Can NC Treasurers serve two masters?

[caption id="attachment_4878" align="alignleft" width="150"] Janet Cowell[/caption]

by Matt Caulder, Capitol Connection, July 21, 2016.

Following the news that State Treasurer Janet Cowell has joined the boards of two companies based in the Triangle, while she is still in office, the board of trustees for the state’s retirement systems is discussing policy changes to ensure that the treasurer is employed solely to serve the people of North Carolina.

Cowell was absent from the meeting Thursday.

The conversation about recommending changes to keep the treasurer, and possibly other members of the Council of State, from holding other employment while in office began at a June 14 meeting between two trustees and Cowell, as well as at least one attorney.

During the meeting with Cowell, John Anarella and Michael Mebane, both appointed to the board by Gov. Pat McCrory, expressed concerns about Cowell’s employment with two businesses: e-commerce software company ChannelAdvisor and insurance firm James River Group Holdings. The issue was discussed in the wider lens of what policies should be put in place for future treasurers.

Staff at the Treasurer’s Office will study the issue and recommend policy changes at the upcoming meetings of the Investment Advisory Committee (IAC) and the Teachers’ and State Employees’ Retirement System (TSERS) and Local Governmental Employees’ Retirement System (LGERS) Board of Trustees.

The next IAC meeting will be in September, with the retirement board meeting again in October.

“During the term of the next treasurer, we will likely face a number of critical issues together,” Mebane said during the board meeting Thursday. “The issue of secondary employment for the treasurer will likely not be a material issue. It’s my opinion that there are no looming ethics breaches [here], but a difference of opinion and an ill-advised decision. I do feel a strong stance that further action is required either through this board or IAC, Investment Advisory Committee, or both.”

Mebane said the people the state retirement system serves need to trust that the department has their best interests in mind.

“Our board must be comfortable that we are representing our members fully and effectively,” he said. “Although our mandate is limited, we have a unique perspective and our members expect that we stand guarding their interests every day as we serve. I have often said that credibility on significant issues depends on how we deal with the small issues like secondary employment.

“We need to be good stewards of the small talents that are given to us to look after. During the term that many of you will serve on this board, the retirement model will be challenged and the board must demonstrate independence and objectivity in order to maintain an effective seat at the table.”

When asked what the proposed policies brought to the board in October would look like, Mebane said, “I think a commonsense one would be that you should not seek outside employment while you are serving as treasurer, as the sole fiduciary of the state.”

Anarella also spoke during the discussion Thursday about his surprise to learn this wasn’t already prohibited.

“I was actually shocked to learn that the governor, all the way on down, could have another job,” he said. “I think with the nature of the Treasurer’s Office and the nature of the Governor’s Office, and [as a] matter of fact any of the Council of State offices, getting paid to be on an outside board or getting paid to be in another job is probably not the best use of their time.”

http://nccapitolconnection.com/2016/07/21/can-ncs-treasurer-serve-two-masters/