|CLICK TO ENLARGE|
Monday, August 27, 2012
As Treasurer, David Schweikert invested 97% of Maricopa County’s $ 4 BILLION+ portfolio in Fannie Mae & Freddie Mac, then QUIT when housing market began to FAIL
Part 3 in a series on David Schweikert’s taxpayer deception and his administrative manipulation of the real estate market.
Today: Schweikert gambles with taxpayer Billions
When David Schweikert was the Maricopa County Treasurer from 2004 – 2007, the County’s internal auditors repeatedly and formally objected to the lack of oversight and segregation in the management of billions of dollars invested by Schweikert.
In 2005, Schweikert wrote a three-page vague guideline of disclosures that doubled as his Maricopa County investment playbook. This did not deter the auditors.
As they continued to press for accountability, not surprisingly, Schweikert ignored the auditors’ call for stricter oversight and compliance with best practices.
With only two people making investment decisions with billions of County taxpayer dollars (one investment manager hired by Schweikert - Mike Roberts - and Schweikert himself) the auditors knew that the risk to taxpayers and County services was far too great to ignore.
As internal audit findings began to surface, Schweikert's small team of insiders was nervous.
Schweikert quit when the heat from the auditors was too hot to handle.
Just three months after quitting his elected post as Treasurer in late 2007, Schweikert’s former right-hand-man, Steve Partridge, fired off a dismissive and rude letter to the Internal Audit Department – not once but twice.
The auditors made good use of Partridge’s bitchiness.
As prudent auditors should, they sent management letters with audit findings to the Arizona Legislature. In the 2008 reports to the Legislature for fiscal years FY05 and FY06, the auditors blasted Schweikert’s management as Treasurer and included Partridge’s letter.
Partridge mocks the auditors’ findings but intentionally neglects the most damning piece of evidence contained in the Maricopa County finance records.
The auditors had proof that Schweikert invested 97% of all Maricopa County funds in Federal mortgage securities and programs of the Government Services Enterprises (GSE’s) often known as Fannie Mae, Freddie Mac, etc.
The auditors even published a colored graph of Schweikert's $4 billion gambling scheme in the Financial Condition Report of FY 2006.
Conveniently, Schweikert is currently the vice-chairman of the House Financial Services subcommittee on Capital Markets and GovernmentSponsored Enterprises. Politico Mafioso has been reporting on the personal benefits Schweikert has reaped and is attempting to secure as a result of his vice-chairmanship.
As a personal real estate broker and investor while Maricopa County Treasurer, Schweikert took full advantage of taxpayers by pouring 97% of $4 billion into federally guaranteed real estate products during his tenure.
Schweikert fortified the strength of the real estate market during the glory days, then cashed in and QUIT as the market began to show signs of stress.
Schweikert still had over one year to go in his elected term when he got nervous and walked.
Instead of fleeing the country while billions of taxpayer dollars languished in the failing GSEs, Schweikert decided to run for Congress instead. He announced a run in CD-5 in November 2007. Schweikert ran a dirty campaign (surprise) against the Republicans in the 2008 primary and won. He lost to Harry Mitchell in the general election in November.
One of Schweikert’s biggest secrets is, he absolutely knew he had a hand in gambling with the fiscal stability of Maricopa County as he watched the economy of the United States crumble under the crash of the housing market just before losing to Mitchell in the 2008 general election.
As the US economy crashed and burned in October 2008, at a candidate forum sponsored by the East Valley Tribune, Schweikert chastised the United States Government for not stabilizing the housing bubble he helped create with billions of Taxpayer dollars. The EV Tribune reported this highlight from the forum:
"It hasn't gotten better, has it?" Schweikert said. "It's actually gotten worse. Has anyone in this room looked at your IRA in the last day or so? How many of you who wanted to retire in the next year or two are going to be working for years longer because of what's going on?"
Schweikert said Congress instead should have addressed the "underlying problem" that home values have plummeted.
He said the government should have helped stabilize the slide by converting a portion of interest paid for mortgage from tax deductions into tax credits. Furthermore, the government should have motivated investors to purchase troubled mortgages by waiving certain capital gains taxes.
Love that Schweikert got in a plug for real estate investors as he pretended to be concerned in front of distressed homeowners and panicked retirees.
Now, as a member of Congress, he’s working hard to make sure he gets a slice of the real estate investor action as the market improves.
Schweikert has been manipulating the taxpayers and government agencies that have written his paycheck for years.
It’s time he’s put out of his misery and is forced to get a real job and pay off his nearly $2 million in campaign and real estate loans – without having access to billions of taxpayer dollars in his petty cash account.