@NCCapitol

Lawmaker fires back at media while defending his nonprofits

Posted August 16, 2011 6:31 p.m. EDT
Updated August 17, 2011 8:29 a.m. EDT

— A state lawmaker said Tuesday that he is the victim of a "hit piece" in a liberal-leaning publication over the way he runs two nonprofits.

NC Policy Watch ran a story two weeks ago about a two-month investigation of the East Carolina Development Co. and Piedmont Development Co., which are operated by Rep. Stephen LaRoque, R-Kinston. The two nonprofits essentially provide low-interest loans to small businesses in rural areas.

The investigation showed that LaRoque used some of the $8 million in federal grants to the nonprofits to lend money to close associates, his wife and two Republican lawmakers – Sen. Debbie Clary of Shelby and Rep. Mark Hilton of Conover.

The organization also questioned LaRoque's salary, the make-up of the nonprofits' boards of directors and the decision to fold the two agencies into a for-profit company run by LaRoque and his brother.

"It's clear it's been a political hit piece in response to my statements about one of their board members and his organization," LaRoque said in his first response to the article.

In May, LaRoque publicly called the state NAACP and president Rev. William Barber racist. Barber sits on the board of directors of the NC Justice Center, which publishes NC Policy Watch.

Reporter Sarah Ovaska denied that LaRoque's criticism of Barber prompted the investigation.

"Part of running for office (and) being in public office is taking hard questions," Ovaska said.

LaRoque rebutted a number of allegations in the article during an hour-long news conference, including that his compensation was excessive, that board members were kept in the dark about the nonprofits' operations and that he stacked the boards with people who wouldn't question him.

There are no regulations that prohibit having relatives on a board of directors, he said, and the loans to Clary and Hilton were legitimate. He declined to go into detail about his salary, which is paid by LaRoque Management Group in Kinston.

"I'm not going to tell you. It's a private corporation. It's none of your business," he said.

"We actually question that structure," Ovaska said. "I think it's unusual to have a for-profit entity essentially running two nonprofits."

NC Policy Watch will continue to look LaRoque's dealings, she said.