“Our investment performance, which is the ultimate standard I would like to be judged against, was always superior,” Mr. Moore added. “According to the annual reports of the ratings agencies, North Carolina was always near the top in terms of soundness.”
In an e-mail, Mr. Moore also charged that SEANC had “an ax to grind” and had timed its lawsuit to “be detrimental” to his unsuccessful 2008 campaign to be North Carolina's governor. Mr. Moore also said that he is not a party to the lawsuit and that the lawsuit had been filed against his office when he was treasurer.
Mr. Moore was hired by Relational in April 2009. Heather Franco, a spokeswoman for the North Carolina treasurer's office, said the state executed a contract with Relational on July 25, 2008 — while Mr. Moore was still sole fiduciary — for a total commitment of $500 million.
In an interview, Ralph Whitworth, Relational's founder and principal, said Mr. Moore's employment was not related to his hiring Relational to run money for the pension fund.
“He was a very attractive person, particularly given his background as a corporate governance activist, and we thought he fit very well,” Mr. Whitworth said.
In his e-mail, Mr. Moore said that after he stepped down as treasurer, he received a “blessing” from the North Carolina State Board of Ethics to consider job offers from financial institutions that had done business with the state.
Janet Cowell was elected to succeed Mr. Moore as state treasurer in 2008 and officially assumed the post on Jan. 10, 2009. She had no comment on the SEANC lawsuit, according to Ms. Franco.
“This department does not comment on pending litigation,” Ms. Franco said in an e-mail response to questions.
Nonetheless, on June 17, Ms. Cowell announced that Relational was one of five external managers for the state pension fu nd that agreed to reduce fees charged to the plan. Ms. Cowell said Relational had been charging more than comparable managers.
Relational had been getting a management fee of 1.5%, along with a 20% incentive fee on above-benchmark returns. Under the new fee schedule, Relational receives 1.5% on the first $300 million of assets under management, and 1% for more than $300 million.
Ms. Cowell said the reduction would save the pension fund $1.24 million a year in fees (Pensions & Investments, June 18).
In his interview, Mr. Moore said North Carolina had been paying the same fees other big pension funds pay.
In her e-mail, Ms. Franco also said Ms. Cowell had enacted a series of reforms, including the hiring of Ennis Knupp & Associates Inc. to conduct a fiduciary study for the pension funds. In addition, Ms. Cowell has banned key state executives from trying to influence former colleagues for two years after quitting their government posts. She also required money managers to disclose their use of placement agents.
The changes, Ms. Franco said in her e-mail, were designed to increase transparency and accountability.
In an interview, SEANC's Ms. Davis said the interest of state labor union officials in Mr. Moore's hiring of money managers for the pension fund was spurred by a March 12, 2007, article in Forbes. The story alleged Mr. Moore had parlayed his power over manager hirings into one of the “biggest fundraising machines in the state” by accepting campaign contributions from financial firms that stood to benefit from the contributions.
Ms. Davis said SEANC's requests for state records related to the hires were met with stonewalling and the release of documents that weren't of great importance to the case.
“It was a document dump of very little value,” Ms. Davis said of Mr. Moore's personal delivery of a load of about 700 pages to SEANC's offices in March 2007.