Easley's lawyer stuns board, asks that DA get the case

Elections board, which likely will rule today, may grant his wish

Staff WritersOctober 30, 2009 

  • 1. Did former Gov. Mike Easley commit any crimes?

    2. Did the Mike Easley Committee violate elections law?

    3. Did the state Democratic Party break elections law?

    The state Board of Elections will rule today. It could issue exonerations, rebukes, levy fines or refer possible crimes to prosecutors.

    The board is expected to deliberate throughout the morning.

  • State and federal authorities have been investigating former Gov. Mike Easley and his campaign. The probes follow a series of reports in The News & Observer about free cars, flights and how donors appeared to be funneling donations to Easley through the state Democratic Party. In July, the watchdog group Democracy North Carolina requested hearings by the State Board of Elections.

    On Monday, former Easley confidant McQueen Campbell testified that Easley directed his campaign to pay for $11,000 in roof and bathroom repairs at his personal residence and kept it secret. On Tuesday, board members released memos that indicated an Easley strategy to funnel donations illegally through the state Democratic Party to circumvent contribution limits. On Wednesday, Easley contradicted Campbell's testimony, and Thursday, his attorney urged the board to refer the matter to the Wake district attorney in order to clear his name.

    The board could fine Easley's campaign and declare that crimes occurred and refer those matters to prosecutors.

— After four days of putting the campaigns of Gov. Mike Easley and the N.C. Democratic Party under the microscope, the State Board of Elections expects to decide today whether a criminal probe is needed.

On Thursday, Easley's personal attorney told them to skip the deliberation.

"The question is: 'Do you refer the case to the district attorney?' " said Thomas Hicks. "Please do."

Also, Wake County District Attorney Colon Willoughby said Friday he has recused himself from taking the case against Easley, a longtime friend.

The case will be handled by William D. Kenerly, the district attorney for Rowan County, Willoughby said.

Easley and his campaign committee are under investigation over free air travel and a free vehicle, home repairs billed to the campaign, and evidence that the campaign used the state Democratic Party to skirt contribution limits. On Thursday, attorneys for Easley, his campaign committee and the state party argued to the board that in many cases only minor transgressions occurred that should be resolved with fines from the board.

But Hicks' request that the case go to a prosecutor drew a double-take from board Chairman Larry Leake, who asked whether Hicks had talked with his client before speaking. Hicks said the governor told him to say it, even though he and Hicks say there is no case.

"No matter what happens, the public is going to question, 'Did Mike Easley slip one over on the board?' " Hicks said. "He's saying refer it. That's his position."

Whether the district attorney could handle it is another matter. Wake County District Attorney Colon Willoughby, who would normally get the case, is a longtime friend of the governor. Easley's son, Michael Jr., a law student, worked for the prosecutor this summer. Late Friday, Easley recused himself from considering the case, which now will be handled by William D. Kenerly, the district attorney for Rowan County, Willoughby said.

Leake and other board members said they would not make a referral to the district attorney based on Easley's request. They said they can make referrals only when they suspect a crime.

Witnesses and campaign documents have suggested that the campaign asked donors to give sums to the party that exceeded what they could legally give directly to Easley. The party, which can take unlimited donations, then would channel that money to the campaign, according to witnesses and documents.

Mistakes called minor

Lawyers for the Democratic Party and Easley's campaign committee had no desire to roll the dice with prosecutors. They said that the transgressions involving unreported flights and the vehicle were minor and were corrected. They said they did not scheme to launder contributions.

"I have not heard evidence, and there is no evidence, that the Mike Easley Committee engaged in illegal fundraising activities in any way," said John Wallace, a Raleigh lawyer representing the Easley campaign.

Scott Falmlen, the party's executive director from 1999 to 2005, took the stand Thursday and denied any scheme to raise funds illegally. He said he had complete control of money raised by the Easley campaign that had been turned over to the party.

The board introduced more documents indicating that such a scheme was afoot within the Easley campaign, including one that included a diagram of a "soft money" pyramid that made clear the advantage of collecting big money from a few instead of smaller amounts from many. Other documents showed that the party had taken on basic campaign expenses, such as paying the salary and benefits of employees.

"This is where we are going," said Bob Hall, executive director of Democracy North Carolina, a nonpartisan campaign watchdog that supports public financing of elections. "You can set up a shadow campaign within the party."

Hall urged the board to find that the law was broken.

The board may be limited in what action it can take. Many of the events took place more than two years ago, past the statute of limitations on misdemeanors. The board could find that the Democratic Party and Easley's campaign knowingly filed false reports, which is a felony and not subject to that limit.

Two men, two tales

The board will also be weighing contradictory stories from Easley and McQueen Campbell, a longtime friend and fundraiser .

Easley testified Wednesday that he never said or implied to Campbell, a private pilot who often flew Easley, that he should bill $11,000 in home repairs to the campaign under the guise of air travel. Campbell dropped that bombshell when he took the stand Monday.

Hicks told the board that Campbell was caught in one lie and then told another.

"I would suggest to you that there are a lot of things going on with McQueen Campbell that this board should scrutinize very closely," Hicks said.

He acknowledged outside the hearing room that a criminal probe could hit Easley with numerous charges relating to his relationship with Campbell, including fraud and conspiracy.

"McQueen Campbell is saying, 'I did a crime. But I conspired with the governor to do it. The governor conspired with me to defraud his campaign,' " Hicks said.

GOP flights also unpaid

Hicks' request for a criminal investigation wasn't the only surprise Thursday. The Easley campaign had a private investigator testify that three GOP gubernatorial candidates had not reported paying for some flights during their campaigns.

Two, Fred Smith of Clayton and Bill Graham of Salisbury, either own or co-own planes.

Smith said Thursday night that he had gotten approval not to bill his campaign from the Board of Elections. Board staff told him that because he owned the plane he could treat it as he would his car, he said.

The Democratic Party also attacked the allegations that it channeled money to Easley. The party's attorney, Jim Cooney, said GOP contributors who hit limits in former Charlotte Mayor Richard Vinroot's 2000 gubernatorial campaign went on to give to the Republican Party. Combined, they gave $80,000 to the party, almost to the dollar what the party gave to Vinroot's campaign.

"Folks who have maxed out to a candidate can and often do make contributions to the party," said Andrew Whalen, the N.C. Democratic Party's executive director.

Jane Pinsky, who leads the N.C. Coalition for Lobbying and Government Reform, said the party's defense served only to illustrate serious problems with campaign finance.

"It's like a kid saying, 'I want to do it because everybody else is,' " she said.

dan.kane@newsobserver. com or 919-829-4861

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