Campaign Attacks Parading as News

In yesterday's Sacramento Bee there was a story titled "Campaign 2006: 2003 bank deal raises questions of possible conflict for Westly" It related a series of charges that in the process of securing financing for the bonds which helped to get California out of its Davis related deficit, that the controller received some personal windfall by personally owning bonds in Goldman Sachs and Bank of America. As one read the story, although it was front page news, it had less and less substance. It was clearly a campaign attack. Perhaps it is just a coincidence that the Bee has endorsed Westly's opponent.

At the time the bonds were being negotiated, because of the fiscal condition of the state, the bonds needed to be enhanced. That helped to lower the amount of money we would pay to bail out the fiscal irresponsibility that the Davis Administration and the decline in the fortunes of internet businesses had gotten us into. The amount of borrowing was huge. In order to be credible the credit enhancements needed to be done by major banks. Thus, the choices of banks was important but very limited. There is no credible information in the story that Westly did anything improper here, at least in the sense that he personally benefitted from the transaction or that he steered the business to a firm improperly.

Westly's opponent has a history of breaking last minute attacks. When he first ran for treasurer he attacked the abortion views of his opponent (a real important issue for the Treasurer's office) in a last minute hit. Westly has also gone negative in this campaign - explaining that his opponent was a land developer and created a housing community in an area subject to flooding (most of the Sacramento valley).

Today (on page 3) there is a followup which explains a couple of key details including the fact that most of what Westly did in the transaction was ministerial and that the total amount of investment in all of the firms was miniscule. This kind of reporting stinks. One wonders why both newspapers and politicians are at such a low ebb.