properly discharge its duties; provided, however, that the Board shall meet at least 2 times annually; and provided further, that the State Treasurer or the Chairperson of the Board shall be authorized to call special meetings of the Board.

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and 2716 (c)(2)

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a quorum of 5 members shall be necessary to hold a meeting of the Board.

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and 2716 (d)(5)

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The use of teleconferencing or videoconferencing is authorized for use in conducting meetings of the Cash Management Policy Board.

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Even now under existing policy only 3 people out of nine, if they time their conference-call correctly, can decide the future investment strategy of this state. Patty Blevin’s law would now give those three people (whomever they might be) unprecedented power and remove the current oversight of the only elected official responsible to the public.

“Coup” is the proper term for it.