North Carolina Union Files SEC Pay-to-Play Complaint Against Erskine Bowles
A union representing 55,000 North Carolina current and retired state workers Tuesday filed a complaint with the Securities and Exchange Commission alleging that former White House Chief of Staff Erskine Bowles and his wife, a JPMorgan Chase & Co. (NYSE:JPM) director, may have violated federal pay-to-play rules in a major North Carolina pension contract. The State Employees Association of North Carolina (SEANC) filed the complaint with the SEC's Office of the Whistleblower.
As the International Business Times first reported, the 2011 contract in question was granted by the North Carolina Innovation Fund's financial manager, Credit Suisse Group AG (NYSE:CS). The contract was granted to Carousel Capital, which Erskine Bowles co-founded and which still lists Bowles as a senior adviser on its website. The Innovation Fund, which invests state pension money, is overseen by North Carolina State Treasurer Janet Cowell, a Democrat.
Weeks before the contract was given to Carousel, a campaign fundraiser was held for Cowell at the Bowles' home. The SEC's pay-to-play rule, which was enacted months before the fundraiser, restricts campaign contributions to state officials from senior executives at firms managing state pension money.
In a statement emailed to IBTimes, Cowell's spokesperson Schorr Johnson said: "More than two years ago, the Department of State Treasurer verified with outside legal counsel that neither Erskine nor Crandall Bowles were covered by SEC prohibition. The Department then took it a step further by ensuring contractually with Carousel that they were compliant with this SEC rule. If Carousel failed to comply with the rule, the investment would likely end."
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