The firing of the chief investment officer in the office of the North Carolina state treasurer points to an apparent gap in policy that needs to be closed, immediately. Patricia Gerrick was fired by Treasurer Janet Cowell on Aug. 24, records show, because of "a review of various agency records" and "other concerns."
The position is obviously important, and well-compensated, because it has to do with managing the state's $60 billion in pension fund assets. Gerrick, hired in 2004 by Cowell's predecessor, Richard Moore, was paid $364,000 a year. She had held a similar position in Indiana, from which she also was dismissed.
The News & Observer reported Saturday that Cowell had sought reimbursement from Gerrick for personal calls on Gerrick's state cell phone. (She has made that payment.) The first announcement of her departure said she had resigned. She later decided not to resign, and was fired. The calls, as shown in cell phone logs, went all over the world, including many to Indiana.
Another interesting aspect here is that Gerrick recently updated sworn ethics forms disclosing that outside money managers had paid her travel-related expenses amounting to nearly $20,000 for various conferences where strategies of money management were discussed. Gerrick disclosed five other trips from last year, including one to London, but the costs were not included in those listings.
A treasurer's spokesperson said that allowing those outside firms, many of which want lucrative management business from the state, to pay for such trips is OK as long as there is disclosure and oversight of the trips. If that's the policy, it's wrong. Those seeking and doing business with the state shouldn't be picking up the tab, even if the arrangement is publicized on every billboard in town. Disclosure isn't the cure-all.
And those who want the state's business doubtless will be happy to come to Raleigh to discuss strategy and investments. A state official doesn't need to be making all these trips. Cowell should change this policy right now. And any other agencies that have similar procedures need to do a double-take as well.
