State News

N.C. treasurer, AG fight over pension lawsuit

Posted October 31, 2008 7:11 a.m. EDT
Updated October 31, 2008 4:43 p.m. EDT

— North Carolina's attorney general and state treasurer disagree who will represent state government workers and retirees in a fraud lawsuit.

The News & Observer of Raleigh reported State Treasurer Richard Moore and Attorney General Roy Cooper disagree about a securities fraud lawsuit against Freddie Mac.

The lawsuit alleges that Freddie Mac concealed and misrepresented the company's poor financial practices, which led to huge losses. North Carolina's pension fund lost $18 million.

The newspaper said Moore hired two law firms to persuade a federal judge to make the North Carolina Retirement Systems the lead plaintiff.

Cooper's chief deputy attorney general, Grayson Kelley, wrote one of Moore's lead attorneys, saying Moore's office has no authority to hire lawyers to represent the state.

The two candidates seeking to succeed Moore as state treasurer, Democrat Janet Cowell and Republican Bill Daughtridge, said Friday that North Carolina needs to bring in lawyers who specialize in securities and pension law to handle the case.

"We have to work however we can to make sure that we protect our pensions," Daughtridge said. "We have to make sure we're dealing with specialists who can get the best results."

"When you're pursuing losses of $20 million, you want the best folks on your team who can represent the state," Cowell said.

Both Cowell and Daughtridge praised Moore for the job he ad done with the pension fund and the state's bond rating – both remain sound despite the financial crisis – but Daughtridge said the State Treasurer's Office needs to be moderinzed and made more efficient.