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"Well, to my knowledge I don't think I've ever seen a campaign report," Easley said under oath, as a stunned board chairman Larry Leake stared at him.

Dismantling the power structure of former Gov. Mike Easley 

There's a reason people called him "Weasley"

Click for larger image • Pass the marinade and prepare for grilling: Former Gov. Mike Easley testified on the third day of the State Board of Election hearings.

Photo by Bob Geary

Click for larger image • Pass the marinade and prepare for grilling: Former Gov. Mike Easley testified on the third day of the State Board of Election hearings.

A former governor who tried to be charming and to stay above it all, but who came off instead as evasive and self-indulgent—perhaps to the point of criminal wrongdoing. A perpetual fundraising machine operating under the Democratic Party label that reeks of pay-to-play politics. They were the featured elements in the drama staged last week by the State Board of Elections, which conducted five days of hearings into the campaign practices of ex-Gov. Mike Easley and his Democratic mates.

At the hearing's conclusion, the board voted 5-0 to sock the Easley campaign with a $100,000 fine for failing to report as in-kind contributions a slew of free flights he took on airplanes piloted by his wealthy backers. The N.C. Democratic Party was fined $9,000.

Also by a 5-0 vote, the board made a criminal referral to the Wake County District Attorney's office, citing testimony that, "if believed," may indicate that Easley falsely billed his campaign for $11,000 in personal expenses—repairs to the Easley family house in Raleigh—while disguising them as something else. Easley vehemently denied the accusation, opening himself up to a potential perjury charge on top of the alleged campaign violation.

The setting for this tawdry tale was an appropriately drab meeting room in the Clarion Hotel, the round tower located within shouting distance of the State Capitol in Raleigh. The room was equipped, however, with a first-rate sound system and enough white fabric to dress it up for the TV cameras that lined its walls. The Capitol press corps was out in force, especially the McClatchy newspapers—The News & Observer and The Charlotte Observer—whose reporters recently helped expose Easley and his wife, Mary, after the two had evaded scrutiny throughout Easley's two terms as governor and two terms as attorney general.

Also present for Easley's grilling were a quartet of muckraking reformers who approach the corruption at the center of Raleigh's politics from different sides of the political spectrum.

Bob Hall, the crusading director of Democracy North Carolina who filed the complaint that helped trigger the board hearings, and Joe Sinsheimer, an ex-Democratic campaign operative turned leading critic of pay-to-play politics, are strong progressives.

Don Carrington, who wrote some of the first pieces questioning Easley's ethics for the John Locke Foundation's Carolina Journal, and former state Sen. Fern Shubert, a Republican who's dished dirt about Easley in many forums, including a now-defunct Union County newspaper, are staunch conservatives.

Shubert, an also-ran in the 2004 Republican gubernatorial primary (she traveled the state attacking corruption in the Easley administration, she says, but the press ignored her), thinks North Carolina is essentially a one-party state, "controlled by the 'Greenback Party'—which is mostly Democrats, but there are enough of them in the Republican Party, too."

These big-money contributors give to both political parties and, in return, expect to receive favored treatment from state government, especially for land development deals. "The best way to make big money," Shubert likes to say, "is to buy cheap land and cheap politicians."

A few of Easley's developer-contributor friends and their lawyers appeared during the week, the former having been subpoenaed to testify about the money they gave to Easley and the Democratic Party. They admitted no quid pro quos, merely their desire to help a favored candidate.

In the end, the hearings offered more titillation than fulfillment, with many questions left unanswered (or unasked) about Easley's and the Democrats' fundraising methods. The board, with its limited purview, focused on a few instances in which contributions went unreported or were given to the party but earmarked for Easley—an illegal practice, if the money was being laundered for his campaign. Much less was revealed about why the money was given.

(The latter question, and the favors divvied out to the Easleys by their friends, are the focus of a federal investigation led by U.S. Attorney George Holding and the FBI.)

Still, when considered in the context of Easley's history and the reporting by The N&O and other media, there was plenty of information in the board's hearings to draw some pretty appalling conclusions about state politics.

When Easley took the witness stand Oct. 28, he testified that he didn't like fundraising, didn't pay much attention to who gave him what and didn't review his own campaign reports to see if they were accurate. "Well, to my knowledge I don't think I've ever seen a campaign report," he said under oath, as a stunned board chairman Larry Leake stared at him.

Click for larger image • State Board of Elections Chairman Larry Leake was stunned at Easley's testimony that he'd never reviewed his campaign reports. - PHOTO BY D.L. ANDERSON

Easley's statement covered his two successful campaigns for attorney general (1992 and 1996), as well as his 2000 and 2004 gubernatorial bids. He said he didn't know that his campaign treasurer wasn't reporting dozens of free flights supplied to him from 1998 to 2006 by his friend McQueen Campbell, as the law required. He was too busy doing his job as governor, he testified, to be bothered by such mundane tasks as scanning the campaign reports that showed no such air travel.

To listeners aware that Easley was widely considered by his fellow Democrats, as well as Republicans, to be distant and uninvolved in even the most important issues of state government while he was in office, this explanation for his ignorance defied belief.

It did serve as a reminder, though, of how Easley was plucked from obscurity 20 years ago by the Democratic Party, and specifically by Tony Rand, the Fayetteville state senator who, in 1988, was a candidate for lieutenant governor. Rand, as Sinsheimer recalls, was taking a beating from his Republican opponent over crime issues, and he was looking for someone to vouch for his anti-crime credentials in a TV ad.

At the time, Easley was the district attorney for the Southeastern District of the state. He had been elected to that post, according to the testimony, with the help of Campbell's father, a wealthy Elizabethtown businessman. Easley was given a screen test by Rand's media guru, Saul Schorr of Philadelphia. "It turned out that he had the gift," Sinsheimer remembers—the gift of seeming forthright and strong on television.

Soon, Easley was starring in a pro-Rand campaign ad as a crime-fighting district attorney who'd battled the drug runners when they tried to land on our southeastern coast.

Rand lost that election, but Easley's star was born. He ran for the U.S. Senate two years later under the same crime-fighting motif but finished a strong second in the Democratic primary to Harvey Gantt.

Two years later, in 1992, Easley ran for attorney general and was elected comfortably, as he was in his three subsequent campaigns for state office.

Throughout, Easley had Schorr on his team managing his TV ads. By Easley's own testimony, the ads—"my message"—and the polls were what he paid attention to as a candidate, not who was giving him money or trips in their planes.

Meanwhile, Rand returned to the Senate, where he currently serves as majority leader and is arguably, with Senate President Pro Tem Marc Basnight, the real power in state Democratic politics—the guy who called the shots while Easley wasn't.

As evidence, look at Easley's secretary of transportation for eight years—the man with the biggest say over where the roads go and whose land they cross: Lyndo Tippett, Rand's trusted political ally from Fayetteville.

In a strange way, a disengaged, remote officeholder like Easley, who was accustomed to having others do for him, was the perfect match for Democratic fundraisers who knew how to use him for his money connections.

In fact, Easley's 2000 campaign manager, Jay Reiff, arrived with a plan to blend Easley's fundraising into that of the Democratic party. And for good reason: While individual contributions to a candidate's campaign legally can't exceed $4,000 ($8,000 if there's also a primary), the law allows unlimited contributions to party committees and, likewise, from party committees to candidates.

The only caveat is that contributions to the party can't be earmarked for a specific candidate—that is, be laundered through the party but remain under the candidate's control.

Thus, Reiff wrote in a memo obtained by the elections board that the Easley campaign could in theory raise virtually all its money using the party as a conduit (and, by using nonprofit 501(c)4 organizations, he said, it could accept corporate funds as well—also illegal if given directly to the candidate), effectively eliminating the $4,000 limit.

The only drawback, Reiff wrote, is that big-money contributors prefer to give directly to a candidate rather than to the party, especially if it's a candidate for governor.

On the other hand, Easley's TV image was the party's strongest weapon, its "firewall" between a weak presidential candidate at the top of the ticket—Gore in 2000, Kerry in 2004—and the rest of the Democratic slate below.

The smart contributors would understand that strategy, Reiff and several other Democratic fundraisers who testified agreed.

The board called two such contributors. Lanny Wilson, a real estate investor and developer whom Easley appointed to the state Board of Transportation, gave regularly to the party, he said, so it was not unusual for him to write $5,000 checks to the N.C. Democratic Party after he'd "maxed out" (given $4,000) to Easley directly.

And Gary Allen, a developer who frequently teamed with Wilson, gave $50,000 to the party in 2003 and again in 2004, although his recollection was fuzzy about why. He didn't remember meeting with Easley in 2003—a meeting for which Wilson had prepped Easley's office when a project Allen was developing on the coast was sweating a key permit from the state. The permit was approved, Allen testified, only after he modified his plans and spent an extra $150,000 bridging over a problem area along the shoreline.

"To me, none of that was tied together," the laconic Allen said. "Everybody contributes what they can," and since he and his brother "had a long hot streak with real estate," they could give money to campaigns while others donated their time.

Allen and Wilson both said they expected their contributions to the party to benefit Easley's campaigns, but no one made them any guarantees as to how the money would be used.

The board heard a plethora of evidence that the Easley and party fundraising operations were tied at the hip, especially during Gov. Easley's 2004 re-election campaign, and that the party paid key Easley staffers, including Reiff, who was back as campaign manager.

Hall, of Democracy N.C., called it a "shadow campaign" for Easley, clearly designed to evade the statutory contribution limits and therefore illegal—or should be.

But the elections board disagreed, fining the party just $9,000—the total of the only two checks it received in 2004 with a specific earmark for "Easley" written on them.

In all, Easley's fundraisers, with little help from him, brought in more than $11 million for his campaign and the party in 2000, and another $9 million in 2004.

The only bombshell of the hearings was McQueen Campbell's charge, as the leadoff witness on Day 1, that Easley pilfered money from his 2004 campaign treasury for personal, household expenses by having Campbell bill them as air travel.

Easley flatly denied it. It was undisputed, however, that Campbell—a commercial real estate broker and, according to Easley, a jack-of-all-trades—handled repairs to the Easley's personal residence in Raleigh while they were living in the Governor's Mansion.

These two sets of repairs totaled $11,077, the cost of which Campbell says Easley insinuated should be reimbursed by Campbell submitting a voucher for "unbilled flights."

Easley testified that he thought Campbell had been paid for all his flights, and besides which, the law at the time—it's since been changed—would've allowed the campaign to pay for the repairs, even if they were unrelated to his candidacy.

What Easley didn't explain, though, is how he did pay for the repairs—if he did. And the repairs are just the tip of the legal iceberg Easley may be facing.

At just 30 years old, Campbell was named by Easley to the N.C. State University board of trustees. Now 38, Campbell resigned this year over his role, while he held the position of board chair, in snagging Mary Easley a plum job at NCSU—a controversial appointment that also led to the resignations of the university's chancellor and its provost.

Campbell was also involved as a broker in a coastal development called Cannonsgate, in Carteret County, put together by developers and major Democratic Party contributors Gary Allen and his brother Randy.

Don Carrington, of the John Locke Foundation, starting sniffing around Cannonsgate in 2005, when a tipster alerted him that Easley bought a prime lot there, maybe for less than the going rate.

Years earlier, Carrington caught Attorney General Easley using his campaign media team, including Schorr, to make a series of consumer-oriented TV ads with public funds. The ads helped Easley win the governorship, and they also convinced Carrington that Easley "perhaps wasn't always truthful."

This time, Carrington questioned Easley's judgment for buying a lot in a project that the state had only days before approved for a waste disposal permit. And he said the selling price of $549,880 was less than others with similar lots had paid. It was only this year that The News & Observer obtained a closing document showing that Easley didn't even pay that much. With a secret discount of 25 percent from the developer, Easley saved $137,470—but concealed it from public records.

And then there was the car—an SUV that Easley "leased" from a Fayetteville car dealer, ostensibly for his 2004 campaign. But he never paid anything for it until this year, after The N&O caught him at that, too.

The vehicle, a 2000 Chevy Yukon, was garaged at the Governor's Mansion and used by Easley's son, Michael Jr., a college student at the time. The dealer, Robert Bleecker, met Easley when Tony Rand was running for lieutenant governor in 1988. "They were good friends," Easley testified.

Bleecker said he had a handshake deal with Easley that the governor would pay what he owed on the Yukon when he was done with it. Thus, the Yukon never showed up on any campaign records, because the Easley family kept it. Like the case of Easley's home repairs, it's possible that he wanted to pay for the SUV with campaign funds but not reveal it until the campaign was over and he had been re-elected.

The Easleys finally paid Bleecker for the Yukon and took title last spring.

Whatever Mike Easley's crimes, if any, watchdogs like Shubert, Hall and Sinsheimer see him as a symptom, not the cause, of a deeper problem of corruption in state politics.

For Shubert, it's a simple matter of politicians in both parties—but mainly the Democrats, historically the majority party in the state—who reward their contributors with goodies at the expense of all other taxpayers. She points to the long, wretched history of road alignments chosen to reward big campaign donors. She argues that for today's developers, water-sewer connections may constitute an even larger slush fund than the highway money.

"Oddly enough," she said, "were it not for the polarization of party labels, I think I'm probably closer to [the progressive reformers] than I am to the leadership of my own party."

That may be true, because Sinsheimer, at least, is saying the same thing. Sinsheimer helped dethrone corrupt former House Speaker Jim Black, the Charlotte Democrat who was caught trading legislation (protection for the video poker industry, for example) for contributions. Sinsheimer sees Easley's problems as a continuation of Black's.

"We'll have these until there's a cultural shift," he said, "and we have an election where people just say, throw the bums out" and 30 or 40 members of the General Assembly lose their seats.

When that happens, the Democrats will be out and anti-government Republicans in, with a license to dismantle important government programs, not just the corrupt ones.

"I think the [Democratic] party needs to look inside its own soul and realize that we've become the party of pay-to-play," Sinsheimer said as the hearings ended. "And as a progressive, that angers me."

Hall, a longtime proponent of public campaign financing, said such an alternative is needed to keep politicians honest and restore the public's faith in government.

"The money chase is driving an awful lot of what we see from one scandal to another scandal to another scandal," he said. "There's a certain level of people who are prone to corruption. But there's also people who start out in politics with a pretty honorable perspective and commitment to public service who then, in order to survive, or to stay in the majority and so on, become corrupted."

Correction (Nov. 5 and Nov. 10, 2009): Tony Rand was a candidate for lieutenant governor in 1988, not 1998. Mary Easley's appointment led to the resignations of N.C. State's chancellor and provost, not president and provost.

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