(intro music) - Welcome to Meet The Candidates, I'm Jennifer Fuller.

Today, we're talking with the Democratic candidate for Illinois treasurer, the incumbent Michael Frerichs.

Treasurer Frerichs, thanks for joining us on Meet The Candidates.

- Thanks for having me, itt's great to be back here.

- For people who are not familiar, let's get them caught up.

Tell us a little bit about your career and what brought you to be the treasurer here in Illinois.

- Great, I once served as the Champaign county auditor, where I became a certified public finance officer, I was elected to Illinois state Senate, and it was there that I realized the treasure's office to be a combination of my experience in government finance and my experience in state government and ran for treasurer because as the chief investment officer, it's very important, very important job.

We make a lot of money for the state and it's important that every dollar we can raise in interest is a dollar that doesn't have to be raised in taxes, or doesn't have to be made in cuts to things like education or higher education.

- Certainly something that you need to have a good well-rounded experience for.

You mentioned your legislative experience.

How does that experience inform the way you work day to day as a treasurer, but also working with the general assembly?

- Well, I'm a constitutional officer.

I have certain responsibilities that are dedicated to me in the constitution, but there are other things we want to do to help out people, to help give people the tools they need to invest in themselves.

And so we have programs like our college savings plan or programs that we got past our ABLE savings program for people with disabilities or our retirement savings program, to make sure that people could enjoy their golden years and have a retirement with dignity.

Those require going to the general assembly and getting their permission.

And so that experience in legislature has allowed us to offer more programs to people in our state.

- Are there things that you'd like to work with the general assembly on if you're elected to another term?

- Oh, most certainly.

We are always looking to improve our programs.

Since coming into office, we have revamped our college savings program, took them from one of the worst in the country.

To first this according to Morningstar rating agency, we went from a bronze rating to gold, the highest rating they give out, and they only give it out to three programs in the country.

So we're very proud of that and as a result, we have taken the number of accounts and more than doubled them.

We've taken assets under management from $7 billion to $17 billion.

And so we constantly look to improve that program, our ABLE program, our retirement savings program and to do that, we need help from the general assembly.

- For people who don't deal with the treasurer's office on a day to day basis and they start, - They should.

- Well, probably so, they start to hear large sums of money that you work with.

And for many their eyes kind of glaze over and they think well, how am I supposed to understand what's going on?

What are some of the most common day to day interactions that you hope people know and can learn about the treasurer?

- There are very large numbers out there, but an important number for a lot of people is the one and a half billion dollars.

We've returned to people here in the state of Illinois through our unclaimed property division.

What we call Icash there we've returned over a million properties to people.

We find that one in four people who go to our website and look for unclaimed property, find we have something that belongs to them.

So your odds are pretty good and the average amount was about a $1,000.

So we encourage everyone to go out there and it's something that's very fun returning money to people.

It's like I get a place Santa Claus 365 days a year, but also we know it's important for the state.

It makes a difference in their lives.

When you can return $200, $500 to some of the state, that's good for them, but it's also good for all of us because when we put that money back into the pockets of Southern Illinois residents, and they then in turn can spend that a local restaurant or a local business that money circulating throughout the economy does a lot more good for our state than it does sitting in a bank account in Springfield.

- And that gets to the investments.

You mentioned that you're the state's investment officer investments are really what the treasurer's office deals with on a large part of the job.

How does your experience make you the best person to handle that responsibility?

And what changes would you make to ensure those investments are earning the best rate of return and their sound?

- Great and so our state pool, we have made significant increases and we did that by working the general assembly to give us additional access for different investment vehicles and as a result, we've made over $1.2 billion for the state of Illinois, since taking office, we have set records in doing this and we did it by working collaboratively, bipartisan manner and just putting out what it would take to do more for the state.

And we look to continue that the investment options out there aren't static as the world changes.

We need to change to keep pace.

We've done that with our investments.

We've done that with our programs like our Ag invest program.

When I came in, there weren't a lot of farmers using it.

We now have made about a billion dollars in loans because we went out, sat down and talked to farmers.

We talked to bankers and everyone knows over the last few decades, agriculture's gone through great changes.

Our program hadn't changed with it, but by going out and listening, we were able to find out what we needed to do to really ramp up the program.

- This is perhaps something that you're familiar with being a down stater yourself.

There are a lot of people who see a big disconnect between the city of Chicago and the Chicago Metro area and downstate Illinois.

They see perhaps perhaps they're a little bit skewed in whether the facts are there.

That more benefits, more money goes to the state, the city of Chicago, instead of downstate.

How does your office help balance that out?

And how are people benefiting from your office throughout the state of Illinois?

- Yeah, I see the difference because I didn't grow up in Chicago matter In fact, I grew up in a small farming community, Gifford, Illinois population 800 when I was growing up, I think now they're over 900.

It's a great place to be from taught me the values of hard work and common sense that I've applied in this office.

What we try to do is give people tools.

Tools they need to invest in themselves.

Now everyone knows in order to get a good job, you need some sort of post-education post-high school, whether it be a university, a community college or a vocational program, a technical school, we want to help give more kids those opportunities.

And we also know that people really want to be able to enjoy their golden years.

They look forward to retiring, but too few people have actually taken the steps to be able to forward to retire.

And so we created a program to make it easier for people to save their own money in their own individual Roth IRA account.

So it's things like this that can provide opportunity for everyone in the state.

- Sure.

You've mentioned the economy a couple of times and there are those who criticize Illinois being bad for business and there are a lot of criticisms that are leveled at the governor's office or the legislature.

But what about the treasurer's office?

Are there things that the treasurer can do?

And are there things that you would like to do that might help change that persona?

- Yeah, we're always looking for ways to grow our economy here in Illinois treasurer office.

And as the chief investment officer, we can make decisions of where we invest.

So when we invest, we like to invest in things like our Illinois growth and innovation fund that makes direct investments into Illinois based venture capital and private equity companies who then in turn, invest in Illinois tech startup companies cause we know that we can make money by doing that.

But at the same time, if we help those companies grow and they make revenue and they employ more people, it's a double win for the state of Illinois.

We also invest heavily in our agriculture sector here in Illinois, our number one industry in the state of Illinois, we have a business invest program, a linked deposit program by working with local banks.

And we're always looking to make changes out there.

And one of the things we're gonna be able to do now is to invest in infrastructure in the state of Illinois, to help put more people to work and have an infrastructure that's gonna attract more businesses.

In the treasurer's office, we can't solve all the state's problems, but that doesn't stop us from being part of the solution and always looking to improve.

And frequently that's meant going to the general assembly and asking their permission to do things differently.

- You've mentioned this a little bit in a couple of other answers, but on a more personal economic level, a lot of Illinoisans are struggling with the rising cost of housing, food, other essentials.

How will your office help with those day to day struggles in terms of just making ends meet?

- Yeah, so one of the things we can do that's in our control is unclaimed property and when I came in, we made an effort to not only return more money to market differently so that more people hear about this and are claiming their money and as a result, we've returned over one and a half billion dollars.

We've returned a million different claims and the treasurers in charge of this program before me combined returned half a million.

So in a much shorter time, we've doubled this by thinking differently, doing things differently and making government easier to access.

We're gonna continue to do things like this and it's not just for individuals, we also have money for businesses, for non-profits and even some universities.

I was lucky today to sit down with your president and chancellor and tell him how we had found $25,000 for SIU.

- You know we hear you, you mentioned the university, we hear a lot right now about college debt and some of that debt being canceled or payback being extended due to the economy.

I know the treasurer's office offers a few programs for Illinois families to save and they're not without their own challenges.

So how have you managed those programs and what are you doing in the future or what do you hope to do in the future to help students afford higher education?

- Well, grateful.

This was personally important to me cause I remember when I got into college my dad told me congratulations you're not going.

I said okay we can't afford it now.

I don't want any young person to have to hear a conversation like that.

If they've worked hard, we should be able to help them realize their dreams.

And so when I came in, we took efforts to cut fees.

That Wall Street firms were charging Illinois families in half and by doing that and by restructuring the program, that's how we got that rating upgrade from Morningstar, going from bronze to gold, their highest rating.

So we're always looking to make those improvements, but we also realized you could help people afford to go to college.

But there are a lot of people who went to college before I got into office and they graduated with the mountain of debt.

So we went to the general assembly and asked for permission to invest in our students in the state.

And so we're rolling out a program to be able to help students refinance their debt, lower their costs.

So if federal government has taken some effort to cancel some debt, we can't do that as state treasure, but we can invest in our students, help reduce their costs of borrowing and by doing that, that frees up more money for them that they can spend on a new car or a house or starting a family.

These are all things that benefit the entire state economy, not just those students.

- There are programs though that have received criticism for a lack of funding or being unsustainable.

How have you managed that and what would you do in the future to make sure that that doesn't happen again?

- Well, that's those aren't our programs.

So there's a program college Illinois.

That's under the governor's office.

We have to convince people and it's a tough time telling that we have done a good job with our money.

The state can't sweep your money.

This money will be there for you, you are in control of this and because we have done that deliberately gone out and shown people the independent rating agencies and the grades they give us.

That's why we've been able to sign up a lot more families more than doubling the accounts.

And far more than doubling the assets under management since taking office $5 billion in that account has been used to pay for college, that's $5 billion.

Doesn't have to be taken out in debt.

So we think there's gonna be great benefit to this and we're always looking to improve and sign up more families.

- Certainly, How would you work with your counterparts across the country and at the federal level to make sure that priorities for this area are highlighted and perhaps collaborations are formed?

- Well, it's how we get a lot done.

I can tell you that our ABLE program, which we set up when I became treasurer is a program to help families with disabilities with children with disabilities, save for their future.

And I can tell you that we have the lowest cost program in the country and I can say that because Iowa also has the lowest cost program in the country and so does Indiana.

And so does Connecticut and so does Kansas.

And so Arizona, so does North Carolina because we all found out that by working together, I got other states together.

We realized that if we pooled our resource, we pooled our citizens, we could leverage a better deal.

And we did that and those things we try and do and those are states that are some red states and some blue states.

It didn't matter if we agreed on all politics, we all wanted to help our constituents people with disabilities.

And we worked on a lot of those relationships by my involvement with the national association of state treasurers and the national association of state auditors, comptrollers and treasurers, which I just recently became the president of NASACT.

So we do this because one, we like to share our ideas, but we also like to be in regular communication and find good ideas from other states and replicate them to the benefit of our own citizens.

- Certainly, so after years of decline and you've mentioned this already, Illinois is seeing upgrades in its credit rating.

How is your office taking advantage of those boosts when it comes to a investing, but again maintaining the safety and security of those investments?

- So the state of Illinois has had recent grading upgrades after many years of downgrades.

So this is beneficial to the state, but it's really beneficial when we issue debt.

And that's something the governor's office does when we make investments.

If we have cash, people are more than happy to take our cash, but we make sure our investments are smart.

We work with other elected officials.

So we all know that the longer we make an investment, the higher rate of return we get.

If you put money in an overnight account, you don't get as great of interest rate as you put it into a 30 day or a three year CD.

So we're looking to maximize our length of investment to make more money and so if we can help make more money that eases the job of the general assembly, when they're passing budgets, there are a lot of different ways that we try and find by working with others, we can accomplish a lot more.

I can't solve all the problems for the state of Illinois.

I can't solve the problems for those past downgrades.

But when I came in, we fixed our college rating program and Morningstar a company that rates all of the college savings plans in the country gave us one of the highest rating they give out and they only give it out to three different firms.

So three different states.

So this is some of the things we're doing and the kind of things we're gonna continue to do.

If we get another four years.

- That ties into working at the federal level, working at the state level to make sure that decisions are being made, that will benefit those investments as well.

Have you had difficulty and how have you worked through that in making sure that lawmakers know how important their decisions are in these sorts of investments in those credit ratings and things like that?

- Yeah, most certainly we work with our representatives to Congress.

We do that because a lot of federal laws will affect our office and so I will travel around the state and I'll meet with our congressional delegation, our two United States Senator to talk about these things.

One of the campaigns we're waging right now is with our ABLE program, this program helping people with disabilities save to have a brighter future.

Unfortunately they put an age limit on this.

If you maintain, if you got your disability before age 26, you can participate.

If after you can't, we think that's arbitrary and wrong.

Two people serving our country overseas.

If they both step on an IED and have their legs blown off, if that one person is 27 and one is 26, they have different opportunities.

So we're arguing with the federal government trying to influence our members of Congress to pass, to pass the ABLE Age Adjustment Act so that everyone can really have this opportunity to save and have a brighter future.

We just think is the right thing to do and that's why we make trips out to DC and lobby our members of Congress.

- This comes up from time to time, particularly in election years, when we start talking about state finances, there is always an idea floated that the Illinois treasurer's office could be merged with the Illinois controller's office there to fiscal offices, but they do serve different duties.

What's your opinion on that pros and cons?

- My opinion is this is something that's in the state constitution.

It would require a constitutional amendment and I believe in democracy, I believe we should put this in front of the voters and let them decide whether they wanna have two different offices or have them merged.

And if they decide they wanna have it merged, I think we can do this in a way that saves money for the state and maintains internal controls.

So that's something I've supported in the past, but it would require a constitutional amendment.

- Do you think that that is something that the legislature has the appetite for or should take on?

- They haven't recently when I served the state Senate, I voted for this, I've been public in supporting it, but it will not be on the ballot this fall.

So the hope is maybe they'll take that up in a couple of years.

- Certainly when it comes to politics, the treasurer's office is sometimes seen almost as nonpartisan.

A lot of what you deal with.

Doesn't have a lot to do with a political ideology one way or another.

How does your own public policy experience and your political leanings inform the way that you run the treasurer's office?

- Well, I think that investing money shouldn't be very political, but it's a question of who we invest in with our unclaimed property.

I saw that there was a problem with life insurance companies that weren't paying out death benefits and they told me they didn't have to.

It's all logic, everyone assumes that if I buy a life insurance policy and I pass away, my loved ones will get them out their money, but that wasn't happening all the time.

We've discovered over $800 million in unpaid death benefits.

And this should be something that I thought was nonpartisan.

But my opponent in this race voted against our legislation.

Mandating they'd have to pay out.

There is a problem of money in politics and some candidates will take money and then vote the way of the people giving them money.

But I think if you run for office, you should do it to serve the people, the people out there who made a promise, asked the company to make a promise, to take care of their loved ones when they're gone.

And I can't think of anything worse than breaking that promise on someone's deathbed.

- When it comes to working within and without a party.

How do you work within the democratic party?

And do you feel that the party is serving the people as best it should?

- Yeah, we have to work with a general assembly to get our ideas passed and we frequently have done that in a bipartisan manner.

When I came in our unclaimed property was cumbersome, too many people would say to me, treasure you've got my money and I'd say, great, we'd love to give it to you.

They'd say ah, it's too much work.

Well, we don't get to keep that money.

We'll hold onto it forever.

As I said, it does a lot more good back in their hands than it does sitting in a bank account and so we went to general assembly and said, can you help us make this easier for people to claim their money so we got legislation passed in a bipartisan manner, common sense things like allowing e-claiming people that now they don't have to mail things to us.

They can just take a picture or scan it.

We get something called fast track.

Before you had to find all this supporting information to prove that you once lived at that address.

We use the power of the internet now to confirm you once lived there and in some cases, we now will just mail a check to you without you going to our website, by working with other state agencies that have proof of your social security number and that you live at that address.

We'll just mail you a check in some cases.

And these are things that I've seen to be common sense and we got them passed in a bipartisan manner.

- An election year is a political year.

Do you support the ticket?

The democratic ticket?

- I do, I've worked with many of these people.

These people came in and took our state from a large backlog of unpaid bills to paying them down the governor's predecessor or eight credit downgrades in his time under governor Pritzker who had six credit upgrades.

These are the kind of things we should be working on.

Making sure that government works, works for the people of state of Illinois.

We're paying our bills and are things that unfortunately weren't done for a few years.

- Many times people think that the government should be more prepared than it is, so what challenges, what three things are you looking ahead to as these are things we need to address in order to avoid some of the headaches and struggles that people have had to deal with over the last say five years?

- Well, I'd say one of the things that they've been trying to do is to put more money in our rainy day fund for when there's another problem in the future and I applaud them for that.

We put more money into our pension system to get our unfunded liability a little more under control.

There's a lot of work left to be done there, but it's going in the right direction.

When you say what can we do?

We look internally and I think sometimes people in politics just look to the next election or they look to their own re-election.

We try and look to the long term, what can we be doing today?

What seeds can be planting today that will turn into trees in the future.

And we think by making smart investments in the education or young people, helping them to get ready for a lifetime of success is a great seed to plant today.

And so that's why we focus on our college savings plans.

We know that people aren't going to work forever.

They ought to retire and so we find ways to make it easier for people to save their own money and have a brighter life.

These are the kind of things that are within our control that aren't going to turn around our state overnight, but are gonna be critical to long term success for Illinois.

- If young people are looking at ways to get involved in civics, political office or any other sort of public service, voting is one easy way to do that.

But what do you say when you talk to young people as you travel a state in terms of getting involved and why they should support some of the policies and things that you've put in place?

- Well, that's what a political campaign is about going out and making your case for how your programs improve people's lives and fortunately, in our office, we have a track record, a track record of success with college savings, a track record of setting up award-winning programs for retirement and for people with disabilities, smashing records for unclaimed property returned and taking fights to the life insurance industry.

And I just say that if a young person thinks this sounds good, something that is appealing to them, get involved in a campaign because you can make a difference.

- Certainly we've seen over the last several years that Illinois appears to be an outlier in the Midwest in terms of some of its policies and some of the things that they prioritize.

Do you think that Illinois is an outlier?

Is it different than its neighbors?

- Well I would say in some ways, most certainly with our investments in Illinois's technology, it's turned Illinois into the tech leader throughout the Midwest and I can tell you when I go to our national associate of state treasures, state treasures from surrounding states have asked us about this and they've asked for help with legislation to duplicate this with our unclaimed property.

We fight really hard on behalf of consumers here in the state, we don't my office, we don't coddle up next to Wall Street or the big businesses we fight on behalf of people here.

And it's gotten the attention of other states around the country and have asked us how we did these things have asked for help with drafting model legislation and when we do something right, we're more than happy to share it with other states.

And so yes, there are differences, but in many places our office, we are leading in this country.

We were the ones who quit together, the consortium for our ABLE program that allowed us to create enough leverage, to have the lowest cost fee in the country and states have continued to join us because they appreciate our leadership.

- We've talked about this a little bit before, but I wanted to touch on it again in terms of the economic engine that is Chicago and the Chicago Metro region.

How do you think that the state should balance those priorities with, as you mentioned, the agricultural backbone and the agricultural industry throughout the state of Illinois, does the state do it well enough?

- Yeah, I think one of the reasons Illinois has been such a great state is because our diversity, you know, have a great financial center in Chicago but you have some of the best farmland in the country here in downstate, Illinois, you have great manufacturing spread throughout the state of Illinois in Chicago and you have downstate, whether it be John Deere over in the quad cities or caterpillar out of Peoria or ADM, an agricultural processor out of Decatur.

We have great diversity in our industries and I think we benefit each other because a lot of these crops are grown in downstate, Illinois, get processed here in the Midwest and when farmers need access to capital, they go to the board of trade in Chicago.

There's just a great symbiosis here that has really helped out our state in the past, still is in place a great system of transportation.

We have so many miles of interstate.

We have great train lines, rail lines coming through our state, great airports.

And what that means is for companies based in logistics, being situated in the middle of the country with all those great means of transportation just has this uniquely situated for success there.

And as a time that you see temperatures risings and weather patterns disrupting things, I can tell you that being close to some of the largest reserves or fresh water in the world is going to be very key in this country.

A lot of those states out there that have experienced people looking for warmer weather are gonna find when their water dries up.

They won't wanna live there.

- With just a minute or so remaining.

One final word for your campaign.

- Yeah, I think I have one of the best jobs in state government.

I've come into this office and we make money for the state of Illinois made over $1.2 billion.

We help give people the tools.

They need to have success in education or in retirement or for their loved ones with disabilities.

We also get to fight every day on behalf of the people of the state, when they're up against big corporations to get money that belongs to them.

Individuals have a really tough time doing that themselves, but I get to fight on their behalf, it's a great job and I look forward to hopefully four more years of improving on it.

- Treasurer, Michael Frerichs Thank you for your time.

- Thank you.

- I'm Jennifer Fuller, You've been watching Meet The Candidates on WSIU.

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