- Associated Press - Wednesday, April 2, 2014

DOVER, Del. (AP) - State lawmakers are considering several possible reforms for a board that oversees Delaware’s $2 billion cash investment portfolio and which has been roiled by internal tumult.

Members of the legislature’s Joint Sunset Committee held a hearing Wednesday to discuss the Cash Management Portfolio Board. The committee periodically reviews state agencies, commissions or boards to determine whether there is still a need for them.

The nine-member cash management board has been the subject of infighting between elected state treasurer Chip Flowers and other board members, most of whom are appointed by the governor or serve based on their positions as cabinet officials.

Among the reforms for the board Flowers proposed Wednesday are term limits, annual financial disclosures by members, and more transparency.

Lawmakers were receptive to the financial disclosure requirements, and to having an independent financial adviser assisting the board, but seemed to reject the idea of term limits.

“I don’t have a problem with people who are doing a good job and want to stay on a board,” said Sen. David Sokola, D-Newark.

Committee members also indicated that they want minutes of board meetings posted in a more timely fashion. They also could recommend shifting administrative support for the board from the treasurer’s office to the Department of Finance.

In a swipe at Flowers, lawmakers earlier this year passed legislation asserting that the unelected cash management board, not the treasurer, has authority over the investment portfolio.

Flowers warned the committee on Wednesday that subordinating the treasurer to the board could have negative consequences.

“It’s just shifting the powers of the treasury to the governor,” Flowers said, noting that he has no ability to challenge decisions approved by a majority of the board.

“Whatever the board says goes, and if I disagree with that, I have no recourse,” he said.

Flowers said he has no problem with an oversight board, as long as there are measures in place to ensure it is acting in best interests of taxpayers.

In addition to annual financial disclosures and term limits, Flowers has proposed expanding board membership to include state lawmakers, and requiring that the board meet more than twice a year.

Flowers, who has complained about potential conflicts of interest among board members, also said they should be prohibited from making political contributions to the governor, treasurer, Senate president and House speaker, and candidates for those offices.

Sunset Committee co-chair Rep. Gerald Brady, D-Wilmington, said he supports a prohibition on political contributions by board members, “particularly in this year’s climate of pay-to-play.”

Brady was referring to recent investigations of improper contributions to Democratic Gov. Jack Markell and other elected officials, some of which resulted in criminal charges against donors.

John Flynn, chairman of the cash management board, said he doesn’t oppose more frequent financial disclosures from panel members. But he argued that the board should not be treated any differently from other bodies overseeing the state’s finances, such as the pension board, deferred compensation board and financial forecasting council.

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