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Major NC campaign donor tries to get bribery charge tossed, may argue entrapment

In federal court, an attorney for N.C. insurance magnate Greg Lindberg tries to get bribery charges dismissed by arguing the definition of a bribe.

Posted Updated
Court and legal
By
Travis Fain
, WRAL statehouse reporter
CHARLOTTE, N.C. — Attorneys for North Carolina's largest political donor made a no-harm, no-foul argument in federal court Tuesday, asking the judge to toss bribery and conspiracy charges against their client months before a trial begins.

Even if Greg Lindberg offered $2 million in campaign donations to state Insurance Commissioner Mike Causey if he'd reassign a deputy commissioner poking around Lindberg's companies, that doesn't mean he committed bribery, attorney Rajesh Srinivasan argued.

Federal precedent, set three years ago when the U.S. Supreme Court unanimously overturned the bribery conviction of Virginia's former governor, requires more than that, Srinivasan said, such as a final decision that helps Lindberg's companies, or an "official act" that has some sort of measurable impact on the public.

"Simply replacing one decision maker with another decision maker does not result in a decision," Srinivasan said.

Federal prosecutors running the case against Lindberg and alleged co-conspirators caught on tape negotiating campaign donations with Causey dismissed the argument as a misread of the law.

U.S. District Judge Max Cogburn didn't tip his hand on a ruling, which he said should come "fairly quickly," but he questioned the breadth of Lindberg's defense.

If Lindberg can pay an elected official to replace one employee, what about all of his employees, Cogburn asked. Could Lindberg just do that over and over again?

"Probably not, your honor," Srinivasan replied. "All we have here is a single request."

With Causey cooperating with federal investigators and the indictment quoting recorded conversations, Lindberg's defense options are limited. Robin Hayes, a former congressman and the most recent past chairman of the North Carolina Republican Party, pleaded guilty last month to lying to the FBI in the case and promised to assist the government as part of his plea deal.
Lindberg, a wealthy businessman who used to live in Durham and has given more than $5 million to various North Carolina political campaigns over the last three years, is relying on U.S. v. Bob McDonnell, where the Supreme Court found that a governor making phone calls, hosting events and setting up meetings for a man who gave his family loans and expensive gifts didn't rise to bribery.

But a motion Lindberg's team filed in his case last week points at another strategy: Arguing that Causey entrapped him.

In a subpoena request, attorneys seek a wide swath of internal Department of Insurance communications regarding Lindberg's companies. The motion focuses in particular on communications between Causey, Deputy Commissioner Michelle Osborne and Jackie Obusek, the regulator Lindberg allegedly tried to remove.

The motion states Obusek, "potentially at Mr. Causey's direction, had been targeting Mr. Lindberg and his companies in an unfair manner" and suggests Causey orchestrated Lindberg's downfall because he supported Causey's predecessor, Wayne Goodwin, in the 2016 election Causey ultimately won.

"That scheme ultimately was used to improperly induce the government to investigate the defendant in order to remove the defendant as a political opponent," the motion states.

Causey said Tuesday that, on the advice of attorneys, he couldn't comment because of the ongoing federal investigation. His department has taken over Lindberg's insurance companies as part of a deep-dive financial review probing, among other things, how those companies invested their cash in other entities Lindberg owns.

Goodwin is now chairman of the North Carolina Democratic Party, and he announced Tuesday that he'll run next year to return as insurance commissioner.

Lindberg's motion predicts that the state will attempt to quash the new subpoena and asks the judge to decide the issue quickly to leave time for those arguments and for document review ahead of the scheduled February trial.

As for the underlying entrapment argument, federal prosecutors addressed some of that in a recent filing. Causey did indeed ask Lindberg "What's in it for me?" in a private meeting.

"Lindberg responded, without hesitation, with an offer of one to two million dollars for the commissioner's 2020 re-election campaign," prosecutors said in their September filing.

Lindberg and his co-conspirators then "pressed the commissioner for progress on the removal" and assured Causey "they were upholding their end of the bargain." Lindberg's teams wasn't just seeking Obusek's reassignment, prosecutors say, but offered up a Lindberg employee as her replacement.

That employee, John Palermo, faces bribery and conspiracy charges in this case, as does John Gray, a Lindberg consultant.

Srinivasan said Tuesday that a conviction would infringe on Lindberg's First Amendment rights and that the new precedent could affect a wide range of people, allowing the government to prosecute the most minor offers of quid pro quo.

A voter could tell a city council member he'll vote for them only if they get rid of a chief of staff who failed to respond to complaints about a pothole, Srinivasan said. Or a voter could pressure a legislator to force out a legislative aide over sexual harassment allegations, or a law clerk could offer a federal judge a cup of coffee because he or she wants to work on a particular case, Srinivasan told Cogburn.

Prosecutor James C. Mann argued that it was Lindberg's team, not the government's, interpretation of the law that would lead to ridiculous excess.

Under their arguments, "Mr. Lindberg could come in and pay my boss to dismiss me," Mann said.

Mann is a trial attorney for the U.S. Department of Justice's Public Integrity Section in Washington, D.C., which is prosecuting this case with the U.S. Attorney's Office in Charlotte.

Cogburn told attorneys for both sides that their arguments and written briefs were "excellent." He said the case will add to the public understanding of what is, and isn't, a bribe under federal law, adding that, in modern politics, there are many legal ways to for money to change hands and people to get what they want.

"People need to know what is illegal," Cogburn said.

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