A Wake County grand jury Monday handed down indictments alleging that a top aide to Gov. Bev Perdue's 2008 campaign schemed to pay a staff member $32,000 for work that was kept off the books in violation of state election laws.
Peter Reichard, 54, a Greensboro businessman who served as the Perdue campaign's finance director, was charged with obstruction of justice. The former campaign staffer and a campaign donor were also charged.
The new charges, all felonies, are part of a long-running investigation into Perdue campaign activities. The probe has focused on expenditures that would have triggered election law violations for exceeding the limit on personal donations if they had been reported. Earlier this year a retired state magistrate was charged with obstruction of justice for allegedly trying to hide an illegal campaign flight.
Wake County District Attorney Colon Willoughby said that Perdue, a former lieutenant governor and state lawmaker, is not a target of the probe. Still, Monday's indictment reached into the campaign's inner circle and opened up a new area of inquiry with the unreported pay.
"The conduct of the governor has not been an issue, nor any other elected official," Willoughby said. "She cooperated in the investigation, was interviewed, we asked her not to talk about the facts of the case. We thought it might be inappropriate, and there might be additional charges."
The indictments come at a difficult time for Perdue, a New Bern Democrat who is up for re-election next year and has struggled in polls during tough economic times. State Republican Party Chairman Robin Hayes was quick to link Perdue with her predecessor as governor, Mike Easley, a Southport Democrat who was fined last year on a felony election law conviction related to an unreported campaign flight.
Reichard a key Democrat
Reichard has been a key player in the gubernatorial campaigns of Perdue and Easley. Reichard served as Easley's finance director for his 2000 gubernatorial campaign.
Reichard's attorney, Hart Miles, said in a statement that his client was disappointed to learn of the indictments. Miles urged the public to withhold judgment until all the facts are known.
"We are prepared to go to trial if necessary," Miles said. "But, Peter's goal is to work in good faith with the District Attorney to see if this case can be resolved without a lengthy and costly trial. Peter is a man who accepts responsibility for his actions."
The indictment against him said his business, Tryon Capital Ventures, received $32,000 in contributions or loans from Charles Michael Fulenwider, a Perdue contributor from Morganton who owns fast-food restaurants, and who had arranged several campaign flights for Perdue. Reichard used the $32,000, disguised as consulting services, to compensate Julia Leigh Sitton, who later became the director of the governor's western office in Asheville. She is also known as Juleigh Sitton.
Sitton, 49, the daughter of a retired superior court judge, was charged with obstruction of justice and causing the Perdue campaign to file false reports. She resigned from the director's position in August and had been making $50,000 a year. She is a Morganton attorney who has long been active in Democratic political campaigns. Perdue campaign finance records show Sitton was reimbursed for roughly $4,500 in campaign expenses in the 2008.
Sitton and Fulenwider could not be reached.
Trawick "Buzzy" Stubbs, 69, a New Bern attorney who was a longtime law partner with Perdue's first husband, was charged with obstruction of justice and causing the filing of false campaign reports.
The indictments say Stubbs caused the Perdue campaign to file false reports that did not disclose roughly $28,000 in campaign flights. Stubbs reported the flights as expenditures to the N.C. Democratic Party, when he knew that the flights benefited Perdue, the indictment said.
The unreported flights first turned up in a State Board of Elections investigation last year. Election laws prohibit giving more than $4,000 in cash or services to a candidate in one election cycle.
Stubbs provided flights
The elections board's investigation found that Stubbs wanted the travel he provided to be handled properly, but told investigators that he couldn't get the campaign to focus. One elections board report said Stubbs 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 said in a statement that he has cooperated "fully and voluntarily" with the state investigation and was saddened to learn of the indictments.
"It was never my intent to violate any law and I intend to plead not guilty," Stubbs said.
The Perdue campaign was required to pay a $30,000 fine and return more than $20,000 in illegal campaign donations after election board probes.
Perdue issued a statement saying her campaign has cooperated fully with the investigation, but she would not comment on the charges. She said the investigation confirms that she "as a citizen, a candidate for public office, and an elected official" has "strived to follow the rules and laws."
Responding to the indictments, state Rep. Bill Faison, an Efland Democrat with eyes on a higher office, questioned whether Perdue should represent the party at the top of the 2012 ticket. "I don't know that she does," he said. "And at this point she hasn't announced if she is going to run again. ... She doesn't seem to be acting like somebody who should be running for governor."
State Rep. David Lewis, the Republican chairman of the House elections committee, expressed concern about the complexity of the laws governing campaign-finance law.
"I know the political thing for me to do is the lash out at the governor," he said. "I think we need to get a clearer understanding of what is and isn't a contribution.
Lewis said the answer is not "a whole new slew of laws" but suggested additional guidelines are needed to help candidates and "further ensure the integrity of elections."
Willoughby did not know when Reichard, Sitton or Stubbs would be required to appear in court. The earlier charge against the retired magistrate, Robert Lee Caldwell of Morganton, has not been resolved.
Federal investigators were also looking into the Perdue campaign, but there has been little public activity from them since Willoughby confirmed their involvement last year.
Staff writers Craig Jarvis and John Frank and news researcher David Raynor contributed.