By Patrick B. McGuigan
Concerning his Republican opponent in this summer’s primary for state Treasurer, former state Senator Owen Laughlin says, “He's a nice guy but he doesn't have real world experience. On the other hand, I've spent 20 years in the banking business. I went through the bad times of the 1980s in oil and gas, and the agriculture challenges of the 1990s. In that work, I had to make hard decisions.”
In a recent interview with CapitolBeatOK, Laughlin continued, “In government, if you make bad decisions, the results sometimes get ignored or there is someone else to make up for it. In the real world, if you make bad decisions, there might not be a pay check next week.”
Laughlin says his campaign is “focused on performance and on accountability.” Before he left the Legislature after the 2008 election, “IBM did a performance audit and found that a few changes in the way the Department of Central Services does business could yield $70 million in savings.”
Although recent legislation may edge in the direction he advocates, Laughlin contends, “So far, we do things the same way we always have. Cumulatively, this could be worth hundreds of millions of dollars over a decade or less. Right now that is an amount that sounds like it would help us a lot with the state government revenue crunch. It would net the state a lot of money without raising taxes or making a single budget cut.”
Laughlin points to another area of concern in fiscal management: “I was astonished to learn that for roughly 1/4th of all state credit cards, receipts are not reported properly, not adequately accounted for, in information provided to the Auditor's office. Similarly, there is a lack of accounting for use of credit cards and other spending in Higher Education.”
Laughlin continued, “We've never properly inventoried state vehicles, according to the state Auditor's office. The Department of Central Services has begun to do inventory, for the vehicles they control and handle, and that's good. Some analysts believe we could save $20-25 million by managing our vehicle fleets properly.”
Laughlin affirms a frequent conservative criticism in the state government’s “use of outside legal counsel. We're spending about $40 million a year for outside counsel, according to The Oklahoman. There are no effective restrictions or guidelines on the use of outside counsel, but some ideas are percolating this year.”
On the legal counsel issue, Laughlin continued, “When I was in the Legislature I pushed for a bill to require a bidding process for outside counsel, but couldn't get it through. The ballpark on what this actually costs if between that $40 million and as much as $100 million a year. … Every year, there are contingency cases that aren't bid competitively, but are given to selected attorneys.”
Summarizing the situation from his perspective, Laughlin said, “I don't believe Oklahoma is poor. Oklahoma is poorly managed. Even without new law, the treasurer can have an effect on some of these issues. He can refuse to pay any warrants on undocumented or poorly documented expenses. He can require that they be fully documented, or not pay for them.
“Everything takes leadership. Someone has to be willing to point to the hole in boat, and make a big deal about the fact that there is a hole in the boat. Then, that someone has to propose a solution, rally the troops, write up what needs to be said and, if you must, go get the votes. In my lifetime, nobody has really tried to make these kinds of changes in Oklahoma government.”
Laughlin recalls, “I proposed legislation to reform operations at the Department of Central Services (DCS), back in the late 1990s. I could not get a committee to hear it. When it comes to DCS, I think they need to have the same rules that apply with FDIC to financial operations, the same standards the comptroller of the currency uses for banks. In banks, nothing happens or even can happen without dual controls.”
In terms of the state bidding process, “We need to assure multiple bidders and multiple sets of eyes on the process. The idea of audits, regularly occurring, is excellent. It needs to be made more than an idea. Lack of controls may be the biggest piece of the cost problems we have in government.”
Warming to the subject, Laughlin shifts to another area: “We have warehouse space, under DCS control, which has not once ever been inventoried. So, we don't know what we already have. Some purchases could be avoided, because the state already has the material it needs. This is a source of inefficiency and cost run-ups.”
As he reports, “DCS does not actually own those buildings. They are leased under one-year leases and in some cases have been rolled over without serious review for as long as 30 years. There's no inventory and no inventory control. An alternative would be to have a lease/option to purchase. Alternatively you could have lease/option to renew up to 10 years. This would avoid encumbering the funds beyond one year.”
He concludes, “Bottom line, we could gain back in this bad economy $100 million a year, and that's just for starters. We could do this by rationalizing and improving the way we manage 'things' that we have or control in state government. This is a real world business exercise that has not been attempted in government.
Adding interest to the GOP primary in the treasurer’s race is the encouragement to run that Laughlin’s rival, state Rep. Ken Miller of Edmond, received from incumbent Treasurer Scott Meacham, a Democrat. Former University of Oklahoma Coach Barry Switzer, a prominent Democrat, is a Miller supporter.
Laughlin projects confidence about the race, telling CapitolBeatOK, “He has more money, but I have a strategy that will work.” In his formal announcement for the treasurer’s race two weeks ago, former Sen. Laughlin said he would, as his top priority if elected, wage “war on government waste.”
Laughlin was co-floor leader during the historic two-year period (from the 2006 to the 2008 elections) when the upper chamber of the Legislature was evenly divided between Republicans and Democrat. From 1996 to 2008, he represented the sprawling Senate district that covers 10 counties in northwest Oklahoma.