Judge expected to rule in Black's favor today

Staff WriterJuly 16, 2009 

— Disgraced House Speaker Jim Black is on the verge of avoiding a longer stint in prison, but the deal that allowed him to settle half of a hefty state fine with land instead of cash is drawing complaints of favoritism in some quarters.

A Wake County judge is expected to rule today that Black can serve his state sentence on corruption charges at the same time he's behind bars on federal charges.

That anticipated ruling comes after Black was allowed to close out the remaining half of a $1 million criminal fine by transferring undeveloped land in Mecklenburg County to the Wake County school system.

The school system's attorneys and Wake County District Attorney Colon Willoughby, who prosecuted Black, argue that taking the land was the best way to get the fine resolved.

"It was a reasonable way of resolving the fine," said Ann Majestic, the school board's attorney. "It looks to be a very fair value."

But Wake school board member Ron Margiotta feels the school district was shortchanged by the land deal. He says Black should have been required to provide cash instead of turning over land. He's also complaining that school board members weren't notified ahead of time about the land transfer.

"We're dealing with a convicted felon who made deals in bathrooms," Margiotta said. "That's the worst thing a person can do by betraying the public trust."

Black, a Mecklenburg Democrat who was once one of the most powerful politicians in North Carolina, was convicted in 2007 on federal and state charges for accepting thousands of dollars in illegal payments, including instances of cash being handed over in men's bathrooms.

The former House speaker is serving a 63-month sentence after pleading guilty on federal charges. He was moved last week to a federal prison in Jesup, Ga., 300 miles south of Charlotte. He is scheduled to be released in 2012.

Black entered an Alford plea on the state charges, allowing him to take responsibility without pleading guilty. As part of the plea, Wake Superior Court Judge Donald Stephens ruled that Black must pay a $1 million fine or else be sentenced to an additional 19 to 23 months behind bars after he finished his federal sentence.

Fines in state criminal cases go to school systems. Wake is getting the money because it's the county where Black was convicted.

Black, who owns several properties in Mecklenburg and Iredell counties, paid the first $500,000 of the fine in cash in 2008. He received several extensions to pay off the balance of the fine because of the collapse of the housing market.

Willoughby said it was difficult for Black to come up with the money for the remaining part of the fine so they looked at a land transfer. Majestic said Black offered three properties, including the one that was accepted. She didn't identify the other two sites.

Majestic said one property was ruled out because it was an office building with a long-term lease that would have required the school district to be a landlord. She said another commercial property had potential environmental issues.

Willoughby, with the support of the school system's lawyers, agreed in May to take the third property offered by Black -- two parcels totaling 9.5 acres on Rice Road in Matthews, near Charlotte, that were appraised at $613,000. Stephens also approved the deal.

"If they had not acquired the property they would have had to go out and spend legal expenses to collect the fine," Willoughby said. "This was a really low-cost way to get property."

The deal was first reported in June in the Carolina Journal, a publication owned by the John Locke Foundation, a conservative think tank based in Raleigh.

As the first step toward selling the property, the school board is scheduled to vote Tuesday on declaring the land as not being needed for school use. Margiotta said he plans to grill Majestic about the deal at the meeting.

Margiotta is questioning the credibility of the appraisal, which was commissioned by Black's family. He notes that the amount is far higher than the $149,000 it was assessed at by Mecklenburg County in 2003.

"We've got an appraisal done for a criminal," Margiotta said. "Give me a break."

Margiotta said he wants the school district to do its own appraisal.

John Bosworth, whose Charlotte firm did the appraisal, defended the $613,000 figure. He said property values are rising in Matthews and that residential properties near the one acquired by the school board have been selling at a comparable per acre price.

Despite Margiotta's complaints, other board members seem to be more supportive of the way the fine was handled. Majestic said board members aren't normally notified ahead of time about the details involving fines.

"This was not a legal settlement, which we would have been required to be part of," said Kevin Hill, chairman of the school board. "It was a fine and forfeiture, which is handled by staff."

keung.hui@newsobserver.com or 919-829-4534

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