Report on Washington Investment Trust hearings in Olympia

On January 25 and January 26, 2012 there were hearings in Olympia on SB 6310 and on HB 2434, the bills to establish the Washington Investment Trust (WIT), a publicly owned state bank. This report includes a refutation of the testimony of the State Treasurer, Jim McIntire, who is funded by the big banks and is now opposing the Investment Trust.

Both hearings are available on TVW on the Internet:

Hearing SB6310

Hearing 2434

The hearing rooms were full of Washington Investment Trust supporters and many people testified. The many different reasons people gave in support of the Washington Investment Trust reflected a high level of understanding about the concept of publicly-owned state banks. It was an inspiring display of citizen activism. The ONLY testimony against the WIT on both days came from the state treasurer, Jim McIntire. He stated, “Safety, liquidity, and return.  This bill violates these principles.”

 However, not one word of McIntire’s claims have any relationship to the truth. The truth is that an Investment Trust would be much safer than the risky manner that McIntire currently invests State funds. Second, liquidity of State funds would greatly INCREASE if we have an Investment Trust. Third, an Investment Trust would offer a dramatically higher rate of return than we are now getting from McIntire’s policy of handing over all of our State taxpayer’s money over to Wall Street bankers.

First, let’s look at SAFETY:

McIntire claims that the investments made by the Washington Investment Trust to local school districts and other public agencies for infrastructure projects like building schools would not be safe. However, over the last 100 years, not a single infrastructure loan in the state of Washington has defaulted. So, it stands to reason that since the Washington Investment Trust will  primarily loan funds to infrastructure projects of counties, cities, school boards, etc, the loans will be repaid as there hasn’t been a single default over the last 100 years. The Public Bank of North Dakota has also been in business for nearly 100 years and they have been rated as the SAFEST BANK IN THE ENTIRE NATION. Claiming that an Investment Trust would be risky is dishonest and inexcusable.


Now let’s look at how McIntire currently invests State Funds.

A copy of the Retirement System Comprehensive Annual Financial Report (CAFR) can be found at: This report shows that the Retirement System has a net balance of $52 billion. The current asset allocation is

35% gambling in the overseas stock market

25% gambling in the US stock market

14% in the real estate market

11% in the corporate bond market and

Less than 5% in US Treasury bills (the safest form of investments).


Our State paid $12 million in commissions just on stock trades in 2010. Clearly our public funds are not currently being put to work creating jobs in Washington State. Instead, for the most part, they are invested creating sweat shops overseas. Even worse, as recently as the stock market crash of 2008, our State funds lost hundreds of millions of dollars from gambling in the US and overseas stock markets. It is absurd for McIntire to claim that our public funds are safer invested creating jobs in the overseas stock market than invested creating jobs in school districts and cities here in Washington State.


Second, let’s look at LIQUIDITY.
McIntire claims that the state does not have sufficient cash flow to both pay the state’s bills and to invest money in the Investment Trust. Darel Grothaus, who has had many years of experience in banking and was on the Washington Investment Trust task force, refuted McIntire’s testimony. Grothaus stated that the Treasurer has enough liquidity to support the creation of the Investment Trust based upon information given to the task force by the Office of the State Treasurer (OST). To explain, OST has two investment portfolios. One is the liquid portfolio and the other is the core portfolio. The core portfolio, over the last ten years, has never gone below 1.2 billion dollars.  In fact, the average time money is tied up in the core portfolio is about 4 years. According to Grothaus, just a portion of money from the core portfolio would be enough to capitalize the Washington Investment Trust. So the Treasurer’s liquidity argument is false. See the chart in attached PDF and on the HOME page of our website:



McIntire claims that he is getting a high rate of return on State funds with all of his gambling in the overseas stock market. However, a simple direct comparison of the rate of return of Washington State funds to the Bank of North Dakota confirms that the public Bank of North Dakota has consistently gotten a higher rate of return – as much as double the rate of return as the funds under McIntire’s control.


Chart on the rate of return from

Chart also posted on attached PDF and on the HOME page of our website:


Moreover, we are losing billions of dollars due to our current state borrowing system which affects our bottom line rate of return. Under the current system, the State Treasurer goes to Wall Street Banks to buy bonds at 4%-5%. At 5% interest over 20 years the taxpayer ends up paying $1 billion in interest for every $1 billion the treasurer borrowed for infrastructure projects. Currently Washington taxpayers are paying $1.5 billion in interest payments every year to big Wall Street banks.  The State of North Dakota does not pay any interest at all to the big banks as the Bank of North Dakota has helped the State of North Dakota to become entirely self-sufficient. Thanks to the revenue generated by the Bank of North Dakota, the State of North Dakota has almost no debt. So there is no question that the State tax payers would make more and save more by investing in our local economy than by putting ourselves at the mercy of Wall Street banks.


McIntire makes two other false claims. He claims that our State can already do everything that an Investment Trust could do. This is not true. Our State currently has no access to near zero interest funds from the Federal Reserve – we would if we had an Investment Trust. Nor can our State currently leverage assets in order to offer school districts and other public agencies low interest loans. We and every school district in our State are at the mercy of whatever Wall Street wants to charge us.

Finally, McIntire repeats the false claim that the only reason North Dakota is doing so well is that they have oil revenue. McIntire conveniently ignores the fact that 7 other States have more oil revenue than North Dakota – yet all of them suffered a severe collapse of their local economies because they did not have a publicly owned bank to keep the economy going after the big banks left their States small businesses in the dust. It is also a fact that in the past 10 years, the Bank of North Dakota has returned MORE revenue to the State of North Dakota than the oil industry.

Why is McIntire coming out against an Investment Trust, even though the Investment Trust would save local tax payers billions of dollars and create tens of thousands of local jobs?

The answer is that his re-election campaign in being paid for by the very bankers and wealthy corporations that benefit from keeping our State in debt to big Wall Street bankers. See the table in attached PDF). Of McIntire’s campaign chest of $39.5 thousand for 2012, $24,050 comes from institutions or individuals connected to the financial industry. This is just the beginning of buying the Treasurer’s Office. In the 2008 election, McIntire raised and spent nearly $300,000 – far more than any other candidate for State Treasurer – to buy his way into office. We need a State Treasurer that works for the people, not for the big banks.

Do not fall for the false claims of Jim McIntire. An investment trust would be safer and offer a better return on investment than the current system controlled by Jim McIntire and the big banks.

ACTION ITEMS FOR ACTIVISTS: Please go to  and urge your State legislators to support creating an investment trust in Washington State!

Thanks for supporting the Washington Investment Trust!

You friends and fellow citizens at the Washington Public Bank Coalition.

To learn more, visit our website:

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