A few weeks ago, I wrote about the important and little-known office of State Auditor General — one of three executive offices on the ballot this November. That obscure office may be one rung above the office of the State Treasurer in terms of visibility — which is to say, you’d be hard-pressed to find any news coverage or anyone talking about the race. (The third, Attorney General, is a little more high-profile.)
That’s too bad, because the treasurer plays a vital role in the management of the sixth largest economy in the U.S. The treasurer is the state’s chief financial officer. Taxes, investments, fines and fees — all that money is sent to the treasury and then used to pay our bills. Payroll for state employees goes through the treasury, as do pensions, unemployment compensation, agency budgets and both investments made and debts incurred by the state.
Money (to the tune of $163 billion in state funds), comes in. Bills are paid. And then about $50 billion is managed and invested on behalf of Pennsylvania taxpayers. $163 billion is a mind boggling amount of money — almost equal to the annual defense budgets of Russia and Ukraine combined.
In addition to keeping the books balanced, the state treasurer oversees several important programs including: PA ABLE (a disabilities saving program), PA 529 College and Career Savings (which locks in tuition rates and helps Pennsylvania families save for higher education), Keystone Scholars (which are state grants to every baby born for $100, which is invested to grow over the life of a child so they can afford college), and INVEST (low-cost investment pools tailored for local government and nonprofit groups). The treasury also runs the Unclaimed Property Bureau, which we’ll touch on in just a moment.
First, a bit of history
The state treasurer is a very old office, dating back to the early 1700s. The first state treasurer was Samuel Carpenter, a close friend of William Penn. His son (Samuel Carpenter II) died 30 years before the Declaration of Independence was signed.
A traveler from these colonial times would be quite confused about the whole election thing for state treasurer (also why women, Blacks, and non-land holding Whites are voting at all). The 1776 state constitution stated that the office of treasurer was to be selected by the House of Representatives. Fourteen years later, the 1790 Constitution decreed that the treasurer would be elected by a joint vote of the General Assembly. It wasn’t until an amendment in 1872 that voters were granted the right to directly choose their state’s CFO.
Like so many offices in Pennsylvania, the treasury has a long and sordid history, starting in 1809 when legislators first created the office of the Auditor General to, among other things, check the Treasurer’s work. PA legislators foresaw potential friction between the Chief Financial Officer of the state and the newly designated “chief fiscal watchdog.” You don’t have to be Nostradamus to guess that a treasurer (who balances the state books) and an auditor (who polices that balancing) might butt heads.
From state archives we learn that the Auditor General originally made “settlements of public accounts which then went to the Treasurer.” The treasurer was required to “cut vouchers.” If he disagreed with the A.G., he could appeal to the governor. And if, during this back and forth about the books, the treasurer held back funds, the A.G. could “draw a warrant” on the state treasurer for the payment.
The treasurer was also also on the hook if he didn’t comply with the Auditor’s request to to completely open his books. If “the Treasurer’s office withheld any papers needed or demanded by the Auditor, the Treasurer could be fined.”
On the fourth Monday of each December, the treasurer would make a full report to the General Assembly of all the state’s “receipts and expenditures” (this tradition continues with the Annual Investment Report). On the exact same day, the Auditor would submit a separate account of the state’s finances, which included an official report on the “status of the Treasury.” This is kind of like making two criminal defendants recount the same story in separate rooms to make sure the details line up.
The animosity between these two executive offices was historically great enough that by constitutional amendment in 1967, a treasurer was “barred” from serving as auditor general until four years after leaving the treasury. Foxes in the henhouse, and all that.
How effective these tactics were at keeping state treasurers in line is a bit hard to judge, but let’s just say the position has been … susceptible to the lesser angels of our nature. In 1889, Treasurer William Livsey was caught up in a sting operation that netted not only him, but four previous treasurers in a grand jury indictment for “improper use of state funds.” In 1907, Treasurer William Mathues was sentenced to two years at Eastern State Penitentiary for “conspiracy to defraud the state.” And 80 years later, Treasurer Budd Dwyer … horrified the nation on live TV after being found guilty on 11 counts of conspiracy, fraud and racketeering.
Fortunately, most treasurer’s terms are relatively low-profile. Unfortunately, so are their campaigns.
Who’s running for State Treasurer
The Democratic candidate, Erin McClelland, is a substance abuse and mental health counselor from Allegheny County, who pulled off an upset victory against State Rep. Ryan Bizzarro. Her campaign raised a whopping $6,000 before the primary, compared to Bizzarro’s quarter mil, and the Democratic establishment lined up behind Bizzarro. But McClelland still pummeled him by nine points when the dust settled. She has since been endorsed by AFSCME statewide union leaders and Sen. John Fetterman, among others.
McClelland spent much of her career in the world of addiction recovery and in 2006 became a small business owner when she opened the “first and only orthomolecular recovery program for addiction in Pennsylvania.” She made two previous unsuccessful runs for a U.S. House seat in 2014 and 2016.
As to what qualifies her to go from addiction counseling to state treasurer, McClelland writes “[Starting in 2003,] I had the privilege to train under the direction of former Treasury Secretary Paul O’Neill, where I learned supply chain logistics and lean process improvement strategies.” So … tutoring?
Also head-scratching: The fact that she was found to have raised money for her campaign before officially announcing her campaign — a no-no in Pennsylvania. That’s an … odd way to show voters you know how to collect and spend their money.
Numbers, after all, are a representation of facts, and our treasurer is the steward of those numbers.
McClelland’s opponent is incumbent Stacy Garrity, aka “The Angel of the Desert.” The latter part of that moniker was reportedly given to Garrity during one of her three Middle Eastern tours in the U.S. Army Reserve (as a member of the Military Police, she oversaw Iraqi prisoner detentions with no complaints of abuse). Garrity leads her campaign with references to her military service. Besides prominently displaying photographs from her time in the Reserve, Garrity invites voters to “Join Stacy’s Army today!” by making a donation. (The Army of the State Treasurer would surely be one of the dullest homegrown militias in American history.)
Despite being the head of the current establishment Garrity fashions herself as an outsider, with her reelection slogan: “One of Us — Not a Politician.”
Garrity is a full-throated supporter of former President Donald Trump. As Treasurer-elect, she gave a speech at the Capitol on January 5, 2021 declaring that the election Trump had just lost was “tarnished forever.” (She denies being anywhere near Washington during the insurrection that happened the next day.) She endorsed him for this election early, writing on X in January that “There is only one man I trust to get the job done.” She also publicly celebrated the overturning of Roe v. Wade (“this is a great day for the sanctity of life.”)
Still, Garrity has worked with politicians on both sides of the aisle as treasurer, and has earned endorsements from, among others, Philadelphia Building Trades, whose Business Manager Ryan Boyer called her the “real deal” and praised her for visiting every county in Pennsylvania each year of her tenure.
During her time as treasurer, Garrity has championed transparency in the office (you can access a Transparency Portal on the Treasury website that lets you compare the last three years of expenditures). She has also made a priority of returning roughly $4.5 billion of “unclaimed property,” which runs the gamut from unclaimed paychecks to military medals that never reached recipients. Last year, Garrity returned $274 million of this property to their rightful owners.
Since 1961, there have been 14 State Treasurers. All but four have been Democrats (Tim Reese won as an Independent in 2015). Will PA voters return to office a Democratic CFO. in November, despite McClelland’s scant experience and campaign accounting errors? Financial accuracy, after all, is the main point of the job. Will Garrity hold on to her seat, despite — or perhaps boosted by — questioning the results of the 2020 election? Numbers, after all, are a representation of facts, and our treasurer is the steward of those numbers.
How much that matters, dear reader, is up to us.
