Chipman L Flowers, Jr

Early life and education

Flowers is the youngest child of Ltc. Chipman Flowers, Sr. a retired Army officer, and C. Jean Johnson Flowers, a former teacher and guidance counselor for the U.S. Department of Defense Dependent Schools. Flowers' father was commissioned by General Daniel "Chappie" James, the nation's first African-American four-star general officer in the United States.

Early life

As the son of a military officer, Flowers traveled extensively in his youth, attending public schools in Dallas, Texas, Lawton, Oklahoma and Pittsburgh, Pennsylvania. He attended middle and high school in Italy while his father was stationed overseas. He is a graduate of Vicenza American High School in Vicenza, Italy. He graduated from the University of Pennsylvania in 1996, earning a bachelor's degree in economics, and then attended Georgetown University, where he earned his Juris Doctor degree and a Master of Business Administration in 2000. While attending Georgetown, Flowers worked at the A. Philip Randolph Institute, the Congressional Joint Economic Committee and in the White House Office of Political Affairs during the Clinton administration.

Flowers later studied at the Harvard Kennedy School where he earned a Master of Public Administration and received the Don K. Price Award for academic excellence and public service.

Career

After graduating from Georgetown, Flowers began his legal career in Delaware in the Wilmington office of Skadden, Arps, Slate, Meagher & Flom, LLP, where he worked as a mergers and acquisition attorney. He served as chairman of the Multicultural Judges and Lawyers Section of the Delaware State Bar Association. Flowers worked as the Chief Democratic Analyst for Delaware Tonight, a nightly news program on WHYY-TV, where he served until the show was cancelled.

In 2006, Flowers founded Flowers Counsel Group, LLC, a corporate law firm that specializes in mergers and acquisitions and procurement law. The firm, which is one of the region's largest minority-owned corporate law firms, provides corporate purchasing services for international and Fortune 500 companies, as well as the nation's leading academic institutions and has represented clients in transactions totaling in excess of $1 billion.

Campaign and election

In 2010, after a largely self-financed campaign, Flowers won the Democratic primary for Delaware State Treasurer against incumbent Velda Jones-Potter, who was appointed by Governor Jack Markell to serve the remainder of his term, with 54.3 percent of the vote. His platform, entitled “The Flowers Framework for Restoring Prosperity,” included a "Financial Warning System" that aimed to categorize economic conditions using a color scheme. Additionally, Flowers proposed a "Hometown Tax Credit" that encouraged businesses to hire from Delaware schools.

In the general election in November 2010, Flowers defeated Colin R. Bonini, a three- term Republican state senator from the Dover area, 153,203 to 147,031. Flowers, elected at the age of 35, became the first African-American elected to serve in Delaware and was the youngest statewide elected official during his term.

Term

During 2011, his first year in office, Flowers restructured the Delaware State Treasury into four distinct offices and began publishing the Delaware Economic Index. He implemented the Delaware Early Warning System, a financial warning system that rates the health of the state’s economy. Within 90 days of assuming office, Flowers also was confronted with the challenge of deciding whether to remove hundreds of millions of uncollateralized state funds from a potential failing financial institution, Wilmington Trust, that failed to meet the state's standards for holding deposits prior to his assuming office. To resolve the issue, Flowers ordered the failing financial institution to move state funds into federally insured transaction accounts and proposed major reforms to diversify the state's assets by spreading state deposits throughout multiple financial institutions to reduce risk - a decision that was not supported by Governor Jack Markell and his appointees on the Cash Management Policy Board who desired to keep the money in the failing financial institution (many of Wilmington Trust's senior executives were eventually indicted by the federal government for making false and misleading statements in public filings relating to the health of the institution). Though his actions to reduce the state's exposure to the failing financial institution was viewed as necessary and proper by many in the financial community and among his fellow Treasurers, it created tension with Governor Markell and the Cash Management Policy Board that lasted throughout his term.

That year he was elected to the Executive Committee of the National Association of State Treasurers, representing the treasurers of the Eastern states. He donated his entire first year salary of over $100,000 to fund two fellowships at the Treasury in partnership with United Way of Delaware.

Cash Management Policy Board Debate

During 2012, Flowers and Governor Markell debated over the role of the state’s Cash Management Policy Board and the need for “open and competitive” contracts in securing the state’s investment managers. Flowers contended that the board’s investment decisions had led to lower than average returns on the state’s investment portfolio and the state needed to engage new investment managers on an open and competitive basis to increase returns and reduce fees. Markell and his aides, in supporting the board (the Governor appoints most of the members of the Policy Board), claimed that Flowers was attempting to usurp the board’s traditional responsibilities to hire fund managers and make decisions about investment policies. Flowers commissioned a report by Credit Suisse Securities USA, LLC, which determined that the rate of return on the state’s portfolio lagged behind the returns realized by similar states. He authored an article that summarized his position. That same year, he increased the returns of the portfolio by $4 million. Flowers, under a revamped model, made over $55 million for the State of Delaware during his term.

Following publication of the Credit Suisse report, the state Treasury began reallocating assets. In October 2012, the Treasury and the board reached agreement to diversify the state’s assets, increase the number of investment managers and require them to meet certain financial performance benchmarks. The Treasury also negotiated a lower fee structure.

Financial Education & Protection of State Deposits

In May 2012, the White House commended Delaware and two other state treasuries, for their efforts to promote financial literacy, praising both the Delaware Economic Index and the Prosperity Portal, a web-based repository of information on financial topics. In early 2013, all three major rating agencies (Moody's, Standard & Poor's and Fitch) awarded a AAA rating to Delaware's bonds. Later in 2012, when the federal Transaction Account Guarantee ("TAG") Program was set to expire, Flowers made a decision to secure Delaware's state deposits by requiring banks holding state funds to post collateral for state accounts with the Federal Reserve (prior to taking office, Delaware was one of a couple of states that did not require state funds to be collateralized by its financial institutions). This action protected hundreds of millions of state funds and is viewed as one of his major achievements of his term.

Honest Way Proposal

In January 2013, Flowers held a major press conference proposing a series of reforms called the "Honest Way" proposals to reform Delaware's financial system - particularly, the operations of the state's Cash Board. Under the Honest Way proposals, Flowers proposed that members of the state's Cash Board would have to file annual financial disclosures (the Cash Board was only required to file disclosures when initially appointed to the Cash Board with no annual update requirement), meet at least quarterly in the management of the state's investments (the Cash Board was only required to meet twice a year), recuse from votes where members have a conflict (the Cash Board had no policy that required its members to recuse from votes where the members had a personal interest), require term limits (some of the Cash Board members had served since the early 80s) and prohibit Cash Board members from making political contributions from elected officials having a role in the state's finances. Flowers stated the impetus of the proposals was the one of the Cash Board members, who had given significant funds to the Governor's campaign and his political action committee, had requested the Treasury place state funds in financial institutions based on his personal interest, not the best interest of the state. The proposals resulted in months of public debate regarding the role of the Cash Board, with the Governor and Democratic leaders of the legislature opposing the proposed reforms. During the press conference, Flowers stated, "I want to work with an honorable Board operating with integrity, not a corrupt Board seeking to use your money for their advantage...I want to do it the right way, not the corrupt way."

In February 2013, in a rare vote, Flowers almost achieved a major upset when the state's Republican caucus in the House of Representatives joined some Democrats causing a tie vote for a reform measure sponsored by State Rep. John Kowalko that would have immediately adopted the annual financial disclosure requirement for the Cash Board over opposition from the Governor and the Speaker of the House of Representatives (ultimately, the reforms were sent to a committee of the state legislature for review). However, as political payback, the Governor and Democratic leaders of the legislature introduced legislation to reduce the powers of the State Treasurer. Flowers refused to back down and ultimately, certain portions of the Honest Way reforms were adopted by the state's General Assembly.

In February 2014, Flowers released The Fourth Report on the Delaware State Treasury, which noted over 35 accomplishments during his tenure, highlighted by the state portfolio returning over $44 million (including positive returns 30 out of 37 months), measures to protect the state’s portfolio and a $400,000 reduction in annual fees.

Despite his accomplishments and potential for re-election success after strong debate performances against his primary opponent, in August 2014, Flowers held a press conference, which was broadcast live in the state, announcing his decision not to seek re-election for a second term citing exhaustion in constantly battling "lies and deception" by his former deputy Erika Jane MacZuba Benner (aka, Erika Benner, Jane Benner, Erika MacZuba or Erika MacZuba Benner). Flowers removed MacZuba Benner from office in January 2014 after it was revealed that she made over 30 personal charges on her state credit card totaling in excess of $6,000 (over a two-year period) in violation of state policy without the knowledge of Flowers. One of MacZuba Benner's personal charges on her state credit card was a Stubhub charge for football game tickets where she invited Flowers to attend the game by misleading him to believe that the tickets were owned by her family as season tickets. MacZuba Benner misled Flowers, Treasury investigators and law enforcement authorities for almost a year telling multiple fabrications about the nature of the Stubhub charge. Flowers informed the public about MacZuba Benner's deception relating to the Stubhub charge and other questionable actions by her that were being investigated by federal and local law enforcement authorities during the August 2014 press conference. It was later discovered by law enforcement authorities that MacZuba Benner was the subject of multiple civil lawsuits in Delaware from various creditors dating back to 2010, where she owed significant amounts of money for failure to pay.

Thirty days before his primary election and prior to his announcement not to seek reelection, MacZuba Benner filed false claims against Flowers which were quickly dismissed by law enforcement authorities as being without merit, after authorities subpoenaed text messages and phone calls from MacZuba Benner to Flowers. After receiving the text messages and phone calls, authorities stated "once that was presented, it was clear" that the claims by MacZuba Benner were false and she never returned calls from law enforcement authorities seeking to question her about her false claims (it is not clear if MacZuba Benner's actions were part of larger political plan to damage Flowers through falsehoods and deceptions nor is it clear if the authorities were seeking to prosecute MacZuba Benner for her false claims and manipulating a police report prior to giving the police report to the Delaware press). Even though Flowers was cleared by law enforcement authorities and received numerous requests for him to re-enter the primary race, he remained firm on his decision to not seek re-election and leave Delaware politics. Flowers, who refused to withdraw his name officially from the ballot until his name was publicly cleared from the falsehoods, stated, “I hope this serves as a strong warning to any individual or political campaign that seeks to resolve political disagreements by using our legal system inappropriately...this should never happen again" In an email to Delawareans on August 28, after being publicly cleared of the falsehoods, Flowers reaffirmed his decision to not seek re-election by telling the public, "We have achieved something greater than re-election victory, the truth that I have served our state honorably and that wrongs will be righted. History will record it correctly in due time and through faith, let us be at peace with it in our time." On Primary Day in September 2014, Flowers' political popularity remained strong as he still received approximately 30% of the primary vote, despite not being a candidate for the office and his name being removed from many of the state ballots.

In addition to Flowers' strong vote total during the primary, the impact of the false claims and state Democratic Party's negative treatment of Flowers as the first African-American statewide officeholder during his term, particularly by Governor Markell and his administration, rippled through the largely Democratic electorate in the general election. Not only did many Democratic base voters in the election fail to vote (causing a very low voter turnout rate), many traditional Democratic base voters joined the state's Republican voters and defeated Markell's and U.S. Senator Tom Carper's supported candidate to replace Flowers by a large margin (over 10%), thus giving the state Republicans their first statewide office victory in over 20 years. Flowers stated that he felt "vindicated" that the voters had sent a strong message for the wrongdoing undertaken by senior members of the state's Democratic establishment. The shift in Flowers' supporters to the Republican candidate in a statewide election is viewed as a pivotal turning point in the traditionally Democratic state and is likely to have major implications in future statewide elections if state Republicans are able to maintain this unique coalition of voters, with some believing that the state's significant minority population, suburban New Castle County and Northern Kent County voters may continue to vote Republican in protest against the state's Democratic Party in future elections.

On January 4, 2015, Flowers held his last major press conference in Delaware announcing that the state made over $55 million during his term in office, and "strengthened and reformed [its] financial system through independent investment advice, protected hundreds of millions from a failing state bank, fostered diversity among [its] investment managers, modernized the treasury, rewarded merit over political connections and allowed innovative ideas to flourish in a political climate that often rewards the status quo." In addition, the speech was noteworthy as Flowers also discussed his experience as Delaware's first African-American statewide elected official. Flowers commended the people of Delaware for showing "true progress and leadership on the issue" and expressed his gratitude for their support, but criticized the state's political leadership, particularly, the administration of Governor Jack Markell and The News Journal (the state's largest print media, aka delawareonline.com) for inappropriately fostering racial stereotypes to deceive the public. Despite his record achievements, unlike other state media, the News Journal printed over 50 articles about Flowers during his term without printing any of his accomplishments and often conveyed misleading and false information to the public, even after state and other government agencies issued reports showing that the information being printed in the publication was false and inaccurate (though the News Journal reassigned its Government Investigations Editor shortly after Flowers was cleared and the lead reporter assigned to Flowers was not employed by the paper less than a year after the false and misleading reporting was revealed and began employment with an agency under Governor Markell's direction). Shortly after Flowers' speech, many community and civic leaders and lawmakers began investigating and documenting claims of racism prevalent throughout Delaware state government during the administration of Governor Markell and questioned diversity at the state's largest university, the University of Delaware.

During his speech, Flowers stated, "Diversity means having the courage to allow people who are different from you to sit at the table and share ideas that you may oppose, but not seek to destroy their lives because they see the world in a different way. We must never allow political leaders or those in media with an agenda to lead the people of this state down this dark and divisive road again." Flowers announced that he would create a website to provide a roadmap for others seeking to serve the public. He stated, "the best legacy is to encourage good and decent people to enter government, so we can forever change the political landscape with those who truly support openness and diversity" to move the state forward. Flowers also stated that he would consider entering public service in his new home state of Massachusetts after a period of rest noting on his final day in office, "my political career isn't ending today, it's truly just beginning."

Flowers completed his term in January 2015 and moved to the Commonwealth of Massachusetts to engage in the "great policy debates of our time.". In March 2016, Flowers gave his first keynote address in Delaware since leaving public office in Wilmington. During the speech, in addressing those members of Delaware state government who created numerous falsehoods about him during his term, Flowers stated, “It was hell going through it, but the first thing I did, and I didn’t do it right away, I forgave them." Though Flowers made millions for the state during his term, Flowers also stated, "When I went to Dover every day, I saw people who were thinking about themselves. It’s not about making a monument to yourself or getting a plaque to yourself. It’s about the fact that you can walk away from something saying, 'I helped people.'"

Freedom of Information Act issue

In March 2015, shortly after leaving office, Flowers and the Archives of The Honorable Chip Flowers, Jr. (the Archives) filed a Freedom of Information Act request with the Office of Governor Jack Markell seeking all electronic and other correspondence from Governor Markell and his cabinet officials involving Flowers, the Cash Management Policy Board, Flowers' former Deputy State Treasurer Erika MacZuba Benner (Erika Benner) and Flowers' primary opponent, Sean Barney (who worked for Governor Markell) during the Flowers' term. Governor Markell denied providing the documents to Flowers and the Archives claiming common law privilege, executive privilege and legislative privilege and only provided Flowers and the Archives press clippings given to the Governor by his Press Secretary during Flowers' term. In September 2015, the legal team for Flowers and the Archives appealed to the Office of the Attorney General, providing specific evidence that Governor Markell and his administration had failed to provide key correspondence not subject to privilege.

In March 2016, Flowers and the Archives received a major legal victory when the Office of the Attorney General in response to the appeal stated it was unclear if Governor Markell had violated FOIA by withholding certain emails solely on the basis that a member of the legislature was copied and ordered a reexamination of all the documents withheld from Flowers and the Archives. Flowers said he wants the information so that the public can have an accurate picture of his relationships with other state officials, his power struggles with members of the Cash Management Policy Board, and the controversies surrounding Benner, though many believe that the requested documents may support Flowers' claim that many of the controversies and falsehoods surrounding him during his term could have been led by the Markell administration. Upon receiving notice of the legal win, Flowers stated, “The issue is whether or not the administration can continue to not disclose these important documents to the public,”, describing the opinion as “a victory for the public.” No timetable has been given for the release of the documents and proposed changes to Delaware's FOIA law may be forthcoming after a report gave the state a "F" in releasing documents to the public. In July 2016, it was publicly announced that Markell engaged an outside law firm with state funds to appeal the decision of the Attorney General to the Superior Court of the State of Delaware. Markell's term expires January 2017.

Additionally, on September 30, 2016, Flowers and the Archives received another legal victory from the Delaware Office of the Attorney General when the Attorney General found that the State of Delaware attempted to overcharge Flowers and the Archives in excess of $15,000 to receive electronic mail correspondence sent and received by Flowers during his term in office. The Attorney General Office found that Flowers' successor, State Treasurer Ken Simpler and the Office of State Treasurer, sought to overcharge Flowers and the Archives for the costs associated with a legal review of the electronic correspondence in direct violation of state law. The true cost for the FOIA request was approximately $1,500.

Travel expense issue

In November 2013, Flowers was questioned about funds spent during a business trip to Alaska with then-deputy treasurer Erika MacZuba Benner the previous year. Flowers stated that his travel expenses were justified and that he spent the trip meeting with bankers and lawyers regarding Delaware's $2 billion portfolio. The trip was subject to reimbursement by the National Association of State Treasurers, but the reimbursement was incorrectly filed by a Treasury staff member. Flowers, who contributed over $550,000 to his campaigns and donated over $100,000 of his first year salary, chose to return $460.80 for the trip and returned an additional $415.25 for an additional day's stay related to a National Association of State Auditors, Comptrollers and Treasurers meeting in Seattle in 2012. On July 30, 2014, the Office of the Auditor of Accounts issued a full report that found that Flowers had traveled for only legitimate business purposes and his travel to Alaska and Seattle were paid (in full or in part) by the National Association of State Treasurers and the National Association of State Auditors, Comptrollers and Treasurers, resulting in the State of Delaware owing him for his reimbursements (the report only found the Governor, Flowers and other senior members of state government had failed to sign a state travel form authorizing themselves to travel - a finding that both the Governor and Flowers claimed needed updating since an elected official should not sign a form authorizing themselves to travel). Flowers declined to seek his reimbursements from the State of Delaware stating during his final day in office in Delaware during a press interview, "Though I have forgiven those who tried so hard to stop me from doing good, the people should not have to suffer for their wrongdoing."

Boards and associations

Flowers served or has served on the following boards and associations: