Alabama PACT Roundup
I haven't had much time to blog since last Thursday. Here’s a roundup of coverage of the Alabama Prepaid Affordable College Tuition Fund from the weekend, and a few notes on my own plans for the next week or so.
Countrycat explains exactly what is at stake:
we're talking about the future of Alabama's children here, not the stock market or the next election. Will 50,000 or so young PACT beneficiaries get the college education their families thought they paid for or will they be forced to forego dreams of a higher education or end up deep in debt in order to earn a degree?
And takes a close look at what Alabama’s universities are spending on private jet travel.
Havealittletalk discovers that a former member of the PACT board was appointed to that position despite having been convicted of a felony involving the theft of public money. She also compares Alabama’s PACT program to Florida’s, and discovers that these programs work a lot better if the state works to keep tuition under control, and to keep the money out of the hands of kleptocrats.
A finance professor explains a few of the legal problems:
I've been doing a lot of thinking about how to get at some of the problems Professor McLeod highlights, and I hope some of the work I am putting together now will serve that purpose.
Robert McLeod, a finance professor at the University of Alabama, said that the way the state has presented the program to participants may ultimately be a linchpin issue in court. The program's literature doesn't mention that participants' money will be invested in the stock market. And most participants interviewed by The Birmingham News said they thought they were paying tuition, not buying a piece of an investment fund.
"You couldn't get away with this if this were a mutual fund," said McLeod. "You'd be thrown in jail if you didn't disclose all this right up front in your promotional material."
"So the state is saying, 'We're using the ... government exemption and are not a security,'" McLeod said. "On the other hand, they're saying, 'We're not part of the government, and it's not guaranteed.' So I think they've got a real problem."
Last night, I posted a list of organizations directly related to the administration of the PACT fund, from the Legislature right down to the money mangers, and links to key financial documents that I’ve located going back to 2004. I've suggested that everyone who is working on this archive those documents.
I am working on putting a lot of the information we’ve compiled so far into a timeline. I am gathering and archiving further information as I go. I am doing this because I want to take a close, chronological look at:
- Legislative changes affecting the fund,
- Changes to official program documents,
- Changes to the allocation of the fund's assets,
- Hirings and firings of private firms, and
- Statements made by public officials as all these changes were going on.
The timeline will take a while to put together, and no doubt I will have a short post or two before it is ready for publication.