The N&O reports today that State Treasurer Janet Cowell has plans to join the boards of two publicly traded companies, which despite the pre-approval from the state ethics commission, is drawing sharp criticism.
But critics say it’s highly unusual for a public official, especially one that controls the state’s $86.6 billion pension fund, to join a corporate board – and that conflicts of interest are inevitable.
“Usually, when you’re in public service, you don’t go on corporate boards because of potential conflicts of interest,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
“I think the potential for conflicts, or even the optics of potential conflicts, mean it’s probably not advisable for a state official to serve on a board,” Elson added.
This potential conflict of interest, however, pales in comparison with the possible pay-to-play politics Cowell has engaged in for years. I connected the dots in this 2012 article. Here is a sample:
Records from the National Institute on Money in State Politics show that Cowell’s 2012 campaign has received more money from out of state sources than from North Carolina backers, and in 2008 she received $225,000 in New York-based contributions alone. Why so much financial support from far-away places?
When a politician is empowered with control over such a large pot of money, this is the inevitable result: interest groups will donate money in hopes of getting a slice of the pie. In this case, it seems that Cowell is all too happy to accept donations from out of state law firms, and in turn the law firms hope to be selected in the event North Carolina’s pension fund engages in class action law suits. The result: Cowell’s campaign coffers swell and the law firms profit handsomely.
The solution to such corruption is to get the politics out of the state pension fund, and shift North Carolina to a 401(k) style retirement fund for state employees that is controlled by the employees/retirees themselves instead of an elected official who could be tempted to leverage their office for personal gain.