NC State Treasurer Race: Over $100 Billion At Stake

Your money. That’s what one of the most important races in North Carolina is about right now.

The race for Treasurer is high-stakes not only for the candidates but for the taxpayers. On the line is a Pension and ailing Healthcare plan system worth over $100 billion dollars. In fact, North Carolina’s pension system is the 25th largest in the world.

Republican Dale Folwell and Democrat Dan Blue III are the two candidates vying for the position of State Treasurer. Without question, fiscal responsibility and competence is a requirement for such a position While both have education and backgrounds in finance, only one is an actual accountant working in a related field.

Dale Folwell is Certified Public Accountant (CPA) and an investor and financial consultant who is no stranger to public service. Folwell previously served as Assistant Secretary of Commerce, spent several years as a Representative at the North Carolina General Assembly ”“ two years of which he was Speaker Pro Tempore(2011-13). Folwell left the General Assembly and took a role with the McCrory Administration as the head of the state’s Division of Employment Security.

At the time Folwell took the position, the state’s unemployment insurance system owed the federal government approximately $2.5 billion dollars. In thirty months time, that debt was paid off and a $1 billion dollar surplus took its place. Folwell also spent eight years on the Winston-Salem Forsyth County School Board.

Dan Blue III is an attorney who spent time in New York as an investment banker for the now defunct Bear Stearns, which was sold to JP Morgan Chase during the financial crisis in 2008. After Stearns collapsed, Blue returned to North Carolina and started a training company for pharmaceutical and biotechnology professionals called Pharmaceutical Institute. That company and its parent company, Campbell Alliance were sold off to inVentiv Healthcare in 2011.

Blue then joined his father’s law firm doing various debt counseling for the State of North Carolina and according to his website bio, he was the Triangle Business Journal’s 2015 Corporate Counsel of the Year award winner. Blue is also the son of Dan Blue, Jr., current Senate Minority Leader and former Speaker of the North Carolina House of Representatives.

As this is a race for Treasurer of the state, an examination of both candidates campaign finances is in order. Folwell’s reports appear prompt and in order, with funds raised in the amount of $850,446 and expenditures of $573,216. Folwell currently has $283,546 on hand.

According to the 3rd quarter filings, the Blue campaign had $185,250 cash on hand, total funds raised to date around $640,714 and $619,811 in total expenditures.

But the Blue campaign’s finances are not as tidy as his opponent. Three times the campaign had to refiled due to under-reporting receipts and expenditures; first quarter reporting had to be amended twice and the second quarter has been amended once so far.

The first quarter amendments saw an increase in receipts of $14,263.43 and an increase in expenditures of $391.39.

  • Q1 2016 filed on 03-07-16: $57,965.00 (receipts) $25,892.08 (expenditures)
  • Q1 2016 Amended on 3-28-16: $60,970.00 (receipts) $26,195.04 (expenditures)
  • Q1 2016 Amended on 10-24-16: $72,228.43 (receipts) $26,283.47 (expenditures)

The second quarter saw receipts increase by $49,537.32. That’s an enormous amount of donations to have under-reported. The increase in expenditures rose by $4,629.28.

  • Q2 filed on 07-11-16: $216,499.03 (receipts) $128,092.14 (expenditures)
  • Q2 Amended on 10-24-16: $266,036.35 (receipts) $132,721.42 (expenditures)

In total, the Blue campaign under or misreported receipts totaling nearly $64,000. In addition to this massive under-reporting, accurate record keeping seems to have been an issue. A $200 Anonymous contribution was noted in the filing of a Penalty and Forfeiture form in March 2016.

These errors were compounded by the fact that Blue filed his campaign organizational paperwork using an address to a condominium which he sold in May of 2014. Blue doesn’t live there anymore, he currently resides in a rental property inside the beltline in Raleigh. To date, the campaign is still filing their campaign finance reports using the old 2014 address.

Turning to Blue’s Statement of Economic Interest (SEI), Blue appears to own no real estate or stocks of any kind yet is carrying a debt of over $10,000. In contrast, Folwell owns real estate, has three stocks listed and no debt. To view the SEI reports, visit the North Carolina State Ethics Commission website.

I inquired with Blue about the SEI form. Blue acknowledged that he does not own any real estate and pointed out the SEI form was narrow in its scope.

“We sold our downtown Raleigh condo in 2014 when the kids outgrew it. We intended to buy or build this year but that doesn’t work with the rigors of a statewide campaign.” said Blue. “Yes, we are renting inside the belt-line to be close to the children’s schools and my law office.”

When asked about a business venture he sold off a few years back for a large sum alleged to have been in the million dollar or so range, Blue declined to elaborate.

“I cannot comment on any private sales of businesses, but I did join my family law firm in 2009 to handle our transactional business, including the bond financing for the state and private college clients.” Blue said.

In response to these findings, we also reached out to Dale Folwell for comment.

“The next NC Treasurer is going to make the generational difference in NC’s future and “close enough for government work” is unacceptable when trying to attack $40 billion worth of pension/healthcare IOU’s that will consume over 20% of our budgets for the next 15 years and simultaneously threaten our AAA bond rating.” stated Folwell.

Folwell added that, “Beginning educators,troopers and other state employees can’t afford family healthcare and their pension is NOT 95% funded because there has been no attention to detail.” Folwell said. “Fixing those problems and maintaining NC’s AAA bond rating will require a level of detail never before seen in the NC Office of the Treasurer.”

Folwell slammed his opponent’s campaign as ‘sloppily run’.

“My opponent has certified that he owns no property in NC or individual investments in excess of $10,000 or knows where he lived when filing for this office.” Folwell said. “His errors on the last two [campaign filings] are either sloppiness or a willful intent to deceive the fact that he is broke or hiding all the financial success he has been claiming over the last several months.”

Folwell concluded, saying that, “There are over 800,000 North Carolinians who depend on the NC Treasurer to be ‘the keeper of the public purse’ related to their pension and healthcare. This is about mathematics. If my opponent can’t manage $100 dollars; how will he manage $100 BILLION.”

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