News: CJ Exclusives

Basnight Said Slush Funds Wrong

'It shouldn't be left in my hands...to decide'

State Senate President Pro Tem 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.

Several news organizations, including Carolina Journal, reported last week that Basnight (D-Dare), House Speaker Jim Black (D-Mecklenburg), and former Co-Speaker Richard Morgan (R-Moore) divided up to $30 million in various state agencies overseen by Gov. Mike Easley, to be spent according to the three legislative leaders’ wishes.

In 1997 Basnight was part of a similar agreement with then-House Speaker Harold Brubaker (R-Randolph) and former Gov. Jim Hunt, who distributed $23 million in “discretionary” funds to special projects favored by political friends and supporters. Upon the media revelations at the time, Basnight said the process of handling those funds was wrong.

“Somehow or other, you’ve got to help these areas in the state that need the money,” Basnight told The News & Observer of Raleigh in February 1997. “But it shouldn’t be left in my hands to decide or Brubaker’s hands to decide.”

On Friday, a Basnight spokeswoman emphasized that he was unaware that itemized projects requested in the Senate version of the budget were converted to a general “grants reserve” in the final document.

“Just as he said in 1997, Sen. Basnight believes un-itemized spending should not be part of the budget process,” said spokeswoman Amy Fulk in an e-mail. “Most of the Senate-related projects (about 90 percent of them) had been itemized in the Senate’s budget bill — Sen. Basnight was unaware that those projects, and the approximately half a million dollars in other un-itemized allocations, were not specifically listed in the final bill.”

In her correspondence with CJ, Fulk was talking about the “reserves” allocated under the Department of Cultural Resources. In other news accounts Basnight called the vague allocation a mistake.

“It won’t happen again,” he told the Associated Press. “I admit I have erred. I will re-insist that it be in the (final) document.”

But according to sources close to the final state budget discussions between House and Senate leaders, Basnight’s close aide, Rolf Blizzard, negotiated the final terms of the compromise.

Basnight made a similar claim of ignorance in December, in a News & Observer article after he testified before a grand jury about the scandal surrounding the John A. Hyman Memorial Youth Foundation, which was led by former state Sen. Frank Ballance. Basnight had said he didn’t know about the state-funded foundation until news stories of its problems were reported in 2003. But Basnight in 1996 arranged for the Hyman Foundation to receive $140,000 from the Department of Health and Human Services.

This fiscal year, Basnight also shared $10 million in reserve funding within the Department of Transportation with Speaker Black for each leader’s discretionary spending. Fulk disputed that characterization.

“The DOT requests get public airing twice and are not discretionary for Sen. Basnight,” she said. “These requests come from local governments, and our office forwards those requests to DOT if the local government has voted to approve a resolution seeking those funds. Each request is then reviewed by the department and ultimately must be approved by the Board of Transportation.”

But Fulk did not explain why it was necessary for General Assembly leaders to be the “gatekeepers” for such requests from local governments.

State Senate Minority Leader Phil Berger, R-Rockingham, said he agreed with Basnight’s statements both in 1997 and last week.

“”It seems to me if the process was broken in ’97,” he said, “then it is probably similarly broken now.”

Paul Chesser is associate editor of Carolina Journal. Contact him at [email protected] Associate published Don Carrington contributed to this report.