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Moore Money
posted at 2007-03-02 21:03 | Last modified 2007-11-14 10:38
State Treasurer Richard Moore’s briefing today was, in fact, open to all of us – even cameras and microphones, thank you very much. He offered a well-organized thirty-minute overview about how and why he invests the state pension fund the way he does, and how well it's been working. Ten minutes in, it was pretty clear the event was a response to Neil Weinberg’s article in this month’s Forbes, accusing Moore of putting his political future ahead of his returns.
To boil it down, Moore explained how he’s diversified the fund portfolio both through asset allocation and through spreading out the “alternative” investments (hedge, real estate, etc) among more managers. Moore’s strategies have yielded successful returns – no one can argue with that. Then again, no one except Weinberg is trying to.
What other observers (notably the one in Charlotte) are questioning is whether Moore is using the state’s 74 billion dollar pension fund as leverage to raise money for his political campaigns. Moore is sole trustee for the fund (most other states have boards), which means he alone makes the final decision about which investment funds get to manage the state’s money and collect substantial fees in return. As it happens, he's received contributions from employees in more than half of the winning firms.
So what reporters wanted to know is how Moore picks investment firms, and whether it’s related to their campaign contributions to his ‘04 re-election, and his ’08 gubernatorial run. Moore was less inclined to entertain that topic. In fact, he got a little testy about it - you can hear it here.
Pay for play?
Is it pay for play? Moore says absolutely not – it’s just how political fundraising works. He also said the state picks funds through a competitive process he says is documented. But when I asked if those documents were available, he wasn’t sure – he said some might be sealed to protect funds’ proprietary secrets. In essence, we can find out whether a fund manager is making money for the state, but not how, or whether another manager might have done better.
Ends v means
It was hard not to get the impression from today's briefing that Moore's more focused on the ends than the means. More than once, when he was asked about his processes, he pointed instead to their results - the profit he’s made for the state pension fund. But in the wake of Jim Black, that brand of pragmatism could be more hazardous than ever.
One other thing Moore didn’t say today – even when pressed, he never acknowledged that the average voter might wonder why people from other states would contribute hundreds of thousands of dollars to Moore’s political future here in NC. Moore doesn’t seem to find that odd. He may be the only one who doesn’t.
Comments? Drop me a line.
