Some members of the state Investment Board want to pull money out of the Bank of North Dakota in a dispute over management of money deposited with the Bank.
In March, 2012, the Board asked the Bank to change its investment strategy. The Board thought that would happen by June first. However, the Bank didn’t do that right away – and instead made the change in late July. Acting State Chief Investment Officer Darren Schulz says because of that, some interest money was lost.
"RIO staff determined that an aggregate loss totaling $2.6 million was incurred," Schulz told the Board. He says says the Bank also charges higher fees than other money managers – and has had more errors. Schulz says he's tried to talk to Bank officials about it, but hasn't gotten very far. So, he suggested that the Board go with the private firm State Street Investments – and draw the money out of the Bank.
"It appears that things have completely stalled<' said State Treasurer Kelly Schmidt, a member of the Investment Board. "I don't think I'm comfortable that we continue to keep this mandate with the bank. Changing this could lower our costs, and lower the tracking error."
But another board member – State Land Commissioner Lance Gaebe – asked that the matter be tabled for a month.
"I'd be inclined to see if we couldn't spend the next month with you (Schulz) visiting with the Bank of North Dakota, to explore options to make some adjustments, opposed to making the decision now," said Gaebe.
The Board voted 5 to 4 to table the matter until the April meeting.
