State Treasurer Richard Moore, who has overseen the sale of $5.5 billion in bonds since he took office in 2001, has steered much of the lucrative legal bond work to the law firms of lawyers who have helped finance his political career.

Moore has raised at least $215,525 from some of North Carolina's elite law firms, including donations from some of the biggest names in state politics, according to a review of campaign finance reports filed with the State Board of Elections.

Moore, a Democrat and two-term treasurer, said he sees no problem in accepting contributions from lawyers whose firms have gotten state business. He said his main interest has been in shifting the legal bond work from Wall Street to firms in North Carolina.

"There are no conflicts," Moore said in a recent interview. "The state of North Carolina has got good value and services from these folks. If they have chosen to be politically active, that is their decision. I think you'll find those firms are politically active with every single statewide officeholder, or many of them."

Moore's political fundraising has come under greater scrutiny as he prepares to seek the Democratic nomination for governor in 2008. Early last month , Moore held a news conference to respond to reports that he has raised hundreds of thousands of dollars from money managers whom he chose to invest in the state's $74 billion pension fund.

Bob Hall of Democracy North Carolina, a nonpartisan watchdog group in Carrboro, said the way bond business is handled appears to be a conflict of interest.

"It's a ridiculous system -- a treasurer raising money from people he's doing business with," he said. "It is, at best, an awkward situation for everyone concerned."

Fattening the kitty

North Carolina state treasurers have long been tempted to use their financial connections to fatten their political kitties. Longtime state Treasurer Harlan Boyles raised political contributions from Wall Street executives who managed the state's bond business. He also escorted North Carolina's Democratic nominees for governor around Wall Street -- including Hunt in 1992, Bob Jordan in 1988 and Rufus Edmisten in 1984 -- to help them raise political contributions. One of the big issues in the 1948 gubernatorial race was Treasurer Charlie Johnson's parking the state's money with Wachovia, whose executives were supporting him, rather than spreading it to other banks.

North Carolina is not an isolated example. Wall Street's involvement in the pay-to-play culture resulted in the industry's passage of a rule in 1994. The rule bars local government bond dealers -- securities dealers, usually connected with banks and brokerage houses, that market bonds -- from accepting a public contract within two years of having made a political donation to that public official.

Since 2001, Moore's office has handled the sale of about $5.5 billion in bonds to construct buildings on college campuses, prisons, water and sewer lines and other improvements. Moore decides which bond lawyers are hired to make sure the bonds are legal, valid and binding and to verify their tax status. Moore has paid out $2 million in fees for bond counsels since taking office, according to records in the treasurer's office.

Under Boyles, Moore's predecessor, most of the bond business went to one New York bond attorney, George Boyle. He later moved to Raleigh and went to work for the Raleigh law firm Poyner & Spruill.

When Moore was running for treasurer in 2000, he promised North Carolina bond lawyers that he would spread the legal business around.

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