A federal indictment of former U.S. Rep. Frank Ballance Jr. of Warrenton also alleges that other people and groups cooperated with Ballance in questionable financial transactions. One person featured prominently in the indictment was State Sen. Robert Holloman of Ahoskie.
In early September the federal grand jury indicted Ballance 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 of Norlina, was indicted on a charge of failure to file a federal income tax return for 2000.
The federal investigation of the Ballances stemmed from news reports and a scathing review of the John A. Hyman Memorial Foundation by the State Auditor’s Office in October 2003. The former 1st District congressman helped start the nonprofit drug-abuse prevention and treatment program in Warrenton and served as its board chairman. While in the state Senate, he channeled more than $2 million in state grants to the organization.
Holloman’s wife, Velma Holloman, is a Hyman Foundation board member.
Holloman was elected in 2002, taking the state Fourth District Senate seat vacated by Ballance. He is also pastor of Nebo Baptist Church located just outside of Murfreesboro. Nebo was a significant beneficiary of the Hyman Foundation and other funds secured by Ballance.
The indictment listed Hyman Foundation grants to Nebo totaling $218,000 from 1994 to 2002. In addition, Ballance secured special appropriations of $100,000 in 2001 and $75,000 in 2002 for a “community program in Northampton County that works with substance abuse offenders.” The funds ended up at Nebo Baptist Church. In total, the indictment documented $393,000 that Holloman’s church received through the efforts of Ballance.
In a phone interview last week, Holloman told Carolina Journal that he had not read the Ballance indictment and was unaware that the document 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.” He said he would provide CJ a full accounting of the money.
The indictment also described a transaction between Ballance and Holloman on Dec. 31, 2002. On that date Ballance wrote a $25,000 Hyman check to the Nebo Roads Program. In the memo portion of the check Ballance wrote “mini grant/loan.” Ballance then told Holloman, who had just been elected to the Senate, that if Holloman was able to get a seat on the Justice and Public Safety subcommittee and write his own appropriation for Nebo, the payment would be considered a loan and needed to be paid back. If not, it would be a grant. Holloman did obtain a seat on the committee and was named vice chairman by Senate leader Marc Basnight. According to the indictment, Nebo did not receive a grant from the committee because of the growing negative publicity about the Hyman Foundation.
Asked about the agreement with Ballance, Holloman said the idea was Ballance’s. Asked whether he thought the deal was ethical, Holloman said that it did not raise any ethical concerns and that he did not realize what Ballance was setting up. And what did Holloman think of Ballance’s indictment? “I have no comment,” he said.
When the Ballance indictment was announced, U.S. Attorney Frank Whitney said the investigation would continue. Last week, his spokeswoman, Gloria Dupree, told CJ that the U.S. attorney would not comment on any further indictments.
Holloman’s current legislative district includes all or parts of Gates, Halifax, Hertford, Northhampton, Vance, and Warren counties. He won the Democratic primary this year and is unopposed in the November general election. His district for 2004 has changed and includes all of Bertie, Chowan, Gates, Halifax Hertford, Northhampton, and Perquimans counties.
Other organizations and people mentioned in the indictment involved in Ballance’s financial transactions include:
* Greenwood Baptist Church and Pastor Eddie Lawrence
* Ballance’s legal secretary and other law firm employees
* Kiddie World Child Development Center in Windsor
* Alice Eason Ballance, Frank Ballance’s mother
* The Alice Eason Ballance Foundation
* The Warren Family Institute
* The Vance County NAACP
* The Bertie County Rural Health Association
* Valerie Ballance, Frank Ballance’s daughter
The indictment also mentioned that Garey Ballance was a paid consultant to the 2000 Mike Easley campaign for governor, and that in December 2000, then Gov. Jim Hunt appointed Garey Ballance to a District Court Judge’s seat in Warren County.
State Sen. Hamilton Horton, R-Forsyth, has pushed for more accountability from the non-profits that receive state funds. He was shocked after reading the entire 51-page indictment. “It is disappointing that the second-highest ranking member of our state Senate, someone who held himself out as a role model to young people of his race, should instead defraud the state and betray those whom the money was supposed to help.”
Sabra Faires, chief of staff for House Co-Speaker Richard Morgan, told CJ that she had a copy of the indictment but that she had not read it. But speaking on Morgan’s behalf she said, “Nobody should use their office to funnel money to themselves and family members. It is an outrage that this had been happening.”
House Co-Speaker Jim Black, state Senate leader Marc Basnight, and Easley have not responded to several CJ requests to comment on Ballance’s indictment.
Carolina Journal was at the forefront of early investigations into the finances of the Hyman Foundation and failure to comply with state and federal laws and regulations. The CJ exclusive series on the affair and the 51-page indictment can be found here.
Don Carrington is associate publisher of Carolina Journal.