@NCCapitol

SEANC: Treasurer's handling of pension fund warrants criminal probe

A state employees' organization called Tuesday for a criminal investigation into State Treasurer Janet Cowell's handling of the state's $87 billion pension fund.

Posted Updated

By
Laura Leslie
RALEIGH, N.C. — A state employees' organization called Tuesday for a criminal investigation into State Treasurer Janet Cowell's handling of the state's $87 billion pension fund.

The State Employees Association of North Carolina, a longtime critic of the Treasurer's Office and the fees the pension fund pays to financial managers, hired an investigator to review the fund's finances.

The Florida-based investigator, Ted Siedle, accused Cowell of a "heist" because $30 billion of the pension fund has been moved into alternative investments that aren't open to public inspection. The names of the money managers and the fees charged are secret, he said, which goes against legislation the General Assembly passed last year to fully report all fees.

"There's compelling evidence of wrongdoing," he said.

SEANC requested investigations by the Securities & Exchange Commission, the Internal Revenue Service and the FBI, as well as the State Auditor's Office and the North Carolina Attorney General's Office.

"The magnitude of the scam is 20 times greater than Madoff," Siedle said during a news conference, referring to jailed Wall Street financier Bernie Madoff, who is believed to have fleeced $18 billion from investors.

Schorr Johnson, a spokesman for the Treasurer's Office, said Siedle's report "is simply wrong" on several points.

"A full accounting of every dollar of the pension fund is provided in the annual report," Johnson said in an email.

Siedle said Cowell's control over the pension fund makes her the most powerful politician in the state because she can "facilitate political contributions not only to herself but to others as well," and he accused her of making questionable investment deals that have enriched local firms.

In addition to criminal investigations, SEANC called on lawmakers to change the way the state pension fund is governed. The group wants it to be overseen by a board, instead of only by the treasurer, and it wants prohibitions against any investment deal that would keep details secret.

North Carolina is one of only four states with a sole fiduciary running its public pension fund, Siedle said, and the only state he knows of with a pension fund that has never been audited.

 Credits 

Copyright 2024 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.