Mourdock Hits Rusthoven And Howey For Blaming Him For Pension Fund Losses

Indiana State Treasurer Richard Mourdock has hit back against claims by Barnes & Thornburg's Peter Rusthoven and Howey Politics' Brian Howey that he was responsible for $1.2 billion in recent losses in the state's Public Employees Retirement Fund. As State Treasurer, Mourdock only manages the State Police Pention Trust. Yet, Howey and Rusthoven both penned columns recently attributing the pension fund losses to Mourdock's management of the funds. Mourdock fired off a letter to the editor of the IBJ demanding a retraction and an apology in response to Rusthoven's recent column in the IBJ:

Peter Rusthoven's column about raising the federal debt limit included a major error worthy of retraction and an apology. He is a long-time financial supporter of Sen. Richard Lugar and wrote with the intention of promoting his candidacy. Rusthoven should form his opinions around facts, not blatant fallacy.

Rusthoven claims that pensions funds I oversee as state treasurer "lost $1.2 billion since June." That allegation is ridiculous, false and reckless. The pension fund he is referring to is not managed by the state treasurer.

Indeed, the sole pension fund I oversee as state treasurer, the Indiana State Police Pension Trust, had total assets of $388 million at the end of the last quarter, and therefore it could not have lost $1.2 billion as Rusthoven claims. This elementary and obvious fact might have been made clear to him with no more effort than a visit to the state treasurer's website.

The IBJ offered no apology for Rusthoven's column. Instead, an editor's note says, "Rusthoven based the comment on a news article erroneously saying Mourdock managed all state pension funds." It added, "Mourdock manages the police pension trust, and by law, he or his designee is a trustee of the public employee retirement system." Appointees of Gov. Daniels actually control Indiana's public retirement system board of trustees. Mourdock does, however, sit on the the board in his capacity as state treasurer. Outside financial investment consultants are retained by the board of trustees to manage the invested funds. The board generally just sets the allocation among investment types and leaves it to the funds' managers to make the specific investment decisions.

Howey, also a big supporter of Sen. Lugar, repeated the claim in his weekly political newsletter that Mourdock managed the PERF funds as well. Mourdock also demanded a retraction and apology from him. Howey declined the invitation and instead pointed in a recent column to reports put out by Mourdock's office boasting of his stewardship of state investments:

In an Oct. 20, 2010 press released from the Treasurer’s office, Mourdock claimed credit for a 6.99 percent return - or $480 million - in interest on “state investments.”

In an interview with the Wabash Conservative Union in 2007, Mourdock was asked to define his duties. He responded, “Simultaneously very narrow, which is to say, in the constitution the only description of this office, is that the State Treasurer shall serve as the state’s chief financial officer. The only constitutional duty I have is to make sure we earn the highest possible grade of interest on the funds of the State of Indiana.”

He added, “I believe that I have the greatest job in all of Indiana government because I have huge responsibilities, which I like, I have tremendous latitude, I get to be creative, and I don’t think any newspaper reporter knows we exist. It can’t get any better than that.”

Just as the current secretary of state says he’s not the state’s chief elections officer, Mourdock appears to be saying he’s the state’s chief financial officer - but only for the good parts.

Howey didn't stop there. Howey questioned why Mourdock had not placed his personal investments in a blind trust after he recently mentioned that he had pulled out a significant amount of his personal investments from the stock market after Congress voted to raise the national debt limit, which was followed quickly thereafter by Standard & Poor's decision to lower the U.S. government's credit rating from its long-standing AAA status.

I can’t remember a single politician ever talking about his own personal stock portfolios. And Mourdock is no ordinary politician. He’s the treasurer of Indiana.

Why aren’t his personal stocks in a blind trust, so those wires don’t get crossed with his state duties? I thought the timing of his personal sell off - three days before Standard & Poor’s downgraded the U.S. credit rating - was curious. And it made me wonder about Mourdock’s temperament for office. His challenge to the Chrysler/Fiat merger after bankruptcy, he claims, was based on principle, but it smacked of political grandstanding with thousands of Indiana jobs (and future tax revenue) at stake. If he had won, it would have cratered the Indiana auto sector. A prudent leader would have looked for another way.

Howey claims that Mourdock is upset at him for criticizing the failure of his campaign to raise nearly as much as Lugar has raised for his re-election bid, an altercation his chief of staff had with a tea party activist and losses his backers suffered in recent state central committee races. It's clear that a raw nerve was struck and there is no love lost between Mourdock and the two Lugar supporters, Rusthoven and Howey.