Raleigh

It was a strange juxtaposition. The U.S. Senate had begun squabbling about reform intended to rein in Wall Street abuses; North Carolina legislators picked at each other over a proposal to allow $20 late fees on small consumer finance loans.

Meanwhile, the state treasurer was defending a decade-long increase in the fees paid to that Wall Street crowd to manage the state's $67 billion pension fund. Her defense came as she was heading out to southern California to speak at a conference organized by the man who became the face of Wall Street recklessness and avarice in the 1980s.

Southern California was an apt setting. It is where Jim Morrison penned the words "Strange days have found us."

Back in North Carolina, the plan to impose the late fees on consumer loans got a rough ride. A legislative committee studying the idea dropped it after advocacy groups for low-income borrowers and the AARP raised a stink.

Walking into the Legislative Building prior to the meeting, I overheard a comment coming from a gaggle of loan industry officials. "In this atmosphere," the fellow began.

Indeed. In this atmosphere, you thought putting a new fee on the backs of consumers had a chance?

Afterward, a lobbyist complained to me, "They wouldn't even negotiate." The "they" were the consumer advocacy groups. "They didn't have to," I responded.

As that meeting was going on, State Treasurer Janet Cowell was three time zones away, talking about business -opportunities in China at a conference being hosted by convicted felon Michael Milken.

The old junk bond king and his Milken Institute have been doing this kind of thing for a while. And he has all kinds of defenders these days, particularly among those who tapped his easy credit to build modern-day business empires that gobbled up competitors by the score in the go-go '80s and '90s.

Cowell had some interesting company: three other state treasurers, the head of the California pension fund, Arnold and Maria, Minnesota Gov. Tim Pawlenty, Virginia Congressman Eric Cantor. Plenty of Milken's old buddies from Drexel, Burnham, Lambert days, now running their own venture capital or hedge funds, were around too.

A New York Times editor moderated some panels.

Just before leaving Raleigh, Cowell had been explaining to TV station WRAL why annual fees paid to the investment bankers, venture capitalists and hedge fund managers who put slices of the state pension fund into various investments had risen from $40.8 million to $266 million over the last decade.

Cowell wasn't treasurer for most of that decade. But she is an advocate of the diversification that has led to the higher management fees. With the 2008 market collapse, there's not a whole lot of return to show for the fees.

Cowell told the TV station that -comparisons aren't fair because of the 2008 losses. She added that outside expert investors are needed because investing is more sophisticated than ever.

It is. Just go ask the naked shorters or the credit default swappers. Or, ask Michael Milken.

Scott Mooneyham writes for Capitol Press Association in Raleigh. Contact him at smooneyh@ncinsider.com.