Office of State Treasurer James H. Douglas

133 State Street

Montpelier, Vermont 05633

Telephone (802) 828-2301

PRESS RELEASE

DOUGLAS CONCERNED ABOUT VISION SYSTEM

FOR IMMEDIATE RELEASE

DATE: February 4, 2002

CONTACT: James H. Douglas, State Treasurer

MONTPELIER - State Treasurer James H. Douglas announced today that he is determined to expedite the state's bank reconciliation process despite persistent problems with the state's new computerized accounting system. These problems have led to a backlog "that needs to be cleaned up, and cleaned up fast," Douglas said.

The new accounting system, called VISION, replaced the State's 20-year-old system. The project was administered by the Department of Finance & Management. A software program, PeopleSoft, and an implementation consultant, Arthur Andersen, were selected by the Department of Finance & Management. The new system went online on July 1, 2001.

However, bugs in the reconciliation software immediately developed. "The computerized tools and reports necessary to complete the reconciliations were never fully developed," Douglas said. "I am definitely not very happy, and have expressed my concerns to the Administration's Department of Finance & Management. In my mind, the Department of Finance & Management's consultant, Arthur Andersen, has been extremely slow in correcting outstanding problems," Douglas said.

Douglas said he is going to expedite the reconciliation process now that the Administration's Department of Finance & Management has finally been able to close the State's books for the first quarter of this fiscal year. "We will work hard with internal staff and outside accountants, to make sure this is done right." In addition, Douglas is insisting that the consultants be called back in by the Department of Finance and Management to make necessary fixes to the software package.

Office of State Treasurer James H. Douglas

133 State Street

Montpelier, Vermont 05633

Telephone (802) 828-2301

PRESS RELEASE

DOUGLAS CALLS FOR IMPROVED CORPORATE RESPONSIBILITY

Treasurer Reports State Pension Funds Outperform Most Other States

FOR IMMEDIATE RELEASE

DATE: June 27, 2002

CONTACT: James H. Douglas, State Treasurer

MONTPELIER - State Treasurer Jim Douglas today said he supports efforts by the Bush administration and Congress to improve corporate responsibility and said that despite recent corporate scandals, Vermont's pension funds are performing strongly.

Douglas said Congress should pass legislation giving more information to investors, requiring closer scrutiny of auditing firms, and demanding more accountability of corporate officers.

"Honesty is the foundation of our market system. The greed and deception displayed by these corporate executives should result in some serious time behind bars," said Douglas. "Their actions do a disservice to the overwhelming majority of businessmen and women who are honest, responsible, and have genuine respect for their employees."

Corporate scandals involving Global Crossing, Arthur Andersen, Enron, ImClone and WorldCom have caused concern among Vermonters who rely on the state pension fund, said Douglas. But Vermont's fund system has performed strongly in spite of these abuses.

Douglas reports that state pension funds outperformed the national median public fund by 0.45% over the past seven years, which equates to an extra $65 million earned by the Vermont funds. Over this period, the pension funds have nearly doubled in value, bringing the total fund to over $2.2 billion.

"A well-diversified portfolio and strong fiscal management has allowed Vermont to withstand the market effects of corporate corruption," said Douglas. "Like all stockholders, Vermont has been a victim of corporate greed, but we are still well positioned to fulfill our promise to Vermont's state retirees."

Douglas also noted that the pension funds achieved these gains without taking undue risk. This means that funds were invested in only investment-grade bonds, stocks, and real estate, with a small amount placed in locally targeted venture capital.

Further, Douglas reported that Vermont will be a party in the pending class action lawsuit against Enron. The court handling the Enron case has chosen the University of California as lead plaintiff; Vermont's custodian bank, State Street Bank, will file for class status on behalf of Vermont.

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