Moore's firm got $500 mill investment

Six months before former state Treasurer Richard Moore left office, the North Carolina pension fund that he oversaw invested more than $500 million in the investment fund firm that now employs him, the Insider reports.

Moore was named a managing director at San Diego-based Relational Investors in April of this year. The office of current Treasurer Janet Cowell confirmed that in July 2008 the pension fund signed an agreement to make a substantial investment with Relational Investors. The investment, as of Sept. 30, was valued at $508,623,784. It was the pension fund's first and only investment with the firm.

Ralph Whitworth, founding director of Relational Investors, said the investment and Moore's hiring were completely unrelated.

"If it creates a perception, that's unfortunate. Richard, after he left the state treasurer's office, was one of the most sought-after persons in finance," Whitworth said. "We were totally excited."

UPDATE: Moore responds to the story in an email to Dome. (After the jump.)

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Whitworth said that he had only ever met Moore once while in office and that the vetting of the pension fund's investment with Relational Investors was handled overwhelmingly by investment staffers other than Moore.

Moore also said there was no connection between his hiring and the investment. He said he did not consider any job offers until he was out of office, deflecting discussions in that direction. Moore added that he only began to consider a position with Relational Investors after a friendly lunch with Whitworth last spring to discuss its unique investing strategy.

"I am proud of the pension funds performance while I was treasurer," Moore wrote in an email to Dome. "If (Bank of America) and Wachovia's performance had been like ours(only down 14% from July 08 to June 09) they would be the toast of the financial world. We never picked a manager for any reason other than we thought they were the best fit at the time. To suggest otherwise would not square with the our performance and number 1 ranking."

Moore supplied a copy of a September memo by William Clark, director of New Jersey's State Investment Council, in which he boasted that, while state pension funds were down 19 percent on average, New Jersey's fund was down 14 percent: "tied with North Carolina as the best performing fund in the country."

Moore also sought and received an informal opinion letter from State Ethics Commission executive director Perry Newson saying that the move, as explained, would not violate any ethics laws.

"What else was I supposed to do?" Moore said. "I'm proud of my work as treasurer. I'm proud of my work for Relational Investors."

After tumbling like most investments last fall, the value of the investment in the Relational Investors fund has risen 22 percent since January, according to figures supplied by the treasurer's office. Since last October, it is still down nearly 10 percent.

In September, Cowell put in place a policy that prohibits the treasurer and top staff members from doing business with or attempting to influence business with the office for two years upon leaving a job in the office.

Relational Investors manages $6 billion, investing the money in publicly-traded companies deemed to have governance problems, gains seats on their corporate boards and then tries to return value to investors by fixing the problems. The fixes have included firing CEOs and slashing executive benefits. Whitworth was instrumental in ousting Bob Nardelli as Home Depot.