Treasurer tiff turns theatrical

RALEIGH -- In the murky world of politics, it's not always clear where the line is between political wheeling and dealing and extortion.

The question came to a head in a Wake County courtroom Thursday when a judge was asked to settle a festering dispute between state Treasurer Richard Moore and a group that represents 55,000 state government employees and retirees.

A lawyer for Moore said an attorney for the State Employees Association of North Carolina privately offered this week to drop a lawsuit the association had brought against Moore in a public records dispute. In exchange, the association wanted Moore's agreement to support a bill in the legislature that would take away the treasurer's sole control over the state pension fund.

Kieran Shanahan, Moore's attorney, said the offer amounted to extortion or bribery. He is seeking to have the association's lawsuit dismissed as a result.

The association acknowledged that Tom Harris, its general counsel, made the offer in a phone call and e-mail message with Shanahan. But the association said in a court filing that it was business as usual in legal and political matters, calling Shanahan's charges "impertinent and histrionic."

The debate evolves

The hearing Thursday was an unusual twist in a case that began as a dispute over public records but has evolved into a debate over whether the state treasurer has too much power. The cast of characters in a Wake County courtroom included a swaggering Republican attorney representing a prominent Democratic official, a high-profile head of a state workers lobby that has dramatically beefed up its political muscle, and a judge who is familiar with what can happen when politics and the law collide.

Superior Court Judge Jim Hardin, who preceded Mike Nifong as the district attorney in Durham County, gave no indication Thursday what he thinks of the dispute.

But a Duke University law professor who teaches civil procedure said there aren't really any rules that would prohibit such a settlement offer.

"It is kind of a screwy trade- off," said Paul Carrington, the Duke professor, in an interview. "To say it's bribery is a little bit over the hill."

The bill the association wants Moore to support would take away the treasurer's sole control over the state pension fund -- worth $73 billion as of March. Under the bill, the fund would be run by a board of trustees.

The employees association leaders say they became concerned about Moore's handling of the fund after Forbes magazine published an article in 2007 accusing Moore of hiring money managers who gave him campaign contributions.

Moore, who unsuccessfully sought the Democratic nomination for governor this year, has repeatedly said campaign contributions had nothing to do with decisions about who got paid to manage the state's money. And Moore says he has turned over all the records the association requested.

The association disagrees and, in the middle of the Democratic primary for governor, filed its suit against Moore.

Suit called 'baseless'

Moore said the lawsuit was baseless and designed to help the candidacy of Beverly Perdue, Moore's opponent and the winner of the Democratic primary for governor. Although the association did not endorse Perdue, it ran a full-page ad publicizing its records dispute with Moore in the two largest newspapers in the state.

Shanahan, a Republican and former Raleigh City Council member, said in court Thursday that the association cannot point to a single specific public record that has been withheld. He told Hardin that the offer to drop the case in exchange for political support was even more proof that the case isn't about getting records. Letting the association make its offer, he said, would encourage more people to use lawsuits to try to force officials to vote their way.

"It's outrageous, it is offensive and it's in violation of the law," said Shanahan, who advertises his law firm with the slogan, "Don't bring a knife to a gunfight."

Dana Cope, executive director of the association, dismissed claims that there was a bribe or extortion attempt, calling them "Shanahan shenanigans." Cope said the bill they want Moore to support is related to the lawsuit because the bill would provide more transparency and oversight to the running of the pension system, the same thing the public records law is designed to do.

"The only reason why we sought the public information request is to make an independent determination: Is there a pay-for-play going on," Cope said in an interview.

A spokeswoman for Moore said he was unavailable for comment Thursday.

Hardin said he would decide later whether to dismiss the case.