News: CJ Exclusives

Republican Folwell questions Democrat Blue’s campaign reporting

GOP treasurer candidate says changes and anomalies in Democrat's financial reporting raises concerns

Republican state treasurer candidate Dale Folwell believes a series of errors on campaign finance paperwork submitted by Daniel Blue III raises questions about his Democratic opponent’s ability to manage the state’s pension and health care investment portfolios. Blue’s campaign says Folwell’s allegations show desperation.

“ ‘It’s close enough for government work’ is not good enough when you’re managing [nearly] $100 billion, one of the largest pools of money in the world, and you have responsibility for the pension and health care of over 800,000 people,” Folwell said.

“It is clear to us that Dale Folwell is six days away from losing an election, and is desperate to paint our campaign in a negative light regardless of the truth,” said Blue campaign manager Brad Kennedy.

Folwell and Blue ran for the open seat after Democratic Treasurer Janet Cowell said she would not seek re-election. A Public Policy Polling survey published Oct. 24 listed the race too close to call with large numbers of undecided voters. Blue led Folwell in that survey 39-37 percent. Civitas Institute had the candidates tied at 36 percent in its Oct. 19 poll.

“Throughout the course of this campaign Mr. Folwell has repeatedly said that he attacks problems not people. That is plainly false. We are disappointed that we could not continue to have a policy-driven debate with so much at stake in this office,” Kennedy said.

“Our campaign is about attacking problems, and not people. But these are things that he has signed his name to,” Folwell said.

A Carolina Journal review of Blue’s campaign finance statements shows that he amended his first quarter report twice, and his second quarter report once.

Blue had to forfeit $200 in contributions to the North Carolina Civil Penalty and Forfeiture Fund because the campaign impermissibly collected two donations of $100 each from anonymous donors.

Pat Gannon, spokesman for the State Board of Elections, said Blue’s campaign treasurer contacted the Elections Board, and requested assistance resolving an issue with the way the BOE software was calculating third quarter report balances.

“Our auditor assisted him with some software adjustments that prompted a need for him to submit an amended Q2 report,” Gannon said.

“There is nothing about his filing an amended Q2 report that is unusual, improper or would result in any enforcement or other action against him,” Gannon said. The Elections Board had received more than 260 amendments from various campaign committees as of Nov. 2.

However, no explanation has yet been given by the elections board for Blue having to amend his first quarter report twice, resulting in three different sets of figures for receipts, expenditures, and cash on hand. In his third filing, Blue showed $14,263 more in receipts than in the original submission, or a 24.6 percent increase. His cash on hand increased $14,088, or 37 percent.

Blue’s third quarter campaign finance report shows $10,200 in donations from California attorney Randy Renick in two installments of $5,100. North Carolina law limits individual donations to $5,100 total.

Neither Blue’s campaign nor the elections board responded to a question to explain the overage. A lawyer familiar with campaign finance laws told CJ there could be an easy explanation. For example, he said, a husband and wife could legally donate the maximum individual amount allowable, but only one is listed on the paperwork.

“The job that I’m applying for is the keeper of the public purse. I think when people hand their purses to someone, they want someone who is detail oriented,” Folwell said.

David McLennan, a political science professor at Meredith College, said on Wednesday Folwell might have legitimate campaign issues, but doubts there is enough time to inform voters and get traction before the election.

“We’ve seen examples over the past decade or so that campaign finance issues can become a real problem, but it’s often almost after the fact.” He cited the current example of state Sen. Fletcher Hartsell, R-Cabarrus, and past violations by Democratic House Speaker Jim Black.

The number of campaign finance amendments by Blue “is very unusual for somebody seeking a job [managing] public money,” McLennan said. Underreporting donations is “more of a head scratcher than something that necessarily smells of corruption.”

In his candidate committee statement of organization, and his campaign finance statements, Blue lists 317 West Morgan Street #410 as his address. He bought that condominium for $533,000 on April 21, 2006, and sold it for $525,000 on May 21, 2014, to Frederic and Ann Watke, according to warranty deeds filed at the Wake County Register of Deeds office.

The Watkes, both registered Republicans, did not respond to multiple attempts by CJ to answer why the Democratic state treasurer candidate lists their condo as his residence. Neither Blue nor his campaign manager responded to questions about the discrepancy.

Blue is now living at a rental house at 812 Glen Eden Drive in Raleigh owned by Shadbush LLC. Records in the Secretary of State’s office list Nora Hutton Shepard, a noted poet and painter, and former president of the North Carolina Museum of Art’s docent organization, as principal manager of Shadbush.

“It’s either sloppiness or a willful intent to deceive where he lives, or how successful he’s been compared to what he has been saying for the past few months,” Folwell said of the address irregularity.

On Blue’s Statement of Economic Interest, he and his wife Traci list indebtedness of more than $10,000, and no stocks in a publicly owned company, or stock options in a company. Folwell contrasted that with his own statement of economic interest showing stock ownership, and no indebtedness as a track record voters can count on.

“Different people in different stages of life, and different people with different means have different kinds of financial assets,” said Andy Taylor, a political science professor at N.C. State University. Given that Folwell is 58, and Blue is 43, Taylor said, it might be expected that Folwell would be in a stronger financial position.

If any issues resonate in the campaign, “it has more to do with the inability to report finances correctly,” Taylor said, because voters look for someone in whom they place confidence to understand general financial practices.