Local Politics

Ex-N.C. senator pays $150K for campaign finance violations

Posted December 9, 2010 4:02 a.m. EST
Updated December 9, 2010 4:12 p.m. EST

— Former state Sen. Fred Hobbs has paid a $150,000 fine to the State Board of Elections for violating campaign finance laws, the board announced on Thursday. 

The board was investigating allegations that the Democratic senator bankrolled political contributions by his employees to get around donation limits.

State law prohibits corporations from donating to political campaigns, and it caps individual contributions at $4,000 per candidate in any election cycle.

An investigator for the elections board found $148,000 in company funds from Hobbs' Southern Pines engineering firm, Hobbs, Upchurch and Associates, was used to make campaign donations.

"I believe this individual understood what he was doing," State Board of Elections Chair Larry Leake said.

Hobbs admitted to funneling money through his company over the past 11 years to various candidates, including $109,000 to Senate President Pro Tempore Marc Basnight, $13,000 to former Gov. Mike Easley, $20,000 to Gov. Beverly Perdue and $6,000 to former Lt. Governor Dennis Wicker. 

Board members say they found no reason to believe the campaigns knew the money was illegal.

Perdue campaign spokesman Marc Farinella said Hobbs' money will be relinquished to the state elections board once it confirms the amount illegally donated was $20,000.

Basnight spokesman Schorr Johnson said the Dare County Democrat, who will lose the Senate's top post when Republicans take control of the chamber next month, also will give money donated by Hobbs to the elections board.

"Sen. Basnight would not want any contributions that were given to him inappropriately or illegally," Johnson said. "He, like all candidates, must assume that anything given to him is done so appropriately."

Easley's campaign committee earlier this year reported it is out of money, drained by legal bills in a criminal probe of unreported campaign flights and other alleged benefits enjoyed by the governor who left office nearly two years ago. Easley last month ended state and federal investigations by agreeing to a plea deal that included a felony conviction and a $1,000 fine for an improperly filed campaign finance report.

Wicker, who has been out of public office since 2001, moved to close the last of his campaign committees in September after giving the final $48,000 he had on hand to other candidates and campaign committees.

Hobbs still faces potential misdemeanor charges on donations to Perdue and Basnight, according to his attorney, Michael Weisel.

The elections board has already turned over its findings to Moore County District Attorney Maureen Krueger to determine whether criminal charges are warranted.

Hobbs did not attend the board's hearing on Thursday. Weisel presented the board with a check for the fine.

"He is remorseful and deeply regrets his actions, but does take responsibility and feels essentially the disgorgement, which is what the $150,000 represents, of all those campaign contributions is appropriate," Weisel said.

The fine was the biggest ever imposed by the State Board of Elections. 

"This is a serious violation of the integrity of our election process. Somebody's trying to cheat and steal our democracy basically. It's a crime against our democracy," said Bob Hall, of the campaign finance watchdog group Democracy North Carolina.

Earlier this year, the elections board fined Wilmington businessman Rusty Carter $100,000 for his role in funneling illegal donations to the campaigns of Perdue, Basnight and former Sen. Julia Boseman. He also accepted responsibility for the violations in court.