DELAWARE'S TREASURER REINVENTS A BELEAGUERED OFFICE
The Bond Buyer
By Alison Vekshin
May 21, 2002
Jack A. Markell has proven he can think outside the box.
After spending 16 years in the corporate world, Markell was elected Delaware's treasurer in 1998 and immediately began to convert his business know-how into innovative changes at the state government.
"What I have tried to do is really seek out opportunities beyond the four corners of the state treasurer's job description where I can make a difference," said Markell, a Democrat.
Markell, 41, started his career as a banker at First Chicago Corp., and later worked as a consultant at McKinsey and Co. In 1989, he joined what is now known as Nextel Communications Inc., and takes credit for coming up with the company's name. As the firm's 13th employee, he worked as a senior vice president for corporate development and dealt mainly with mergers and acquisitions. Markell went on to work for Comcast Corp. before running for the treasurer's seat. In 1998, he spent hundreds of thousands of his own money and garnered 58% of the vote to unseat Republican incumbent treasurer Janet C. Rzewnicki, who had served for 16 years.
His victory came after some members of the legislature and the last two gubernatorial administrations lost confidence in Rzewnicki's abilities as treasurer because they perceived her as incapable of performing the job, according to sources.
In addition, Rzewnicki had led a failed but controversial gubernatorial campaign against former Gov. Thomas R. Carper in 1996. She was accused of being associated with a Republican group that alleged Carper had beaten his wife, according to published reports.
The combination of the two led to some erosion in the treasurer's powers, both through legislative actions and through colleagues gradually taking on more of the treasurer's responsibilities, sources said.
For instance, Rzewnicki had been chairwoman of the state's Life Insurance Committee when the legislature merged it with the Employee Benefits Committee, eliminating her leadership role in the panel, sources said. The legislature's Joint Finance Committee also approved a measure that reduced the treasurer's salary while she was in office, sources said.
As a result, Markell inherited a fairly thin mandate, sources said. But Markell has not let that stop him.
"I'm not trying to regain any particular functions," he said. "I have never had a job where the job description limited what I did."
Carper and Gov. Ruth Ann Minner "have asked me to get involved in some areas that don't necessarily have a lot to do with being state treasurer, like the technology initiatives," Markell said.
On her second day in office in 2001, fellow Democrat Minner asked Markell to lead an effort to revamp the state's management of information technology by heading the state's Information Services Taskforce.
"We came up with a set of recommendations that are now being implemented which don't really at all look like recommendations for a government," Markell said. "They do look a lot more like recommendations for the private sector."
As chairman of the state's E-Government Steering Committee, Markell oversaw the launching of a state Internet portal for e-government services.
He has spearheaded an effort to teach financial literacy to both children and adults statewide. His office has hosted conferences on money management and fiscal responsibility. He created the Delaware Money School, which offers free classes on all kinds of financial topics, such as saving for college and retirement planning. Markell partnered with the University of Delaware Center for Economic Education and Entrepreneurship, leading state banks, and the Delaware State Chamber of Commerce to teach children the basics of money and saving. Through this partnership, they have set up banking centers in 25 elementary schools across the state.
He has restructured Delaware's deferred compensation program and helped establish a government match program that pays state employees to save for retirement.
Although he was able to transfer his technology skills to his new post, Markell had to leave his corporate salary behind. As treasurer, he earns some $90,000 annually, less than one-fourth of what he made as a corporate executive.
Markell said he applies a "get it done" approach, but believes government cannot be run like a business.
"Think about the differences," he said. "In business your focus is on things like profitability, return on investment, market share. In government, your objectives are things like equity, justice, and fairness."
The office's official duties include preparing the operating budget, managing the state's cash and relationships with banks and money managers, reconciling the state's bank accounts and payroll, and managing the state's general obligation bond authorizations, issuances, and refundings. The state finance department establishes most of Delaware's debt policy.
Markell said the state's approach to bond issuance is straightforward.
"We typically go out once a year in a competitive bid situation," he said. "We've got a good handle on what it is that we need and we try to get the best price."
He added that the triple A-rated state's bonds are in high demand when it goes out on a competitive bid basis. Merrill Lynch & Co. has won the last couple of deals, he said.
"We've had excellent support for our bonds from a broad variety of investors," Markell said.
Delaware issues bonds only once a year and 80% of their debt matures within 10 years, which is very rapid, according to John Hallacy, managing director at Merrill Lynch.
Hallacy said the bonds are highly regarded.
"We don't see them too often," he said. "People tend to buy them and put them away. They hold on to them."
Markell said Delaware tries to take care of its infrastructure needs with surplus cash, when it is available, as opposed to issuing bonds.
The state's bond issuance varied widely in the early 1990s, but has averaged $128 million annually over the last five years.
"He's really turned that office around," said David Singleton, Delaware's finance secretary. "He's brought a fresh viewpoint and he's not restraining himself to the official duties of the treasurer. Jack has very wisely picked a couple of areas where he saw an ability to make a difference and some of these relate to traditional functions of the treasurer's office and some of them, frankly, have no bearing at all on the traditional functions."
Singleton lauded Markell's work on the information services taskforce.
"I don't think you'd find too many of our past treasurers step into something like that or being asked to step into something like that," Singleton said.
Budget director Peter Ross also praised Markell's innovative approach to the job.
"As opposed to his predecessor, Jack has been a refreshing fountain of a lot of new ideas that help the state run more efficiently and save us money," Ross said. "His predecessor had made a few big faux pas so the contrasts are very positive."
Markell credits his upbringing for his passion for public service and for prompting him to run for his first elected office.
Markell grew up in Newark, Del. His father taught at the University of Delaware and his mother was a state social worker.
"I had been raised to believe that public service was very important," Markell said. "I wanted to make a difference. I felt like I had been so fortunate to have a very good and exciting career in the business world at a relatively young age."
Markell graduated from Brown University and received an MBA from the University of Chicago. He and his wife, Carla, were high school classmates. He has two children, Molly and Michael. An avid table-tennis player, he's an assistant coach of his daughter's softball team and a coach of his son's basketball team.
Although still in his first term, Markell already has made his political mark.
"He's one of the bright rising stars of the Democratic Party in this state," Singleton said.
Markell is currently running unopposed for another term and said he is not ruling out a run for governor one day.
"I don't put any time frame on anything," he said. "I really do want to do whatever I can to make this a better state. I have to constantly evaluate from which position I can do that."
In a state with one governor, two senators, and one congressman, Delaware has a history of politicians rotating between political offices -- regardless of their party affiliation. Former Gov. Mike Castle, a Republican, was elected governor in 1984 and 1988. Prevented by term limits from running again, he switched jobs with Democratic Congressman-at-Large Thomas Carper in 1992. After serving two terms as governor, Carper won a seat in the U.S. Senate in 2000, defeating Republican Sen. William Roth. Roth was first elected to the Senate in 1970, after serving four years in the U.S. House.
Looking back, Markell said he is satisfied with his first term.
"I'm getting started and I really think we're doing a lot to make a difference in people's lives in the area of financial literacy, in terms of restructuring government online, making government more effective," he said. "All of those things that I have spent frankly every day of the last three years on."
And for now, he said he has no plans to leave state government.
"I had a terrific career in the private sector," he said. "I walked away from something that was very exciting and I did it because I'm very committed to making a difference."
