Todd Russ defends banking record as Oklahoma state treasurer candidates trade barbs
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A state treasurer candidate is defending his record of managing a small bank in western Oklahoma after his opponent launched television commercials highlighting federal regulators' previous criticism of the institution.
Rep. Todd Russ said he's not to blame for what the Federal Deposit Insurance Corporation called in 2009 “unsafe and unsound banking practices" at Washita State Bank in Burns Flat.
One of two Republican candidates for state treasurer, Russ in a debate Tuesday said he was no longer in charge of the bank when federal regulators dinged the institution. He also criticized his opponent, former state Sen. Clark Jolley, for launching the negative ads.
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Russ served as president and CEO of Washita State Bank from 2003 to 2008. In November 2009, the FDIC issued an enforcement action saying the bank had inadequate management, capital and earnings and was sensitive to market risk as a result of its financial investments.
Russ said when he was in charge of Washita State Bank, he ran a "fantastic," high-performing bank. The term-limited state lawmaker has made his banking experience a key point of his campaign.
"The date on that document is a year or more after I sold and left the bank," Russ said. "Any of the focus, the comments in that FDIC document are about the management after I left."
The FDIC's examination of Washita State Bank began in December 2008. Russ said he left the bank in the summer of 2008. But the FDIC questioned transactions the bank made prior to Russ' departure, and noted the institution did not correct deficiencies brought up in a 2008 report.
In the state treasurer's debate hosted by News 9 and online news outlet NonDoc, Jolley cited the FDIC action and said Washita State Bank relied heavily on volatile liabilities.
Russ operated the bank with an aggressive and risky management style, Jolley said.
"We cannot have somebody that is going to take that risky behavior in the state treasurer's office with taxpayers' dollars," Jolley said.
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Russ continued to defend his management of the bank.
"Our depositors never lost a penny," he said. "We made a profit every quarter, and we had zero at risk because we were smart."
Treasurer candidates Russ and Jolley debate legislative records on tax hikes, state budgets
During the hourlong debate, Russ and Jolley sparred on their records.
Jolley criticized Russ for voting for the largest tax increase in state history when more than three-fourths of the Oklahoma Legislature voted to raise taxes in 2018 to fund teacher pay raises. The package of legislation raised fuel, cigarette and gross production taxes.
Russ defended his vote that resulted in teachers getting an average increase of $6,100 and blamed Jolley for the state's poor financial picture that he said forced state lawmakers to raise revenue through tax increases.
"Senator Jolley's reign cost us two downgrades on our bond rating with Standard and Poor's," he said. "The idea that we raised taxes to give the teachers a pay raise was some kind of terrible thing to do, it's going to be hard for him to answer for down the road."
In response, Jolley tried to gloss over the pay raises by saying the tax hike increased funds for a bloated state government.
As the chairman of the Senate Appropriations Committee for five years, Jolley was tasked with crafting a state budget in what he says were some of the state's worst financial years.
Jolley said it was ludicrous to blame him for the hits the state took to its bond rating, noting he previously met with officials from the bond ratings agencies. The agencies took issue with state finances being so dependent on the fluctuating oil and natural gas industries, Jolley said.
He also noted that he inherited an economic situation of low oil and natural gas prices that meant less revenue coming into the state.
"I'm proud of what I did during my time as budget chairman," Jolley said. "We balanced the budget without raising taxes."
The exchange about teacher pay raises stemmed from a conversation in which Jolley and Russ verbally sparred about which candidate was a bigger supporter of the state's oil and natural gas industries.
Russ accused Jolley of raising taxes on the production of fossil fuels to the tune of $132 million. After the Legislature had lowered from 7% to 1% the gross production tax on some new oil wells, Jolley in 2014 voted to reinstate the temporary tax on new wells at a rate of 2% before it expired and reverted back to the 7% rate.
"The bill that Representative Russ is mentioning actually was a tax cut to make permanent a 2% rate instead of a 7% rate, which was a tax cut on the oil and gas industry," Jolley said. "My opponent actually voted several times to double the gross production tax and raise taxes on oil and gas."
The 2018 tax package to fund teacher pay raises that Russ and a majority of Republican legislators voted for increased from 2% to 5% gross production taxes for the the first three years of production.
Debate moderators also asked Russ about a comment he made and apologized for in 2016 in which he said Native Americans are "predisposed" to alcoholism during a House floor debate on legislation to expand beer and liquor sales.
Russ said his comments were taken out of context by Democrats, which spurred outrage among "out-of-state special interest groups."
Jolley said one of Russ' House colleagues, as opposed to any outside group, was the first to take offense to the comments. A Republican lawmaker who is a member of the Creek Nation was the first to raise an objection.
Russ said Tuesday he was trying to express compassion while talking about the pain alcoholism had inflicted upon his family.
A new poll from Oklahoma City's Amber Integrated shows Russ and Jolley are virtually tied at 28% and 27%, respectively. Roughly 46% of the 684 likely Republican runoff voters surveyed were undecided in the race.
In the June primary, Russ got nearly 49% of the vote. Jolley got support from 34% of GOP voters.
Russ and Jolley will be on the Republican runoff primary ballot on Aug. 23
This article originally appeared on Oklahoman: Oklahoma treasurer candidate defends banking record in heated debate
