Auditor, Ethics Commission spar over lawmaker's role

A dispute between the State Ethics Commission and State Auditor Les Merritt's office thickened Tuesday when Merritt defended his investigation into a potential conflict of interest by a state senator.

The State Auditor's Office released the findings of its investigation into Sen. Martin Nesbitt, D-Buncombe, saying he should have disclosed on a financial disclosure report his ties to his son's stock car racing team and its sponsorship by Blue Cross and Blue Shield of North Carolina.

But Nesbitt said he complied with advice he sought more than a year ago from the ethics commission, which said the financial relationship didn't have to be disclosed on the report. Nesbitt said state law should be changed to make the ethics commission the ultimate authority on such matters and keep out the auditor.

"When someone has a question about following the law, they need to have confidence in the answer. Getting different answers from different sources simply leads to more confusion," Nesbitt said in a prepared statement.

He also accused Merritt, a Republican running for re-election this year, of actions that he said "are nothing more than an attempt to turn negative politics and misleading attacks into official, tax-subsidized actions of state government."

Merritt said in his own statements that an employee investigated the complaint it received through its telephone tip line and that no politics was involved.

According to the 2006 law creating the panel, the State Ethics Commission doesn't have the final word on legislative ethics matters. The separate Legislative Ethics Committee comprised of House and Senate members can choose to overturn the rulings of the State Ethics Committee, according to the law.

The auditor believes he has the authority as an independently elected official to review conflicts of interest brought to its attention, his attorney said.

Otherwise, "the result is that legislators could escape independent oversight and scrutiny all under the cover of the State Ethics Act," said Tim Hoegemeyer, the auditor's general counsel.

According to the auditor's probe, Nesbitt owns half-interest in a company called Nesbitt Ventures Inc. that owned property used as collateral for a credit line for another firm, Nesbitt Racing Enterprises. The racing outfit, until recently, had Blue Cross and Blue Shield as a major financial sponsor.

"Therefore, if Nesbitt Racing fails, which could happen if a major financial sponsor backed out, Nesbitt Ventures and its owners are left holding the debt," Merritt said.

Nesbitt served on two health care-related committees in the Senate, the auditor said, so the health insurer was a company that came before the panels.

In a May 7 letter responding to the probe, Nesbitt said the auditor's staff was misinterpreting the ethics laws and argued by its logic that he would need to disclose far more than is reasonable. Nesbitt has been a voluntary crew chief of his son's team.

The Legislative Ethics Committee, which oversees ethics probes of lawmakers, agreed earlier this month to endorse a bill that would prohibit the State Auditor from enforcing the ethics law. The bill would identify the State Ethics Commission as the only entity to carry out the law.