The campaign of Gov. Bev Perdue did not properly disclose a total of more than $56,000 in air travel during the 2004 and 2008 elections, even as the campaign had in place ways to track the travel, according to a new report and documents released on Friday by state elections investigators.
The report, which examined air travel by gubernatorial candidates in North Carolina over the past two campaigns, disclosed one additional unreported flight by Perdue, bringing to 42 the number of flights officials say she took in the 2004 and 2008 campaign cycles that were not disclosed as required on public reports.
The newly disclosed flight, valued at $8,900, was to a fundraiser in Michigan in September 2007 in which Perdue, a Democrat, raised $29,550 from insurance executives, lawyers and financiers.
A major basis of elections law is that campaigns properly disclose what money they take in and spend in the belief that transparency helps to inform voters.
The report describes several instances in which the Perdue campaign developed methods going back to 2005, and that were refined in 2007, to internally track air travel. Air travel is an increasing part of campaigning as candidates seek to move quickly around the state and beyond to meet with supporters.
But air travel didn't become a big issue until last year, when the campaign of former Gov. Mike Easley came under scrutiny. The elections board fined the Easley campaign $100,000, an amount that was tied to roughly $60,000 in unreported travel from McQueen Campbell, an Easley friend and supporter and the former chairman of the board of trustees at N.C. State University.
Perdue's campaign, as a result of internal auditing a year ago, began revealing unreported flights. It did so several times throughout the year and has said it is taking extraordinary efforts to comply with the letter and spirit of state law.
Expensive compliance
But it's also costly. Many of the people who foot the travel bill were also donors who had already given the maximum amount allowed under law, or were providing travel at values that exceeded allowable donation limits. That means the campaign should have paid for the travel and disclosed it to stay within the law. Donors who provide travel at costs under the $4,000-per-cycle limit can donate the value of the flights, but it still must be disclosed.
A spokesman for the Perdue campaign, Marc Farinella, said in an interview that there was no actual system in place to "adequately" monitor and track the flying of Perdue.
"The whole system was haphazard and insufficient and some fell through the cracks," he said.
He said many of the travel providers did not bill the campaign, which would have generated better tracking.
But in one instance, according to the report, a New Bern lawyer who is a friend of Perdue seems to have had trouble getting the campaign to engage on how to handle roughly $28,000 in travel he had provided. The report says that Trawick H. "Buzzy" Stubbs Jr. "stated on many occasions he had inquired about how his payments for the flights would be handled because he was aware that he had already contributed the maximum legal amount to the Perdue Committee."
Stubbs, who was a law partner for 25 years with Perdue's first husband, told interviewers that he talked to many people in the campaign, including Perdue's top two finance people, about how to handle the flights. The report says he was "told of a variety of ways the travel payments could be handled and that he often was not comfortable with the information that he was being provided."
Stubbs, who could not be reached, said in the report that he thought the finance people didn't care how the travel was paid. Documents show he provided flights in 2007 and early 2008.
He wrote a letter on Oct. 23, 2008, to the Perdue campaign and said he was going to list the travel as a donation to the state Democratic Party. But that would violate elections law, and the Perdue campaign's lawyer stopped it. Stubbs still was not paid after that.
Stubbs finally paid
As the Perdue campaign scoured its records over the past year, it eventually cut Stubbs' law firm a series of checks in May, June and November last year, records show.
Previously, the Perdue campaign had said that a change in computer software helped identify the problems and there were a variety of reasons why so many flights were not disclosed as required.
The new report offers more detail.
"The Perdue Committee has provided several reasons as to why flights were not timely disclosed, including: the fast paced nature of the campaign; lack of staff when the campaign was over; and constant turnover of staff. One reason expressed ... was that the campaign had no process in place to track and disclose information regarding flights," says the report, which was written by longtime elections investigator Kim Strach.
Still, the reports says, "[b]ased on the documentation provided by the Perdue Committee and interviews that have been conducted, the committee did have a process in place to obtain information on all flights and calculate the costs of the flight if no invoice was received for the flight. Based on documents produced, the Perdue Committee used a form for capturing data related to flights as early as 2005."
Republicans seized on the information Friday, saying it's clear that the Perdue campaign "knowingly and willfully" evaded disclosure laws. State Republican Party chairman Tom Fetzer said that there were at least two reports filed after Stubbs made his efforts to get paid, yet there was no proper disclosure.
But state elections director Gary Bartlett, in a memo to the five-member State Board of Elections, wrote that he saw no evidence "indicating any intent of wrongdoing."
"It is my belief that other than for an intense educational effort as to air travel, it is time for us to move forward," he wrote.
In an interview, Bartlett acknowledged that he doesn't decide the outcome, but said he wants to encourage disclosure by campaigns while not "barbecuing" them.
"It's the role of the state board to decide, if it's egregious enough, what to do," Bartlett said.
Perdue's spokesman said the campaign accepts responsibility for the mistakes and has tried to be aggressive about fixing them and reimbursing flyers. Asked whether the campaign would accept a civil fine or other punitive measures, he said "we'll leave it to others to judge."
"We will abide by whatever the state Board of Elections decides," he said.
The board, made up of three Democrats and two Republicans, could take up the report next month. It could request more information, issue rebukes, levy fines or take no action.
Fetzer's criticism
Fetzer also questioned the board's probe. Documents show that Strach, who has led many of the board's investigations in recent years, was not in on many key interviews or was accompanied by elections chairman Larry Leake of Mars Hill. In addition, it does not appear that Zach Ambrose, the chief of staff and campaign director for Perdue, was interviewed.
Moreover, Leake, who has been elections chairman since 1997, will ultimately have to decide on any possible penalties, and should not have participated in interviews, Fetzer said.
Fetzer said he intends to hold a news conference on Monday, possibly at the board's offices, to highlight his ongoing request for an independent review of the matter.
Leake couldn't be reached.
The board's probe arose out of the Easley matter. The two major parties filed complaints against each other, and officials said they would inquire of all recent campaigns.
The new report detailed problems with others, too, but not to the same scale as Perdue.
Among them, the report says:
Former state treasurer Richard Moore, a Democrat, has destroyed all of his campaign's documents in violation of the state's campaign finance guidelines. "No records should have been destroyed until January 2011," the report says.
Former Republican candidate for governor Fred Smith did not properly account for use of a plane he owned and traveled on during the 2008 campaign. According to an affidavit from Smith's lawyer, Smith thought he had been advised by the state Board of Elections that it could "be treated like the candidate's vehicle." But the report says that's not the case, and that all expenses should have been disclosed.
Former Republican candidate Pat McCrory didn't properly disclose two helicopter flights he took in the final days of the 2008 campaign. They were paid in February 2010.
