Monica Wehby and Jeff Merkley Financial Disclosures Reviewed – Oregon US Senate Race

The following analysis of the personal financial disclosures of Monica Wehby and Jeff Merkley  was done for the Oregonian newspaper.  The story by Jeff Mapes resulting from the analysis can be accessed here:  Senate Candidates Financial Disclosure- Part I   Also note that the analysis was updated after Wehby disclosed her final statement on August 15, after requesting two extensions.  See Senate Candidates Financial Disclosure – Part II.  The only substantive difference from the previous disclosure was the investment in a biopharmaceutical company in which Stimson Lumber CEO Andrew Miller serves as a board member.  It was Miller who contacted the police and filed a restraining order against Wehby after their relationship ended.

Senate Candidates

The purpose of this analysis was to provide an impartial financial review of both Wehby and Merkely’s personal financial disclosure statements, the findings of which were the basis for the story in the Oregonian.

Senate Candidate Monica Wehby:

Monica Wehby appears to maintain her primary banking relationship with US Bank, both checking and savings. Although no longer technically based in Oregon, the bank has an enormous presence and received high marks, on a comparative basis, for its conduct during the financial crisis.

Wehby’s overall investment strategy can be summarized in two parts.

The first includes a variety of publicly traded mutual funds, with Vanguard and Pimco being the largest.   The bulk of these funds appear to be in retirement accounts, many poor choices, yet that is  not Wehby’s fault but rather a result of the overall poor quality of the Legacy Hospital Systems retirement plan.

The second part includes three non-publicly traded investments, the largest being Ecola Point Development LLC.  Based upon her overall portfolio, this one investment appears to account for at least 50 percent, perhaps as high as 75 percent of her entire net worth.  State records indicate Wehby manages this real estate venture in partnership with Ron Seedal.

Certainly more disclosure is needed here, especially given that Seedall’s name appears to be spelled with two ll’s while the filing had one.   Who is Ron Seedal and what is his background. Davis Wright Tremaine, a prominent Portland law firm, is listed as the agent for the LLC.

It is not clear from the disclosure whether or not this partnership  is held within an IRA.  Wehby would be wise to clarify this up front, especially if simply a non-ira based investment,  given all the difficulty Mitt Romney had explaining his IRA.

A Pediatric Surgeon at Legacy Health Systems, Wehby’s salary was $998,677 in 2013 according to recent filings.   This seems high, even for a surgeon, and has not helped reduce concern after disclosures indicating Wehby is being sued for performing numerous unnecessary procedures.  It is unfortunate that she can not clarify this due to HIPPA health care rules, especially given that surgeons are so often sued by patients, even though the highest standard of care was attempted.

Senator Jeff Merkley:

Merkley is a member of Unitus Credit union, which he appears to use as his primary banking relationship.    This is a good community based institution yet when it came to refinancing his 15 year mortgage at 3 percent, he however chose Wells Fargo.

Wells Fargo is a good  bank for businesses yet it was one of the most egregious predatory lenders during the crisis and it does seem rather hypocritical of Merkley, while so aggressively criticizing the banks’ lending practices, to give this business to Wells Fargo rather than to a credit union or a bank like US Bank with a better consumer based corporate governance record.

Merkley’s overall investment strategy can also be summarized in two parts.

The first would be retirement accounts, which are mostly invested in mutual funds at Fidelity Investments.  Overall, they are a mix of poor choices reflecting retail level fees, rather than the wholesale level of fees participants in such plans deserve.

Merkley should note that Fidelity’s own employees are suing the company over their own 401K plan, claiming excessive fees and poor choices.   His fund choices include Fidelity Contrafund, Growth Discovery and Low Priced Stock.   Merkley’s wife invests in the same funds via her 403B at Providence hospital, and various IRA’s.  Her fund choices include Fidelity Contrafund, Growth Discovery, etc.

One choice in Merkley’s spouse’s 403B is the JP Morgan Large Cap Growth fund.  Rather surprising given the massive financial frauds JP Morgan has been involved in, literally one scheme after another ranging from the London Whale to mortgage fraud.  Why would they invest in such a fund when the Providence System offers access to high quality wholesale level funds such as the Fidelity Spartan Index 500?

Part two of Merkley’s investment strategy is focused upon income producing rental property.  His disclosure indicates he owns four rental properties and one undeveloped lot.

Conclusion:  Both Wehby and Merkley like real estate with Wehby focused upon speculative undeveloped land via Ecola Point Development and Merkley focused upon rental properties.   Both also seem to mostly limit stock and bond investing to retirement accounts.