Office of State Treasurer paid candidate's firm $180,000 over past eight years

Posted September 13

Dan Blue III, candidate for state treasurer, 2016.

— North Carolina's Office of State Treasurer has paid the family law firm of Dan Blue III, a Democratic candidate for state treasurer, $180,000 over the past eight years for work related to issuing bonds.

Blue Stephens & Fellers served as bond counsel on four separate occasions since 2009, according to figures obtained under a public records request from the office.

Blue's campaign manager, Brad Kennedy, said Tuesday that the candidate would not use his family's law firm for any sort of work should he be elected.

"No, he will not use his family’s law firm as bond counsel. That would be off-limits," Kennedy said. "Likewise, he would not use his family’s law firm for securities litigation."

Blue is running for treasurer against Republican Dale Folwell. Both men talked about why they running and their differences during a recent episode of WRAL News' "On the Record."

Along with posts such as governor, attorney general and agriculture commissioner, state treasurer is one of 10 independently elected statewide officials. The office oversees the state's pension fund and health insurance plan for teachers, state workers and retirees. It is also responsible for issuing and refinancing bonds, the state's primary method of borrowing money.

The current state treasurer is Janet Cowell, a Democrat who opted not to seek re-election.

Blue is the son of Sen. Dan Blue, D-Wake, the minority leader in the state Senate. Blue III's campaign biography says that, after working for investment banks and a pharmaceutical training business, he "returned to his family law firm in 2009, where he currently works."

Blue mentions the work for the state in his campaign biography, and both he and his father disclosed the payments on required state ethics forms.

Specifically, the firm worked on GARVEE bonds, or Grant Anticipation Revenue bonds, that help the state put federal transportation dollars to work.

North Carolina spent $3.06 million on bond counsel over the past eight years, according to the Office of State Treasurer. Bond lawyers certify that bonds have been properly issued and meet requirements for tax-exempt status.

"My moral compass dictates that all transactions at (Office of State Treasurer) be based solely on who is qualified, not who is connected," Folwell said in an email Tuesday. "The only profit or savings of managing the $100 billion operation of OST goes to the people of NC."

Folwell did not take direct aim at Blue in his comments, but he did suggest that political connections might sometimes play a role in who lands work from the state.

"As the next State Treasurer, any deals by past or present employees that were to the benefit of them and not the people of NC will be pursued," Folwell said.

Asked how he would decide on bond attorneys if elected, Kennedy said Blue "will maintain a pool of qualified law firms to serve as bond counsel for the state. He would select firms through a competitive and transparent (Request for Proposal) process."


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