Fundraiser admits illegal donations

Carter sent $150,000 to top Dems

Staff WriterMay 5, 2010 

  • Included in the charges that Wilmington businessman Rusty Carter pleaded guilty to Tuesday were donations that his company, Atlantic Packaging Corp., paid for but that were publicly shown as being from his employees. A breakdown on the candidates and amounts they received per year:

    Gov. Bev Perdue

    2005

    $20,000

    2008

    $44,000

    Sen. Marc Basnight

    2003

    $4,000

    2006

    $24,000

    2008

    $56,000

    Former Sen. Julia Boseman

    2006

    $28,000

— A major Democratic fundraiser illegally funneled about $150,000 into the campaigns of Gov. Bev Perdue and Senate leader Marc Basnight, a judge ruled Tuesday.

Rusty Carter, who owns the Atlantic Packaging Corp. of Wilmington and who was on the UNC-Chapel Hill Board of Trustees, struck a deal with prosecutors and pleaded guilty to three misdemeanor counts of giving illegal donations. The scheme extended to other candidates not covered in the plea, records show.

Judge John J. Carroll III of New Hanover County accepted the deal, which was entered under what's known as an Alford plea. Such a plea allows defendants to assert innocence while acknowledging the evidence is against them.

Carter said in a statement after the court hearing Tuesday that he has "accepted responsibility" for the violations.

The judge ordered that Carter pay a $5,000 fine - an amount specified in the plea agreement - and prohibited Carter from making campaign donations for the next two years. A 30-day jail sentence was suspended.

The prosecutor, Tom Old, spent nearly two decades as a trial court judge in Ohio. He said that he had been surprised to discover that the violations were misdemeanors.

"That's too little," Old said. "Something like this should probably be a felony, if only to discourage that kind of conduct. A felony has a whole lot more bearing on people's conduct, particularly sophisticated people with wealth."

A money man

Carter, 61, became a heavy hitter in political circles by raising large sums. He served for years on the UNC-Chapel Hill board, an appointment he secured through his fraternity brother, former Gov. Mike Easley.

Perdue appointed Carter's wife, Susan, to the UNC-Wilmington Board of Trustees last year; she resigned recently as news of the questionable contributions surfaced.

Carter channeled money through some of his employees. He gave them bonuses from company accounts and directed the employees to use the money for political donations, according to his lawyers and a prosecutor.

It's illegal to give money to someone else for the purpose of evading the state's $4,000 per person contribution limit. Violations are a class 2 misdemeanor, the equivalent of failing to yield for an emergency vehicle.

It is also illegal in North Carolina for corporations to give money directly to a candidate - and Carter's lawyers acknowledged in an interview that federal tax implications still loom.

A lawyer for Carter, David Long of Raleigh, said there are tax questions related to the employee bonuses being used for political donations. But he said he could not comment.

"It's a complex question," he said. "I would just tell you that we are evaluating everything."

Basnight forfeits money

Once the employees had the bonuses, they and the wives of some of them gave the maximum allowed contribution of $4,000 for an election campaign over and over - 24 times to Perdue and Basnight since 2006, records show.

Prosecutors and Carter's lawyers said that Carter came up with the method of giving to candidates on his own and that none of the candidates who received the money knew that Carter was bypassing election laws.

Perdue, who was lieutenant governor before being elected governor in 2008, received $64,000 from Carter employees since 2005. Basnight, a Manteo Democrat who rules the Senate, took in $84,000.

Basnight forfeited the money Tuesday to state elections officials, saying the illegal aspects had been "unbeknownst to me."

Perdue has already forfeited $48,000 she had previously identified as being questionable. A spokesman said Perdue's campaign would return the rest of the illegal money soon.

Boseman got $28,000

Former state Sen. Julia Boseman of New Hanover County received $28,000 from Carter employees - donations for her 2006 Senate race that also were included in the plea deal. Boseman, who is running to become a district court judge, could not be reached.

Old said he requested and received agreement from Carter to go farther back than the two-year statute of limitations in the probe, which added the counts related to Basnight and Boseman donations.

The same pattern played out in donations to former Gov. Mike Easley, totaling more than $25,000, as well as to the Bush-Cheney campaign in 2004 and to Erskine Bowles' Senate campaign in 2002.

acurliss@newsobserver.com or 919-829-4840

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