NC Ethics Commission head defends agency’s opinion on Cowell

The head of the State Ethics Commission is defending the agency’s ruling that state Treasurer Janet Cowell could join the boards of two publicly traded companies as the right call under the law.

Perry Newsom, the commission’s executive director, also said he’s a bit surprised by the controversy that has arisen over the issue.

“My official response is, the opinion is correct and speaks for itself,” Newsom said in an interview Wednesday.

Newsom added that none of the criticism he’s seen of the commission’s formal advisory opinion has challenged “the legal analysis” behind it, just the final result.

“I’ve read a lot about people questioning pretty much the policy behind it, but not the way at which the decision was arrived,” he said.

“I think it’s the right analysis of the law as it applies to those facts,” Newsom said. “It’s kind of like following a road map. That’s the legal road map that the commission is charged with following. Wherever the map takes you, that’s where you go.”

Cowell, a Democrat who isn’t seeking re-election to a third term as treasurer in the November election, sought the commission’s advice before joining the boards of two companies: Morrisville-based ChannelAdvisor and James River Group Holdings, a specialty insurance company based in Bermuda that has a U.S. headquarters in Raleigh.

The eight-member commission found that the State Government Ethics Act didn’t bar Cowell from joining the boards. The commission did say there were a few strings attached; for example, she couldn’t use her position as Treasurer to advance the interests of a company whose board she sat on.

Despite that opinion and Cowell’s pledge to recuse herself from any matters involving the two companies in her role as Treasurer, Cowell’s acceptance of the two positions has struck a nerve. This week the The State Employees Association of North Carolina, a long-time critic of Cowell, called on her to either resign from the board seats or step down as Treasurer.

Newsom said the level of controversy was “a bit surprising.”

“Maybe I have blinders on ... regarding just the compelling logic of the decision itself,” he said.

Critics of Cowell’s decision have pointed to potential conflicts of interest.

Wellington Management manages billions for the state pension fund, which is overseen by Cowell, and also is a major shareholder in James River. In addition, James Rivers’ chairman and CEO is a director of Raleigh-based Yadkin Bank and a major shareholder of the bank; Cowell chairs the state banking commission.

The Ethics Commission’s ruling doesn’t specifically address either of those issues and Newsom declined to say whether they were part of the agency’s deliberations.

“The specifics of the opinion, I’m just not going to get into,” he said.

The eight members of the commission either couldn’t be reached for comment or declined to comment on the opinion.

The Ethics Commission typically posts its formal advisory opinions online without identifying who requested them, but in this instance Cowell waived confidentiality.

This story was originally published May 18, 2016 at 12:56 PM with the headline "NC Ethics Commission head defends agency’s opinion on Cowell."