Auditor turns up dispute with ethics panel

"We know of no situation in which a state agency refused to cooperate, refused access to persons and records and filed a lawsuit to block access and transparency," the interim report said. "There are important questions that must be fully reviewed and resolved with full disclosure."

The commission sued Merritt last month, saying that by state law, the General Assembly must investigate the panel because the auditor's office has a conflict of interest. Merritt's top investigator, Frank Perry, worked for the ethics panel until last year.

"We would have thought that you would welcome a ruling on these issues," commission executive director Perry Newson wrote in a letter dated Thursday to Merritt. "If you have confidence in your cause, such a ruling would give your investigation a legitimacy it now sorely lacks."

The auditor's office has asked that the lawsuit be dismissed. Merritt, in a prepared statement released with the report, said "the ethics commission is attempting to conceal the facts of this case from the public" with the lawsuit.

Merritt's office wants to know whether an aide to Lt. Gov. Beverly Perdue received special treatment last year by reviewing in private a financial disclosure statement she had filed previously. Newson also failed to give a reason why he fired office assistant Amanda Thaxton in July, also a potential violation of the law, according to the report.

According to her attorney, Thaxton was the office assistant that made the notation in an electronic log showing that Perdue's aide reviewed the document behind closed doors. She later spoke with Merritt's office and state personnel workers and provided copies of the log.

The interim report says Merritt's office later uncovered evidence that the log was altered to remove Thaxton's notation, which if done intentionally, would be a misdemeanor.

Ethics commission officials have denied wrongdoing and said that Thaxton was not fired in retaliation. She has since filed a whistleblower lawsuit for wrongful termination.

Newson's letter asked for more time to respond to the interim report, which he said the commission received late Tuesday afternoon. The report was released to the public two days later.

The ethics commission and Merritt's office already have locked horns this year when the Democratic-led Legislature passed a law in July narrowing the auditor's role in ethics investigations and stating the ethics commission's pre-eminence on those matters.

The clarified law is cited by the ethics commission in its lawsuit asking that a judge order Merritt to back off.

The auditor, a Republican who is seeking re-election in November, had in May defended his conflict-of-interest investigation of state Sen. Martin Nesbitt, D-Buncombe.