Oregon Watchdog: Republicans demand answers as hundreds of millions lost in state savings program

OREGON HOUSE REPUBLICANS

FOR IMMEDIATE RELEASE: December 19, 2008
CONTACT: Nick Smith, 503-986-1351

HOUSE REPUBLICANS DEMAND ANSWERS AS PARENTS, KIDS LOSE HUNDREDS OF MILLIONS
IN STATE SAVINGS PROGRAM
Legislative Audits Office Would Boost Accountability, Oversight

SALEM— House Republicans are demanding answers after news reports indicated that the Oregon College Savings Plan has lost hundreds of millions of dollars in value over the past few months. Oregonians are learning the state invested much of their savings in a risky portfolio that has lost 38 percent of its value this year.

“The state government has marketed the Oregon College Savings Plan as a safe and conservative program for Oregonians’ college savings,” said House Republican Leader Bruce Hanna (R-Roseburg). “Despite repeated red flags, Democrats fell asleep at the wheel and allowed Oregonians to lose hundreds of millions of their hard earned dollars. Oregonians deserve an explanation, considering the state could have invested in other bond funds that have posted modest gains this year.”

Rep. Hanna said Democrats knew several months ago that the Oregon College Savings Plan was losing value, but advised Oregonians not to cash out of the plan. In October, the State Treasurer acknowledged the losses but said he wasn’t “changing a thing” and that “overall people are going to fine.”

“This is yet another example of the Democrats’ continued mismanagement of state finances,” Rep. Hanna said. “Everyone understands that the Wall Street crisis was caused by greed and risky investments, yet the state sunk Oregonians’ college savings into failing mortgage-backed securities and corporate bonds.”

Rep. Hanna said House Republicans support increased legislative oversight of state investments and will continue to push for a Legislative Audits Office to hold the Executive Branch accountable.

“Oregonians are losing confidence in state government’s ability to manage our finances,” Rep. Hanna said. “While Democrats defend the status quo, House Republicans will continue to call for increased legislative auditing capabilities. As legislators, we need a Legislative Audits Office to protect our constituents from a state government that’s out of control.”
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