Ethics talk was tougher than plan

Gov. Bev Perdue's proposals for lawmakers omit measures that she had pushed before.

Staff WriterMay 9, 2010 

  • Ethics and legal questions have been in the news for the past year, leading to efforts to strengthen standards.

    Former Gov. Mike Easley was fined by elections regulators, and his case was referred to a prosecutor on evidence he might have committed crimes while in office. But he hasn't paid up. Part of the controversy surrounding Easley, a two-term governor, involves appointments of key money raisers to important positions in state government, his own use of state planes and helicopters for trips to a home he owned in Southport, and land deals and gifts he received.

    A top aide to Easley, Ruffin Poole, was charged with 57 corruption-related counts, and he pleaded guilty to a single tax-evasion charge. Poole was instrumental in raising money, some through the state Democratic Party, while he also had a big hand in who won coveted appointments to powerful state boards.

    A major Democratic fundraiser, Rusty Carter, was convicted last week on charges of illegally funneling $176,000 to the campaigns of Gov. Bev Perdue, Senate leader Marc Basnight and state Sen. Julia Boseman. Carter used company money to pay employees to make contributions to designated candidates, which violated the law.

  • While she backed away from a number of ideas, Gov. Bev Perdue this year has advocated several changes in how state government operates. Her plan includes:

    Prohibit contractors who do business with the state from giving contributions to officials who oversee the awarding of contracts.

    Adopt a one-year cooling-off period to keep high-level state employees from going to work for a company or industry they formerly regulated. (High-level state employees would also have a one-year wait to become lobbyists.)

    Require the removal of any board or commission member, or other state appointee, who is under a felony indictment or who refuses to cooperate with investigators.

    Mandate that appointees attend 75 percent of meetings and abide by a ban on gifts and conflict-of-interest standards.

    Secure power for the governor to remove any of her appointees at will, without cause.

    Extend a ban on gifts to employees in her administration to all of state government.

    Require state employees convicted of corruption to forfeit their pensions.

    Allow ethics disclosure forms to be filed electronically, and require state officials to file those forms to cover their last year in office.

    Force disclosure of any gift to a public servant that is worth more than $200 and any gift worth more than $100 from anyone who does business with the state.

    Perdue has also signaled support for other changes in response to news in recent weeks:

    Relax the personnel law to make more information available about the actions of state employees.

    Strip out privacy provisions that keep lobbying law violations secret.

    Make it a felony to give illegal campaign contributions.

  • J . Andrew Curliss has covered state and local politics for The News & Observer for the past decade. He was among six finalists for the 2010 Goldsmith Prize for Investigative Reporting for "Executive Privilege: The Perks of Power," a series of articles about the legal and ethical problems surrounding former Gov. Mike Easley and top administrators at N.C. State University.

    Mark Johnson has covered state government for The Charlotte Observer for 10 years. He has been a member of the joint News & Observer/Charlotte Observer Capitol Bureau for two years.

Gov. Bev Perdue has traveled the state this year, telling people she will push for tough ethics standards and crack down on corruption to try and restore sagging confidence in state government.

"Each of us here and across North Carolina," the governor said at one stop, "must grab the opportunity to be a part of reform and change. ... It will be the drumbeat driving everything I do."

But Perdue, a Democrat, is not pursuing reforms that she has advocated in the past. Nor is she backing other ideas that have broad support within her own party and that reformers say are necessary and could be dealt with now as lawmakers return to Raleigh on Wednesday to launch this year's legislative session.

Documents and memos from Perdue's office show the governor had considered a more ambitious plan than the one she is now supporting publicly. One draft document, a planned news release, quotes her as saying she would shock the old political establishment by ending "smoke-filled rooms" and "pay-to-play" politics.

When her plan was rolled out last month, it was praised by many. But it was still cast as a first step in an ongoing effort to make change, and it did not include a number of ideas to change the influence of money on elections or put more sunshine on it.

Perdue has not included in her current agenda an idea to set limits on the amount of money that political parties can dole out to candidates, for example. She had supported those limits while campaigning.

Twenty-nine states curb party donations as a way of spreading out the sources of money in elections and limiting the influence of big-money donors. In North Carolina, the political parties can receive an unlimited amount from a person and can provide an unlimited amount to candidates. Individual donors are subject to a maximum contribution of $4,000 for a candidate in an election.

Bob Hall of Democracy North Carolina, a longtime campaign-finance watchdog group, said elected officials must tackle "the very flow of money itself" if they are serious about change.

Other proposals rejected by Perdue:

Allowing state investigative grand juries, a request backed by Attorney General Roy Cooper, also a Democrat. The grand juries are seen as a way to enable state prosecutors to investigate public corruption and not leave that work to federal authorities.

Holding politicians financially responsible for their campaign's misdeeds, a change sought unanimously by the State Board of Elections, whose members Perdue appoints after getting a recommendation from the state political parties. Former Gov. Mike Easley's campaign, for example, was fined $100,000 last year but is broke.

Forcing more disclosures by political fundraisers who are appointed to major boards and commissions, an idea that passed the state House last year 115-0.

Making it easier for the public to see who is using state-owned aircraft and where the planes are going by posting the information online.

Prohibiting legislators and top elected officials from soliciting contributions for their favorite nonprofits from lobbyists, a practice that critics say gets around a ban on meals and travel and allows lobbyists to curry favor. Perdue was outspoken against the practice while campaigning.

In a brief interview, Perdue did not specifically explain why she is pushing for some ideas but not others.

She said this year amounts to a "second round" of change that builds on executive orders she has already issued - and she said at least "two or three more waves" of reform will follow.

"Obviously we'll come back in January with another round of ethics reforms when there's more time for new ideas and more comprehensive debates," Perdue said. "Just because it's not in this package does not exclude it from the next package."

Reformers say they've heard that before.

"Last year, they also said they ran out of time and would take things up this year," said Jane Pinsky, who leads a bipartisan coalition of interest groups and people who want ethics changes. "The fact is, some are afraid of opening a can of worms. It's a thorny issue, and a lot of the legislators want to pass a budget and go home and campaign."

A string of scandals

The push for cleaning up government now comes after a series of controversies that have captured a big part of the state's political attention in the past six months. Easley is under investigation by federal authorities. His former chief aide, Ruffin Poole, has pleaded guilty to tax evasion. Fundraiser Rusty Carter was convicted on charges he gave illegal campaign contributions to Perdue and Senate leader Marc Basnight.

In a speech in Greensboro, Perdue stressed the importance of change.

"I don't have to give any examples. I don't have to call any names," she said. "We're all fed up with the dishonesty. We're angry about the back-room dealing. We're tired of business as usual. It's got to stop."

The fate of all the reform ideas is uncertain, and not entirely in Perdue's hands because many require legislative action. The state House passed some legislation last year, but it did not advance in the Senate. Senators say they will take those bills up this year but make no promises about the outcome. Both chambers could roll out more ideas in the next month or two.

But leading lawmakers, all of whom are up for election later this year, acknowledge they are not as focused on ethics as Perdue is. They say creating jobs and solving a budget crisis are far moreimportant.

Perdue said in the interview that she will have "skin in the game" and wants true changes made.

Options put on hold

Still, her policy advisers outlined a number of options for her to pursue this year, even specifying instances where she had already taken public positions in favor of changes. But she didn't back them. They also warned her of "backlash" and "skepticism" of her plan if she didn't take on some campaign-finance reforms.

One idea not in her plan would force more openness and disclosure about the fundraising activities of appointees, a proposal that unanimously passed the House last year. The bill would require appointees to major boards and commissions to disclose the extent of their receiving or forwarding campaign money.

Reform advocates say it would shed more light on a "pay-to-play" culture that has enveloped Raleigh over the past decade as the chase for money to finance costly campaigns has shot up.

More disclosure from more appointees would seem to strengthen a similar requirement already in place for members of the state Board of Transportation, the result of a late 1990s scandal that brought changes.

Asked why she wasn't backing it, Perdue looked at two staffers.

"Didn't we do that?" Perdue asked.

They told her it was put off until next year's long session of the legislature.

"Nothing [is] off the table," the governor then said. "I'm very eager to do more ethics by executive order between now and the long session and to do the ground work to pass things after the short session ends."

About those grand juries

Documents indicate that many ideas were still under review by the governor into late February, when Perdue met with Basnight and House Speaker Joe Hackney.

An e-mail message on the day of the meeting from Mike Arnold, a policy adviser to Perdue, sought to delay a planned internal staff meeting on ethics. "I really want to ... understand what the gov, basnight, and hackney decided ... our conversation may be moot at this point," Arnold wrote to communications director Pearse Edwards.

The state budget dominated the leaders' meeting, according to people who were there, but government reforms apparently came up, too.

"I remember that we did talk about it," Basnight said. "I can't recall now the specifics. That was some months ago. I'm focused on the unemployment numbers."

Hackney said he couldn't remember the discussion.

By mid-March, according to an internal administration memo, Perdue had all but settled on her reform package, which excluded more than two dozen ideas.

One was investigative grand juries. A spokeswoman for Attorney General Roy Cooper said that Cooper has been pressing the governor in private discussions to push for granting district attorneys authority to convene grand juries to investigate public corruption. He first sought the power in 2006, and other attorneys general before him have made similar requests.

State grand juries now are limited to hearing evidence gathered by government officials. Investigative grand juries have broader scope and can subpoena witnesses who testify in secret under penalty of perjury.

Cooper says giving investigators "the strongest possible tools to uncover the truth will assure everyone that public corruption will be rooted out and prosecuted."

The request highlights a difference in how the state and federal governments have probed wrongdoing in recent years. The state has played a supporting role as federal prosecutors convened grand juries, subpoenaed witnesses under oath and ultimately obtained convictions of state officials on bribery, fraud and other crimes.

Lying to an FBI agent is a crime. There is no such penalty for lying to an SBI agent.

The state-level public corruption grand jury idea was on a list of proposals Perdue considered. In the margin next to it, the governor wrote one word: "no."

Cooper's spokeswoman, Noelle Talley, said efforts have been met with strong, bipartisan opposition. Lawmakers fear politically motivated investigations and prosecutions.

One idea that wasn't on any list but is suddenly getting support is to make it a felony for a donor to give an illegal campaign donation.

Last week, Democratic fundraiser Rusty Carter of Wilmington was convicted on misdemeanor charges of illegally funneling $176,000 to the campaigns of Perdue, Basnight and state Sen. Julia Boseman.

The prosecutor who handled the case, a former judge, said he was surprised at the light penalty. Within a day, both Perdue and Basnight said that type of wrongdoing should be a felony and carry harsher penalties than the $5,000 fine imposed on Carter.

Perdue said she's angry that one of her donors broke laws and will push for a stiffer penalty.

But Basnight and Hackney said they couldn't promise that anything would change this year.

acurliss@newsobserver.com or 919-829-4840

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