Ethics Category


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LOD: McCrory’s Opening Miscue

Thursday, February 9th, 2012

Guess where Pat McCrory ended his swing across the state, announcing the official start of his campaign for governor as the candidate who will “turn North Carolina around” and end the “corruption” of the Democrats? The trip finished in Wilmington, with a large McCrory rally at a pool hall and grill – which is owned by Steven Hebert, a donor to former House Speaker and convicted felon Jim Black, and which is stocked even today with video sweepstakes games from Southland Amusements, a company run by Robert E. (Bobby) Huckabee III. Huckabee’s Southland Amusements & Vending Inc. was at the center of the corruption complaint filed by Democracy North Carolina in July 2004 against Jim Black’s network of video-poker donors. Back then, Hebert had Huckabee’s video poker machines in his bar; the two have been doing business together for years. Many of the individuals listed in the complaint funneled campaign money to Black through other donors, with or without their knowledge, including Huckabee’s sister and Hebert’s wife-to-be, Holly Abbuhl. In testimony at the State Board of Elections into the complaint, it came out that Hebert gave Abbuhl the money to make her $1,500 donation to Black. Huckabee avoided testifying at the hearing by conveniently being out the country, but the taint of his dealings continues, as does the controversial evolution of video poker in North Carolina. It’s a surprising blunder to see Pat McCrory pledging to “turn around” pay-to-play politics at a place like Wilmington’s Break Time Billiards & Grille.


LOD: Two Nasties, One Target

Tuesday, January 31st, 2012

Here’s a strategy to simultaneously fight nasty political money and the nasty political ads they buy: Go after the broadcasters and make them pull any ad not completely substantiated with hard evidence. As a media expert explains, independent ads don’t enjoy the same protection from a broadcaster’s good-taste test as ads produced by candidates during the election season. Independent groups escape many campaign finance regulations because they’re technically not connected to the candidate. So why not use this distinction to insist that their ads get treated like non-campaign ads and are pulled when they cross the line with exaggerated claims and accusations. Here’s another strategy being tried in the high octane Senate race in Massachusetts. Sen. Scott Brown (R) and challenger Elizabeth Warren (D) have signed an unusual agreement that they will give a charity half the cost of any third-party’s ad attacking his or her opponent – and they’re telling outside groups from Karl Rove’s American Crossroads to the League of Conservation Voters to back off and let the candidates handle their own messaging, with the piles of money their raising themselves. Definitely a model worth watching.


LOD: Pope’s Blessing

Thursday, January 26th, 2012

An editorial writer for the Raleigh News & Observer handed Art Pope a bevy of compliments for his “humanitarian” philanthropy, extolling the list of “charities and universities the Pope Foundation blessed with $1.2 million in grants last year.” Alliance Medical Ministries – $10,000; Barium Springs Home for Children – $10,000; Blessed Sacrament School – $10,000; etc. The writer, Burgetta Wheeler, managed this sweet story by cherry picking from the list of foundation recipients and committing the “one dimensional” journalism she ascribes to Pope’s detractors. Here’s a link to the complete list (pp. 20-23). A balanced story would have noted that the Pope Foundation gave a whopping $1.35 million to the strident rightwing group Americans for Prosperity in the same fiscal year, more than the combined total of Wheeler’s featured grantees. Or how does Pope’s giving to the goody-good list compare to one gift for college sports – $1,000,000 to UNC’s Rams Club, cleverly named The Educational Foundation Inc. Other unmentionables for the year: John Locke Foundation – $2.6 million; Civitas Institute – $1.2 million; NC Institute for Constitutional Law – $710,000; Pope Center for Higher Education – $542,800; NC Family Policy Council – $100,000; Job Creators Alliance – $100,000; NC Free Enterprise Foundation – $95,000; Heritage Foundation – $50,000. To shore up the foundation’s cash flow, Art and sister Amanda each donated $3.5 million, presumably from their share of earnings from Variety Wholesalers (Roses, Maxway, Super Dollar). An LOD account of previous foundation donations is here.


LOD: Mike Easley’s Money

Monday, January 23rd, 2012

For those of you fascinated by the strange behavior of former Gov. Mike Easley, Don Carrington of the Carolina Journal has a new piece that examines Easley’s finances after his felony conviction, with an appropriate question: How can he move hundreds of thousands of dollars around and still not pay a dime toward the $90,000-plus fine that the Mike Easley Committee owes the State Board of Elections – that’s the fine Easley says he accepts personal responsibility for, but why doesn’t he pay it? The fine was levied in the same case where Democracy North Carolina filed a complaint against the NC Democratic Party for acting as an illegal conduit of money meant for the Mike Easley Committee, with supplement documentation to highlight the abuse. The Party forked over thousands of dollars as a result, and the Mike Easley Committee was also found guilty of benefitting from undisclosed airplane flights. Even though Democracy North Carolina filed this complaint against the Democratic Party (and the earlier one that triggered the state and federal investigation into Jim Black), some Republicans still say we’re a front for the Democratic Party whenever we criticize their practices. Go figure.



LOD: Good Ol’ Boys to Cash Cows

Friday, December 9th, 2011

The transition from “good ol’ boy” politics to money-dominated politics is a story best told from the South, and who can tell it better than Fritz Hollings, the former South Carolina governor who represented his state in the US Senate from 1967 to 2005. His column in the Charleston, SC newspaper gives a special window into the problems of both the old and new. Definitely worth reading, even if you don’t agree with some of his conclusions. Examples abound of the slimy mess of lobbyists buying government with their clients’ money. The most recent came yesterday with the rejection of Richard Cordray to lead the Consumer Financial Protection Bureau; here’s an account of how Sen. Dean Heller is cashing in on his vote.


LOD: Perdue Campaigners Indicted

Monday, November 28th, 2011

Three individuals on the inside of Bev Perdue’s 2008 gubernatorial campaign were indicted today – not by the feds but by a Wake County grand jury. According to the News & Observer, the indictments allege that a top fundraiser for candidate Perdue “schemed to pay a staffer $32,000 for work that was kept off the books in violation of state election laws.” The felony charges result from a year-plus investigation into the campaign’s handing of finances, including hiding in-kind donations of airplane flights and other donations that would put the donor over contribution limits. The charges include obstructing justice and failure to report campaign finances. As the N&O report continues: “Earlier this year a retired state magistrate was charged with obstruction of justice for allegedly trying to hide an illegal campaign flight. Wake County District Attorney Colon Willoughby has said that Perdue, a former lieutenant governor and state lawmaker, is not a target of the probe, but today’s indictment reached into the campaign’s inner circle. ‘The conduct of the governor has not been an issue, nor any other elected official,’ Willoughby said. ‘She cooperated in the investigation, was interviewed. We asked her not to talk about the facts of the case. We thought it might be inappropriate, and there might be additional charges.’” The Associated Press story is here, and the brief indictments for each charge are here.


LOD: Funding->Performance

Tuesday, October 18th, 2011

The State Auditor’s office issued a report criticizing the State Board of Elections’ failure to process campaign finance reports in a timely manner and hold late report filers accountable. Democracy NC has identified similar problems, including our May report pointing out that 42% of the campaign reports for the legislative winners in 2010 had not been entered into the Board’s database, the first step in its review process. The State Auditor’s report reveals the scope of the problem: “At the time of our audit, there were over 30,000 reports that had not been audited. Some of these unaudited reports date back to the 2000 election. The receipts and expenditures for approximately 10,000 of those reports had not been entered in the campaign finance database, which is necessary before an audit can be performed since many of the audit procedures are performed electronically. For the 2010 election cycle . . . 6,578 of the 10,931 reports still had not been entered in the database and therefore had not been audited within the timeframe required.”

Why is the backlog so large? A blog entry and editorial by the Greensboro News & Record suggest it may be purposeful negligence by state legislators who don’t want their reports dissected. Except for a brief period after the conviction of House Speaker Jim Black, the State Board has been chronically understaffed and underfunded by the General Assembly. Meanwhile, some legislators want to merge the campaign finance section into a combined agency with the State Ethics Commission and lobbyist regulation office of the Secretary of State. They better be prepared to put up a lot more money to make it possible for all of these duties to be properly fulfilled.


LOD: Target the Pressure

Monday, September 19th, 2011

Public Campaign has a good bi-partisan campaign that challenges members of the debt reduction Super Committee to stop raising money while they are choosing whose ox will be gored by possible spending cuts or tax increases. The nonprofit has calculated that each of the 12 Members has so much money already stockpiled that they can afford to take a break – collectively, their campaign accounts have $20 million in cash-on-hand. But even as the Committee began meeting, most of them kept up a vigorous fundraising schedule, hosting or attending $1,000-a-person events with lobbyists and their clients – it’s almost laughable to read. Public Campaign scored a victory with a pledge by one member, Sen. John Kerry (D-MA), to embargo fundraising for his own campaign. He’s under pressure to stop helping others, too. The bi-partisan campaign is a great illustration of how a focused grassroots effort, with an incremental goal, can yield results.



LOD: Dissent from the Top

Wednesday, August 17th, 2011

The political system is so blatantly tilted to help the super-rich and powerful that even they are embarrassed. They know it’s wrong, and it’s great when they speak out and call for change. In a singularly important op-ed, Warren Buffett, the second richest man in the US, is lambasting Congressional leaders for not making the wealthy share in the pain of a bad economy and red-ink government. Republican leaders are vigorously trashing him for losing sight of the goal: Selfishness First! But the CEO of Starbucks, Howard Schultz, is so mad with the Washington establishment that he’s calling on his fellow zillionaires to withhold all campaign contributions to the President and Members of Congress until they consider “all options, from entitlement programs to taxes,” and reach a wide-ranging budget deal “long before the deadline arrives this fall.” Third example: The American Bar Association just adopted a resolution calling for a ban on lobbyists giving or soliciting political donations for Members of Congress they lobbied in the previous two years; in other words, you have to choose to be a donor or a lobbyist but you can’t be both to the same policymaker. This action by the nation’s premiere organization of attorneys gains added weight because it was recommended by a team of blue-chip legal counsel for Republican and Democratic politicians.


LOD: Thumb’s Up, Down for Legs

Friday, August 5th, 2011

Rep. Steve LaRoque’s home newspaper in Kinston got him to talk about the Policy Watch investigation of his use of two government-funded nonprofits to benefit himself, his family, and his political associates. The paper is owned by the Libertarian-leaning Freedom Communications chain, so it is noteworthy that the story didn’t end when LaRoque dismissed everything as a liberal conspiracy full of lies; indeed, the paper presented a balanced account and let Kinston readers hear from independent experts who added credibility to Policy Watch’s analysis of LaRoque’s inappropriate dealings. Meanwhile, House Speaker Thom Tillis received an award from the secretive American Legislative Exchange Council (ALEC) as one the nation’s “best legislators of the year.” Tillis and 31 other NC state legislators are attending the ALEC meeting in New Orleans, no doubt picking up more “model legislation” from the group, per our earlier account. The Sunshine Award that Democracy North Carolina recently presented to 22 legislators is also gaining attention in their hometown media (e.g., in Burlington, Fayetteville and Jacksonville). The award honors legislators for ”demonstrating respect for the public’s right-to-know through the superior quality of your campaign disclosure reports in the 2010 election.” The money chase is well underway for the 2012 cycle, with both state parties pulling in nearly half a million dollars in the first six months of 2011, most of it raised by their respective legislative caucuses. Whether you give the General Assembly a thumb’s up or down, money will be gushing at records levels for the 2012 showdown.


LOD: NC Legislator On Dole He Hates

Wednesday, August 3rd, 2011

A two-month investigation by NC Policy Watch reveals that a powerful state legislator has been raking in six-figure paychecks from two government-funded organizations at the same time he’s railing against government waste and spending! Payments to NC House Rules Chair Rep. Stephen LaRoque (R-Kinston) reached $195,000 a year as the head of two economic development nonprofits – the East Carolina Development Company and Piedmont Development Company. The two organizations have received $8 million in federal funds since 1997, and LaRoque has used them to loan government money to his close associates and political allies. Read all the parts of this fascinating series.


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