The office of state Treasurer Janet Cowell, whose management of the states pension fund was blasted in a report commissioned by the State Employees Association of North Carolina, contends that analysis took a one-size-fits-all approach and played fast and loose with the facts.
Kevin SigRist, the funds chief investment officer, asserts the report authored by consultant Edward Ted Siedle and paid for by the State Employees Association of North Carolina contained inaccuracies and unsupported allegations. SigRist, in a letter to the $76 billion pension funds investment advisory committee that was released Tuesday, also contended Siedle has called for investigations of state treasurers in Rhode Island and Kentucky as he did with Cowell that dont appear to have gained traction.
The SEANC-funded report made a splash by accusing Cowell of violating numerous state and federal laws regarding investment disclosure. The association said that it would file complaints asking state and federal agencies to launch investigations. It also complained, among a lengthy list of other things, that Cowell concealed $30 billion in investments from public view.
The Department of State Treasurer has not received any indication that the SEC, the State Auditor, the Secretary of State or the U.S. Internal Revenue Service has initiated an investigation in response to any complaint made by SEANC or Siedle, noted one of two appendixes that accompanied SigRists letter.
Representatives for the state Auditors office and the SEC said their agencies dont disclose whether an investigation has been launched.
Officials at the IRS couldnt be reached for comment. The state Secretary of States office reported it has not received a complaint from either Siedle or SEANC.
The Treasurers response also noted that Siedle previously made similar calls for the SEC to investigate the state treasurers of Rhode Island and Kentucky.
No SEC investigation has taken place in Rhode Island, and concerning Kentucky, the SEC has issued a no action letter, the Treasurers response noted.
As for that one-size-fits-all complaint, SigRist, in an appendix, cited nearly 50 paragraphs in the 147-page report that contain similar or identical language to a blistering report Siedle wrote about the employees pension fund in Rhode Island.
A number of those paragraphs are, to be sure, general overviews, such as one that discusses a Bloomberg Businessweek cover story on hedge funds and another noting that, six years ago, famed investor Warren Buffett wagered $1 million that hedge funds would not beat the S&P 500. But more than a dozen paragraphs are essentially the same except for substituting TSERS (North Carolinas Teachers and State Employees Retirement System) for ERSRI (the Employee Retirement System of Rhode Island).
SEANC issued a statement Tuesday contending that the agencys response was full of inaccuracies and appears to be an attempt to dupe the General Assembly and taxpayers.
SEANC sarcastically commented that we do understand Cowells political tactic of releasing her report on the same day as a major announcement regarding the state budget, and we will take the necessary time and due diligence to read her report with our former SEC investigator and respond in detail to her many inaccuracies.
SEANC also is calling for an end to the he-said-she-said of this report and for a public debate between Ted Siedle and Janet Cowell.
SEANC, whose members contribute 6 percent of their paychecks to the state pension fund, has been a regular and vitriolic critic of Cowell. The association wants pension fund investments to be handled by an investment board rather than the state treasurer.
The allegations in the SEANC report were so voluminous that the Treasurers offices rebuttals were grouped in eight separate categories. Among other things, the agency said that it makes public more information about its investment practices than the majority of public pension plans, that it is complying with investment disclosure laws, and that it has no secret accounts.
All the money in the pension fund is accounted for and publicly reported, the agency stated.
The Treasurers 25-page response only mentions SEANC in footnotes. Instead it refers to the report funded by SEANC as the BFS Report, a reference to Siedles Florida-based firm, Benchmark Financial Services.