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Who's who on the Rules Review Commission

Profiles in vested interests 

Who's who on the Rules Review Commission

E. Graham Bell
Residential real estate and golf course developer; former member of the N.C. General Assembly
Cramerton

Bell says as a developer and as a legislator, he "wasn't opposed to rules and regulations" but sought to improve the process to make it easier for people in the field trying to obey them. His background as a member of the regulated community has been helpful in his job on the RRC, he says, and he believes it's important to have some non-lawyers at the table. "It gives you a better working knowledge, even than an attorney, because you've been there and done that, and you know how important rules are and just how far they should go," Bell says. "The commission is established for the purpose of checks and balances, and I don't think it's out of balance," he says.

He disagrees that there's a pro-industry bias on the board, and says his career does not pose a conflict of interest because he's no longer in the business.

A Gaston County legislator from 1973 to 1982, Bell is most widely known as the developer and owner of Cramer Mountain Country Club and Properties about 15 miles west of Charlotte, which opened in 1986 and includes a golf course surrounded by an upscale community of luxury homes.

A key leader in the Rules Review Commission's rejection of the proposed regulations on stormwater, Bell has been cited at least twice for violating standards for environmental protections, public records show. In 1987 and 1996, Department of Environment and Natural Resources inspectors issued violation notices at Cramer Mountain. In the earlier case, for which details were unavailable, Bell paid a fine of about $7,000. In the later case, inspectors noted a creek filled with sediment from runoff at a construction site within Cramer Mountain. He was ordered to clean up the creek, take steps to prevent further erosion, and pay a fine of $3,080.

Asked about the DENR violations, Bell recalled the earlier case but says he had no knowledge about the later events, though state records show he paid the fine.

"I don't think there's any case where someone is involved in development for 15 to 20 years and doesn't have a notice of violation," Bell says. "A person that's been in the business brings important points to the table, but I don't think that makes you anti-regulatory, by any means."

The quality of the roads that Bell built at Cramer Mountain have also been a matter of conflict with public officials and the residents of his country club subdivision. In 1999, Cramerton town commissioners ordered Bell to repair the roads to bring them up to town standards and gave him two years to do so, according to reports in the Charlotte Observer. A group of homeowners who were suing Bell over the roads at the time said elected leaders were too lenient on the wealthy developer. In testimony to how well-connected Bell is, three of the six town commissioners had to recuse themselves from voting on the issue because they owned property in his developments.

Bell also was charged in 1992 with illegally serving liquor at his country club after Alcohol Law Enforcement officers seized more than 700 bottles of beer, wine and liquor from his clubhouse, according to news reports. Bell downplays the misdemeanor charges, saying investigators entered his club on a night it was closed and found an employee with a personal liquor locker open.

In addition to Cramer Mountain, Bell reported financial interests in two other businesses in his disclosure to the N.C. Board of Ethics: Mayworth Development Corporation and Cramer Commons Office Park.

The person who put him on the Rules Review Commission believes that Bell's tangles with state regulators don't impair his ability to be a fair gatekeeper of rules--including environmental regulations and alcohol permits.

"I've known Graham Bell for 25 years. He's a good businessman and I think he makes good decisions based on balanced information," says House Speaker Jim Black (D-Mecklenburg), who served with Bell in the General Assembly in the 1980s and hails from the same area of the state. "He comes and talks to me about his work on the commission occasionally, and I know he takes it very seriously."

Jim R. Funderburk
Attorney, self-employed
Bessemer City

A graduate of Wake Forest University law school, Funderburk is a solo practice attorney in Gastonia. He is also an N.C. State Bar councilor for his district, and serves on the bar's grievance committee. In his financial disclosure form for the state ethics board, he reported owning more than 300 acres of land in South Carolina. Funderburk was traveling for an extended period and could not be reached for comment.

Jeffrey P. Gray
Attorney and partner, Holt, York, McDarris & High
Raleigh

A 1985 graduate of Campbell University Law School, Gray worked as a special assistant to Lacy Thornburg, the former state attorney general and current federal judge whose 1992 gubernatorial campaign Gray also managed. Gray then worked as an assistant attorney general from 1992-98 before joining the private Raleigh firm where he now specializes in administrative law (the area the Rules Review Commission mostly deals with), as well as civil litigation and government and legislative affairs. Holt, York, McDarris & High, where Gray holds a one-sixth partnership, advertises "legislative representation before the N.C. General Assembly" as one of the firm's focus areas.

A vocal opponent of the stormwater rules, Gray insists he's not "a development attorney," noting that the bulk of his firm's work on land-use issues is simply "rezonings." However, court records and news accounts show that a sampling of Gray's personal client list includes: Trafalgar Properties, which developed a 40-acre subdivision in northeast Durham and in 2003 was handed Durham County's largest fine ever--nearly $100,000--for violating erosion control regulations and damaging a creek during construction; the developers of the controversial Haddon Hall project in Apex, who sued over the town's sewer moratorium in 2000; and the Homebuilders Association of Johnston County.

Gray is also one of two registered lobbyists on the commission. Since 1999, he has represented the State Lodge of the Fraternal Order of Police in the legislature, a position he says is not a conflict of interest.

"The FOP is not involved in the rules-making process," Gray says. "I'd have to say no to lobbying for groups that were."

After Black appointed him in 2001, Gray lost his seat in 2003 when the House leadership went to co-speakers, who split the appointment slots. Gray then sought appointment by the Senate president pro tem. Records in Basnight's office reflect a letter-writing campaign on Gray's behalf, including praise and recommendations from state Sens. David Hoyle (D-Gaston), A.B. Swindell (D-Nash) and Scott Thomas (D-Carteret). N.C. Retail Merchants Association lobbyist Fran Preston also urged Basnight to put him back on the board, praising Gray's "ample experience representing the regulated community."

Jennie Jarrell Hayman
Attorney, real-estate investment company manager
Raleigh
A 1982 graduate of Campbell University law school, Hayman worked as an assistant attorney general from 1985 to 1992. She is not currently practicing law but is active in volunteer efforts, including a leading role in the Junior League of Raleigh. She served as group president during 2000 and headed that group's organization of Gov. Mike Easley's inaugural ball. According to public records, Hayman helps run two privately held family real estate companies: T&C Associates, based in her mother's hometown of High Point, where she is an officer and a shareholder and from which she collects a salary, according to her disclosure form on file with the N.C. Board of Ethics; and Jarrell Investment Properties, which lists Hayman as its manager and Hayman's home address in Raleigh as its headquarters. Hayman declined to answer specific questions about her family companies.

"My disclosure form with the North Carolina Board of Ethics fully answered the questions regarding those businesses to the satisfaction of the Board of Ethics," Hayman wrote in response to questions about the nature, extent and location of the companies' investments. Land records show T&C Associates owns at least 35 parcels of land in High Point with a combined tax value of about $1.2 million.

Hayman is the daughter of Mary Jarrell, a Democrat from High Point who left the legislature in 2004. In an e-mail dated Sept. 5, 2002, Black's special assistant wrote to a colleague that "Rep. Mary Jarrell just came and said her daughter Jennie Hayman wanted to be reappointed to Rules Review."

Asked what role her mother played in her reappointment to the commission, Hayman replied, "I do not know."

Hayman's husband, attorney Wilson Hayman, is a partner in Poyner & Spruill, a large firm in Raleigh, Charlotte and Rocky Mount that represents some of North Carolina's corporate heavy-hitters. Poyner & Spruill also has a prestigious government relations practice headed by former legislator Marvin Musselwhite, who frequently appears near the top of the list in the annual survey of North Carolina's most influential lobbyists published by the N.C. Center for Public Policy Research. In evaluating Hayman's statement of financial disclosure, the N.C. Board of Ethics cautioned Hayman about the potential for conflicts of interests involving her husband's law firm.

Hayman says her record shows that she recuses herself from discussion and votes on matters involving her spouse or his firm. However, members of the public seeking to communicate with her on Rules Review Commission matters are given the Poyner & Spruill fax number as her only contact information. Though other members of the board she chairs list work or home telephone numbers and e-mail addresses for citizens trying to contact them, Hayman chooses not to give out her home telephone or e-mail and uses her husband's fax.

"Any documents sent to me via fax are a matter of public record," Hayman says.

Thomas Hilliard III
Attorney, Hilliard and Jones law firm
Raleigh

Hilliard is a former government lawyer who served as assistant director of the N.C. Administrative Office of the Courts from 1999-2001 and as deputy director in the office of legal affairs at the N.C. Department of Environment, Health and Natural Resources prior to that appointment. Now in private practice specializing in real property, criminal law, negligence and administrative law, Hilliard also serves on the Triangle Transit Authority's board of directors. Hilliard is the only member of the commission with any background in environmental law, having studied land use and environmental planning at UNC and worked as an attorney for DENR in the 1980s.

"I wasn't a tree-hugger, but I always was interested in environmental issues," Hilliard says of his decade in the legal affairs office at the agency.

Hilliard says the board fills an important niche in state government.

"It's important that the public understand that agencies aren't out here promulgating rules just to make life difficult--particularly in the business community," Hilliard says.

Robert W. Saunders
Attorney, Brooks, Pierce, McLendon, Humphrey & Leonard
Carrboro

A 1987 graduate of the University of Virginia law school, Saunders is a corporate attorney at a large Raleigh and Greensboro firm, where he specializes in issues affecting tax-exempt organizations and closely held businesses, including medical practices. His firm's client list includes financial interests such as the N.C. Bankers Association, Citicorp and Wachovia Bank; media companies such as Time Warner and Jefferson-Pilot; and Lorillard Tobacco. Saunders declined to be interviewed or to answer a list of written questions.

"I believe any response from me would not be appropriate due to the pending litigation involving the Rules Review Commission," Saunders wrote.

Lee Settle
Bank director, retired restaurant owner and corporate executive
Pinehurst

Settle had a long career in the food industry, as the operator of several Del Taco restaurants in California and as a McDonald's franchisee and regional executive in North Carolina. Settle helped found Square 1 Bank, the state's first venture capital bank scheduled to open at Durham's American Tobacco campus later this year, which will have an initial capitalization of $80 million to $120 million, according to plans approved by the N.C. Commissioner of Banks this spring. In forms filed with the N.C. Board of Ethics, Settle reported that he holds 26,000 shares in Square 1 and is a member of the board of directors.

His financial disclosure form listed three other business ventures in recent years: The Sweete Shop, Sundance Trading Co. and a J.C. Penney catalogue store.

Settle declined to be interviewed or to answer a list of written questions via e-mail, except to say: "The question concerning Square 1 Bank is purely business and should not be included in dialogue concerning the Rules Review Commission."

Dana E. Simpson
Attorney, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan
Raleigh

A 2000 graduate of UNC law school, Simpson specializes in administrative law, government relations, health care and telecommunications. His firm represents a long list of some of North Carolina's most powerful corporations, including banking, insurance and pharmaceutical giants. Simpson is also a lobbyist, representing various corporate interests in the General Assembly. He is currently registered as a lobbyist for the N.C. Society of Anesthesiologists and the Telephone Cooperative Coalition of N.C., and in the past has worked for the Medical Society of N.C., Ford Motor Co. and AT&T.

Simpson's wife, Stephanie Mansur Simpson, is the long-time director of government affairs for the N.C. Association of Realtors, a job that puts her on the front lines of the real estate lobby's legislative offensive, and occasionally lands her employer in front of her husband's board. The Realtors' association fired off letters to RRC members detailing their objections to the stormwater rules; Dana Simpson recused himself from that vote.

Dana Simpson is a legislative insider in yet another way: Prior to attending law school, he worked as a special assistant for communications and policy in the office of Morgan, the co-speaker of the N.C. House who later appointed him to the commission.

Simpson did not return repeated phone calls and did not respond to a list of written questions sent via e-mail.

John L. Tart
Retired President Johnston Community College; former Wayne County Commissioner; former member of the N.C. House; farmer
Goldsboro

Tart says his experience in the N.C. House in the late '80s--right after the Rules Review Commission was first established--led to his interest in serving on it. "I was convinced it was a wonderful thing to have. I saw where state agencies would take a statute and turn it around to fit their own needs, and I thought that was just as wrong as it could be," says Tart, noting that the commission's legal charge is to evaluate rules only on three criteria. "As long as the agencies don't try to get out of bounds with the statutes, we don't have any authority at all. It's been written up that it's a powerful board, but the only thing you've got to do is follow the statute, and then we don't have any say-so at all."

In addition to seeing the rule-making process from the legislative side, Tart also experienced the enforcement end of it as the head of Johnston Community College, which is governed by regulations set by the State Board of Community Colleges and reviewed by the RRC. Tart says he disagreed with the way many rules were applied.

"There were some that I questioned whether the agency had the authority to do that," Tart says, declining to name examples.

Tart served as the president of the Smithfield school for nearly three decades beginning in 1969, announcing his retirement shortly after state auditors issued a scathing report accusing Tart of questionable financial practices in 1997. A comprehensive review of the school's finances showed that Tart, a Wayne County commissioner at that time, had mixed his personal and political business with that of the school and not followed standard financial practices and documentation procedures for large contracts, school equipment, and donations to the school's foundation. Among the findings: $190,000 in school construction contracts were awarded to a company that did personal work for Tart at his farm, for which Tart didn't pay; a business owned by a maintenance supervisor at the college sold carpet to the school at least 11 times, which auditors cited as a conflict of interest; Tart failed to note as leave time the hours he was away from his job on county commissioner business; and that maintenance workers at JCC used a campus shop to paint campaign signs for their boss.

"There was absolutely no proof of anything that was in there--it was a lot of half-truths," Tart says, insisting there's no connection between the audit and his role on the RRC. "I just don't think it's relevant at all."

The audit also spun off a related lawsuit by the administrator who alerted auditors. The school's dean of instruction, Catherine Bunn, accused Tart of professional and sexual harassment in 1999. According to news reports, the suit settled privately out of court without a ruling on liability; Bunn received $165,000.

Tart was appointed almost solely on the recommendation of another House member, says Black, the House speaker who named Tart to the panel in 2002.

"I know very little about John Tart, except that he came highly recommended by Rep. Phil Baddour [D-Wayne], who was the House majority leader at the time," says Black.

David R. Twiddy
Banking, real estate and insurance executive
Elizabeth City

Twiddy currently serves as the senior executive vice president of Gateway Bank & Trust, the state's 27th largest bank, and as president and CEO of Gateway Insurance Services and Gateway Investment Services, two of its affiliates. He is also licensed as a real estate broker and hails from one of the Outer Banks' most successful real estate investment and development families. Twiddy has a long record of championing growth initiatives, including serving on the Pasquotank-Camden Economic Development Commission and the Edenton Waterfront Development Commission. His wife, Rhonda, is the president of the Elizabeth City Area Chamber of Commerce.

Twiddy did not return repeated phone calls or reply to a list of written questions sent by e-mail.

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