Elections hearing raises stakes in Easley probe

A federal grand jury has been investigating Easley's dealings with friends and contributors while in office for several months, and the elections board closed its files on Easley to the public in May, signaling that its staff also was looking into the former governor's campaign fundraising and spending.

"We are going to have a thorough and complete investigation and ... the truth will come out," elections board Chairman Larry Leake said in July.

Last month, officials said enough evidence has been gathered to warrant a hearing into Easley's campaign finances. The hearing is set to start next Monday and could last a week, officials said.

Questions surround amended finance reports Easley's campaign filed in April after previously failing to disclose the use of an SUV provided by a Red Springs car dealer. The campaign is also under scrutiny over unreported flights on private planes, which could have violated donation limits.

State law prohibits political contributions from corporations and limits individual donations to $4,000 per candidate in any election cycle.

Bob Hall, executive director of the political watchdog group Democracy North Carolina, has said that campaigns often try to route questionable donations through political parties as "in kind" contributions, even though it's illegal to contribute to a party with the purpose of benefiting a single candidate.

"This is a way to game the system to get around the law to benefit my campaign," Hall said previously. "(It's saying) 'I'm cheating. I'm stealing. I'm lying.' All three of those things are happening here."

The North Carolina Democratic Party paid the elections board more than $24,000 in July to resolve questions about several in-kind contributions from the 2004 campaign, including six flights by Easley. Party officials said they had no reason to believe the contributions were improper.

The elections board hearing marks the first time a former North Carolina governor has faced a campaign finance inquiry.

John Wallace, the attorney for Easley's campaign committee, has said the campaign has cooperated with the State Board of Elections investigation and will continue to do so.

Political watchdog Joe Sinsheimer has said that he expects the board to tackle questions about influence, favors and privilege.

"If people are allowed to give the chief executive officer of the state goodies, whether it's free flights or free meals or free cars, then the entire process gets corrupted," he said.

Meanwhile, the federal grand jury continues to gather evidence in its investigation, which also includes a high-paying job Easley's wife got at North Carolina State University, the couple's purchase of a waterfront lot in Carteret County at a below-market price, state Division of Motor Vehicles actions that might have benefited a political contributor and the state's sale of a Southport marina to a group that included some political contributors.

On Wednesday, former state Department of Environment and Natural Resources Secretary Bill Ross went before the grand jury to discuss the Cannonsgate development in Carteret County. The development received expedited environmental permits shortly before the Easleys purchased property there.