By a 5-0 vote, the State Board of Elections this morning sent the issue of who's lying, former Gov. Mike Easley or his friend McQueen Campbell, to the Wake County District Attorney for review. The Board's resolution referred to evidence heard during its four days of hearings this week that, "if believed, would tend to indicate that criminal violations of the state election laws and campaign finance laws have occurred." The resolution named Easley personally, "and perhaps others" -- an apparent reference to Campbell.

Easley's lawyer, Tommy Hicks, says he expects Wake D.A. Colon Willoughby will send the case on to the Attorney General's office because of Willoughby's longstanding friendship with Easley, including the fact that Willoughby employed Easley's son, Michael, as an intern in his office.

The Board voted to fine Easley's campaign committee at total of $100,000 for failing to report private air travel to which Easley was treated while running for and serving in the Governor's office. The total includes $40,000 for the cost of the hearings, Chairman Larry Leake said.

Whether the Easley campaign can pay the fine is uncertain, since -- given its legal bills -- it's effectively broke. That's a problem, Leake said, that the General Assembly should address. On his motion, the Board voted 5-0 to ask legislators to change the law so that if a candidate's committee can't pay such fines, the candidate himself or herself would be on the hook for them.

The Board levied another $9,000 fine against the North Carolina Democratic Party based on testimony from two witnesses that their contributions -- which totaled $9,000 -- were "earmarked" for the Easley campaign. But on the larger issue raised by Democracy North Carolina, a progressive watchdog group, that Easley set up a "shadow campaign" within the party apparatus for the purpose of circumventing the law limiting individual contributions to candidates, the Board took a pass.

After the session, Republican appointee Bill Peaslee, a former chief of state at the N.C. Republican Party, told reporters he disagreed with that last outcome. Did he think, as  Democracy NC alleged, that there was a "grand scheme" within the Easley campaign to have the party launder contributions in excess of the $4,000 limit? "Oh, absolutely," Peaslee said.

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The State Board of Elections just concluded four days of hearings into former Gov. Mike Easley's political campaigns and their relationship to the N.C. Democratic Party, with Chairman Larry Leake saying they'll meet in closed session tomorrow morning at 9 to figure out what they're supposed to do. We'll know, he said, as soon as they do. Three things are clear from the testimony. First, enormous sums of money and favors -- free airplane travel prominently among the latter -- are available to a governor who'll take them. And Easley, as self-indulgent a character as has ever appeared on the political scene, was a willing taker. Second, not all of these favors were reported as campaign contributions, in violation of state law. The plane rides that Easley enjoyed, for example, and an SUV supplied by a Fayetteville car dealer that was used by Easley's son Michael, could've been paid for by the Easley campaign but weren't, perhaps because doing so would have pierced the veil of secrecy (in the case of the air travel) that permitted Easley to spend so little time on being governor without anybody being the wiser. And in the case of the SUV, reporting it as a campaign expense would've subjected Easley to criticism -- the campaign paying for what essentially was his son's private vehicle -- even though at the time such expenditures were legal. As much as Easley disliked working, he disliked criticism even more.

The third thing that's clear is that, as Bob Hall of Democracy North Carolina said in a statement to the Board just prior to its adjournment, the Easley campaign used the N.C. Democratic Party to circumvent the $4,000 limit on personal contributions to political candidates, creating what amounted to "a shadow campaign" (Hall's term) inside the party. The $4,000 limit is itself pretty porous -- individual contributors can give $4,000 to a candidate in a primary and again in the election and again, if one is necessary, in a runoff. So can their spouses. And their children. Now, dad's not supposed to give junior $4K to hand over to our good friend Governor Mike, but it's been done. Still, if you want your good friend Gary Allen, the Charlotte developer, to contribute $100,000, the best way to get it done -- and the legal way -- is have him give it to the state Democratic party, which can legally accept unlimited sums from contributors and give unlimited sums to candidates.

The only thing that would be illegal about such a transaction -- apparently -- is if Mr. Allen insisted, in writing or a conversation someone overheard, that his money was only to be used for the Mike Easley campaign -- "earmarked" it, in other words -- and the state party then proceeded to spend it exclusively on the Easley campaign in some easily (pardon the pun) traceable way. Which is almost what the N.C. Democrats did, but not quite. They took the money from Allen and others who were giving large sums because Easley's campaign asked them to, and they put it into an account (not an actual account, only a "tally," their lawyer insisted) called the Governor's Fund. At the same time they set up another account for expenditures in support of the Governor's campaign and tracked them. But the two accounts weren't supposed to "balance," and they didn't. So, see, Mr. Allen's contribution wasn't "earmarked." Was it?

Hall says there's no question it was, and that if this sort of thing isn't illegal, it needs to be made illegal. Otherwise, the $4,000 limit is a sham.

The board will decide that question tomorrow -- probably.

It will also decide what to do about the damning accusation made against Easley by one of his coterie, McQueen Campbell, who flew Easley all over the place for free for years and was rewarded, at age 30, with a seat on the N.C. State University Board of Trustees. Easley's lawyer, Tommy Hicks, this afternoon labeled Campbell a "sycophant." Sure he was, and a well-rewarded one at that.

But here's the issue, and it's akin to the SUV problem above. Easley in 2004 tells his sycophant friend Campbell that the tenants are complaining at the former Easley residence on West Lake Drive in Raleigh, a house the Easleys are renting while they occupy the Governor's Mansion. Take care of it, says the governor, and Campbell does, paying contractors out of his own pocket. But when Campbell comes back to Easley to get paid, Easley has three choices. He can pay him with his own money. He can pay him from his campaign fund, because remember, at the time campaign money could be spent on anything -- vacations, mistresses, you name it -- as long as it was accurately reported. But if Easley paid him from campaign funds, once again, it might lead to criticism -- and Easley hates criticism. There is a third way, according to Campbell's testimony. Easley asks if they aren't "unbilled flights," and Campbell gets the message: He should submit a voucher for the cost of the repairs ($4,777.50) but call it campaign air travel. Which he did, Campbell said.

Now Easley's version of the events isn't that he, the governor, paid for the repairs out of his own funds, because he didn't -- although that's certainly what he should've done. His version is that he could've -- would've -- paid for them from campaign funds if only McQueen Campbell had come to him for payment, which he never did. Easley's testimony on Wednesday was that the conversation that Campbell described never took place, and that Campbell never asked to be reimbursed for the repairs.

But then there's a second set of repairs -- $6,300 worth -- that Campbell also handles when the Easley home springs a bathroom leak. Again, Campbell says, he talked to Easley and -- he doesn't remember the details but the outcome was the same -- he was paid by submitting another false voucher for air travel. And again, Easley says it never happened, but there's a problem with just denying it flat out. This time, in mid-2005, since the campaign is long since over, a secretary who handles such things for Easley's campaign treasurer, a lawyer-lobbyist in Raleigh named Dave Horne, balks at paying Campbell's bill. It's for "various flights." Where's the backup? she asks. What flights? Soon after, the phone rings and it's Easley on the line to the secretary, and he tells her he knows what the bill says, pay it. And how do we know so specifically about this conversation four-plus years later? Because as secretaries are wont to do, she wrote it up at the time in a memo to Horne. Easley can't deny it, because why would she -- loyal campaign volunteer -- be lying? So he's got to address it, and address specifically the fact that he'd said he knew what the bill was for.

Easley's testimony: He and Campbell had talked about the fact that Campbell wasn't getting paid promptly -- did I mention that Easley maintains that Campbell told him he was getting paid for all those free flights? -- and Easley had suggested that Campbell bill ahead for air time. Get paid in advance, that is. So when Easley told Rebeccca McGhee that he knew what the bill was for and to pay it, he thought it was for air time in advance.

The bill, however, was for "various flights, November to April" of 2004-5. This conversation with McGhee was on August 12, 2005, according to her memo. So if Easley's to be believed, he thought the voucher was for future flights starting starting three months hence?

It should be mentioned that Easley's excuse for not knowing anything about his personal finances, his campaign contributions or even where his campaign headquarters was located -- he didn't recall if he was ever there -- is that he was so busy with the affairs of state. Getting the lottery passed, for instance, in August of 2005.

Easley was notorious, throughout his 16 years in Raleigh as attorney general and then as governor, for being unavailable and secretive about his whereabouts. His handy excuse was that when he was a D.A. in southeastern North Carolina in the early '80s, he prosecuted some bad guys and they promised to kill him. So he could never let anyone know where he was going -- or where he'd been. He got away with this because his security guys -- Highway Patrol officers assigned to the Justice Department and the Governor's Office -- kept the press and public at bay.

Legislators too. They complained throughout his tenure as governor about how little time he put in, how inaccessible he was and how uninvolved in major legislation. So to hear him testify -- heatedly at times -- that he too busy being governor to deal with the minutiae of the election laws -- would've been funny except that his circumstances are so dire.

Easley could face criminal prosecution if the Elections Board believes Campbell (and McGhee) is more likely telling the truth than Easley. If it does, it will refer the issue of the misreported air travel to the Wake County District Attorney for further investigation. Because Easley and Wake D.A. Colon Willoughby "go way back," Tommy Hicks said today, it's likely Willoughby will buck the case to Attorney General Roy Cooper, and that he in turn will appoint a special prosecutor.

Hicks said Easley wants the case referred, because otherwise the public may conclude that the former governor "put one over on the elections board."

One way or the other, it looks like a criminal referral is the way this is headed. And of course, there's already a federal grand jury looking into various other perks that Easley got as governor, including that $180,000 a year job at N.C. State, greased by one McQueen Campbell, board of trustees chairman at the time. And the price break on the lot at Cannonsgate. And the free golf club membership.

Things came so easily once to Mike Easley. Pun intended.

Former Gov. Mike Easley, at the outset of hearings into possible violations of the state's campaign finance laws, stands accused -- by a friend -- of being a petty grifter.

The accusation is that Easley took $11,000 in campaign funds to pay for repairs to the house he owned on East Lake Drive in Raleigh, a house he rented out during the eight years he occupied the Governor’s Mansion. He hid the transactions by misreporting what they were for, the friend testified.

The repairs were contracted and paid for by McQueen Campbell, Easley’s friend and someone who, according to his testimony, frequently piloted the governor free of charge in airplanes owned by one of Campbell’s companies. The costs, for two different sets of repairs, came to $4,777.50 and $6,300, respectively. They were billed to the Easley campaign not as repairs—since that would’ve been an illegal, personal expense an embarrassing if technically legal expense—but rather as “various flights,” ostensibly to campaign-related events, Campbell testified.

[Update, Day 2: Paying personal expenses from campaign accounts was perfectly legal under state law at the time, according to Dave Horne, who testified this morning, even for something like home repairs. Horne, a lawyer, served as treasurer for Easley's 2000 and 2004 gubernatorial campagins. The only rule at the time, he said, was that such expenses needed to be reported accurately, which if Campbell is to be believed, Easley failed to do. Since the 2004 campaign, state election laws have been tightened. Such things as meals, clothes and cars can still be paid for with campaign funds, but only if the expenditure can be linked to winning or holding a public office; repairs to a rental house would presumably not qualify.]

A campaign aide who questioned the second bill testified that Easley called her and directed her to pay it, even though it was vague and unsupported by any documentation about the flights. In a memo she wrote to her boss at the time, she quoted Easley as telling her he “knows what it says” and wanted it paid anyway.

The aide, Rebecca McGhee, worked for Raleigh lawyer Dave Horne, an Easley confidante who was serving at the time as treasurer of Easley’s 2004 re-election campaign.

She and Campbell testified under subpoena Monday, the first day of hearings by the State Board of Elections into allegations that the Easley campaign and the North Carolina Democratic Party may have committed criminal violations in their handling of contributions from Easley’s supporters. The hearings are expected to continue through the week.