Since North Carolina State Treasurer Janet Cowell took seats at corporate boards while remaining in office this year, she has been the subject of a barrage of criticism. Now, after a weekend vote, her state’s largest public employees’ union unanimously agreed that Cowell must choose between her public office and the private corporate boards — a set-up that ethicists say could present a serious conflict of interest.
“Janet Cowell has a choice to make,” said Ross Hailey, the president of the State Employees Association of North Carolina Board of Governors. “Either she can finish out the last eight months of the job the state’s voters elected her to do free from outside influence, or she can resign and focus on making millions in the private sector. She can’t do both.”
That vote puts the board of governors in line with many others in the state. A recent survey of 19 candidates for statewide office in North Carolina’s executive branch found that 17 of them said they wouldn’t accept similar situations.
Critics of Cowell’s positions on the board of insurance conglomerate James River Group Holdings and e-commerce firm ChannelAdvisor say that her potentially conflicting private and public roles should worry the 900,000 current and former North Carolina public employees who rely on state pensions. SEANC said that Cowell’s role as the sole fiduciary in charge of the $90 billion Teachers’ and State Employees’ Retirement System means her public position is “in direct conflict with her position on these boards.”
“If it doesn’t look good, if it requires explanation, it’s probably something that good judgment would argue against doing, and this certainly seems to require some explanation,” Norman Stein, a Drexel University law professor and specialist in pension issues, previously told the International Business Times when asked about the potential conflict of interest. “She’s sitting on the board of a company that does financial services and has relationships with companies, and there may be future entanglements you can’t even see right now. If I were somebody who had elected her to a position of state treasurer — to be ultimately responsible for my pension — my question would be, why is she doing this?”
When her office was contacted to respond to the board of governors’ vote, Cowell stood by her record.
“I have worked hard during the last seven and a half years as Treasurer to enhance accountability in the office. In that spirit, I vetted any opportunities with the state Ethics Commission and voluntarily recused myself from any potential decision-making that involved these companies, neither of which are in the state pension funds,” Cowell said in a statement provided by email to the International Business Times. “As I said last fall when I announced that I was not running for a third term, I plan to serve out my term through 2016. I am dedicated to continuing my work securing retirement and healthcare for teachers and public employees and maintaining our state’s fiscal health.”
Cowell, who is currently serving her second term as treasurer, plans on leaving the post in roughly eight months. Her contract with the two corporate boards give her a total of $300,000 in cash and stock options for the year, according to Securities and Exchange Commission filings from the two companies. Her government position pays $124,676 a year.
While her first board position was announced in February, she had been corresponding with representatives from the companies for some time, according to emails obtained by the International Business Times .
A 2014 email showed she had been corresponding with James River CEO Adam Abram then. She later, according to further emails, corresponded with Abram and the company’s outside counsel to assure them she would have her office make sure the state’s ethics commission customized the approval of Cowell’s board seat to meet the company’s standards.
The ethics commission later released an advisory opinion, saying that while “the conflict of interest provisions of the Ethics Act may restrict her from taking official action in certain matters affecting those companies,” the letter of the law “would not restrict Treasurer Cowell’s service on corporate boards of directors or her acceptance of compensation, food and beverages, and travel expenses directly related to that service.” She was formally nominated to the board in April.
As for ChannelAdvisor, Cowell met with CEO David Spitz for lunch in 2015, and the two soon after engaged in a discussion about hiring women to the firm’s board of directors. She later announced that she wouldn’t run for re-election. Soon after, she was informed that the company wanted to move ahead with considering her for a board position.