Pope wins feud with Morgan

Raleigh businessman Art Pope won. Former House Speaker Richard Morgan lost.

That was the result of a State Board of Elections decision Wednesday dismissing a complaint that Pope had acted illegally when he helped direct the use of hundreds of thousands of corporate dollars to help defeat Morgan and his legislative allies.

After holding two days of hearings, the board voted 4-1 that Pope had not acted improperly when he and his groups used $660,000 from his retail company to send thousands of critical mailings to the constituents of Republican lawmakers who had formed a power-sharing agreement with House Democratic Speaker Jim Black.

But while the board found no wrongdoing, several board members said that Pope had walked up to the line of what was permissible. Pope said that Morgan's complaint was motivated by political and personal animus.

"We are very happy with the ruling," Pope said. "We fully complied with the law."

Morgan said that despite the setback, there were still important issues too be resolved. Morgan said he will decide in the coming weeks whether to appeal the decision to the courts.

"Of course, I'm disappointed," Morgan said. "I don't believe the rank-and-file Republicans in North Carolina ... want to see corporate money being used to attack candidates and soften them up."

The complaint placed two values in conflict: the state's right to limit the influence of corporations in the political process versus the free-speech right of individuals to criticize their elected leaders.

Despite Pope's victory, it seemed unlikely that the decision would result in a flood of corporate money into elections. That is because Morgan, in his swan song as a legislator this summer, helped push through new restrictions making such mass corporate-financed mailings as those Pope orchestrated much more difficult in the future.

Pope said he thought the new legislative restrictions were an unconstitutional infringement on free speech and were ripe for a court challenge.

The hearing was another chapter in the North Carolina Republican Party's blood feud that can be traced to 2003, when the House was deadlocked between Democrats and Republicans, with each party holding 60 of the 120 seats.

Morgan and four allies formed a power-sharing arrangement with the Democrats, a move that infuriated Republican members of the House and many GOP activists across the state.

During the past two elections, Pope, a former state House member, has financed through his companies and various advocacy groups a campaign in which he used the mail or radio ads to sharply criticize those GOP lawmakers who cooperated with the Democrats.

Among the Pope targets who were defeated were Morgan and state Reps. David Miner of Cary and Rick Eddins of Raleigh.

According to testimony Wednesday, Pope said he created a so-called 527 committee called the Republican Legislative Majority because Morgan had created a similar group in 2004. Pope's company bankrolled the effort. Pope selected the consultant. And Pope reviewed some of the campaign literature.

But Pope denied Morgan's allegations that he coordinated his efforts with the state Republican Party or GOP candidates.

Pope and his backers said the effort has helped make the House Republican caucus more unified and more conservative.

But Morgan said he was offended by "a Wake County CEO millionaire trying to buy up legislative seats."

Morgan filed a complaint, saying that the Pope-directed mailings violated state laws that prohibit direct corporate contributions to candidates and limit individuals donations to $4,000 per individual per candidate.

But Pope and his attorneys argued that corporate contributions were permissible because the mailings did not specifically call for the defeat of candidates and therefore were not covered by rules that govern elections.

The mailings criticized lawmakers for voting for a Democrat -- Black -- for speaker, for agreeing to $1 billion in continued tax increases, and for voting for a redistricting plan that aided Democrats.

One elections board member, Bob Cordle, a Charlotte lawyer and Black ally, said one mailing that encouraged voters to "call Richard Morgan out" crossed the line into political advocacy. Pope said it was just a baseball metaphor.

But Cordle failed to convince the rest of the board that the Pope-connected organizations should be found guilty and fined $19,000 -- the cost of one of the mailings.

"I believe [the Pope group] walked right up to the line, came very close, but didn't walk over," said Lorraine Shinn, a Republican from Greenville.

Larry Leake, the chairman of the Democrat-dominated board, said he would have been inclined to find the Pope-connected groups guilty if only North Carolina law were considered.

But Leake said the board was constrained by a 1996 case still working its way through the federal courts involving N.C. Right to Life that limits the board's ability to regulate issue advertising. U.S. District Court Judge Terrence Boyle has struck down the $4,000 limit on issue-oriented third-party groups as unconstitutional.