Schwartzkopf, Flowers square off

In a recent phone interview, Speaker of the House Rep. Pete Schwartzkopf said State Treasurer Chip Flowers is out for himself, and not for the people of Delaware.

He also charged Flowers is on his way to becoming a pariah for the state.

Flowers takes exception to these comments and says Schwartzkopf is out of line and that the truth will emerge at a meeting Wednesday, April 2.

“He's just dead wrong. It's repulsive, and I'm tired of the vendetta. The speaker of the House and the governor would blame me for the assassination of Abraham Lincoln if they could get away with it.”

While he supported Flowers in his 2010 campaign against Sen. Colin Bonini, R-Dover South, Schwartzkopf is now a vocal opponent of the treasurer.

For Schwartzkopf, D-Rehoboth Beach, the straw that broke the camel's back was a recent mixup between the state's Cash Management Policy Board and the General Assembly's bipartisan Joint Sunset Committee.

The board was created in 1981 after a financial scare with Farmers Bank in 1975 highlighted weaknesses in the state's investment policies and left the state's investments exposed. There are nine members on the board, including the state treasurer, the secretary of finance, the secretary of state, the controller general, and five members of the public appointed by the governor. The purpose of the board is to watch over the state's investments and monitor a portfolio that has grown to $2 billion.

A committee hearing regarding the board, scheduled March 12, was postponed after it became clear that all nine members of the board hadn't been notified about the meeting and that Flowers was the only member of the board who was prepared to speak.

The meeting has been rescheduled at noon to April 2, in the Joint Finance Committee Room at Legislative Hall in Dover.

Sen. Ernie Lopez, R-Lewes, sits on the committee. He was the first to voice concern over the absence of the board members, including board chair John Flynn, at the meeting. He said shortly after the meeting was supposed to begin, it was obvious the meeting had been highjacked by Flowers.

It was very clear the committee was not going to get a full description of how the board was working, and that it was only going to be Flowers' side, Lopez said.

“I was disappointed,” said Lopez.

Lopez wouldn't go as a far as to say Flowers purposely didn't inform other board members in an effort to make them look bad, but he was skeptical.

“I can't imagine it was only a coincidence,” he said.

Opinions on what happened

Schwartzkopf and Flowers differ on why the whole board wasn't prepared for the committee meeting.

Schwartzkopf said Flowers manipulated the process in an effort to make the board look bad and so only his point of view would be heard.

“Chip's sole goal in life is to have this board eliminated,” said the representative.

Flowers said it was a case of miscommunication. He called Schwartzkopf's accusations ridiculous and was very disappointed that he was speaking to the press without any of the facts. Flowers said Schwartzkopf is suffering from a case of Speaker Syndrome.

“He was a listener before. Now he's giving his opinion on things the way he wants them to be, not the way they are,” said Flowers.

History of disagreements

Since being elected, Flowers, the only elected official on the board, has butted heads with other board members. Because of these problems, Schwartzkopf drafted legislation, later supported by Gov. Jack A. Markell, to clarify policy and investment practices of the board. It also redefines the treasurer's role on the board.

The purpose of the board is to set the policy, said Schwartzkopf, and it's up to the treasurer to execute that policy.

Schwartzkopf said the problem with giving the treasurer too much power is that a person elected to the position may not have the experience it takes to manage the state's portfolio. Voters may just elect someone who can smile and be personable, he said.

Schwartzkopf said the commotion surrounding the board is what caused the Joint Sunset Committee to ask for a review. The committee has the power to extinguish the board or make changes to improve its function, he said.

As part of the sunset committee process, a board going before the committee for review fills out a questionnaire. In the case of the mid-March meeting between the committee and the Cash Management Board, Flowers was the only one to prepare a response to the questionnaire.

Flowers said it was a case of miscommunication between his office and the other members of the board.

Schwartzkopf doesn't buy it. He points to the fact that Flowers put himself as the official liaison between the committee and the board.

Schwartzkopf said what Flowers did was respond back to the sunset committee and tell it to send all future correspondence to him and him alone. Schwartzkopf said as a result, the treasurer didn't tell the other board members about the mid-March meeting.

“He wants the board to go away,” Schwartzkopf said of Flowers.

Flowers said the truth will emerge during this week's April 2 hearing.

Lopez said he's looking forward to the public hearing regarding the board and wants the presentation given to represent all the members of the board.

“I want something made on behalf of the entire board, not just a specific faction of the board,” he said.