When a federal grand jury indicted former Gov. Mike Easley’s legal counsel Ruffin Poole Jan. 21, it was just the latest setback for an Easley associate since the state’s media began investigating the former governor’s activities.

Poole’s indictment came nearly four years after Carolina Journal first reported that Easley bought a waterfront lot for a bargain price in the Cannonsgate community on Bogue Sound in Carteret County.

The former gubernatorial legal counsel was charged with 51 counts of corruption related to his involvement with a group of politically active coastal developers behind Cannonsgate.

• In May 2009, McQueen Campbell resigned from the N.C. State board over his role in the initial hiring of Mary Easley by the university in 2005. Soon after that, Mary Easley was fired from her $170,000 a year job.

• Also in May, ABC Chairman Doug Fox resigned from his commission after he sent a racist e-mail referencing President Obama. Acording to the indictment, Fox provided liquor worth $600 for Poole’s wedding.

• In late October, the State Board of Elections convened a hearing to investigate alleged campaign finance violations by Easley’s campaign committee. At that hearing, developer Gary Allen and businessman Lanny Wilson acknowledged writing checks to the N. C. Democratic Party under the assumption the money was earmarked for Easley, a violation of the law.

• Campbell, a pilot and aircraft owner, testified at the hearing that he had flown Easley to numerous campaign events but never billed Easley’s campaign for the flights. He also testified that on two occasions he billed the Easley campaign for flying services that in fact reimbursed Campbell for repairs to Easley’s Raleigh home that Campbell had paid for.

• At the conclusion of the hearing, the election board concluded that laws were broken and made a criminal referral to the Wake County district attorney. Since Wake County DA Colon Willoughby considered Easley a personal friend, Willoughby asked the Rowan County district attorney to take over the case.

• In December, Poole resigned from his job at the McGuireWoods law firm in Raleigh and his position on the board of the grantmaking Golden LEAF Foundation.

• On Jan. 4, a lawyer for Allen and his development associates told Pamlico County officials that his client was abandoning the 680-acre Cutter Bay development. Allen sought a refund of $2.96 million in impact fees he had paid to the county for water. County commissioners voted unanimously not to return the money.

• The same day Poole was indicted, Wilson resigned from the N. C. Department of Transportation board and a few days later resigned from the N. C. Turnpike Authority board.

Poole’s alleged criminal activities started in January 2001 and continued throughout Easley’s eight years as governor. During his tenure with Easley, Poole became the person Easley’s political supporters needed to go through to obtain assistance from the governor. Supporters referred to Poole as the “little governor.”

Easley’s attorney, Joe Cheshire of Raleigh, has asserted that Easley knew nothing of Poole’s alleged illegal activities.

News stories by CJ and other state media likely triggered the current federal investigation of Easley’s real estate transactions, his acceptance of free cars, his use of free airplanes for campaign activities, and a lucrative job for his wife Mary at N.C. State University.

The developers named in the indictment include brothers Randy Allen and Gary Allen of Matthews, Campbell of Raleigh, and Wilson of Wilmington, all of whom were involved in Cannonsgate. The developers relied on Poole to help them secure environmental permits for Cannonsgate, Oyster Harbour in Brunswick County, Summerhouse in Onslow County, and Cutter Bay in Pamlico County.

In his role with the governor’s office, Poole became familiar with political supporters who needed assistance with regulatory matters pending with various state agencies.

The 64-page indictment specifically claims Poole, 38, derived significant personal benefits from using his official position to expedite environmental permits for coastal developers from the Department of Environment and Natural Resources. (The entire PDF document is available here.)

“As Poole became personally acquainted with the governor’s political supporters, he also began assisting them in obtaining state board and commission appointments for themselves and their friends and family,” the indictment stated.

Poole also developed a close social relationship with Campbell, Wilson, and Wilmington attorney Fox.

Easley appointed Campbell to the N.C. State University Board of Trustess in 2001 and again in 2005. Campbell was chairman at the time he resigned in 2009. Easley appointed Wilson to the N. C. Real Estate Commission and the N. C. Board of Transportation in 2001. Easley appointed Fox chairman of the state Alcoholic Beverage Control Commission in 2004.

The indictment also alleges that Wilson provided Poole with several free vacations to Costa Rica, a bachelor party in New Orleans, an engagement party in Wilmington, and free liquor for his wedding reception.

In 2005, Wilson also allowed Poole to invest in $100,000 in Cannonsgate, netting Poole a $30,000 return in less than four months. In 2006, Wilson allowed Poole to invest $100,000 in the Summerhouse developments, clearing $25,000 the next year.

Poole failed to report his gifts and financial gains on his annual Statement of Economic Interest, as required by law.

In 2004, Gary Allen made a $50,000 donation and Wilson made a $10,000 donation to the N. C. Democratic Party after they had contributed the maximum allowed by law to the Mike Easley campaign. Wilson said he understood his donation would be earmarked for the benefit of the Easley campaign — if true, a violation of campaign finance laws. Wilson testified at an October State Board of Elections hearing that Poole was involved in soliciting both donations.

Cannonsgate at center

In April 2006, CJ reported that Easley appeared to have received a bargain price on one of the choicest lots in Cannonsgate, a 525-lot, 287-acre gated subdivision located on the mainland across from Emerald Isle Beach. His lot borders the Intracoastal Waterway and the entrance to a new marina.

The Allen brothers developed the project and Wilson provided $12.5 million in short-term financing.

Carteret County land records show that Dec. 16, 2005, Mike and Mary Easley paid $549,880 for the 0.36-acre lot at the Intracoastal Waterway and the entrance to the Cannonsgate marina.

Records indicate that they paid 10 percent down and financed the remainder through a $494,000 mortgage loan from Branch Banking & Trust.

The Charlotte Observer then published a similar story concluding that Easley got a favorable deal. Easley spokeswoman Cari Boyce told the newspaper that Easley did not receive special treatment.

”The governor paid the listed asking price for the lot. The price was set and non-negotiable,” she said at the time. She also said he bought the land as an investment. In that story, the newspaper also introduced McQueen Campbell as the person who brokered the deal for Easley.

One year after Easley’s purchase, the Carteret County Tax office assigned a value of $1,198,245 to the lot making, it the second-most valuable property in the development. The development’s roads and other infrastructure are complete, but only one house has been built.

In September 2009, The News & Observer added considerably more information about Easley’s Cannonsgate purchase. The paper obtained Easley’s closing documents showing Easley was given an additional 25 percent discount — or $137,000 — at the closing in December 2005.

The real-estate market has changed considerably and several Cannonsgate lots have gone through foreclosure, most likely making Easley’s lot worth considerably less than the most recent tax value.

Don Carrington is executive editor of Carolina Journal.