News: CJ Exclusives

Trail of Ethical Lapses, Donation Irregularities Emerges at Easley Hearings

Free flights and cars, furtive campaign donation methods discussed

Six witnesses subpoenaed to testify Monday in the North Carolina Board of Elections’ probe into former Gov. Mike Easley’s campaign finances highlighted slipshod record-keeping of contributions, promises from Easley staffers that money from maxed-out donors would be diverted from Democratic Party coffers to the governor’s campaign, and accounts of services provided to the governor that were not disclosed in a timely manner and not reimbursed, as the law requires.

The testimony ranged from free flights and cars given Easley and his family to furtive contribution schemes that appear to bypass contribution limits. The witnesses, who were under oath, often gave accounts that conflicted with explanations already provided by Easley.

The four-hour hearing sometimes degenerated into a finger-pointing contest. At one point, Easley’s lawyer questioned the honesty of McQueen Campbell, a Raleigh real-estate broker and long-time Easley friend, suggesting that Campbell had lied to the media when he resigned under a cloud as chairman of the N.C. State University board of trustees.

The first day wrapped up in late afternoon with testimony from a developer who said that he donated money to the state Democratic Party with the understanding that it would be funneled to the Easley campaign, possibly bypassing campaign finance limits.

Campbell testifies

The much-anticipated hearings, held at the Clarion Hotel in downtown Raleigh, began with a bang as Campbell testified under oath about his relationship with the former governor.

For years, Campbell gave Easley free flights on aircraft owned by his company, none of which Easley mentioned on his ethics disclosure forms. Under questioning from elections board chairman Larry Leake, Campbell testified today that Easley never reimbursed him for the flights.

North Carolina law prohibits corporate donations of any amount to political candidates.

Campbell said that flight requests came from Easley’s campaign staff, never from the former governor himself, and that the flights began about a decade ago while Easley was still attorney general.

Campbell also said that Easley twice asked him to help with repairs to his Raleigh house. Campbell coordinated the repairs and paid the workers, but said Easley didn’t reimburse him promptly.

“I fully anticipated to get reimbursed for it,” Campbell said. “When he asked me to help him, it was conveyed to me that I would be paid back.”

After Campbell pressed for payment, though, Easley said the cash would come from his campaign stockpile.

“So the Easley campaign and its contributors actually paid for the repairs to Gov. Easley’s home,” Leake asked.

“That’s correct,” Campbell replied.

Campbell also testified that Easley received an insurance reimbursement of $5,400 to cover the cost of some of these repairs. Campbell did not collect the money and it is not known who cashed the check.

Robert Bleecker, owner of a Fayetteville-area auto dealership, testified after Campbell that he provided at least two vehicles to the Easley family under highly irregular leasing arrangements.

In one instance, Bleecker testified that in 2003 he provided a used GMC Yukon valued at $16,000 to the Easleys without accepting any money at the time of delivery and without requiring any paperwork. Bleecker said he expected to receive payment “when they were done with it.”

Bleecker said Mary Easley wrote a check for approximately $6,900 in March 2009 to purchase the SUV, with an additional payment for more than $16,000 coming a week later to cover the costs of operating the vehicle, including taxes. That settlement came in separate checks from the state Democratic Party and the Easley family. Bleecker said that under a normal lease agreement, the person possessing the vehicle would pay any taxes due.

Rebecca McGhee, former assistant to Easley campaign treasurer Dave Horne, testified that she worked as a volunteer for the Easley campaign while she was a salaried employee at Horne’s law firm — a potential in-kind donation to the campaign that was only disclosed by the firm after state ethics laws were changed.

McGhee also testified that she flagged at least one suspicious travel invoice from Campbell in 2005 covering “various flights from November to April” that had no additional backup documentation. She paid the invoice on Horne’s orders after Easley had called and said to pay it.

Donations gone awry

Aside from questions about flights and cars, a major theme that emerged during the hearing dealt with irregular campaign donations.

Lanny Wilson, a real estate developer whose business provided $12.5 million in financing for the 285-acre Cannonsgate development where Easley owns property, testified that he was told that even though he and his wife had donated the maximum allowed by law to the Easley campaign, they could continue writing checks.

The money would be funneled through a “special account” of the state Democratic Party “for the use of” the Easley campaign, Wilson said.

Nick Garrett, a Wilmington contractor who oversaw renovations of Easley’s Southport home, said he was asked to make contributions under the names of his children after he had maxed out. Garrett refused, testifying that he had “given enough.”

In another instance of alleged campaign finance wrongdoing, Florida businesswoman Grace Ramsey testified that she made an “in-kind” contribution of Christmas ornaments to the Easley campaign. An invoice she found in her files, however, did not match one in the possession of the Board of Elections.

At the time of the donation, Ramsey was married to Raleigh developer Steve Stroud, who later sold Cannonsgate to a company owned by Randy and Gary Allen of Charlotte. Gary Allen has been subpoenaed to testify at the hearing.

Ramsey said that she gave to the Easley campaign because both she and Mrs. Easley are of Greek descent.

Monday afternoon, Ruffin Poole, Easley’s former general counsel, had his subpoena quashed in Wake County Superior Court. The election board has asked the Attorney General’s Office to appeal the ruling.

David N. Bass is an associate editor of Carolina Journal. Managing Editor Rick Henderson provided additional reporting for this story.