News: CJ Exclusives

Perdue Team Headed To Court

Several aides may be called to testify about illegal contributions

Editor’s note: Judge Abe Jones has issued a stay until the Court of Appeals can hear motions filed by Stubbs and Juleigh Sitton. See this update on the trial here.

RALEIGH — Even though Gov. Bev Perdue’s 2008 campaign for governor ended nearly four years ago, the upcoming trial of New Bern attorney Trawick “Buzzy” Stubbs should offer further insight into her campaign’s mysterious aircraft provider program.

Wake County District Attorney Colon Willoughby maintains that the 10 flights Stubbs paid for, reported by Perdue’s campaign staff months after the election, amounted to illegal campaign donations.

The trial, scheduled to begin June 11, also may provide insight into Perdue’s decision not to seek a second term as governor.

Perdue never has acknowledged publicly when she learned her campaign did not pay for more than 40 flights she took in privately owned aircraft to attend political fundraisers.

In addition, Perdue has not explained fully a number of flights that she took as lieutenant governor. A Carolina Journal review of 2007-08 expenditures by Perdue’s office reveals that, in addition to not paying for a number of campaign-related flights, she also made no payments to private aircraft owners for travel related to official state business.

Records show flights that combined official business with campaign events. In October 2010, Perdue spokeswoman Chrissy Pearson acknowledged the flights and told CJ that travel provided to Perdue when she was conducting official state business was treated by the Office of the Lieutenant Governor as a gift to the state from those providing the flights.

A Wake County grand jury indicted Stubbs Nov. 28. He is accused of funneling more than $28,000 through his law firm to pay for aircraft to fly Perdue to campaign events during 2007 and 2008. The free flights were not reported on campaign finance reports, a violation of campaign finance laws. The two specific charges are obstruction of justice and causing the Perdue campaign committee to file false reports. If convicted, in addition to fines and prison, Stubbs likely would lose his law license.

Stubbs and his attorneys do not dispute the basic facts surrounding the charges but they believe Willoughby should have focused on the Perdue campaign organization instead of Stubbs.

“We can’t blame [Stubbs] because the campaign was disorganized and didn’t know what it was doing,” Stubbs’ attorney David Rudolf said at a recent court hearing where Stubbs sought to have the charges dismissed. “Mr. Stubbs is sitting here as a scapegoat for what the campaign didn’t do right,” Rudolf said.

News stories often refer to Stubbs, a Republican, as a close friend of Democrat Perdue. He was the law partner of Perdue’s late former husband and his eight-member law firm continues to bear the name Stubbs & Perdue. He is a seasoned political donor who has made more than 250 campaign contributions to state or local candidates or committees over the past two decades. He also served as treasurer for George Wainwright’s successful campaign for the North Carolina Supreme Court in 1998.

In 2010, Willoughby asked the State Bureau of Investigation to look into issues that came up during a State Board of Elections investigation of the Perdue’s campaign organization. The elections board documented the unreported flights and fined the Perdue committee $30,000.

Stubbs’ defense team has indicated that they will subpoena former staffers who worked for Perdue at the lieutenant governor’s office as well as members of her campaign staff. “We are evaluating everyone interviewed by the SBI during this investigation as a potential witness,” David Long, another Stubbs attorney, told CJ.

Superior Court Judge Abe Jones denied motions by Stubbs to have his case dismissed or moved to Craven County where Stubbs lives. Stubbs has filed a notice that he is appealing Jones’ decisions to the North Carolina Court of Appeals. He also filed a motion asking that the case be put on hold pending his appeal.

In January, Perdue made the surprise announcement that she wouldn’t seek a second term in 2012, but she has never said that the Stubbs situation or the broader investigation of her campaign played a role in her decision not to run.

Stubbs’ defense

In March, Stubbs’ attorney filed a lengthy motion to dismiss his indictment “for failure to state crime and for violation of due process.” Jones ruled the motion was “without merit and therefore denied.”

But the motion gives considerable insight into Stubbs’ likely defense strategy. Stubbs claims that campaign finance director Peter Reichard, along with other campaign workers or employees of Lt. Gov. Perdue’s office, solicited his assistance in arranging air travel during 2007 and 2008.

Stubbs admits he arranged and paid for 10 flights through his law office, but that he furnished enough information for the campaign to report them. He maintains that he merely advanced the costs of the flights to the campaign and that the campaign should have reported those flights as debts and reimbursed him.

And yet in his motion, Stubbs stated that in October 2008, in consultation with the campaign’s attorney John Wallace, he attempted to turn the flights into a $28,498 contribution to the North Carolina Democratic Party. Stubbs submitted paperwork and a check to the party. Wallace, who also was the attorney for the party, rejected the contribution.

Stubbs said that at least nine individuals associated with either the campaign or the lieutenant governor’s office were aware of the flights and the information necessary to report them.

He said he cooperated fully with election board investigator Kim Strach in 2010.

Others charged

Morganton attorney Julia Leigh Sitton, also known as Juleigh Sitton, also was charged with obstruction of justice and filing false reports. She worked for the 2008 campaign and later joined state government as the manager of Perdue’s Western North Carolina office. Like Stubbs, Sitton sought to have her case dismissed or at least moved to her home county of Burke. Jones also denied her motions, but a trial date has not been set.

Reichard, Perdue’s former campaign finance director, worked out a felony plea agreement In December. Reichard was charged with funneling $32,000 from Morganton businessman Charles M. Fulenwider through a business Reichard owns to pay a portion of Sitton’s salary with the Perdue campaign. Fulenwider already had given the maximum $8,000 allowed during the primary and general election cycles. A judge sentenced Reichard to two years of unsupervised probation and ordered him to pay a $25,000 fine. He also banned Reichard from political fundraising or consulting for a period of two years.

A fourth person, Robert Lee Caldwell of Morganton, was indicted in February 2011. Caldwell, a former chairman of the board of Western Piedmont Community College, was charged with causing the Perdue campaign committee to file false reports and obstruction of justice. Caldwell’s indictment states that he solicited and accepted a check from James Fleming, a Morganton barber, in the amount of $3,048.50 to pay for a chartered aircraft for Perdue. Caldwell then reimbursed Fleming for the check with money that came from an unidentified third party — a violation of campaign law. Fulenwider, an acquaintance of Caldwell, originally was invoiced for the flight. Caldwell ‘s case has not been scheduled for a hearing.

Fulenwider has not been charged with any crimes even though he was involved in the activities surrounding Reichard and Sitton’s criminal charges, and he admitted he arranted the flight mentioned in the Caldwell charges.

The story so far

CJ first reported in October 2008 on Gov. Mike Easley’s unreported use of private aircraft for his political campaigns. In May 2009, shortly after The News & Observer also reported on Easley’s flights, Perdue’s campaign committee quietly began revising her 2004 and 2008 campaign finance reports. Her campaign eventually disclosed and paid for 42 unreported flights valued at $56,000. Perdue and others associated with her campaign claimed that failing to report the flights was unintentional.

Then-state Republican Party Chairman Tom Fetzer didn’t accept that explanation. He claimed the unreported flights were a deliberate attempt to violate campaign finance reporting laws. In October 2009, he called on the State Board of Elections to launch an investigation. After a lengthy investigation by board staff, the board discussed the staff report at an August 2010 meeting.

The board’s three-member Democratic majority rejected a proposal from a Republican member to convene public hearings on Perdue’s flying activities, so the board never questioned dozens of aircraft providers about their role in the free flights.

The board fined the Perdue campaign $30,000 and found “no intent of wrongdoing.” Immediately after the board hearing, Willoughby said he would review the case.

In September 2010, Willoughby acknowledged publicly that he asked the SBI to look into Perdue’s unreported flights because he thought the elections board might not have addressed the issues fully.

The following month, Perdue acknowledged that federal authorities also were investigating her campaign. In February 2010, Perdue said she had hired high-profile criminal defense attorneys Joe Cheshire and Wade Smith for legal advice related to the state and federal investigations of her campaigns.

Perdue’s comments limited

In a December 2010 interview with CJ and other reporters, Perdue called the actions of members of her 2004 and 2008 campaign staff who did not report free campaign flights “inexcusable,” but would not identify who committed the violations that led to the $30,000 fine by the State Board of Elections. Nor would she say if anyone had been held accountable for those violations.

In a statement released Nov. 29, 2011, the day after Stubbs, Sitton, and Reichard were indicted, Perdue said:

“Over a year ago, at the conclusion of several months of investigation by the State Board of Elections into certain flights provided to my campaign, the Wake County District Attorney began an investigation into any possible wrongdoing associated with those flights and my 2008 campaign.

“My campaign committee cooperated fully with that investigation. Today, the District Attorney announced several charges arising from the investigation. At the District Attorney’s request, while those matters are pending, I will not comment on the specific charges or any aspect of the investigation. I will, however, reiterate what I made clear at the beginning of the investigation, and what the investigation has confirmed: as a citizen, a candidate for public office, and an elected official, I have strived to follow the rules and laws.”

On Jan. 26, Perdue announced she would not seek a second term as governor.

To read all of CJ’s stories about the Perdue investigations, click the links.

Don Carrington is executive editor of Carolina Journal.