Engineering firm under investigation

A criminal investigation is under way concerning a North Carolina engineering and surveying firm headed by a former state senator.

The State Board of Elections is looking into the pattern of campaign contributions to top elected officials in recent years, according to Larry Leake, the elections board chairman.

Leake said no documents gathered about the firm, Hobbs, Upchurch and Associates of Southern Pines, will be released while the probe is ongoing.

"The file is closed, and a criminal investigation is under way," Leake said.

The firm's lawyer, Michael Weisel, said no one from the firm would comment until the probe is completed.

Fred Hobbs, who leads the company along with David Upchurch, has previously acknowledged being contacted by elections officials. He has said the company is cooperating "fully and completely."

Hobbs was a Democratic state senator for one term in the mid-1990s and a delegate to the Democratic National Convention in 2004.

His firm's website has claimed that Hobbs, Upchurch helped secure millions of dollars in grants for various infrastructure projects across the state over the years. The firm says it has secured more than $100 million for its clients from several state-funded sources, such as the N.C. Rural Center, the Clean Water Management Trust Fund and the Golden LEAF foundation. Typical projects were for water, sewer and other types of infrastructure improvements.

Leaders of the state Republican Party have previously raised questions about the pattern of donations from employees of Hobbs, Upchurch.

Elections officials began an inquiry, and they now acknowledge it is a criminal investigation. Elections officials can decide to hold a public hearing as part of gathering evidence. They have the option to resolve the matter with a rebuke, fines, or by referring the case to a criminal prosecutor.

Republicans had also previously raised questions about the pattern of donations from a company owned by prominent Democratic fundraiser Rusty Carter of Wilmington. Carter was convicted as part of a plea deal in connection with funneling more than $175,000 in illegal campaign contributions to Gov. Bev Perdue, Senate leader Marc Basnight, and state Sen. Julia Boseman.

It is illegal for a corporation to donate to a candidate in North Carolina. It's also illegal for someone to give money through a third person, known as giving in the name of another. Carter did both, by giving his employees bonus money and directing them to give to candidates, according to his lawyer and prosecutors.

The Hobbs, Upchurch lawyer specifically declined to comment on the pattern of giving by the firm's employees and owners.

A review of state elections records shows that several Hobbs, Upchurch employees have given to candidates on the same days. In some instances, they all gave the maximum allowable contribution of $4,000 in an election period.

Records show that in late June 2007, Hobbs and Upchurch as well as a company engineer and a bookkeeper combined to give $10,000 to Perdue, a Democrat who was campaigning to become governor at the time.

On April 24, 2008, the firm's employees gave a combined $8,000 to Perdue and $24,000 to Basnight, who is in charge of the state Senate. Donations were all the maximum allowed and included contributions from a sales manager, a survey manager and the firm's corporate plane pilot.

On Oct. 22 and 23, 2008, the firm's employees gave maximum contributions totaling $20,000 to Basnight, while Hobbs contributed $4,000 to Perdue.