WRAL Investigates

Ex-investment officer defends her ties to fund managers

Posted October 12, 2009 4:43 p.m. EDT
Updated October 12, 2009 6:24 p.m. EDT

— The woman who until last month oversaw investments for North Carolina's $56 billion public pension fund said Monday that her friendships with fund managers benefited the state.

State Treasurer Janet Cowell fired Patricia Gerrick as the state's chief investment officer. No reason for the termination has been disclosed.

Questions about ties between the Treasurer's Office and investment fund managers have come to light recently because of a "pay-to-play" investigation in New York's state pension fund

A former political power-broker and an investment executive have pleaded guilty in New York to accepting kickbacks from investment firms doing business with that state's public pension fund. Because of the scandal, the Securities and Exchange Commission is considering beefing up limits on contributions from people doing pension business with states.

A month before last year's election, Cowell received a $4,000 check from Pamela Joyner, the founder of investment firm Avid Partners. Records show the firm was paid as a "placement agent" for lining up a state pension contract in 2005.

Joyner and her husband, Fred Giuffrida, are longtime friends of Gerrick.

In 2007, Giuffrida's investment firm, Horsley Bridge, was contracted to handle $225 million in state pension money for a $1.5 million fee.

Gerrick said her friendships helped the state.

"My relationship with Pam helped me get access to a very good investment for North Carolina," she told WRAL News.

She also said the she fully disclosed her relationship with Joyner and Giuffrida to former Treasurer Richard Moore.

The State Employees Association of North Carolina, which has pushed to spread control of the pension to several advisers, questions the links between the Treasurer's Office and fund managers.

"This is just another example of the disturbing relationships between the Treasurer's Office and investment fund managers. No politician (or) their appointees should have sole control over a $56 billion pension fund," said Ardis Watkins, SEANC's legislative director.

Cowell last month implemented new ethics guidelines for the State Treasurer's Office, requiring all employees to disclose any payments made to placement agents for helping pension managers find funds in which to invest.