Has Shane Osborn Proven That Nebraska Doesn't Need A State Treasurer?

by: Kyle Michaelis

Wed Mar 10, 2010 at 22:10:22 PM CST

On Tuesday's first round vote by the Legislature, LR 284CA received support from 37 State Senators - well more than the 30 needed to put the question to the voters.  Registering as "present but not voting" was State Senator Tony Fulton of Lincoln, one of three candidates running for the Republican nomination for the office.  He'll face former Attorney General Don Stenberg and former State Patrol commander Tom Nesbitt in the May primary, with the winner of that contest likely to face Democrat Mark Stoj in November.  If support holds for the resolution in the Legislature, voters will not only be choosing their next State Treasurer in that election but will also be deciding whether he will be their last.  

The one conosolation for these candidates is that the winner should at least be assured a full term in office.  As originally introduced, the proposed amendment would have taken effect on January 1, 2013. That has since been amended so the State Treasurer would remain in existence until January 8, 2015.  

Still, the question remains why Nebraska should abolish this office.  From Utter's statements and those of other supporters of the resolution, it primarily has to do with efficiency and cost-savings.  There's also been talk that eliminating State Treasurer would result in even more consolidation of power in the hands of the Governor.  This could also mean more accountability resting with the Governor, with less opportunity for shifting blame - at least, in theory.

According to the Omaha World-Herald, three attempts were made to eliminate the State Treasurer's office in the 1990s.  However, it wasn't until now that the proposal has had any real chance at passing. So far, there's been no public discussion of Shane Osborn's record as Treasurer having anything to do with the growing support for eliminating his position.  But, just because it hasn't been said doesn't mean that it's not a factor with State Senators and that it won't be one with voters.

Osborn never made any attempt to hide that he perceived this office as a political stepping stone, hoping to follow the lead of former State Treasurers Dave Heineman and Kay Orr, who both went on to serve as Governor.  However, while Osborn's term has not been so disastrous as that of Heineman-protege Lorelee Byrd, it's certainly raised enough questions about his dedication, leadership, and decision-making to hurt his political future - and to even make some people question whether Nebraska really needs a State Treasurer at all.

Following are the top three ways in which Shane Osborn has hurt the standing and jeopardized the future of the office he currently holds:

In June of 2007, the Omaha World-Herald reported:

State Treasurer Shane Osborn has continued working for an Omaha insurance brokerage while holding his $85,000-a-year elected office.  Osborn confirmed Tuesday that he remains director of the aviation risk division for SilverStone Group, the company where he worked after leaving the Navy and while running for state treasurer last year.

A Republican, Osborn took office in January.  He said the SilverStone work is part time and carried out during his off hours. He said it does not conflict with his duties as state treasurer....But some elected officials and a government watchdog questioned whether Nebraska voters want their constitutional officers holding second jobs.

"This idea that you can be a full-time public servant and a part-time employee somewhere else, that's not what the public expected," said Jack Gould, a spokesman for Common Cause Nebraska.

Secretary of State John Gale said he thinks people expect top constitutional officers - governor, lieutenant governor, auditor, secretary of state, attorney general and treasurer - to be full time, especially at their level of pay.

2. Mismanagement and Illegal Practices

In September of 2008, the Associated Press reported:

A former employee in the Nebraska Treasurer's Office has sued the state, alleging he was directed to illegally create a computer program to prohibit employees from filing for overtime.

Robert Harrison of Lincoln alleges that after he refused - including directing his protests toward State Treasurer Shane Osborn and several managers - his bosses retaliated by asking him to resign....Harrison alleges the retaliation violates labor laws. He is seeking to be returned to his database and Web development position, for which the state hired him in December 2007, or to be paid what he would have earned. The lawsuit also asks for unspecified compensatory damages.

"He was only looking out for the interest of his employees of the State Treasurer's Office," [Attorney Kathleen] Neary said. "He refused to do something that was illegal"....

It's unfortunate the lawsuit was filed, Osborn said. "I'm fully confident once the facts are revealed the Treasurer's Office will be fully exonerated."

3. A Broken Trust

In April of 2009, a Lincoln Journal-Star editorial noted:

It is disappointing to see that our beloved state of Nebraska has the dubious distinction of being the only state with two 529 college-savings plans in Morningstar's list of the worst performers....Last fall, Nebraska's responsible parties handed management of one of its 529 funds to Oppenheimer Funds Inc., which Morningstar, the respected research company, calls "the poster child for how badly some 529 players went awry in 2008."  

At the time, Nebraska state Treasurer Shane Osborn took credit publicly for aggressively pursuing an Oppenheimer Funds subsidiary to become the new investment manager of Nebraska's State Farm College Savings Plan, one of the state's four options. It looked as if the choice would save some costs for the college-saving clientele.

But the change was made just in time for the implosion...of the Oppenheimer Core Bond fund, a fixture in Oppenheimer-managed 529s that lost more than 35 percent in 2008, mostly because of management's bets on mortgages not backed by federal agencies and on commercial real estate derivatives.

There are four plans in Nebraska's Educational Savings Plan Trust. Osborn is the program trustee, responsible for administration, operation and maintenance.