The State Employees Association of North Carolina has accused state Treasurer Janet Cowell of violating a new state law by failing to disclose some of the fees paid to money managers who invest the state’s $86 billion pension fund.
The accusation, made Monday, marks an escalation of SEANC’s ongoing dispute with Cowell over the fees paid to pension fund money managers.
Schorr Johnson, a spokesman for the Treasurer’s office, disputed the allegation.
“We report all fees as required,” Johnson said.
Earlier this month, a consultant hired by SEANC, Edward “Ted” Siedle of Florida, accused the Treasurer’s office of paying “massive hidden fees” that aren’t disclosed. He complained that the Treasurer hires “fund of funds” such as Franklin Street Partners in Chapel Hill that disclose their fees but not the fees charged by the hedge funds they in turn hire to manage the state’s money.
Ardis Watkins, SEANC’s legislative affairs director, said the organization recently became aware that a state law passed in July that expanded the treasurer’s ability to make alternative investments, including hedge funds, called for the disclosure of “all direct and indirect placement fees, asset fees, performance fees, and any other money management fees incurred by the state.”
“She’s not reporting hundreds of millions of dollars in fees,” Watkins said.
Siedle wrote a letter to state Auditor Beth Wood on Monday contending that Cowell is violating the law and asking her to conduct an investigation “and compel the Treasurer to disclose all direct and indirect fees, as required by North Carolina law.”
But Johnson insisted that the Treasurer’s office is in compliance with the new law’s reporting requirements.
“Even before that 2013 law was passed,” Johnson wrote in an email, “the Treasurer reported to the General Assembly all the fee information that must be provided under the new statute.”