They're all accused of trying to bribe state Insurance Commissioner Mike Causey, who got in touch with federal investigators and recorded conversations quoted in the indictment. The alleged scheme would have traded more than $1 million in political contributions in exchange for regulatory help at the department.
Hayes, a former congressman and GOP candidate for governor, is also charged with three counts of lying to the FBI. On Monday he announced that he wouldn't seek another term as chairman of the state Republican Party, citing his health.
Brian Benczkowski, the assistant attorney general for the Department of Justice's criminal division in Washington, D.C., called the scheme "brazen" in a news release Tuesday. The indictments indicate others, known and unknown , were involved as well.
Lindberg's attorney, former U.S. Attorney for the Western District of North Carolina Anne Tompkins, said in a statement that he "is innocent of the charges in the indictment, and we look forward to demonstrating this when we get our day in court.”
Lindberg owns or is involved in hundreds of companies, including several regulated by the state Department of Insurance. The indictments indicate federal investigators have been poking around since January 2018, when Causey called them.
Lindberg allegedly wanted Causey to fire or reassign an unnamed deputy commissioner causing problems for some of the businesses Lindberg owns, and he offered up to $2 million in political donations to get it done.
Lindberg, whose Durham and Raleigh mansions recently went up for sale, has given more than $5 million to North Carolina political campaigns over the last few years, including more than $1.49 million to the state Republican Party. The state party turned around and gave $250,000 of that to Causey's campaign, and the indictment alleges this was an effort to get around state political giving rules, which allow unlimited donations to parties but cap individual campaign donations at $5,400.
The indictment describes a number of clandestine meetings, at least some of which Causey recorded. The two other men indicted, Lindberg consultant John Gray and John Palermo, a vice president at Lindberg's Eli Global business and the current or former chairman of the Chatham County GOP, coordinated a number of these meetings, the indictment states.
Causey declined Tuesday to discuss his role in the investigation.
"Those questions would impact the investigation, so I'll leave it to the federal investigators," he told WRAL News.
"It is a sad day for North Carolina when you see what a big role money plays in politics today," Causey added.
The indictment says that Hayes, in a phone call with Causey, Gray and Lindberg, expressed some concern about a lump-sum transfer because it would raise suspicions.
"We'll get with you and, um, understanding that this is all confidential," the indictment quotes Gray as saying.
"Yeah, oh, absolutely," Hayes responded, according to the indictment.
Lindberg also paid to set up an independent expenditure committee for Causey, the indictment states. Presumably, that's NC Growth and Prosperity, for which Palermo was treasurer.
One of the meetings described in the indictments unsealed Tuesday occurred at Concord Regional Airport in February 2018. Before that meeting, Gray allegedly told Causey that he and Lindberg would enter through a different door "so that nobody would see them together."
Causey later met with Palermo at a closed restaurant in Chapel Hill, and Palermo suggested the commissioner hire him at the department, the indictment states.
Gray allegedly told Causey that, if the deputy commissioner causing Lindberg problems wasn't fired, he should "set it so that ... she doesn't breathe a word outside that office, or send a slip of paper outside that office, that is not reviewed first by John (Palermo)," the indictment states.
The indictment also references an unidentified "Public Official A" that Gray and Lindberg discussed via text message, and who called Causey to "explain that Lindberg was doing good things for North Carolina business" two days after Lindberg made a $150,000 contribution on Feb. 5, 2018, to a committee supporting the official.
A joint fundraising committee for Republican 6th District Congressman Mark Walker logged a $150,000 Lindberg donation Feb. 17, 2018.
Walker spokesman Jack Minor said Tuesday he couldn't confirm that the congressman, who like Causey is from Guilford County, is "Public Official A." He said Walker has cooperated with the Department of Justice in the case, but that he couldn't characterize the nature of that assistance.
"He has not been a target of the investigation and he has assisted the DOJ,” Minor said.
Lindberg is also Lt. Gov. Dan Forest's largest donor, having given more than $2 million to political committees supporting him. Hal Weatherman, the head of Forest's exploratory committee for the 2020 gubernatorial race, said in an email that Forest was never questioned by the FBI or other investigators, was never subpoenaed and isn't "Public Official A."
Forest told reporters as he headed into an state Senate session Tuesday that he is friends with the people indicted, calling them "good guys." He said neither Lindberg nor his associates ever asked him for anything in return for campaign donations.
Lindberg gave $1.4 million to the N.C. Republican Council of State Committee, which Forest chairs, and the lieutenant governor said the group would have to meet to decide how to proceed. He said giving up the money is "certainly an option," but he declined to identify other members of the group that would make that decision.
The committee was created so Republican members of the Council of State, the GOP's statewide elected officials, could accept unlimited donations, but not all members of the council participate.
Another $1 million went to Truth and Prosperity, a PAC run by a Forest supporter, but campaign finance law forbids the lieutenant governor from coordinating with the group on expenditures.
Forest didn't mention at the time that most of that money came from Lindberg.
As the federal investigation of Lindberg's dealings became public knowledge last year, Forest said repeatedly that the process needed to play out and that he was comfortable keeping the donations. He said Tuesday that everyone is innocent until proven guilty and that the indictments have "absolutely nothing to do with us."
"It has nothing to do with dirty money or anything else at this point," Forest said. "It has to do with that situation that they were in at the time. I don't know where this is going to lead to in the end. Like I said, in America, you are innocent until proven guilty."
Global Bankers is mentioned repeatedly in the indictment.
Goodwin didn't respond to an interview request Tuesday afternoon. He told The Journal for its article that he cooperated with federal investigators, that he wasn't a target in their inquiry and that “any suggestion that I have ever taken any action in return for contributions is categorically false."
A party spokesman asked for comment Tuesday on Hayes' indictment and on Lindberg's, given Goodwin's connections to the wealthy businessman, dealt only with the first issue, calling it "extremely shocking and disappointing.
"These actions underscore the lengths Republicans have gone to disregard our laws in order to hold onto power," Democratic Party spokesman Robert Howard said in an email.
The state GOP put out a statement hours after news of the arrests broke, saying it it was "aware of several indictments surrounding the conduct of a major donor to both major political parties and two of his associates."
The statement, from North Carolina Republican Party Counsel Josh Howard, never mentioned Hayes or his arrest.
"The party has been cooperating with the investigation for several months, including staff members providing statements and responding to various document requests," Howard said in the statement. "The party, which has its day-to-day operations managed by professional staff under the direction of the NCGOP Central Committee, remains fully operational and focused on its mission at hand."
Joe Sinsheimer, a former political consultant who called out a campaign finance scandal involving former House Speaker Jim Black a decade ago, said Tuesday that "pay-to-play corruption culture in this state is still alive."
"The state parties have a long history of being used as washing machines to basically wash dirty money, but in this case, the party was being used as part of a bribery scheme," he said.
The DOJ's Public Integrity Section and U.S. Attorney’s Office in Charlotte are prosecuting this case.
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