While pay-to-play scandals, investment investigations and corruption have made for heated debate in numerous races this election cycle, the race for New Mexico State Treasurer (stonm.org) has been notably quiet. That’s a big change from the last election cycle, when high-profile indictments (which eventually became convictions) against two state treasurers—Robert Vigil and Michael Montoya—put the office in the limelight.

In addition to its role as “bank” for the state, the Treasurer’s Office oversees some of its short-term investments, such as ones for operating cash and bond proceeds.

On the Nov. 2 general election ballot, Democrat incumbent James B Lewis (who also held the position from 1985 to 1990) will be challenged by Republican Jim Schoonover, a former Doña Ana County treasurer and current clerk for the Village of Hatch. SFR gave its pop quiz to both candidates. The rules are: No looking up information or calling back later with different answers. SFR’s occasional interjections are italicized.


1. How much has the value of the state’s investment portfolio dropped since the beginning of 2008? Do you think the state’s portfolio is optimal, or should its distribution be changed?

2. Who has been your opponent’s largest donor in this race?

3. What percentage of the state’s portfolio are collateralized mortgage obligations allowed to constitute?

4. The state treasurer is required to make sure that Local Government Investment Pool

maintains a stable net asset value. What is that value?

5. The state’s investment policy mandates three priorities when investing. In order of

importance, what are they?

6. What is the most important function of the treasurer’s office, and how would/have you execute/d it?


James B Lewis, New Mexico state treasurer, jamesblewis.net

1. When you say the state portfolio, I’m not sure what you mean. There is a state general fund. And the general fund, when we look at how much it has decreased, we have what we call a legal least, but when you look at PERA/ERA [Public Employees Retirement Association and the Educational Retirement Account], those different funds, they have alternatives; we can’t invest in any equities there. So do you know how much the general fund portfolio has dropped since 2008? I’m not sure, I’d have to get all that information.

2. My opponent’s largest donor…I have no idea. I see he has only about $500 in the bank. He seems to have carried over a deficit from the county treasurer of about $8- or $9,000. So who’s contributing? I haven’t been following that because I haven’t seen him raise much money. I’m not sure who his big donors are, if there are any big donors.

3. The way collateral is, is we have six different ratios, and when you have the collateral, it is based upon—and this is not the treasurer policy; this is a policy from the board of finance—we will have some that are collateralized by some that are 50 percent, some that are 75 percent and some that are 100 percent. The question regarded collateralized mortgage obligations, not actual collateral. We have corporate bonds, but you may be commingling some of the investments we have in PERA/ERA, and we have very liquid-type securities. We have a short-term portfolio, but we’re paying the bills from month-to-month.

4. Stable net asset value is a dollar-for-dollar.

5. For the state’s treasurer, we have safety first, No. 2 liquidity, and No. 3 is yield.

6. Well, the most important function is making sure that the investments are safe and making sure we have the liquidity to pay the bills. So we have hired some of the best and brightest investment people to make sure that our investment portfolios are invested in a rational manner.

Jim Schoonover, Village of Hatch clerk, voteschoonover.com

1. Now we’re talking about the total appropriations, or…? We’re talking about the investment portfolio, not appropriations. I believe it’s around $17 million in short-term investments—$17 billion in short-term investments. Did you say “million” or “billion”? I think it’s billion. I’m not sure. OK, the answer to the question is, the portfolios and the billions of dollars, one of the things I’d like to make sure is that, in all investments, they’re collateralized so that none of the principle is at jeopardy, and it’s important that first we take care of the principle amount, and then make sure it’s liquid enough to meet the needs of the state, and then, thirdly, that it maximizes our interest rate.

2. Who’s been my opponent’s largest contributor? I don’t know. I have never looked up his financial records.

3. Well, I know by state statute that all investments need to be collateralized by 50 percent and that by the Constitution they need to be totally secure.

4. I know that the local state investment pool is made for all the different counties and municipalities and they need to be able to invest in it short term because they don’t have the expertise or the abilities to do that—especially in the small communities—to make sure that they can get the best value on their money. So we pool it all together to see if we can get a better rate of return on their investment pool.

5. Well, I believe they should be to make sure that our funds are secure and that we have a liquid ability to be able to back up our funds, and then, thirdly, that to make sure that we get a rate of return on our investments.

6. I think the most important function of the Treasurer’s Office is, of course, the reconciliation of all cash statements and balances, making sure we know where all the funds are at all times, and also to make sure that all investments are done correctly, and that all money is secure and that there’s adequate internal control to protect taxpayers’ money.

Answer Key

1. The value of the general fund investment portfolio has dropped by half since 2008, according to the state treasurer’s Sept. 2010 monthly

investment report.

2. Lewis’ largest donor was the NEA New Mexico Education PAC, which gave $2,500. Schoonover’s were Four Corners Federated Republican Women PAC, and schoolteacher Kathleen Thompson, who each gave $300.

3. Under state investment policy, collateralized mortgage obligations are limited to 25 percent of state portfolios.

4. The state treasurer is required to make sure that Local Government Investment Pool maintains a stable net asset value of $1 per share.

5. In order of importance, the state’s investment policy mandates the

following three priorities when investing: safety, liquidity and return.