I’ve never been a shy person, especially when it comes to politics. ALDOT director John Cooper threatening to shoot his neighbor? Yep, I’ll write an op-ed on that. Alabama House Republicans pass a bill to put gambling on the November election ballot, all but guaranteeing Republicans lose the second congressional district? A scathing rebuke seemed in order, so I wrote one.
But what about when a politician takes a principled, controversial, and – dare I say – unpopular stand on an issue and he’s actually right? Yes, that also deserves public comment.
I’m speaking, of course, of State Treasurer Young Boozer and the Birmingham-Southern College (BSC) debacle.
After earning a bachelor’s degree in economics from Stanford University and a master’s degree from the Wharton School at the University of Pennsylvania, Boozer spent 35 years in banking and finance before serving as the Deputy State Finance Director under former Alabama Gov. Bob Riley. In his first political race in 2010, Boozer defeated George Wallace, Jr. in the Republican primary, going on to be elected as both the 39th and 41st Alabama Treasurer. Love him or hate him, Boozer has the right credentials to hold the position he does.
Fast forward to 2023 when Boozer was thrust into a position he didn’t ask to be in by a legislative act that he didn’t support. BSC was teetering on the brink of insolvency, so the Alabama Legislature passed the Distressed Institutions of Higher Education Revolving Loan Program that authorized, but did not compel, the State Treasurer to loan up to $30 million dollars to save BSC. (OK, technically the law didn’t say BSC, but everyone knew exactly why the bill was passed and who stood to benefit from it.)
However, there was one pesky detail that derailed the whole plan – the bill left it up to the state treasurer to determine if there was adequate collateral for the loan and if the institution had the means to repay it.
Obviously, BSC failed this basic test, the loan was denied, and Boozer was then sued by the college – a lawsuit that he won, because the law said “may” issue and did not compel him to do anything.
In fact, the law put a basic test in place as a condition for the loan: could the loan reasonably expect to be repaid?
We hate it when activist judges interpret the law in a way it was never intended to be, but BSC alumni wanted Boozer to bend the wording of the law and issue a bad loan anyway. Instead, he did exactly what the law required and denied the loan.
Inevitably, the BSC board voted to close the college and the blame was cast on Boozer rather than where it belonged … with the BSC board which mishandled an endowment in the hundreds of millions, dwindling it down to nothing.
Oddly enough, no one is making the argument that BSC was a good credit risk! All the arguments boil down to the idea that alumni are sentimentally attached to their alma mater, thus, Alabama taxpayers should bail out BSC.
If the legislature wanted to loan the $30 million, they could have just done it! Why word the law that the state treasurer must see if the collateral was good and if the loan could be repaid? Everybody knew BSC wasn’t a good loan risk! They were routinely running deficits of $10 to $20 million, so a $30 million loan wouldn't have kept them afloat much longer.
Is it possible the Alabama Legislature knew the loan would never be approved but wanted to shift the blame to the treasurer instead of taking the heat themselves?
We’ll never know, but one thing is sure – the school’s alumni are all blaming Boozer.
The state treasurer has a fiduciary duty to the citizens of this state. Loosely defined, this means he must handle their money in the way that is best for them, not best for himself. Would it have been easier for Boozer to loan the $30 million and avoid taking the political heat? Definitely! But that would have violated his fiduciary duty to the state of Alabama.
The BSC situation was a ticking time bomb, and a bridge loan would have only delayed the inevitable. The situation was the result of 30 years of mismanagement, overspending and outright negligence on the part of BSC presidents and board … none of which is Boozer’s fault.
It’s time we put the blame where it belongs! To paraphrase something paleontologist Bob Carter allegedly said, lack of planning on your part does not constitute an emergency on our part.
I’ll end with an Ayn Rand quote: “If a businessman makes a mistake, he suffers the consequences. If a bureaucrat (in this case, politician) makes a mistake, you suffer the consequences.”
On behalf of the 5 million residents of Alabama, thank you, Young Boozer for not making that mistake.
Bryan Dawson is CEO of 1819 News. The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to Commentary@1819News.com.
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