Raleigh, N.C. — The State Board of Elections on Friday turned its investigation into alleged campaign finance violations by former Gov. Mike Easley over to prosecutors, saying "evidence suggests" crimes might have been committed by him and others.
The elections board also cited Easley's campaign for violations of campaign finance laws that were uncovered during a week-long hearing in the case but cleared the state Democratic Party of any wrongdoing.
Easley asked for the criminal probe Wednesday during almost five hours of testimony before the board. It marked the first time that a sitting or former North Carolina governor faced a public inquiry before the elections board.
"I would rather you decide some of those issues against me than run the risk of giving you misinformation," he said, noting he couldn't recall the specifics of a deal he had for using an SUV free of charge for several years.
His attorney, Tommy Hicks, surprised the elections board Thursday by boldly restating the call for a full criminal investigation of the former governor's relations with campaign donors.
"The question is, do you refer the case to the district attorney. Please do," Hicks said in his closing statement.
Hicks told reporters Friday he got what he asked for.
"There have been allegations that Gov. Easley did certain things, and we did not do that," he said.
A criminal investigation by the Wake County District Attorney's Office is the only way Easley can remove the cloud of suspicion raised by witnesses in the hearing, Hicks said.
Raleigh businessman McQueen Campbell said Monday that he ferried Easley around the state in his private planes for the 2000 and 2004 campaigns but was never reimbursed for them. He also said Easley suggested that he bill the campaign for repairs to Easley's Raleigh home that Campbell paid for and list the expense as flight costs.
Easley flatly denied Campbell's allegation, saying the conversation Campbell contended the two had about falsifying campaign invoices "never, ever happened."
Wake County District Attorney Colon Willoughby said Friday he has asked Rowan County District Attorney Bill Kenerly to oversee the Easley investigation, saying he's not personally or politically connected to the former governor.
Willoughby has a long professional relationship with Easley, his wife used to work for Easley and Easley's son served an internship in the Willoughby's office.
"I thought this should be an independent decision," Willoughby said, adding "I've had a lot of friends that have gotten in trouble over the years."
Easley also still faces a federal grand jury investigation into his dealings with friends and contributors while in office. In addition to his campaign finances, the grand jury is looking into how his wife landed a high-paying job at North Carolina State University, the couple's purchase of a waterfront lot in a coastal development at a below-market rate and whether political influence was used to benefit others close to the Easleys.
"Any problems for Gov. Easley weren't going to be in (the elections board hearing)," former federal prosecutor Dan Boyce said. "It's the federal grand jury investigation that's the more serious problem for him."
Joe Sinsheimer, a Democratic consultant and political watchdog, agreed that Easley still faces many legal obstacles other than the elections board hearing.
"It's this pattern of personal enrichment that federal prosecutors are looking at that really is what is putting Gov. Easley in jeopardy of going to jail," Sinsheimer said.
Reforms to campaign finance laws urged
During his testimony, Easley also said he thought his campaign had paid for his trips aboard donors' planes and for a used GMC Yukon that Fayetteville car dealer Bobby Bleecker gave Easley six years ago with the understanding no money would be paid until he was finished using the vehicle.
The structure of Easley's campaign organization was fairly loose, according to testimony during the hearing. Neither Easley nor several former members of his campaign staff could identify who was in charge of determining the legality of contributions and expenses.
Leake said in announcing the board's decisions that candidates need to take more ownership of their campaigns, and the board called on state lawmakers to change campaign finance laws to allow officials to collect from candidates when their campaign committees are found to have violated state laws but lack the money to pay any fines and forfeitures assessed against them.
"We want the candidate to accept responsibility," Leake said later.
The board ordered Easley's campaign to forfeit $60,000 for plane trips the former governor took on private planes that were never noted on campaign finance reports, and the board assessed a $40,000 fine against the campaign committee to pay for the cost of the state investigation into the matter.
John Wallace, an attorney representing the campaign, said Thursday that he thought the campaign had done all it could to account for the flights but would be willing to take any other necessary steps.
"We regret it all. It is what it is, and we'll try to address and respond to that which the board has imposed upon us," Wallace said after the hearing Friday.
He noted, however, that the campaign committee doesn't have the money to pay the penalties.
The elections board also ordered the state Democratic Party to forfeit $9,000 in contributions from Easley donors who sought to get around campaign contribution limits.
Wilmington businessmen Lanny Wilson and Nick Garrett said they gave money to the party with the understanding that it would be funneled back to the Easley campaign. Both men had already given $4,000 to the campaign, which is the maximum individual contribution to a single candidate during an election, and they said they could earmark donations to the Democratic Party so the money would come back to the campaign.
Political parties can accept unlimited amounts from donors and can give as much support to candidates as they want, but it's illegal for money given to a party to be earmarked for a specific candidate.
"It was undisputed that the Party did not participate in the solicitations and had no knowledge of the manner in which the solicitations were made," Andrew Whalen, executive director of the party, said in a statement.
The elections board found no evidence that the Democratic Party or former Easley campaign treasurer Dave Horne engaged in any scheme to redirect money from the party to the campaign, despite memos that circulated among campaign staff members in 2003 and 2004 to undertake such a scheme and get the party to fund most of the campaign's expenses.
"The North Carolina Democratic Party cooperated fully with the investigation, providing numerous documents and testimony and is pleased that the board carefully examined the evidence and chose to dismiss the complaint filed against the party," Whalen said.
Elections board member Bill Peaslee said he would have liked to see stiffer penalties handed out in the case.
"The amounts that are having to be paid over are not much of a deterrence to prevent that activity," Peaslee said.