How does purchasing a $26,000 Black 2008 Ford Escape Hybrid SUV with money taken from Bright Start, an Illinois-based college savings fund intended to help less fortunate students pay for higher education, benefit students?
It’s a question that Illinois Treasurer Alexi Giannoulias answered by supporting his decision to purchase a hybrid SUV using funds from the dwindling program, which lost $85 million last year.
Giannoulias claimed to the Chicago Sun-Times that the vehicle purchased will be driven events promoting the college savings plan, and that the truck will ultimately save gas money by virtue of it being a hybrid.
The ostensible purpose for the upgrade is so that Bright Star staff can have more efficient transportation across the state while recruiting families for the college savings plan. Giannoulias says the hybrid SUV is “something that over the long term would be a good investment” by its enabling more families across the state to sign up for the Bright Start.
However, Bright Start staff won’t be the only ones driving around the controversial SUV.
Giannoulias’s spokesman Scott Burnham told the Sun-Times that that the SUV is not solely driven by Giannoulias, and that many workers will be driving it to promote the state’s treasurer’s office programs. “They use it just like any vehicle is used by the entire staff. Bright Start is a large part of the treasurer’s office, and marketing the program and Illinois residents is critical,” Burnham explained.
Giannoulias, for his part, insisted that he never uses the hybrid for personal use. However, the vehicle is nonetheless registered to the same Illinois license plate as three other cars that Giannoulias drives, including a Ford Escape Hybrid. According to state records, the 2008 Escape was bought by Giannoulias’ office in October 2007.
The money spent did not come from tax payer money or the parents’ investments, but, rather, from a fee paid to the treasure office by an investment firm that manages the fund.
Giannoulias’ $2 billion Bright Start program is suppose to create an opportunity for parents to save money for their kid’s college education and earn interest toward it. Giannoulias feels the loss of $85 million last year is the result of poor management from Oppenheimer Funds. Giannoulias described the firm’s decision to use a strategy involving mortgage-backed securities and credit-default swaps as “reckless.”
If necessary, Illinois treasurer says legal charges will be filed against Oppenheimer. Giannoulias’ promise raises questions from the public who wonder how the treasurer witnessed Oppenheimer’s so-called “reckless strategy” involving the purchases of mortgage-backed securities and credit-default swaps and not taken action to stop it or at least discouraged putting Bright Start’s money into Oppenheimer’s rather risky investments.
A complete audit of the fund may be called for soon, according to a Republican state senator who spoke with press.
Treasurer Giannoulias is certainly under quite a bit of heat these days. Chicago’s Southwest Side writer Ray Hanania criticizes Giannoulias’ actions with a blog post saying that “If [Giannoulias] will take money from a fund set up to help little kids one day have the money to go to college so he can buy an SUV, then he would surely look you straight in the eye and tell you he is the champion of the public and quietly pat the bankers on the back as they continue to pillage the consumer.”
“Ultimately, you know, I’m responsible,” Giannoulias said to the Chicago Tribune, responding to the concerns of the public.
Our Take:
Using college fund money to buy an SUV does seem a bit sketchy. Understandably under harsh criticism, Giannoulias will have to turn his Bright Start program around this year if he wants any hope of proving himself and justifying his SUV purchase.
More College News:
Filene’s Basement files for bankruptcy protection
