Carolina Journal News Reports
Peter Reichard, former finance director of Bev Perdue’s 2008 campaign, accepted a felony plea in December. He has said he won’t discuss campaign matters with the media.
RALEIGH — New Bern attorney Trawick “Buzzy” Stubbs faces a felony indictment for using his law firm to hide payments for flights he provided to then-Lt. Gov. Bev Perdue’s 2008 campaign for governor. Stubbs has not disputed the facts underlying the charges.
Meantime, prosecutors have not charged Stubbs for his alleged role in a much larger flying operation for Perdue: helping create what a State Board of Elections investigation called a list of “aircraft providers” to arrange flights for the Perdue campaign committee and the lieutenant governor’s office.
According to the elections board report, three people should have knowledge of the operation of the aircraft provider program: Stubbs, former Perdue campaign finance director Peter Reichard, and Perdue.
None has been charged for those activities, though in December Reichard accepted a felony plea for using a business he owns as a conduit for illegal contributions from a maxed-out donor to the 2008 Perdue campaign.
Perdue always has insisted she did not know about the unreported flights when they occurred.
Wake County District Attorney Colon Willoughby, who is in charge of the Perdue campaign probe, has said the governor is not a target of the investigation. The State Board of Elections closed its investigation in August 2010. Board chairman Larry Leake has said that the board’s role in the matter has ended.
Unless new charges are filed, it’s possible the public never will learn the nature of the relationship between the aircraft providers, campaign officials, and Perdue herself.
The elections board investigation and media reports have identified three patterns of activity by the aircraft providers: campaign flights that were meant to be free; campaign flights from donors who had contributed the legal maximum, wanted to provide additional funding, and wanted to hide the source the money; and free flights for official business by the lieutenant governor.
None of the indictments so far has mentioned the use of private aircraft to conduct state business for free. Nor has anyone from the governor’s office or the campaign explained how providers were recruited and what the providers might have expected in return for giving free flights.
Indictments of Perdue donors
Stubbs, Reichard, and Juleigh Sitton of Morganton were indicted on felony charges by a Wake County grand jury Nov. 28. Sitton, an attorney, worked for the 2008 Perdue campaign and later ran Perdue’s western North Carolina office. Robert Lee Caldwell of Morganton was indicted in February on similar charges.
Reichard was charged with funneling $32,000 from Morganton businessman Charles M. Fulenwider through a business Reichard owns to pay a portion of Sitton’s salary with the Perdue campaign. Fulenwider already had given the maximum $8,000 allowed during the primary and general election cycles.
Stubbs, a registered Republican and longtime donor who has given primarily to GOP candidates, is accused of funneling $28,000 through his law firm to pay for aircraft to fly Perdue to campaign events during 2007 and 2008. The free flights were not reported on campaign finance reports resulting in a number of campaign finance law violations. Stubbs was the law partner of Perdue’s late former husband; his eight-member firm continues to bear the name Stubbs & Perdue.
Caldwell, a former chairman of the board of Western Piedmont Community College, was charged with causing the Perdue campaign committee to file false reports and obstruction of justice.
Caldwell’s indictment states that he solicited and accepted a check from James Fleming, a Morganton barber, in the amount of $3,048.50 to pay for a chartered aircraft for Perdue. Caldwell then reimbursed Fleming for the check with money that came from an unidentified third party — a violation of campaign law. Fulenwider, an acquaintance of Caldwell, originally was invoiced for the flight.
Reichard worked out a plea agreement with Willoughby on Dec. 14. He entered an Alford plea, an arrangement allowing a defendant to maintain his innocence while acknowledging that the prosecutor has sufficient evidence to win a jury trial. He agreed to pay a $25,000 fine and serve two years’ probation. After the hearing he issued a statement that he would not be talking to reporters.
Stubbs is expected to appear in Wake County Superior Court in January and has said he plans to fight the charges against him. Sitton and Caldwell also could make court appearances in January.
SBOE fingers aircraft providers
A June 2010 report by elections board investigator Kim Strach alleged Stubbs and Reichard assembled a list of providers to meet the campaign’s air travel needs. “According to [Gardner] Payne, Governor Perdue advised him in 2006 that Peter Reichard was working with Buzzy Stubbs to obtain aircraft providers for the Perdue Committee flights,” Strach’s report said. Payne is a Raleigh attorney who raised funds for the Perdue campaign.
The report said that when Perdue “needed to travel on private aircraft,” one of two members of the lieutenant governor’s staff would locate a provider. The staffers were Carol Young, Perdue’s official scheduler, and Ann Kannady, a legislative liaison. “According to Ms. Young, Ms. Kannady would use a list of individuals who could be contacted to provide air travel,” the report said. “The list had been provided to Ms. Young’s office.” In some instances, the campaign arranged the travel and Young would add the information to Perdue’s calendar.
Perdue legally could have used state-owned aircraft for official and campaign business — so long as the campaign reimbursed the state. And yet the elections board found that several dozen flights were not reported in a timely manner and many were not reimbursed.
A Carolina Journal report from October 2010 revealed that Perdue also made no payments to private aircraft owners for travel related to official state business in 2007 and 2008.
Perdue campaign committee records turned over to the elections board show that she sometimes used privately owned aircraft for trips that were related entirely to official state business. On many other flights, she combined official business as lieutenant governor with political events in her quest to become the state’s chief executive. For those flights, someone in the Perdue campaign made calculations to separate the purported costs of official state business from expenses related to her gubernatorial campaign.
‘Gifts to the state’
In 2010, Perdue spokeswoman Chrissy Pearson acknowledged the flights and told CJ that the office of the lieutenant governor treated the free flights for official state business as “gifts to the state” from those providing the flights. It remains unclear how those flights were accounted for by the state and the provider.
More than 20 official-business free flights occurred, based on records made public through the elections board. Some examples include:
• A round-trip flight for Perdue on Jan. 30, 2007, from Raleigh to Concord in a Cessna Citation jet owned by David King of Raleigh was listed as official state business, yet there is no record of either the lieutenant governor’s office or the campaign paying for the flight. King provided flights to Perdue on other occasions. A flight on March 5, 2007, to Wilmington in King’s jet was valued at $1,389. Two-thirds of the event time involved state business and one-third covered campaign events. The Perdue Committee paid only $202 for this flight on July 1, 2007. There is no record of any payment from the lieutenant governor’s office.
• A July 23, 2007, flight between New Bern and Ocean Isle to transport Perdue for a speech to the N.C. Sheriffs Association was listed as official state business, but there is no record of any payment from the lieutenant governor’s office. The pilot was Michael D’Orosko from Wilmington. CJ was unable to determine who owned the single engine airplane used for the trip.
• A flight Sept. 29, 2007, involved a one-way trip for Perdue from New Bern to Raleigh in a Cessna Citation jet. The plane was owned by Flying W LLC and managed by Buddy Stallings of New Bern. Her events that day included campaign and state business. The total cost was $701 and the campaign paid $239 on Jan. 12, 2008. There is no record of payment from the lieutenant governor’s office for the remainder.
• On Nov. 9, 2007, records indicate Perdue traveled round trip from Chapel Hill to Hickory in a corporate plane originating in Dunn, owned by Warren Oil Company. Her events in Hickory consisted of an official state business event lasting 50 minutes and a private campaign event lasting 120 minutes. The total flight costs were stated as $589, with $415 calculated as the share attributed to the campaign. The Perdue Committee paid Warren Oil $415 on Dec. 31, 2007, almost two months after the flight took place. The difference could have been paid directly with public funds from the lieutenant governor’s office, but there is no record of payment.
• A Jan. 31, 2008, flight, in an aircraft owned by Agemark LLC in Hickory originated in Hickory. Perdue was picked up in Chapel Hill, flown to Concord, and then delivered back to Chapel Hill. The trip was listed as official state business, but no value was stated for the flight, and there is no record of a payment from the lieutenant governor’s office or the Perdue campaign committee.
Recent attempts to speak to Perdue officials about the use of private aircraft for official business were not successful.
Don Carrington is executive editor of Carolina Journal.