Alabama PACT Timeline: 1990 - 2009. Who Said (and Did) What - and When

by: countrycat

Thu Jan 14, 2010 at 12:53:08 PM CST

Who would believe that it was just a year ago that Alabama Treasurer (and candidate for governor), Kay Ivey, was touting Alabama's Affordable Prepaid College Tuition (PACT) program and encouraging parents and grandparents to invest?

Using her "folksy charm," Ivey told the Andalusia Chamber of Commerce banquet that they needed to buy more PACT contracts!

“There are 160 students in Covington County enrolled in the PACT program,” Ivey said. “Y’all have got mo’ chil’en than that,” she said, asking those present to encourage parents and grandparents to participate in the program.

What's happened to those "chill'en" enrolled in the program since then isn't so charming.

So, in honor of Cowgirl Kay Ivey, here's a recap of the PACT program's history.  Take a look and see if you agree with my assessment that Ivey and the PACT board are either totally delusional or just flat out lying when they blame the whole problem on the stock market fall.

Bradley Byrne's Bad Week Raises Questions About His Candidacy

by: countrycat

Fri Jan 08, 2010 at 15:52:39 PM CST

Former Democrat and GOP candidate for governor, Bradley Byrne, is widely considered to be the frontrunner for the nomination. (Danny at the Political Parlor says: "Favorite of the state's GOP establishment is still the one to beat.")

Yet Byrne has found himself pretty much beaten by the news cycle this week.  What's amazing is how self-inflicted the wounds are.  From PACT to the Bible, Mr. Byrne seems to be having trouble choosing a position and sticking with it.

Furthermore, he's proving to be a candidate who's not just full of what King Cockfight calls "gentle Caucasian charm," but a comparatively thinskinned one too.  You have to wonder how he'll stand up under the pressures of a hard-fought primary and/or general election.

It's been pretty amazing to watch Byrne pull off a political hat trick and alienate these three important constituencies... all in one week:

• Approximately 45,000 PACT contract holders, their families, and friends.
• The Biblical inerrancy crowd that seems to form the base of Alabama's Republican Party.
• His own hometown paper - the Mobile Press-Register.

"When You Make A PACT...." Who'll Keep Alabama's PACT Promises?

by: countrycat

Wed Jan 06, 2010 at 15:51:08 PM CST

Just how committed is former PACT board member Bradley Byrne to the Prepaid Affordable College Tuition program?  How committed is present Treasurer Kay Ivey?  (ASK HER!  She's hosting the Dale Jackson show on WVNN in Athens (92.5 FM -  1-866-494-WVNN) from 6-9am tomorrow morning!)

Mooncat asked this question when she blogged about Byrne's contention that a "moral obligation" is "more important" than a legal obligation. Oh really?  Hey, I can't wait to go to court and ask the judge to enforce someone's "moral obligation" to me.  How about you?

Now, other candidates for governor and other statewide offices are asking the question that many PACT contract holders asked when they saw Byrne's comment:

"Just how committed is Byrne to PACT?  If there's no legal obligation, what recourse to contract holders have?  Are they to be dependent solely on Byrne's good will if he's elected governor?"

Candidate for Alabama Treasurer, Jeremy Sherer, is unequivocal in his support:

“The recent actuarial study conducted by the Retirements System of Alabama found that Alabama had a legal obligation to honor all PACT contracts. Further the RSA reported that any compromise of PACT contractual benefits would amount to a breach of contract, resulting in litigation that the State of Alabama would likely lose. I share RSA’s opinion, and believe that today’s decision by the PACT Board is a step backwards in solving PACT”.

Now, Congressman Artur Davis has weighed in and is urging voters to sign a petition urging Bradley Byrne to keep his promises:

Alabamians need to know we can trust our government. Bradley Byrne, show that you understand our legal responsibility to uphold Alabama's promise to the 48,000 families whose children need PACT money for college.

Byrne will no doubt try to write off this effort as "politics," but it's "politics" that's going to resolve this issue.  His statements about "no legal obligation" call his support of PACT into doubt and he shouldn't whine when people criticize him for it.

Davis' press release is on the flip.  Ron Sparks hasn't issued a statement, but his speech to the Save Alabama PACT group in August had a succinct, "veni vidi vici" rythm to it:

"You paid for it.
You ought to get it.
It's that simple."

Yes it is, Commissioner!

Alabama PACT reaction story featuring Jeremy Sherer

by: lawdog

Wed Dec 30, 2009 at 13:53:38 PM CST

Here is a link to a story that aired on WHNT last night featuring the reaction of Jeremy Sherer to the "thief in the night" Alabama PACT deal that recently was approved by the PACT board:

Here is the Link: http://www.whnt.com/videobeta/watch/?watch=faf052c9-8aaf-489b-b5ab-5a91c32e1a03&src=front

note: a transcription is on the flip for those who can't get the link to work. 

In it, Sherer points out what we at LIA and other blogs have been saying for a long time.  This isn't "just" a stock market issue.  The PACT board didn't adequately manage the program and the stock market is their excuse.

Sure would be nice to read that from Alabama newspapers, the AP (I'm looking at you, Phillip Rawls!), or TV stations.  With the exception of Bob Lowry, most have just re-written Kay Ivey's press releases and called it "reporting." Glad to see that WHNT is giving some coverage to it and to Sherer.

Kay Ivey's Committment to PACT and Government Transparency Is A "Transparent" Lie

by: countrycat

Tue Dec 29, 2009 at 17:09:42 PM CST

Under Kay Ivey's "leadership," the Alabama PACT Board met today for a "special" meeting at 8am in Montgomery.  The Alabama PACT Board voted to change the terms of every existing PACT contract in a way that will cost the average university student at least an extra $500/semester beginning in the fall of 2010.

Under Kay Ivey's "leadership," this change was made with no notice to the PACT parents and students, no notice to the press, and no notice to those candidates running for governor and state treasurer.  

This is the "leadership" and committment to transparency that Treasurer Kay Ivey promises to bring to the state if she's elected governor. Or, if you prefer... it's PACT 2.0: Piss Away Citzens' Trust in Alabama's government and institutions."

There are so many things to criticize about this that it's hard to pick just a couple, but let's hit the high points first:

• The meeting notice wasn't posted on the Alabama PACT Web site.  It's there now.  It wasn't yesterday.  And you'll LOVE the reason Cowgirl Kay Ivey gave for that...
• This important meeting was held between the Christmas and New Years' holidays when most folks are on vacation or relaxing with the family.
• At least one PACT board member didn't know about the meeting as late as last night.
• Inexplicably, the PACT board voted to change the terms of the PACT contracts - in such a way that immediately gives hundreds, if not thousands, of PACT contract holders standing to sue the PACT board for breach of contract.  'course, they probably aren't worried for themselves.  Remember, they bought themselves liability insurance (paid for out of the PACT operating funds) in 2004.

All this is brought to you by Cowgirl Kay Ivey, who promises to do for the State of Alabama what the did for the Prepaid Affordable College Tuition program.  Note that first word in that title:  PREPAID.

In Kay Ivey's view, that is just another example of her committment to "transparency in government."  It fades away over time until it means absolutely nothing.

Stay tuned.  On the flip, we'll cover the following:

1. How the meeting was called.
2. What happened.
3. How this changes the equation.
   
4. Why take this action now? 

Jeremy Sherer Responds to Kay Ivey's PACT Proposal

by: countrycat

Wed Dec 02, 2009 at 08:37:09 AM CST

In a statement released yesterday, Jeremy Sherer, candidate for Alabama Treasurer, criticized Kay Ivey's so-called "Kay Ivey Partnership for PACT." 

"I am pleased that after more than a month from when State Representative Greg Wren’s proposed legislation guaranteeing PACT contracts was first released that Treasurer Ivey has decided to support the 45,000 PACT families that the proposed legislation protects”.

“Treasurer Ivey’s additional statement, regarding the apportionment of PACT funds among colleges and universities for their reserving of enrollment for PACT students, lacks substance. Ivey’s proposal relies on the altruism and generosity of universities to assume the full financial burden caused by PACT’s mismanagement under Ivey’s administration. In no way do Ivey’s proposals provide any financial solution for PACT, it merely passes the buck.”

I'm with Sherer on this one. Instead of calling the plan her "Kay Ivey Partnership for PACT" it would be more descriptive to call it "Kay Ivey Punts PACT." (Who names stuff after themselves anyway?)

Just who is she planning to "partner" with anyway?  Most of Alabama's colleges and universities have shown absolutely no inclination to work with Save Alabama PACT, the Treasurer's office, or the Legislature. 

In fact, University of Alabama officials have flatly told Save Alabama PACT leaders that they "don't care" if they lose PACT students becuase those slots could be filled by students from out of state who bring in more revenue.

However, Ivey acknowledged the universities and colleges could not be forced to go along with the proposal. "There is no forcing anybody," Ivey said. Ivey said she hoped the universities and colleges would be wiling to discuss her ideas.

Unless she's totally delusional, Ivey has to know that this proposal is dead on arrival at Alabama universities.  Even her proposed bribe of the ever-dwindling PACT money won't be enough.  

Jeremy Sherer's entire statement is on the flip:

"Where's The Accountability?" In the Alabama PACT Program, It's Well... Missing

by: countrycat

Tue Nov 10, 2009 at 11:01:15 AM CST

At the Save Alabama PACT meeting last Wednesday (11/4) after the PACT board meeting, Treasurer Kay Ivey faced tough questioning from parents about why the PACT board sat for 7 months in 2008 and watched the fund ride the stock market all the way to the bottom.

The parents' anger and disappointment wasn't a surprise, but Ivey seemed completely unprepared for the tough questioning.  And it's no wonder: the Alabama media has pretty much given her a pass.  I haven't seen a single interview or news report that asks the tough questions or confronts Ivey's version of PACT fantasyland.

Instead, it's left to parents to state the obvious:

"When you lose 50% of a fund, you've lost a heck of a lot of money and most of us were smart enough to go: 'Hey! I'm going to stop this bleeding.  I'm going to get me a band-aid and put it in a money market.' 

But we went seven more months like that with your board of directors.  We need somebody who's accountable for that money before the seven months goes by."

The media hasn't asked the hard questions; they've left it up to parents to ask.  They didn't even stay for the entire meeting; just skedaddled off to dinner and deadlines. Wouldn't it be cool to have a reporter from the Birmingham News pursue the PACT board with the same zeal as they have other elected officials?

The PACT board - particularly Kay Ivey - tries to deflect these questions and blame the stock market, blame the economy, blame anybody or anything except their own mismanagement.  They want us to look to the "future" and to "solutions."  Yep.

We need solutions, but it's hard to solve a problem when you don't have a firm handle on what caused it.  And it's even more difficult when the people in charge don't seem to want the whole story to become public.

Why the tapdancing Kay? If nobody did anything wrong, then there's no reason to block Davis, Sparks, Sherer, an others' calls for a full audit.  Unless, of course, you're afraid that accountability in the PACT program might uncover some uncomfortable truths about your role in the meltdown.

Video of the parent takedown of Ivey is on the flip.  It's well worth the 2 minutes to see concerned citizens angry about real issues that affect the state and their children.  But not just angry:  demanding real answers and not doubletalk from their representatives.

Alabama PACT Meltdown: Mismanagement or Malfeasance? More Demands For A Special Audit To Find Out

by: countrycat

Fri Nov 06, 2009 at 17:09:23 PM CST

After the PACT board's March 24 board meeting, Congressman Artur Davis rebuked the board for its poor performance and called for a special program audit:

I would also renew my call for a special audit that answers the hard questions of how Alabama families were left in this predicament.

In a press release today, Agriculture Commissioner Ron Sparks upped the ante with a call for a "forensic audit" of the PACT program.

"I am calling for a full forensic audit of the PACT investment program," Ron Sparks said. "If people unlawfully made money off the backs of thousands of Alabama families who invested in the PACT program, it's time to go get our money back."

Now, many people (including me!) have alleged that the Prepaid Affordable College Tuition program lost money money due to the incompetence of the investment managers and oversight failure of the PACT board.  But this is the first time I've heard any allegations of deliberate criminal activity.

Alabama Treasurer candidate, Jeremy Sherer, warns against using criminal investigations "as a political tool," but agrees that a forensic audit is a good idea - as is an investigation should the facts warrant one:

We've seen too much of that in our politics. Alabama legal authorities should constantly operate in a state of due diligence to prevent abuse of power and corruption. However, if any information of substance is derived from the SEC investigation that might relate to PACT financial operations, state authorities most certainly should investigate any potential wrong-doing. 

More about this issue on the flip - including my personal impressions of Mr. Huff from seeing him in action at PACT Board meetings.

Alabama PACT Board Meeting Report - Observations & Video You Won't Get From the Local Media

by: countrycat

Thu Nov 05, 2009 at 13:22:00 PM CST

Alabama's troubled Prepaid Affordable College Tuition board met yesterday to discuss the health of the program, review investments, and discuss working with the Alabama Legislature to fix the program.

Immediately following the meeting, members of Save Alabama PACT met to plot strategy and hear from Lt. Governor Folsom, Treasurer Kay Ivey, and the three announced candidates for Treasurer: Jeremy Sherer (D), Charles Grimsley (D) no Web site yet , and George Wallace, Jr. (R).

Although the PACT board meeting was "packed" with TV and print reporters, most drifted away quickly after Lt. Governor Folsom addressed the Save Alabama PACT meeting.  Lacking the deadlines (or dinner plans?) of traditional media, Mooncat and I stayed throughout the meeting and got excellent footage of the treasurer candidates and even got the chance to grill Cowgirl Kay Ivey on her lackluster performance managing the program.

News accounts in today's papers are rather, well, dry.  Not to mention short.

Bob Lowry covered the meeting for the Huntsville Times and Stan Diel was there for the Birmingham News. (Note: I'm not criticizing the reporters who sat through the entire meeting, but rather the editors who don't give them enough space to adequately report what they saw.)

Want more?  On the flip, we have video and turn a rather more acerbic eye on the proceedings, players, and decisions made.

Alabama PACT: One Step Forward & One Step Back

by: countrycat

Fri Oct 23, 2009 at 11:16:28 AM CDT

Alabama's troubled Prepaid Affordable College Tuition (PACT) program was in the news yesterday as some legislators search for ways to fix the program. 

Representative Greg Wren (R-Montgomery) held a press conference yesterday to announce a package of PACT-related bills:

State Rep. Greg Wren plans to introduce a three-bill legislative package that, if passed, would make it state policy to honor all of the existing 48,000 PACT contracts.

[...]

Wren's package would also redesign the PACT board, make that board report to the state Legislature on an annual basis and report to a new 25-member advisory task force on a quarterly basis. The task force would include legislators and two PACT contract holders from each of the seven congressional districts. Legislators also would serve on the new PACT board.

That's the good news.

The bad news? Huntsville Times reporter, Bob Lowry, covered the State Board of Education meeting yesterday:

The state Board of Education Thursday approved tuition increases of 19.7 percent for all of Alabama's two-year community and technical colleges. 

As the four-year colleges and universities have increased tuition at rates approaching 10% per year (or more!), the community colleges and two-year colleges have been been the only bright spot as PACT writes tuition checks for contract holders.

On the flip, Alabama Treasurer candidate, Jeremy Sherer, shares his thoughts and Kay Ivey changes her tune and welcomes PACT contract holder involvement!

Cowgirl Kay Still Delusional on Alabama PACT. Jeremy Sherer Is Facing Facts & Offering Solutions

by: countrycat

Fri Sep 11, 2009 at 15:56:35 PM CDT

Cowgirl Kay Ivey is at it again. Her delusions of support from Alabama PACT parents and students were on full display last May:

"...I was deeply gratified to hear from those in attendance time and time again, "Kay, you concentrate and work hard for a solution for PACT— we’ll all be waiting here for you at the time you decide to move forward with your plans for 2010."

But now, we find in this news item (titled "PACT 'Going Fine' State Treasurer Says") from the Shelby County Reporter that she's decided the rewrite the history of the Alabama PACT program debacle.  Surprise!  She's not responsible:

“The fact is, the market just damaged every investment company there is,” Ivey told the group. “The market just hit everyone. An RSA (Retirement Systems of Alabama) study showed there was not mismanagement of funds or anything like that.”

No, nothing like that Cowgirl!  Just a PACT board that was warned in 2005 that the program wasn't financially viable and an Alabama Treasurer who glossed over concerns about the PACT program to get re-elected. 

Democratic candidate for Alabama Treasurer, Jeremy Sherer, was quick to respond.  He's a nicer person than I am, because he didn't recommend either resignation or medication:

“I think she is more focused on running for governor than upholding her responsibilities as treasurer right now,” Sherer said. “There were unsound investments made by the PACT board while the economy was tanking.”

The treasurer candidate also blasted Ivey for what he said were overly conservative investment practices over the past few weeks.

“It’s just bad financial management during bad economic times. She is not utilizing her due diligence in managing those investments,” Sherer said. “Now, when she should be capitalizing on the rising economy, she is playing it conservative.

“The next treasurer will be a stakeholder in PACT, and will have to work hard to manage those investments,” Sherer added. “But none of those are topics she is talking about right now.”

Sherer's entire statement on Kay Ivey and Alabama PACT is on the flip.

Jeremy Sherer Offering Commonsense Solutions For Alabama PACT Program

by: countrycat

Tue Sep 01, 2009 at 15:30:00 PM CDT

One Alabama state treasurer, Kay Ivey, helped break PACT. One Alabama Democratic candidate for Treasurer, Jeremy Sherer, is working on solutions to fix Alabama's Affordable Prepaid College Tuition program.

In an open letter to PACT contract holders, he discussing the following issues and possible solutions:

• The State of Alabama must reassure parents and students that tuition will be paid.  Sherer: "I say this because at the moment, tuition payments are only guaranteed by PACT through spring semester 2010. I firmly believe that PACT families deserve more certainty regarding their children’s college future than that."
• Cut the administrative costs for PACT and make better investment decisions.  We're paying almost $2 million each year to these investment "manager" who advised the board to "stay the course" last year as the market bottomed out.  Countrycat's side note: Our investment advisor moved us out of stocks last summer and we lost less than 10%.  And he charged a LOT less than $2 million/year!
• Don't try to rush a solution.  With the shaky economy and state budget crisis, we need to carefully design a long-term solution.
• The Oil & Gas Trust Fund shouldn't be our first stop.  It funds Medicaid, the general fund, and other state programs.  Sherer: "I do not believe that taking funds from the O&G TF is a moral or politically viable solution for PACT."
• Alabama's Unclaimed Property Fund.  Sherer: "The Unclaimed Property Fund is now valued just short of $400 million. I believe we can siphon money from this fund, to help restore PACT investments."
• Get some cooperation from state colleges.  Sherer: "The best way this can be done is by the state legislature giving stable, predictable funding to our higher education institutions."
• Flexibility is critical. Sherer: "...state leaders must also appreciate that the best source of revenue in 2012 might not be the best source of revenue in 2020."

Wow.  Someone who's giving this careful thought, considering the best solutions, and not looking for a "quick fix" that will help him/her get elected, but could hurt the long-term viability of the program.

That's a candidate I can support.  For too long, PACT has been used by candidates to help them get elected or re-elected.  This is the case even when other candidates were questioning the program's financial viability, even when actuaries where warning that the program was unsound, and even when the PACT board itself knew in 2004 there were financial problems.

What happened to Ivey and company is that they didn't expect the huge market downturn last year.  They all knew there were structural problems in PACT, but they seemed very far away and so Ivey, Byrne, even Folsom seemed willing just to kick the can down the road and leave the problem for someone else.

Jeremy Sherer though, knows what he's getting into and is working for real solutions, not just sound bytes.  He has the vote of this PACT parent!

Sherer's entire press release is on the flip.

Cowgirl Kay Ivey Wins the Yellow Badge of Courage at Save Alabama PACT Meeting

by: countrycat

Fri Aug 21, 2009 at 15:23:02 PM CDT

Cowgirl Kay Ivey should have bought her six-gun to Wednesday's meeting of Save Alabama Pact.

After the PACT board declined to discuss the RSA study of the PACT trust fund's financial situation at Wednesday's meeting, Ivey attended the "meeting after the meeting" with worried PACT contract holders.

Ivey was number 4 on the list of gubernatorial hopefuls who spoke - after Congressman Artur Davis, Agriculture Commissioner Ron Sparks, and former 2 yr college chair (and PACT board member), Bradley Byrne. Reporter Bob Lowry from the Huntsville Times noted the "political turn" of the discussion. Jeremy Sherer, who's running for Treasurer, also spoke to the group.

Like the other candidates, Ivey pledged to work to keep PACT solvent, and - as Mooncat noted - probably made points with the crowd just by having the nerve to show up. What a brave cowgirl she was!

Things went well for her until the questions began. It was soon obvious that Ivey prefers to speak to a crowd, not talk with voters.  It wasn't quite a gunfight at the PACT corral, but she certainly did quite a dance trying to dodge the lassos of PACT parents who want her to include a blurb about Save Alabama PACT in future PACT mailing.  It's the only way, organizer Patti Lambert, explained, to get the word out to all 48,000 contract holders.

Without the combined voice of those thousands of parents, grandparents, students, their friends, and families, there may be no chance of the Legislature acting quickly enough to save the program.

Watching her desperate attempts to dodge the question, I was reminded of the song in "Best Little Whorehouse in Texas" where the governor danced about singing:

Ooh, I love to dance the little sidestep / Now they see me, now they don't / I've come and gone / And ooh, I love to sweep around a wide step / Cut a little swath / And lead the people on! 

The Kay Ivey sidestep video is on the flip.  Watch to see how much MORE concerned she seems to be about the reputation of the PACT board's attorney than she about the program.  AND read excerpts from Jeremy Sherer's statement about the PACT meeting and parents' request for help.

Want To Be A Frequent Flyer? Auburn University Has An Opening For A New Trustee!

by: countrycat

Fri Aug 07, 2009 at 16:26:25 PM CDT

Auburn University is accepting applications for an opening on its frequent flyer club board of trustees!

Applicants must be a resident of the district and less than 70 years old at their time of appointment.

The Auburn Board consists of one trustee from each congressional district as they were constituted in 1961, a trustee representing Lee County, three at-large trustees and the governor as an ex-officio member.

Candidates can submit applications to Auburn University Trustee Selection Committee, Attn: Grant Davis, 105 Samford Hall, Auburn, AL 36849.

Now kids, this is a cushy gig.  As you may remember, back in March, the Huntsville Times reported that the university had spent almost half a million dollars flying trustees and university officials around the country (including good old Tunica, MS) and around the state (most notably from Auburn to BIRMINGHAM - 14 trips) on private jets.  Most of which belonged to the athletic department.

Well hell, at least some department at the school is well-fixed for funds.  Because, as a PACT parent, it's hard for me to keep from gagging when university officials poor mouth about funding and tuition, when we know that they spend more time in the air than the average migratory bird.

I'm thinking that I should apply!  As an almuna, I could bring an interesting perspective to this whole issue.  AND, I've served on numerous statewide boards and never expected to be flown to meetings - or even be reimbursed for travel expenses.  Maybe Auburn can take my share of the flight $ and apply it to my daughter's tuition in 2012.

Follow me on the flip for an interesting story about this report that explains a lot about the mostly sorry state of journalism in Alabama.

Can the Alabama PACT Program Be Saved? Maybe, Says RSA

by: countrycat

Wed Jul 29, 2009 at 07:57:55 AM CDT

From the Florence Times Daily:

The state can likely save the limping Prepaid Affordable College Tuition program, a high-ranking state investment official said Monday.

Retirement Systems of Alabama Deputy Director Marcus H. Reynolds said he bases his opinion on results of a study of the program's finances and future projections by an actuarial firm.

But the deal is not done yet.

"It is going to take a collective effort to solve this, but it is do-able. We didn't know before if it was possible," Reynolds said. "It won't be easy, but there is a possible solution. We got some good numbers from the actuarial study that make us think it can be done."

I'm intrigued by the RSA acturial study, because the reports the PACT Board has gotten from their actuary over the past 5 years have been filled with more doom and gloom than one of Jeremiah's (the prophet) sermons.

So PACT maybe can be saved?  GREAT!  But there's a catch - a big one:

Reynolds said a successful plan for PACT hinges on Riley, the Legislature and representatives of K-12 and universities reaching mutual agreement on a plan.

Oh Lord.  We'd depending on the Legislature and a cash-starved University system not inclined to be cooperative.

Cowgirl Kay Is Bucking For A Promotion!

by: countrycat

Sun Jun 21, 2009 at 16:54:03 PM CDT

Alabama State Treasurer Kay Ivey will formally announce her candidacy for governor on Wednesday.  (Which is, darn it, the day we have to drive to Mississippi to deliver our daughter to camp.)

She'll be herding the local press corps in Montgomery, Birmingham, Huntsville, and Mobile and trying to lasso supporters.  I wonder if any PACT parents will show up to kick up a fuss.  Can you say OK Corral?

I just can't wait to see what her campaign slogan might be.  Remember, this is the cowgirl who was minding the stable when the PACT trust fund broke broke down its stall and headed for the Cayman islands parts unknown. Unbelievably, she's planning to stress her "hands on experience in finance and budgets" in the campaign.

Brian at FlashPointBlog plays the Kay Ivey word association game:

• PACT
• PACT
• Ponzi scheme
• PACT
• Cheryl Baswell Guthrie
• PACT

I'd add one more:  Delusional.

Alabama PACT Board Bought Themselves Some Liability Insurance In 2004

by: countrycat

Sat Jun 13, 2009 at 13:45:00 PM CDT

The way things are going, they may need it!

At their 4/8/2004 meeting (page 9), the PACT board approved a motion for the purchase of liability insurance for the board.

Treasurer Kay Ivey "...informed the Board that coverage could be provided for less than $100 per year per member" through the General Liability Trust Fund.

This General Liability Trust Fund is an interesting beast. The insurance is defined as:

36-1-6.1 Insurance coverage for negligent, wrongful acts of state employees or agents, including foster parents and adult foster care providers; duties of Finance Director; self-insurance; service of copy of lawsuit on Attorney General; costs of insurance.

I'm sure that this is standard for the board members of many state agencies.  But I was struck by the timing.  The PACT Board decided they needed liability insurance just a month before PACT parent, Dale Goode, asked them to take steps to strengthen the program and got rebuffed.

Could their sanguinity have had anything to do with their newly "protected" status?

The Cowgirl Speaks: Kay Ivey & Those "Emotional PACT Contract Holders."

by: countrycat

Thu May 28, 2009 at 15:21:24 PM CDT

Alabama State Treasurer, Kay Ivey, sent an long, rambling, and - dare I say it? - delusional email to supporters on May 27th (surprise!  I didn't get one!) about her plans to run for governor.

 h/t to Danny at the Political Parlor - he has the full text

I have more hands-on experience and knowledge of the state’s finances and budgets than any other announced candidate or soon-to-be-announced candidate. We have some serious challenges and shortfalls to address and manage in the future. Don’t we need someone with expertise on "Day 1" available to tackle the financial problems rather than someone who will require on-the-job orientation? I submit to you that we do.

THIS IS HER PLATFORM?  EXPERTISE IN MANAGING FINANCES?

Kay, Kay, Kay... we already know how you tackle financial problems.  But we need someone competent running the state government!

Follow below the fold for more, well, delusion.

"What Do Parents Think They're Buying?" Alabama PACT Board Discussed This At Meetings

by: countrycat

Tue May 26, 2009 at 15:47:53 PM CDT

In 2005, the Alabama PACT board modified the disclosure statement to put it in a "more friendly presentation by using bold type, space between important paragraphs and that sort of thing..."

The goal was to make it clear that "obligations are limited, payable only from proceeds received on contract sales and earnings from investment. [sic]"

These quotes are taken from the 4/15/2005 PACT Board meeting (page 26 of the 2005 minutes).  It sounds like they're really concerned with full disclosure.  But, three pages later, board member Ricky Jones asks:

"Do people really look at the return on this program, or do they look at the idea that they know they'll have their college paid for?"

MR. SHERLING:  "I think it's the latter.

MS. MOORE:  "I do, too."

MS. EMFINGER: "That's absolutely true.  They're looking to see that once they've made these payments, they don't have to worry about whether or not they're earning 5 percent, 4 percent, 10 percent, or 15 percent.  They just know that if they make their payments, at the end of the day when it's all said and done, their child is going to have their tuition paid."

MS. MOORE: "I think that's why it's important that we did that disclosure in bold at the first of the Rules, that we're not misleading anybody.  That is the psychology of why they're buying it.  But the fact of the matter is, it's not a guarantee.

hmmm... did the new disclosure work?  Because there was absolutely no discussion at that meeting about changing the way the program was marketed or changing the name from, well, PREPAID COLLEGE TUITION to something more descriptive like the "Pay Us Now & Maybe Your Kid Can Go To College Unless We Screw Up Savings Program (PUNAMYKCGTCUWSUSP).  Hmmmm... that's a long acronym.  Let's just call it PUNY for short.

More about what the PACT PUNY board knew - and what they told contract holders on the flip.

Actuary Warned Alabama PACT Board in 2005 That Program "Not Viable" - He Didn't Get the Job

by: countrycat

Fri May 22, 2009 at 15:06:04 PM CDT

At its August 24, 2005 meeting, the Alabama Pact Board interviewed three candidate companies who had applied to provide actuarial services to the board.

The three firms interviewed were: Actuarial Resources, Milliman, and Buck Consultant.

The presentation given by Mr. Bill Reimert of Millman (Agenda Item IV. A. (3.) is jaw dropping:

Mr. Reimert discussed information about his firm.  He then called the Board's attention to his presentation concerning the current PACT trust fund deficit.  He stated that he was concerned about the 9% rate of return assumption and discussed his thoughts on the future of prepaid programs in general.  He discussed his belief that the programs were not viable without full faith and credit or some other backing.  

Read it for yourself in the minutes!

Surprise!  He didn't get the job....

But the man is hardly a slouch as an actuary.  Read his bio... gee... he can look at my books anytime! Unless, of course, I don't want to know the truth.

And this is certainly not the only warning the board received.   Learn more on the flip...