An investigation of North Carolina’s state pension system and the state’s Treasurer, Janet Cowell, funded by the State Employees Association of North Carolina (SEANC) suggests that Cowell has failed to present proper transparency of the state’s pension investments and associated fees. Cowell is the sole fiduciary of the state pension fund for retired NC teachers and state workers. From the Triangle Business Journal:
Pension forensic investigator Edward Siedle says North Carolina state Treasurer Janet Cowell has entered into a number of secret Wall Street agreements in which $30 billion of state money is invested — an accusation marking the culmination of his months-long probe into the investment practices of the $87 billion state pension fund.
“This is an unprecedented state of affairs,” Siedle said during the press conference. “(The money) has been taken off the radar screen. No one knows where it’s being invested, and I think the public has a right to know.”
By not disclosing the $30 billion in deals to the General Assembly and the public, Siedle says that Cowell broke a law passed by the state legislature last year (Senate Bill 558) that mandates full disclosure of all direct and indirect investment management and placement agent fees.
Other principal findings from Siedle’s investigation include:
Pension losses of $6.8 billion that are the result of Cowell’s “political manipulation of the state pension plan and self-described ‘experiment’ with high-risk alternative funds”
Estimated Wall Street fees of $1 billion annually, at least half of which were not properly reported to the General Assembly
Cowell’s office responded to the accusations by saying there are a number of areas in the report that are “simply wrong”.
SEANC head Dana Cope said that they intend to file a whistleblower complaint with the Securities and Exchange Commission, as well as request an investigation by the IRS.
I’ve documented in the past some of Cowell’s potential “pay to play” activities.