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The state of Idaho's treasurer's office drops bank, blames lawmaker

The treasurer’s office had $10 million invested in an account at Sunwest Bank until Sept. 30, 2019, when the state withdrew the entire amount.
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File photo of the Idaho Statehouse.

BOISE, Idaho — The state treasurer’s office stopped doing business with Sunwest Bank last fall, with Treasurer Julie Ellsworth accusing an influential lawmaker who works there of using his position to try to get more business.

Rep. Rick Youngblood, R-Nampa, is the co-chairman of the Joint Finance-Appropriations Committee, which sets the state budget. He also works at Sunwest Bank, which is headquartered in Irvine, Calif., and has branches and offices in the Treasure Valley and several other western states. The treasurer’s office had $10 million invested in an account at Sunwest Bank until Sept. 30, 2019, when the state withdrew the entire amount.

Youngblood said he may have sent an email from a legislative account that he should have sent from a personal one but didn’t do anything else wrong, and House Speaker Scott Bedke, R-Oakley, backs him. This dispute takes place amid a backdrop of bad blood between the Legislature and the treasurer over office space during the 2019 session that led Bedke and Senate President Pro Tempore Brent Hill, R-Rexburg, to sue Ellsworth, seeking a ruling affirming the Legislature’s authority over the use of the first floor of the Capitol, where Ellsworth’s office is located. The lawsuit is still pending.

Ellsworth spoke to Bedke about Youngblood in September and followed up with a letter in November that the Post Register obtained via a public records request. In her letter, Ellsworth says Youngblood used his House email to conduct bank-related business with the treasurer’s office; “appears to have used” legislative research and treasurer’s office staff for personal business; and used his political office to secure meetings with Ellsworth and her staff for personal business purposes. In a second letter later that month, she asked that Bedke remove Youngblood from the Credit Rating Enhancement Committee, which reviews policies and actions to preserve the state’s credit rating.

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“In the interest of public accountability and transparency my office has discontinued doing business with Rep. Youngblood’s employer, Sunwest Bank,” Ellsworth wrote. “Idahoans should rest assured that no elected official is using his position to leverage either favorable treatment or an advantage over other market participants. I bring this to your attention so that you will have the necessary documentation should you pursue any ethics implications or review of his committee assignments.”

“I have never used my legislative influence to get any account deposits for the state,” Youngblood told the Post Register, and asked if the office space dispute could be a factor.

“Is she after me because I’m on JFAC, and I handle funds, and she wants to slander me or make comments about me?” he asked.

Bedke said he has nothing but respect for Youngblood and believes he has separated his job from his official duties.

“I think he has, without exception, been able to properly conduct himself,” Bedke said.

Ellsworth declined to comment specifically.

“My office responded to your public record request and the documentation you received speaks for itself,” she said in an email.

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The treasurer’s office has been doing business with Sunwest Bank since May 2015, according to the office’s bank statements. The records show three accounts there. Two, with $8.036 million and $10 million in them originally, were opened in May 2015 and closed in September 2015 and in 2016, respectively. The last, an account for the state’s idle monies, was opened with $1.96 million in May 2015 with a little more than $8 million more deposited in September 2015, bringing the total to $10 million. The balance stayed at $10 million until Ellsworth withdrew all the money last September.

In response to a records request, the treasurer’s office turned over an analysis staff prepared in June 2017, at the request of the Legislative Services Office, about tax anticipation notes, or notes states issue to finance operations before expected tax revenues are received. The Legislative Services Office routinely fields requests from lawmakers looking for information on the state’s finances.

Legislative Services Office Division Manager Paul Headlee sent it to Youngblood, who sent it to Cameron Arial, founder of the municipal finance firm Clearwater Financial. Arial then sent it to Jace Perry, who had recently left the treasurer’s office and worked at Clearwater. Arial sent it to Perry’s old government email, which his former employer was still monitoring, and the email chain thus ended up back in the hands of the treasurer’s office. This analysis is what Ellsworth was referring to when she wrote Youngblood “appears to have used legislative research staff and the Treasurer’s office staff to do work for his personal business interest.” 

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The treasurer’s office also turned over two emails Youngblood sent Ellsworth from his legislative account. One, sent in August 2019, was an invitation to Sunwest Bank’s end of summer party. The second, sent to Ellsworth in July 2019, said he had just had lunch with Ada County Commissioner Kendra Kenyon and county Treasurer Beth Mahn.

“At one point we discussed deposits and funds with the (Local Government Investment Pool), which apparently is significant,” Youngblood wrote. “I mentioned you should be taking them to lunch as one of your clients. Great folks. Just a thought. Hope you are doing well. Any (loose) funds you might have send our way, Lisa (Rice, a vice president of Sunwest Bank) would love to run by.”

Youngblood said perhaps he should have used a personal email account for the July email, but was just suggesting that Ellsworth meet Kenyon and Mahn and wasn’t asking her to send his bank more money.

“I was just trying to be a nice guy,” Youngblood said. “What does that have anything to do with asking anybody for money?”

Youngblood said Rice handled his bank’s business with the state, and he didn’t have anything to do with it. And the August email, he said, was just an invitation to a bank function.

“I am very offended by all of this,” Youngblood said. “I have not used my staff, personnel or otherwise to do anything for my personal banking.”

Assistant Chief Deputy Attorney General Brian Kane was included on Ellsworth’s letter to Bedke. The attorney general’s office declined to confirm or deny whether it is investigating anything and responded to a records request with only a copy of Ellsworth’s letter.

Reporter Nathan Brown can be reached at 208-542-6757. Follow him on Twitter: @NateBrownNews.

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