Corporate change agent
Richard Moore was irritated. Walt Disney executives had asked for a meeting with Moore, North Carolina's state treasurer, to address his criticisms about the company's management and boardroom secrecy. But instead of sending a finance team to answer an investor's questions in March, Disney sent a public-relations squad--even the new head of the Muppets was on hand. Then, former chairman Michael Eisner bailed from the trip the day before after reportedly taking ill at a Starbucks. He checked in by phone.
What's instructive is not Moore's outrage over the snub but the fact that Disney worried about him in the first place. State retirement funds, the 401(k)-like plans for bureaucrats, and the officials who run them are beginning to flex their muscle and shake up Wall Street. Moore, who manages North Carolina's $61 billion state pension fund, is a point man in that movement. While hardly a household name like New York Attorney General Eliot Spitzer--who just last week filed a lawsuit seeking the repayment of more than $100 million of compensation from former New York Stock Exchange chief Richard Grasso--Moore is nonetheless making a name for himself. A camera-friendly southerner with nice hair, good looks, and a London School of Economics pedigree, Moore has joined Spitzer in galvanizing the investor-protection movement among state officials. His visibility earned him an appointment to the NYSE's new executive committee.
Airtime. When the fracas over Disney was at its peak in late February, Moore ordered North Carolina state pension fund managers, who handle $56.5 million in Disney stock, to withhold support for Eisner. Moore's dissent landed him on ABC's World News Tonight, and CNBC dispatched a satellite truck to a political fundraiser in the remote northeastern corner of the state to put Moore on the air. "Mr. Moore, in a variety of ways, was an enthusiastic participant, shall we say, in some of the events around here in past months," says Richard Bernard, the stock exchange's general counsel.
Moore is a tireless self-promoter who has driven across the state handing out checks, like a sweepstakes host, from the state's unclaimed-property fund. The residents who received the abandoned money knew nothing of it until Moore's office called to set up the stunt, with TV crews in tow. Moore, a Democrat, even showed up at the office of the president of the conservative John Locke Foundation, with a check for him in hand.
In 2003, a year ahead of his current campaign for a second term, Moore spent $500,000 of the interest earned from the unclaimed-property fund for an ad campaign telling North Carolinians to log on to find out whether they had money due them. The fund is a collection of unclaimed payments such as utility deposits, dividend checks, and final paychecks. Moore appeared in the TV ads but stopped running them in December--right before a state law kicked in prohibiting elected officials from appearing in public-service announcements during election years. Defying his critics, Moore pointed out that in three years he had doubled both the amount of money in the fund and the amount returned to its rightful owners.
Financial reform lies in his genes. On Moore's wall is a photo of a dour President Franklin D. Roosevelt signing the 1933 Glass-Steagall Act, the government's response to Depression-era banking scandals. Among those surrounding FDR is Frank Hancock, a North Carolina congressman and Moore's grandfather. The sixth generation of his family to have served in the state House of Representatives, Moore hails from Oxford, a former tobacco village outside Raleigh. He and his wife, Noel, have a daughter and two sons. He counts his days as a former federal prosecutor specializing in white-collar crime as among his most satisfying jobs. "I enjoyed putting smart, rich people in jail," he says.
During a 1994 run for Congress, he was swept aside by Newt Gingrich's "Contract With America." But now Moore is among three prominent Democrats circling one another in wait for the 2008 race for governor. (Gov. Mike Easley, a fellow Democrat, is up for re-election this year.)
It is Moore, though, who has most effectively used his obscure office as a political platform. After the Enron scandal in 2002, which cost the state pension fund $150 million, he wondered if the outside investment firms that he hired could have done a better job researching the companies in which they invest. He drew up a set of "investment protection principles" and, through a mutual friend, contacted Spitzer, who had recently settled with Merrill Lynch over conflicts at that firm.
Spitzer got then New York Comptroller Carl McCall on board. Moore and McCall were in unusual positions as two of only four state officials nationwide solely responsible for their state's pensions, but they assembled an alliance of state leaders who manage more than $1 trillion. They demanded an end to the Wall Street conflicts. And they demanded that investment firms strictly scrutinize how companies are managed and audited before investing in them. Similar guidelines for mutual funds have since been drafted.
The newfound activism of pension funds is long overdue, Moore says. Thirty years ago, the funds invested almost exclusively in bonds. In the 1980s and '90s, they moved into stocks, emerging with significant ownership of public companies. But the funds weren't really set up to exert any control.
Meanwhile, companies with a history of strong family ownership, like Disney, saw power shift away from them to outside investors who chose their own executives. "You've got the hired help spending other people's money," Moore said during a recent Manhattan visit. The pension funds were "passive bureaucracies unequipped to exercise both their right and their responsibility as a shareholder."
That is changing rapidly--and, with it, the profile of state officials like Moore. As he left a New York building recently, a giant TV screen on the skyscraper across the street stretched up several stories and blared CNBC. A few hours earlier, Moore had been on that screen looking down on Times Square. "It's a long way," he laughed, "from Oxford, N.C."
This story appears in the June 7, 2004 print edition of U.S. News & World Report.