Democrats Harris, Esparza vie for State Treasurer nomination

FEBRUARY 19, 2024

The Democratic Party hopes to take back the State Treasurer’s post after Republican Dale Folwell decided to run for governor, with a March 5 primary pitting a state lawmaker versus a veteran financial services industry executive.

N.C. State Rep. Wesley Harris, 37, has won three elections in his south Mecklenburg district. Holding a doctorate in economics from Clemson University, he’s been a consultant and taught courses at UNC Charlotte and the University of South Carolina.

Gabe Esparza, 51, most recently worked for the U.S. Small Business Administration after a 13-year career at American Express. He grew up in Boulder, Colorado, and earned an undergraduate degree from Stanford and a Harvard MBA. He has also been an executive at RapidSOS, a New York-based software platform that provides communications services for the U.S. 911 system.

Both candidates are critical of Folwell’s management of state pension funds, which total more than $100 billion. North Carolina is among the few states that put the fiduciary power for pension-fund management in one person’s hands. Under Folwell, the state has emphasized limiting risk and reducing its allocation to private-equity investments, which historically entail higher management fees than stock and bond investing.

Harris contends Folwell has held too much cash over the years, citing a $1 billion annual shortfall compared with the state’s hypothetical gain had it instead invested more money into the Standard & Poor’s 500 index.

Esparza cites a Yale University study showing that the N.C. fund returns have ranked at or near the bottom among peer state retirement funds based on one-, three- and five-year periods ending in 2022. “There’s virtually no communication or awareness of that issue with the people for whom it matters most, the state employees and retirees,” he says.

Harris says Folwell has wrongly opposed efforts that tie some state investments with companies that have strong environmental, social and governance ratings. “The GOP is trying to micromanage, which hinders our ability to get the returns we need,” he says.

However, the legislator says he agrees with Folwell’s divestment of Unilever which the treasurer ordered because of the London-based conglomerate’s ownership of Ben & Jerry’s Homemade. The ice cream company has boycotted Israel over its treatment of Palestinians, a stance opposed by Folwell.

Another key part of the state treasurer’s work is overseeing the State Health Plan, which provides insurance for more than 750,000 state employees, retirees and dependents. Folwell has repeatedly attacked the healthcare industry for not providing transparent pricing to enable payers from clearly understanding the value of their spending. The fund has a large gap between its reserves and how much it has pledged to members.

Both Esparza and Harris say they would take a different negotiating strategy in dealing with healthcare providers and insurers. “We need to get to work on holistic solutions” that include more incentives focusing on long-term wellness, Harris says. He cited Folwell’s decision to block State Health Plan members from using some expensive weight-loss drugs as a complex situation that requires strong negotiating skills. Health plan members who already are taking the drugs for reasons including diabetes, including Harris’ mother, are grandfathered in.

Esparza says working on large, multi-million contracts at the SBA and Amex gives him more experience in big-money contract negotiations than Harris. The next state treasurer is likely to be facing off with either CVS Health’s Aetna unit or Blue Cross Blue Shield of North Carolina serving as the administration of the health plan, which runs through $5 billion a month in claims. Blue Cross is appealing the plan’s decision to award the contract to Aetna with the case now underway in Raleigh.

“For those negotiations, you want someone like me who has experience negotiating with Apple or Google or Uber, or while I was in the federal government, negotiating with other countries,” Esparza says.

Harris says he’s raised more than $400,000 for the campaign, while Esparza says he’s topped $300,000. Esparza’s success in raising funds is impressive because Harris has won endorsements from many Democratic elected officials and has been running for the office since early 2023.

Esparza says he would be a stronger general election candidate because he believes he can appeal to more independent and “crossover” voters because of his broader business experience and attract interest from the state’s growing Latino population. He is Mexican-American.

Harris credits his legislative experience, extensive statewide contacts and having lived in rural, suburban and urban markets in North Carolina as his advantages.

Folwell was the first Republican to win the office in at least the past century, defeating Duke University professor Ronnie Chatterji and Raleigh attorney Dan Blue III in the previous two elections.

In the Republican primary, former New York money manager Brad Briner is running against veteran GOP activist AJ Daoud and Rachel Johnson, the wife of former State Superintendent of Public Instruction Mark Johnson.