"It's Not His Job" - Illinois Treasurer Plays Liberal Activist With College-Savers' Cash

Authored by Mark Glennon via WirePoints.com,

Through a Freedom of Information Act request we’ve learned who owns those shares of stock on which Illinois Treasurer Michael Frerichs is playing activist shareholder: college savers in Illinois 529 accounts.

That’s not his mission and they aren’t his shares. It’s bad policy and a dangerous precedent.

First, some background:

Frerichs has been trying to use his investment clout to solve the problems of fake news, ads by Russian operatives and hate speech, as he sees them. He is using a position in Facebook shares to try to force Facebook to do what he sees fit on those issues. Frerichs’ press release on this is linked here, which includes links to three letters he sent to Facebook.

Frerichs also is using his position in pharmaceutical companies to push them to do what he wants on the opioid crisis. Do something about opioids, he told Cardinal Health and AmerisourceBergen, or we’ll punish your stock prices by selling your shares. He went into great detail about what he’d like AmerisourseBergen to do, linked here. Frerichs has been specific with one other company, weighing on on the separation of McKesson’s CEO and board chair positions as part of the opioid issue.

The response to the Freedom of Information Act request we filed shows all these shares are held in various funds, mostly broad index funds, all of which are in the 529 college savings programs run through the Treasurer’s office.

It’s wrong for the Treasurer to be asserting his personal views on various social issues , through those shares, for a number of reasons:

  • They’re just not his! The Treasurer is merely the administrator of the 529 programs and the shares are paid for entirely with college savers’ money. He doesn’t even manage the funds the shares are in. If shareholders want to use their position to influence social issues, fine, but that should be up to them.
  • It’s not his job .Under Article V Section 18 of the Illinois Constitution, the Treasure is “responsible for the safekeeping and investment of monies and securities deposited with him and for their disbursement upon order of the Comptroller.” That’s it. His sole focus should be on maximizing return and safety of investments. With his implicit and explicit threat to sell shares to punish companies he doesn’t like, he’s subordinating rate of return to other matters.
  • He’s accountable to and directed by nobody as to what issues he takes on or what action should be taken. Even if you think the Treasurer is acting appropriately, should his decisions be his alone?
  • He doesn’t have the resources to do it right. This isn’t about whether the particular actions Frerichs took are right as you or I see things. The fact is that issues like fake news and what pharma companies’ roles are in the opioid crisis are complicated, require expertise and are subject to reasonable differences of opinion. Even if the focus is just on how their conduct is impacting share price, that’s for professional fund managers and share owners to decide.
  • It’s a dangerous precedent. Would a different Treasurer with different politics seek to punish, for example, companies like Starbucks that is pro-gay marriage? Or Nordstrom because it dropped Ivanka Trump’s clothing line?

On a related topic, we earlier wrote about the Treasurer bragging about his purchase of a forest preserve district’s bonds saying, “we understand its value in providing immediate capital support to a local community.” No. That’s not the Treasurer’s job, either, which is only to hold taxpayer money safely and for maximum return. He either over-payed for the bonds or didn’t make any difference, as we explained earlier.

Illinois Treasurer Michael Frerichs


I asked the Treasurer’s office to comment on these matters and I am printing their entire answer below. Decide for yourself, but I say it’s unresponsive.

I also say the Treasurer has much better things to do, like formulating a better cash management strategy for the state. He sits permanently on $11.5 to $14 billion of cash and short term investments, even while the state pays exorbitant late fees on billions in unpaid bills. We’ve written about that repeatedly, most recently linked here.

*Mark Glennon is founder of Wirepoints. Opinions expressed are his own.

Response from Treasurer Frerichs’ office:

Thanks for the opportunity.

Your premise that the state’s chief investment officer should not pursue carefully considered improvements to corporate board policies that would lead to higher profitability is curious, unproductive and would jeopardize shareholder value. Studies demonstrate that companies that consider environmental, social and governance factors are lower-risk investments that lead to better returns. As such, this work clearly is a critical part of our fiduciary duty.

Your contention that college savers who disagree with this investment approach will be harmed is misinformed. Diverse companies outperform their peers. Further, there are alternative investment options for college savers reluctant to embrace this proven strategy.  Finally, I note that Morningstar named Bright Start and Bright Directions among the best in the country.

Fake News is not a partisan issue. Facebook has acknowledged it needs to do more to prevent spoofing. Until more robust action is taken, there remains the risk that shareholder value will fall or not realize its full potential. Protecting shareholder value and increasing shareholder value are proper responsibilities for any investor.

There is an opioid crisis gripping our nation. It is a health epidemic. For investors, it also is a threat to shareholder value. Encouraging corporate boards to plan for the threats to shareholder value, including litigation, is a proper responsibility of any investor.

Further, the failure of Facebook and the opioid companies to self-police invites calls for government regulation which likely would lead to a decrease in shareholder value.

Encouraging boardroom action, including diversity, is done to maximize returns. The suggestion that the treasurer’s office would invest in under-performing companies because of some perceived world-view bias is untrue.

With regard to the Kane County Forest Preserve bond purchase, the market already was set before our decision to invest. That bond purchase was possible because voters overwhelmingly approved the bond sale that would fund forest preserve improvements and refinance more expensive debt so the forest preserve could cut its portion of the tax bill. This purchase allowed the treasurer’s office to a) earn a competitive investment market return, b) invest in Illinois, c) foster job creation and d) lead to a lower tax burden.

Mark, I think you offer a strong voice in addressing our state’s fiscal challenges. On this investment point, however, we disagree. It always is proper for an investor to protect their investments and maximize returns.

Be well,


greenskeeper carl NoDebt Mon, 01/08/2018 - 18:26 Permalink

NoDebt, they won't figure it out by hearing about it, they gotta learn the hard way. Good and hard. Nothing else will do it. I've made the point to people on the left before that the first and only duty of these funds is maximum return for their shareholders. Activism and investing a state's pension fund need to be kept separate. I think this came up with California divesting itself of oil related stocks, but I could be wrong. Anyways, the response was something along the lines of 'there are more important things in life than money'. I just said something along the lines of 'remember you said that when you fund is broke, because I guarantee you that the people relying on that pension aren't going to feel better about getting shafted when they are told it is being done to save the environment'. And getting shafted is exactly what its going to take. Of course, when it happens it will never occur to them to exercise a little introspection and realize they allowed this to happen, they will jsut demand higher taxes and a bailout. The people responsible will either be allowed to keep their jobs, or just retire with pension/golden parachute. Not that these funds aren't completely fucked no matter what happens, but theres still no sense in speeding it up unnecessarily. And then, of course, there is the seperate matter of the fact that costs of attending college are accelerating faster than just about any fund has grown in recent years, so thats also a moot point. Even with record high valuations, college costs are still most ikely going to outpace this fund. Just wait until we get the long overdue 'correction' from thee nosebleed levels.


TL/DR That ended up a lot longer than I intended.

In reply to by NoDebt

ZD1 greenskeeper carl Mon, 01/08/2018 - 19:54 Permalink

"I think this came up with California divesting itself of oil related stocks, but I could be wrong."


The commie shitheads who control Commiefornia's pension and 529 plans are all about leftist social activism. 




In reply to by greenskeeper carl

gdpetti Moe-Monay Mon, 01/08/2018 - 18:16 Permalink

THis is how these guys rise through the system... all the financial idiots in charge of state/corp accounts do this to some extent... and the PTB push them to do so.. they hire these guys who are willing to follow their lead, 'sit down, shut up and follow orders'... same with the politicians in DC, same with the priests/bishops/cardinals/popes in the Church and all its affilite in other donomiations.... same BS show here in Purgatory... where it's all fake all the time... Trumpy should know, he's been working for them since the 80s at least... in training before that under Roy COhn etc... just like Reagan since he become the SAG president and  groomed for 'higher office' since then... same with the Bush clan, the Clinton clan etc.. all 'birds of a feather'.. and this guy isn't any different... all these guys follow WallStreet's lead... same with our doctors who push the pharma line.

In reply to by Moe-Monay

JRobby JRobby Mon, 01/08/2018 - 17:41 Permalink

These Wikibatshit things never talk about who he blew or who ownes him


Michael W. Frerichs (born July 28, 1973) is the State Treasurer of Illinois, having taken office on January 12, 2015. Prior to being elected treasurer, he was a Democratic member of the Illinois Senate, representing the 52nd District since 2007. The East Central Illinois district, located in Champaign and Vermilion counties, includes all or parts of Champaign, Danville, Georgetown, Gifford, Rantoul, Thomasboro and Urbana.[1]

In the 98th General Assembly, Frerichs served as the chairman of the Higher Education committee[2] and had previously served as chairman of the Agriculture & Conservation and Enterprise Zone Extensions committees.[3][4]

Early life and career

Frerichs was born and raised in the small farming town of Gifford. Upon graduating from Rantoul Township High School, Frerichs attended Yale University and received his BA in 1995. He then attended National Cheng Kung University in Taiwan where he studied Mandarin Chinese while teaching English courses.[5] Upon returning home, Frerichs began to teach at his alma mater and became involved in the community serving on his local volunteer fire department, on the board of a local non-profit nursing home, and as a member of the Urbana Rotary Club.

Champaign County official

In 1998, Frerichs ran against then-State Representative Tim Johnson and though he lost, it was the closest margin in Johnson’s political career.[6] In 2000 Frerichs was elected to the Champaign County Board and reelected in 2002.[7][8]

Later that year, Frerichs was appointed to succeed Gerrie Parr as the Champaign County Auditor by his fellow board members.[9] As Auditor he was responsible for preparing budget reports, maintaining financial records, ensuring the county meet state and federal reporting requirements, preventing fraud, and improving the financial health of the county.[10] At the time, he was the only auditor in the state to become a Certified Public Finance Officer, a credential he continues to maintain.[2][5] Two years later he was elected to the position.

Illinois State Senator

In 2005, Frerichs announced he would run for the 52nd Legislative District seat that includes most of Champaign County and Vermilion County to fill the vacancy caused by Rick Winkel’s retirement.[11] In what became the most expensive state senate race of 2006,[12] Senator Frerichs was elected over former Senator Judith Myers by a margin of approximately five hundred votes.[13][14] as the first Democratic State Senator to represent East Central Illinois since 1936.[15]

Treasurer of Illinois

2014 election

See also: Illinois elections, 2014 § Treasurer

Frerichs announced his intention to run for the vacated office of Treasurer of Illinois in early January 2014, after incumbent Republican Treasurer Dan Rutherford had announced his intention to run for Governor of Illinois. Frerichs ran uncontested in the Democratic Party primary and faced Illinois State Representative and former Illinois State House Minority Leader Tom Cross in the General Election on November 4.[20]

For more than two weeks after election day, the election was too close to call, but eventually Frerichs was declared the winner, defeating Cross 48.1% to 47.8%, as the election ended up being one of the closest in Illinois state history, 

In reply to by JRobby

libertysghost Mon, 01/08/2018 - 17:28 Permalink

ANYONE who would give the State of Illinois any money not otherwise required by law that they steal from you through their tax schemes is a idiot beyond compare OR easily snowed by good con artists (and a possible combination of the two is not without precedent). 

CompassionateC… Mon, 01/08/2018 - 17:35 Permalink

You're a racist and a Nazi if you don't think investing in diversity is a good thing.  Folks, we're going to NEED basically infinite Africans to come here and pay our pensions because the population is aging and everyone knows that niggers are the most hard working and peaceful subhumans on this planet.  If you disagree then you're worse than tRump who is so evil he just removed Temporary (temporary as in like 20+ years) Protected Status from some Salvadoran jungle savages!  It just makes me sick!  They came to pay for white supremacists' pensions for fucks sake!!! tRump is ruining the Obama boom economy with his racism!!!

Ar15ak47rpg7 Mon, 01/08/2018 - 17:37 Permalink

What a piece of shit this guy is. This ass clown wasn’t smart enough to be a hedge fund manager or CEO but instead wormed his way to the top of the Illionois Treasury !!! Ha ha ha ...this guy is a complete fraud . It’s no wonder the good people are fleeing that hell hole State with fucked up pussy’s like this queer in charge of the State Funds. My bet is that if there was any honest agents left at the FBI to investigate this fucker they would find all sorts of felonious activity. Oh did I tell you I enjoy fucking this guys wife and daughter in the ass? His daughter loves the taste of cum and his wife really loves DP. 

CompassionateC… Mon, 01/08/2018 - 17:46 Permalink


Mr. Frerichs quickly sent out a statement noting that he'd co-sponsored a bill to encourage more purchases of the Israeli bonds, and attached a quote from several Jewish state legislators claiming that he was "among the most outspoken and vocal advocates for the State of Israel in the Illinois General Assembly." The Frerichs campaign later issued a statement which said in part: "He would continue investing in Israel bonds as treasurer. To say anything else is flat out wrong."


You can also add ANTI-SEMITE to the list if you disagree with Michael Frerichs investment policies.  He's such a good goy!


Small Governme… Mon, 01/08/2018 - 17:48 Permalink

Frerichs is engaged in breach of fiduciary duty.  The principal test for such a breach is did the fiduciary engage in galactic level stupidity?  In this case, the answer is a resounding "Yes".  Frerichs conduct has the potential to impair the value of the assets he is attempting to manipulate.  In so doing, Frerichs will do harm to those to whom the assets belong.  Thus, Frerichs and his employers bear the liability to for losses to the 529 account owners.

Looks like the 529 account holders could push both Illinois and Frerichs into bankruptcy liquidation.  

Tachyon5321 Mon, 01/08/2018 - 18:03 Permalink

Typical FU Democrat family, in Sept. Laura Freirich blew thru a red light and failed to pull over as the police tried to stop her. Then she hit the police car... LOL Her blood level was 3 times over the limit.


So she goes to court after she hits a police car in chase only to get 12 months of court supervision....  Welcome to Illinois corrupt legal system.





Drop-Hammer Mon, 01/08/2018 - 18:32 Permalink

Another skeevy jew.  Will no one rid me of these meddlesome jews?  We need some kind of solution to the Jewish Problem.  BTW, nothing happens in a vacuum in Illinois.  The authorities need to check on the cui bono of this guy's actions.