Carolina Journal News Reports
CJ Series

Frank Ballance's Foundation

Longtime state senator and now Congressman Frank Ballance is in hot water because of revelations by Carolina Journal and others of questionable programs and record-keeping at a nonprofit foundation he helped to create and to fund with millions in state taxpayer money.

(1.16.06) Gasper Fired as HCC President
WELDON — Halifax Community College President Ted Gasper was fired Friday following allegations of impropriety including using college resources on political efforts, especially those of former U.S. Rep. Frank Ballance of North Carolina.

(12.20.05) Not a Profitable Arrangement
Thanks to action by a legislative ethics panel, candidates will have to disclose their nonproft ties. The next step is to bar service on the boards of state-funded groups.

(12.02.05) Ballance Fete Features Dick Gregory
RALEIGH — Friends of former U.S. Rep. Frank Ballance are sponsoring a “friendship luncheon” for him, featuring comedian and civil-rights activist Dick Gregory, on Saturday in Murfreesboro. The event will take place at Nebo Baptist Church at 11 a.m. with Gregory scheduled to arrive at 1:30 p.m.

(10.13.05) Ballances Hear Their Sentences
ELIZABETH CITY — Former First District Congressman Frank Ballance received a four-year prison sentence yesterday for his personal usage of state money, which he had obtained in grants for his non-profit organization when he was a leader in the State Senate. His son, state District Judge Garey Ballance, was also sentenced to nine months in federal prison for failing to file tax returns.

(9.29.05) Ballance Sentencing Day Nears
RALEIGH — The pre-sentencing reports for former U.S. Rep. Frank Ballance and his son, state District Judge Garey Ballance, both of Warren County, have been completed; the next step is scheduling of their sentence hearings. Both pleaded guilty in federal court to charges related to the misuse of state money.

(5.05.05) Ballance Pleads Guilty, Keeps Giving
RALEIGH — Former 1st District Congressman Frank Ballance made a total of $53,500 in political contributions from his federal campaign fund in a nine-week period surrounding the signing of a plea agreement on Aug. 30 that required him to make $61,917 in restitution. The agreement, prepared by the U.S. Attorney, required Ballance to plead guilty to conspiracy to commit mail fraud and money laundering. It also required to make restitution to the state, and to forfeit all assets of the John A. Hyman Memorial Youth Foundation. The political contributions went to the 1st District Democrat Party, the Democratic Congressional Campaign Committee, the Democratic National Committee, and the Warren County Political Action Committee.

(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."

(10.18.04) Troubling Republicans, Sad Democrats
When commenting on allegations of misbehavior by Republicans, The News & Observer is stern. But regarding Democrats guilty of serious corruption and crimes, the language is noticeably different.

(10.11.04) State Senator Didn’t File Tax Forms
RALEIGH — Like former congressman Frank Ballance, his predecessor in the state senate, Robert Holloman failed to timely file federal tax forms for the Nebo Family Life Center, a state-funded nonprofit he runs. Holloman was a full-time state employee, a church pastor, and a Hertford County commissioner at the time his nonprofit received two state grants totaling $175,000. Holloman also failed to file financial statements as state law requires. The financial information he eventually did file with the IRS is inconsistent with information Carolina Journal obtained from the Department of Correction, the agency that wrote him the checks.

(10.04.04) Holloman Speaks on Hyman Scandal
RALEIGH — A federal indictment of former U.S. Rep. Frank Ballance Jr. of Warrenton also alleges that other people and groups cooperated in questionable financial transactions involving tax money. One person featured prominently was State Sen. Robert Holloman of Ahoskie. Holloman told Carolina Journal that he had not read the indictment and was unaware that it contained significant references to him. How was the money spent? “On drug prevention,” he said, and specifically “a counselor and space for a building.” Asked whether his church was paid rent, Holloman answered, “Yes.” But he said, “It is my understanding that we have not done anything illegal or wrong.”

(9.13.04) Ballance Indictment
On September 2, 2004, Frank Ballance and his son Judge Garey Ballance were indicted by a Federal Grand Jury. Frank Ballance was charged with diverting more than $100,000 in state funds meant for the John A. Hyman Memorial Foundation to his son, daughter, mother, church and law firm while he was a state senator. Judge Garey Balance was charged with willful failure to file a federal income tax return for 2000, a misdemeanor that has a maximum punishment of a year in prison and a $100,000 fine.

Download the PDF file of the indictment here (1MB).

(9.03.04) A Ballance of Power Is No More
Former Congressman Frank Ballance and his son were indicted Thursday on charges related to the state-funded Hyman Foundation. The damage extends beyond the fate of two men.

(9.03.04) Ballance, son indicted in Hyman scandal
RALEIGH — A federal grand jury Thursday indicted former U.S. Rep. Frank Ballance Jr. of Warrenton on charges of conspiracy to commit honest services mail fraud, mail fraud of money, and money laundering. His son, N.C. District Judge Garey M. Ballance, was indicted on a charge of failure to file a federal tax return for 2000. Frank Ballance faces felony counts that carry a maximum of five years in prison. The charge against Garey Ballance is a misdemeanor having a maximum of one year imprisonment. The federal investigation of the men stemmed from a scathing review of the John A. Hyman Memorial Foundation by State Auditor Ralph Campbell in October 2003.

(4.27.04) Ballance Helped Sex Offender
RALEIGH — U.S. Rep. Frank Ballance and Warren County Sheriff Johnny Williams helped a woman avoid registering as a North Carolina sex offender as required by law and a federal plea agreement. Subsequent to her conviction as a sex offender, Ballance employed her as an instructor in a substance-abuse program run by an organization of which he was the chairman. The woman, Lisa Louise Hayes, of Warren County, was employed as a drug treatment specialist at the Federal Correctional Institution in Butner from October 1991 until February 2001. In August 2001 federal authorities arrested her and charged her with engaging in a sexual act with a person who was in official detention and who was under her custodial, supervisory, and disciplinary authority.

(4.16.04) Ballance Pledged Money to Center
RALEIGH — U.S. Rep. Frank Ballance pledged $10,000 from the embattled John A. Hyman Memorial Youth Foundation toward the Buck Spring Leadership Excellence Center, a Warren County conference facility in the planning stages. The foundation, which Ballance chairs, has received more than $2 million in state money for substance-abuse programs. But last year, an investigation by Carolina Journal and a special review by State Auditor Ralph Campbell uncovered that the foundation often went for items unrelated to substance abuse. The pledge appears to have been unpaid, and the center remains far short of its fundraising goal.

(3.07.04) Two Wrongs and a Wright
The controversy swirling around former legislator Frank Ballance's tax-funded nonprofit isn't an isolated case, as a new case involving Rep. Thomas Wright demonstrates.

(2.26.04) Ballance Nonprofit Still Skirting Law
RALEIGH — Rep. Frank Ballance’s state-funded charity to help youths apparently has failed to file IRS tax forms required for nonprofit organizations. After inquiries by Carolina Journal, the John Hyman Foundation did eventually file the returns for 1994 through 1997, but no more recent reports are available. Based on IRS guidelines, the foundation’s fines for 10 years of not filing may be as high as $100,000. Ballance has refused to answer media questions on the Hyman matter during a recent tour of his 1st Congressional District.

(2.13.04) Auditor Reports on Nonprofit Funding
RALEIGH — The State Auditor’s Office has delivered to the General Assembly and the Easley administration a new report detailing grants to nonprofit organizations by state agencies last year. The annual report catalogues all grants made by state agencies to nonprofits such as Smart Start partnerships, economic development groups, and community service agencies. Legislators last year set a deadline of Jan. 31 for compiling the report as part of an effort to increase oversight of nonprofit agencies. Most of the nonprofits met the reporting requirements in time, but a few did not.

(1.05.04) Out On An (Un)Ballanced Limb
Distressingly, many folks are predicting that Congressman Frank Ballance may be re-elected in November. Could this happen?

(11.05.03) Officials, Media React to Audit
RALEIGH — Newspaper editorial writers across North Carolina and law enforcement officials reacted swiftly to a state auditor’s report Oct. 22 that confirmed U.S. Rep. Frank Ballance operated a personal and apparently political slush fund behind the facade of a nonprofit humanitarian organization. One newspaper called for Ballance to resign his Congressional seat, while others excoriated him for mismanagement, a lack of candor, or for "chiseling" the taxpayers. A federal investigation of Ballance is reportedly continuing.

(11.05.03) Ballance Explains It All -- Finally
After months of clumsy defenses, embattled U.S. Rep. Frank Ballance finally hit on the right one: he's the victim of a GOP plot. Yes, we've got another Tinfoil Hat Awardee.

(11.03.03) Who was John A. Hyman?
RALEIGH — When U.S. Rep. Frank Ballance and colleagues set up a nonprofit in 1985, they chose to name it after a controversial figure — John A. Hyman, North Carolina’s first black congressman. During his political career, Hyman was a strong civil-rights advocate but “his efforts were clouded by his involvement in frauds and payoffs of significant proportions,” according one historian. He was not renominated for Congress after a single term, and was later accused of embezzlement and convicted of assault.

(10.31.03) Outstanding Issues Facing Ballance
RALEIGH — While State Auditor Ralph Campbell's report provides a review of how the John A. Hyman Foundation operated, there are still several issues related to foundation chairman and U.S. Rep. Frank Ballance that have not been resolved. They include a failure to file reports with the IRS, allegations of illegal campaign contributions and fictitious campaign reporting, the possible role played by the separate Alice Eason Ballance Foundation in the congressman's campaign, and the Hyman Foundation's lease of a former state prison site.

(10.29.03) Audit Missed Some Hyman Funding
RALEIGH — Missing from the state auditor’s report on the John A. Hyman Foundation last week was $140,000 the nonprofit group received from the N.C. Department of Health and Human Services. State Auditor Ralph Campbell’s critical report on the foundation headed by U.S. Rep. Frank Ballance listed a total of $2,115,000 in state funds it had received from the Department of Corrections since 1994. Meanwhile, a federal grand jury is reportedly scheduled to hear evidence from a criminal investigation of Ballance and the Hyman Foundation.

(10.24.03) Phipps & Ballance Back in the News
With scandals surrounding Meg Scott Phipps and Frank Ballance back on the front page, it's worth considering the common denominator: hubris.

(9.29.03) Hyman Foundation Leased Prison
RALEIGH — U.S. Rep. Frank Ballance, a Warren County Democrat and also chairman of the John A. Hyman Memorial Youth Foundation, helped the foundation obtain a lease on a 35-acre former prison site. The five-year lease for $1 per year has an option for the foundation to renew for another five years. It is dated May 25, 2001, and signed by Gov. Mike Easley and by Hyman Vice President Helen Ophelia of Rich Square. The foundation runs substance abuse programs. It has yet to use the property, which was originally going to be used by local residents for an animal shelter.

(9.17.03) Ballance Campaign Makes Gift
RALEIGH — A report filed recently with the Federal Election Commission shows that U.S. Rep. Frank Ballance of North Carolina donated $3,000 in campaign money to a nonprofit organization named for his mother. The contribution to the Alice Eason Ballance Education and Justice Foundation on June 19 was listed on Ballance’s second-quarter campaign report filed with the commission Aug. 13. FEC regulations permit expenditures for charitable organizations, but the recipient group cannot convert the money into personal use for the candidate or to any use that would be prohibited by the FEC.

(8.25.03) Hyman Funds Flowed to Ballance
RALEIGH — Newly revealed records show that U. S. Rep. Frank Ballance, using a nonprofit foundation he chairs, funneled public money to a child care center owned by his mother in Windsor. The business is located in a building owned by the congressman and his wife. The payments were reported when the John A. Hyman Memorial Youth Foundation filed tax forms for 1994-1997 — several years after they were due. Documents indicate that Ballance was solely responsible for distributing Hyman funds. The group's conflict of interest policy prohibited board members and their families from personally benefiting from the foundation’s activities.

(6.30.03) College Used to Aid Campaign
RALEIGH—Halifax Community College President Ted Gasper used state government resources to raise money for the congressional campaign of Rep. Frank Ballance of Warrenton, a transcript of telephone conversations shows. Documents also show that Gasper and others also planned to funnel corporate contributions though the Alice Eason Ballance Education and Justice Foundation, a nonprofit organization that Ballance, a Democrat, set up in October 2001, a few months before he filed to run for the U.S. House. Corporate contributions to political campaigns are illegal in North Carolina, according to campaign finance laws.

(6.12.03) Ballance’s Foundation Reprimanded
RALEIGH—The Administrative Office of the Courts announced last week that it is terminating the Warren County Drug Treatment Court program, which relies on the services of the John Hyman Foundation, an organization based in Warrenton and chaired by U. S. Rep. Frank Ballance, D-1st. In addition, last week the state Division of Mental Health reprimanded the Hyman Foundation for violations of state law and “a pattern of noncompliance” with the foundation’s DWI program.

(6.05.03) On the Ballance Believers
RALEIGH — Two pastors with close ties to Rep. Frank Ballance (D-1st) are associated with possibly illegal contributions to his 2002 campaign for Congress. State Senator Robert L. Holloman, an Ahoskie Democrat and one of those pastors, does not challenge an assertion that he exceeded contribution limits by $500 to Ballance’s campaign. Meanwhile, parents of a 15-year-old have not yet clarified whether the teen gave $1,300 to Ballance out of his own funds.

(6.04.03) Investigation of Ballance Intensifies
RALEIGH — A few months after being sworn in to Congress, Rep. Frank W. Ballance, Jr. (D-1st District) is trying to answer questions about accounting procedures of a nonprofit foundation of which he is the chairman. The foundation failed until recently to file financial statements required by the state and the Internal Revenue Service. The State Auditor and the IRS are investigating the organization and its substance-abuse program. In addition, the State Board of Elections is investigating Ballance for his failure to respond to requests that he explain discrepancies on his 1999 and 2000 Financial Disclosure Reports.

(5.05.03) NC Pastors Bless Rep. Ballance
RALEIGH—Federal Election Commission records indicate that U.S. Rep. Frank Ballance received at least $25,000 for his 2002 election from 23 pastors and their families. At least 12 of the pastors have received grants for their churches from the John A. Hyman Foundation, a nonprofit organization chaired by Ballance. The organization is totally funded through the state budget. Ballance, a Democrat representing North Carolina’s 1st District, helped start the foundation, which has failed until recently to file financial statements required by the state and the IRS.

(4.15.03) Questions Plague State-Funded Group
RALEIGH — The director of a Warren County nonprofit substance abuse program that has received at least $1.8 million from state taxpayers has refused repeated requests to turn over public financial records as required by law. An investigation by Carolina Journal indicates that the records probably don’t exist. Another newspaper reported that it also was unable to obtain financial records of the John A. Hyman Memorial Youth Foundation and that the organization doesn’t appear to be serving any clients.