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Fallout Continues Over Reserve Funds Controlled By Senate, House Leaders

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RALEIGH, N.C. — Some lawmakers and conservative groups are calling on the State Auditor and the Attorney General to investigate the use of more than $20 million. The money comes from reserve funds for state agencies, but controlled by state legislative leaders.

The town of Raeford bought an 100-year-old house three years ago to turn it into a museum. Last year, the Raeford-Hoke Museum received $25,000 in state money. The money came from reserve funds controlled by Senate leader Marc Basnight. All Sen. David Weinstein, D-Robeson, had to do was ask for it.

"I see no problem with it whatsoever," Weinstein said.

Neither does Rep. Edd Nye, D-Bladen, who secured $100,000 from Jim Black for the Bladen County Health Department.

"I didn't know how it was going to be used, but when I found out that grants were available, of course it was my job to see if I could get some people to have better health," Nye said.

"A number of these organizations did not even request the money. They merely got a phone call or an e-mail from Black's office and a few weeks later, a check would arrive," said Chris Neeley, of Americans For Prosperity.

Some Republican lawmakers said it is too much control. They claim House Speaker Jim Black, former co-speaker Richard Morgan and Basnight use the funds as rewards for supporting key legislation. Some are calling for the three lawmakers to resign their leadership posts while an investigation takes place, but even some critics say that is premature.

"Let's let them feel the heat of an investigation and see how deep this goes," said Sen. Hugh Webster, R-Alamance.

State Auditor Les Merritt said he will review the use of the special funds, but he will not confirm whether an audit is taking place. Attorney General Roy Cooper's office said when he receives a request from a government official, he will look closely at the issues as well.

Basnight said he has no plans to resign his leadership post. House leaders were attending the funeral of Rep. John Hall, but the Chairman of the House Rules Committee said they will not and should not even consider resigning.

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