Carolina Journal News Reports
CJ Series

Legislative Slush Funds

In 1997, Carolina Journal led the way in uncovering a secret $21 million slush fund used by legislative leaders to reward political allies and distribute pork, often in violation of law. Now, the practice has returned to Raleigh big-time — and CJ is hard at work uncovering abuses of law and the public interest.

(6.18.13) CJ Flashback: Rural Center Under Fire
RALEIGH — The N.C. Rural Economic Development Center faces the most uncertainty since its creation in 1987. But this scrutiny is nothing new: Carolina Journal questioned the value of the giant grantmaking agency to North Carolina taxpayers and businesses 15 years ago — along with its cozy relationship to the politically connected.


(3.31.11) Slush Funds Survive Party Change
RALEIGH — The practice has been characterized by various state officials as problematic, shrouded in secrecy, lacking accountability, and being an end run around the legislature. DOT records show former Senate President Pro Tem Marc Basnight, D-Dare, personally authorized at least $50 million for nearly 800 projects over his 18-year tenure as Senate leader.


(1.27.06) AG Announces Corruption Fight
RALEIGH — N.C. Attorney General Roy Cooper on Thursday appealed to state legislators to provide more tools for state investigators and prosecutors to ferret out public corruption.

Board of Elections to Investigate Black
By Mitch Kokai

RALEIGH — The N.C. Board of Elections decided Thursday that it will conduct a three-day hearing in February on House Speaker Jim Black’s campaign finances. Board Chairman Larry Leake says the hearing will help the board address some “information that causes us some concern.”

Related NC Ethics & Corruption Articles:
Black 'glad…attorney general agrees with me'
Blust: '(Cooper's) saying things I've been saying for 10 years'


(12.06.05) Faison: Black's Incidental Defender
RALEIGH — Democrat Bill Faison, the only state representative from Orange County who's not from Chapel Hill, says he does not consider himself an intentional defender of House Speaker Jim Black, who is the subject of a federal investigation into his relationship with former political and legislative aide, and lobbyist, Meredith Norris.


(12.05.05) Black Foe Explains Web Site
RALEIGH — Joe Sinsheimer, a former Democratic political consultant who a few weeks ago started a website calling for the resignation of N.C. House Speaker Jim Black, says he did so because his disgust with continuous revelations of unethical conduct reached a boiling point.


(10.18.05) Jim Black Should Resign
The speaker has again managed to show his disdain for an open political process by giving access to lottery deliberations to the friends of insiders.


(9.19.05) DOT Slush Funds Remain Active
RALEIGH — N.C. Department of Transportation Secretary Lyndo Tippett continues to maintain a slush fund of $5 million for House Speaker Jim Black and Senate President Pro Tem Marc Basnight in the wake of a controversy that erupted when the practice was exposed in March. A spreadsheet maintained in the office of DOT Chief Engineer W. S. Varnedoe, and obtained Thursday by Carolina Journal, shows that projects submitted by Black and Basnight are still being charged against their respective $5 million accounts.


(7.05.05) Cooper About to Make News
The state auditor has just issued a detailed report on lawmakers' use of slush funds. Now it is the attorney general's turn at the microphone.


(7.01.05) Auditor Reports on Slush Funds
RALEIGH — In a report released late yesterday, State Auditor Les Merritt explained the handling of special discretionary monies controlled by the leaders of the General Assembly, and suggested that Attorney General Roy Cooper examine legal and constitutional issues related to the special funds. Merritt also raised questions about separation of powers between the legislative and executive branches, as it pertains to control of the reserve funds.


(5.18.05) Basnight Construction Pays Up
RALEIGH — Elizabeth City plumbing contractor James Morris said he expects to be paid this week almost $50,000 owed to him by Basnight Construction for subcontracting work he completed in July 2002. Morris has said he thinks that the political influence of Marc Basnight, president pro tempore of the N.C. Senate and president of Basnight Construction, made it difficult for him to collect the money. “I am thankful it is about over. I have been hesitant to believe it would work out this way. It seemed everything was stacked against me winning this lawsuit,” he told Carolina Journal.


(4.05.05) Black and White and Wrong All Over
NC Speaker Jim Black seems to think he is doing a great job of helping Mecklenburg County while presiding over a slush fund-greased political machine. Oh, were that true.


(4.04.05) ‘Confusion’ Led to Possible Conflict
RALEIGH — Rep. Bill Owens says confusion on the part of House Speaker Jim Black about where to spend state discretionary funds created what appears to be a conflict of interest for the Pasquotank County Democrat. Last fall, Owens helped secure state grants that would benefit his downtown Elizabeth City real estate holdings, located on Main Street. The money came from discretionary funds Black and Senate leader Marc Basnight controlled in the Department of Transportation and the Department of Cultural Resources. Carolina Journal and The News & Observer first revealed the accounts last month.


(3.28.05) Morgan Controlled Yet Another Fund
RALEIGH — In addition to the $2.4 million discretionary fund parked at the Department of Health and Human Services that he and Speaker Jim Black were to divide, former Republican House co-speaker Richard Morgan controlled $1.5 million in another account. Last fall, Morgan instructed the Department of Health and Human Services to send $500,000 to his district of Moore County to set up a senior center. He later decided to double it. On Oct. 14, 2004, DHHS Division of Aging and Adult Services Director Karen Gottovi sent a memo to Moore County Manager Steve Wyatt informing him of the money, which did not appear in any line item in the approved state budget.


(3.25.05) Leaders Defiantly Defend the Indefensible
Leaders of the state legislature have responded to exposes of their discretionary slush-fund accounts — by defending their discretionary slush-fund accounts as proper. Not the right choice.


(3.24.05) Black Should Buy, Sell Building
In their recommendation that the state sell a building to Johnson & Wales University for a dollar, the editorial board of The Charlotte Observer demonstrates that they have no idea who in government is authorized to make promises on behalf of the state.


(3.23.05) Funds Called 'Reward' for Hard Work
RALEIGH — A former state House Appropriations Co-Chair says that discretionary funds controlled by General Assembly leaders constituted a justified reward for their districts, because of the extra hours they put in to pass the budget. State Rep. Debbie Clary, a Cherryville Republican who supported the 2003 power-sharing coalition of Democrat House Co-Speakers Jim Black and Republican Richard Morgan, said entrusting the funding of members' special district projects to General Assembly leaders was the only way to get them passed in the budget.

Also now online: CJ's 1997 articles on slush funds


(3.22.05) Law At Issue In Slush Fund Grants
RALEIGH — Gov. Mike Easley’s administration and legislative leaders may have violated a state law in the distribution of discretionary funds to projects of nonprofits and local governments that had been considered but turned down by the General Assembly. General Statute 143-16.3 says that the state government may spend "no funds from any source…for any new or expanded purposes, positions, or expenditure" which the legislature has already considered but failed to enact earlier in the same fiscal period. Records show that nine projects that were turned down in the final budget passed by the General Assembly were later funded using discretionary funds.


(3.21.05) Basnight Said Slush Funds Wrong
RALEIGH — State Senate leader Marc Basnight last week characterized his personal spending of taxpayer dollars on pet projects as an "error," but when similar activity was revealed in 1997, he acknowledged that the practice was wrong. Basnight was then part of a similar agreement with former Speaker Harold Brubaker and former Gov. Jim Hunt. They distributed $23 million in "discretionary" funds to projects favored by friends and supporters. "Somehow or other, you've got to help these areas in the state that need the money," Basnight said in February 1997. "But it shouldn't be left in my hands to decide or Brubaker's hands to decide."


(3.21.05) 1997 Series on Slush Funds
To read the 1997 Carolina Journal series on slush funds in PDF form, click the following stories:


Follow the Money, February/March 1997
Exploring For Money, April/May 1997
Follow the Money II, April/May 1997
Busting the Pigs, June/July 1997
Slinging Slop, June/July 1997


(3.17.05) Slush Fund Slights Safety Projects
RALEIGH — N.C. Department of Transportation Secretary Lyndo Tippett has diverted millions of dollars that could have been used for documented highway safety needs to projects selected by legislative leaders. According to state law, the DOT secretary is to approve all projects financed from a $15 million annual “contingency fund,” but DOT records and interviews show that for the past few years Tippett gave $5 million a year each to the speaker of the House and president pro tem of the Senate to spend on projects they chose. Rep. Jim Black, D-Mecklenburg, and Sen. Marc Basnight, D-Dare, hold those offices.


(3.17.05) About A Late, Great, Brazen Bug
An incident in the shower Wednesday speaks to the current spate of ethical, legal, and constitutional issues in North Carolina politics. The ending isn't pretty.