North Carolina’s state treasurer, Janet Cowell, is a Democrat who was a lock for re-election. But then late last year, Cowell suddenly announced that she would not run for re-election. Now we may know why.
Cowell has agreed to serve on the boards of two companies with strong North Carolina ties. She will earn six-figure compensation rates for her service while working full time as treasurer. (Cowell cleared the move through the North Carolina State Ethics Commission, and the investment portfolio for the state’s $87 billion retirement system fund currently does not include either of the two companies Cowell helps direct.)
As a Democrat not running against a Republican, Cowell is no longer a protected class in the state news media, and it’s starting to show. Editorials across the state slammed her moves, apparently eager to prove they could go after a Democrat. Recall that the Associated Press and other editorialists in the state were apoplectic when Gov. Pat McCrory wrapped up his service on the board of a publicly traded company within weeks of taking office. But unlike McCrory, Cowell will attempt to do her government and private-sector jobs at the same time.
Cowell told the Ethics Commission that she would recuse herself from any decision that “could reasonably be viewed as directly or indirectly related to my corporate board service.” Even if she lived by that, is it good for the state official who manages the pension fund to be required to absent herself from decisions involving potential investments?
Cowell gets less leeway in this area than other public officials. On the end of the spectrum opposite the treasurer, state law actually requires some members of the state’s boards and commissions to earn income from the industry they help regulate. Legislators come next: since they are paid next to nothing, they need to earn a living. Then there are full-time employees. First, the elected or appointed officials who had existing business relationships before they took office. Then there’s Cowell.
Cowell should have waited until her public service was over to even engage with the companies, much less take an active seat on their boards. Cowell has not done anything illegal, and she may well abide by the Ethics Commission parameters and her own recusal statement. But that’s the crux of the problem it necessarily means that she has voluntarily taken on duties that restrict her ability to fully perform her job.
It’s a safe bet that the General Assembly will take a hard look at restricting this kind of activity. Even though both the Republican and Democratic candidates to replace Cowell have said they will not serve on corporate boards while in office, this one is a no-brainer and can be dispatched with a quick amendment to the State Ethics Act.
General Assembly members should wrap it up so that they can move on to tackling truly pressing fiscal matters such as getting a handle on the more than $25 billion in unfunded state retiree medical benefits.
Cowell likes to crow about the health of the state’s pension fund, which is sound. But she should have spent more time warning about the balloon payments taxpayers will need to make to past employees of state agencies. Cowell will be gone soon enough, but those promised benefits aren’t going away any time soon, and it’s about time someone started addressing the issue.