The North Carolina House approved a new executive branch ethics act Tuesday that may pose a challenge for Gov. Mike Easley and at least three men he has appointed to state boards. If the new laws created by the act had been in place last year, all four may have received fines or criminal charges for failure to comply.

Current ethics guidelines for executive branch employees are contained in an executive order. State laws apply sanctions or criminal penalties to only a few situations. The new laws would apply to top executive branch employees as well as all appointees to boards and commissions.

Under the new provisions, failure to file the required annual statement of economic interest within 30 days its due date can result in a $250 fine. Failure to file within 60 days can result in termination of the violator’s employment or board position. Concealing information or providing false information can lead to criminal charges.

Before becoming law the ethics bill must be approved by the State Senate. Those that would have been affected by the new act’s provisions, had it been in force, are:

• Randolph M. Allen of Matthews, appointed by Easley to the Wildlife Resources Commission. Last year Allen filed his economic interest statement five months after it was due. The Ethics Board has not received Allen’s current statement, due May 15.

• Lanny Wilson of Wilmington, appointed by Easley to the Board of Transportation. Last year Wilson filed his economic interest statement almost six months after it was due. The Ethics Board has also not received Wilson’s current statement.

• Charles “Nick” Garrett of Wilmington, appointed by Easley to the Clean Water Management Trust Fund Board. Last year Garrett failed to file an economic interest statement. The Ethics Board received Garrett’s current statement by fax after working hours on the May 15 deadline. Under the new law Garrett may have lost his board position for failing to file his statement. The Clean Water Board voted last week to put Executive Director Bill Holman on probation for three months for management related issues. Garrett was one of two board members who voted against the measure, hinting that he would have preferred a stronger stand, reported the Wilmington Star-News. “In my opinion, I felt Bill needed to be more accountable,” Garrett said as reported by the paper.

The three appointees all are involved in real estate development and, coincidentally, all three have ties to Easley’s personal real estate transactions. Allen is the president of R. A. North Development, Inc., the company that is developing the Cannonsgate waterfront community in Carteret County. Allen did not list Cannonsgate as real estate that he owned on his economic interest statement.

In December, Easley paid $549,880 for a homesite in the 525-lot subdivision. Wilson has substantial real estate holdings in North Carolina. He provided more than $12 million of the initial financing for Cannonsgate.

Nick Garrett Development was the general contractor for a $150,000 renovation of Easley’s home on the Cape Fear River in Southport. The project was started and completed in 2001 soon after Easley first took office as governor. Garrett and Wilson are partners in a company that is developing condos adjacent to the state-owned Southport Marina. Garrett has been trying to acquire other land adjacent to the marina and tried to buy the marina property from the state last year.

Last year, Easley pushed for a new lease for the new owners of the company that operated the marina, and the Council of State approved the new lease in January 2006. Numerous news reports stated that Garrett was one of the owners of the company, but Easley failed to disclose his business relationship with Garrett (the home-renovation project) before he pushed for approval of the new lease. In March, Easley spokeswoman Sherri Johnson told Carolina Journal that Garrett is not a principal in Southport Marina, Inc.

But if Garrett’s role in the company changed, a letter obtained by CJ indicates the change was well after the lease was approved. “As you all know by now, investors Tim Smith, Julian ‘Bubba’ Rawl and Nick Garrett purchased Southport Marina as of January 2006 and subsequently assumed the property lease,” said a Feb. 28 letter from Southport Marina, Inc. to all boat slip holders.

Since Garrett did not file the required economic interest report last year, his relationship with the company is unclear. He did not list Southport Marina, Inc. on his latest filing. Garrett has not returned several phone calls from CJ seeking further information on his involvement in Southport Marina, or on the details of the remodeling job he did for Easley.

The bill is one of several that have been introduced in response to the scandals revolving around House Speaker Jim Black. Last year lottery commissioner Kevin Geddings, a Black appointee, failed to disclose that Scientific Games, one of the companies seeking to run the state lottery, had paid him.

Don Carrington is executive editor of Carolina Journal.