Gov.-elect Pat McCrory still employed by law firm that lobbies the state

Watchdogs: Gov.-elect creates potential conflicts of interest

jfrank@newsobserver.comDecember 4, 2012 

A month after his election, Gov.-elect Pat McCrory remains employed at a law firm that lobbies state government even as he establishes his administration and controls a $660,000 pot of taxpayer money.

The Republican said weeks ago he was in the process of cutting ties with Moore & Van Allen, the Charlotte firm where he serves as senior director of strategic initiatives, and two publicly traded corporations where he is a board member. But he has yet to resign from any of the posts.

A spokesman for the transition team offered no timetable for his departure but wrote in a statement that McCrory is working on it “leading up to his swearing in on January 5th.”

McCrory is selecting state agency leaders and using state tax dollars to cover the expense of his transition and inauguration. His dual role creates a potential conflict that makes government watchdogs uncomfortable.

“It would be good if he resigned from the corporate boards and took a leave from Moore & Van Allen if he is now doing the people’s business,” said Jane Pinsky, the director of the N.C. Coalition for Lobbying and Government Reform.

Bob Hall, the executive director at the left-leaning Democracy North Carolina, said as long as McCrory is getting paid by the law firm, he should be more transparent about his job. “He ought to disclose what he is doing for them at the least,” Hall said.

McCrory is the state’s first governor elected from the private sector since Democrat Jim Hunt won a third term in 1992, and his transition to the public sector raises questions that didn’t burden his predecessors, including whether he should put his assets in a blind trust.

Govs. Mike Easley and Bev Perdue, both Democrats, served as statewide elected officials when they won the state’s top post: Easley as attorney general and Perdue as lieutenant governor.

Hunt, however, was a lawyer at Poyner & Spruill when he was elected. Shortly after winning, he pledged to cut all ties to the firm and only keep an interest in his Wilson County cattle farm. But he did interview cabinet candidates at his law office and when he left his job is unclear, aides said.

Firm does lobbying work

McCrory’s job at a firm that does lobbying work – even though he is not a registered lobbyist – further complicates matters. Moore & Van Allen lobbyists represent outdoor advertising, technology and real estate interests with matters before the state, as well as the American Petroleum Institute, which is pushing to allow fracking in North Carolina.

McCrory also sits on the board of directors for two major North Carolina companies: Tree.com, an online lender based in Charlotte and parent company to LendingTree, and Kewaunee Scientific, which makes laboratory equipment and furniture in Statesville.

During the campaign, McCrory repeatedly refused to share information about his duties or salary at the law firm and McCrory & Company, a private sales company owned by his brother where he worked as a consultant.

But federal regulatory filings show the two corporations paid McCrory $154,000 in 2011, including stock options and health insurance, to sit on their boards.

A Nov. 27 press release from Kewaunee’s CEO William Shumaker noted that McCrory was elected governor and touted his tenure on the board. Shumaker said in the statement that McCrory would resign when he takes office in January.

McCrory’s ties to publicly traded firms – particularly ones with business in North Carolina – prompt questions about whether he should control his stock portfolio while serving as governor.

Other state governors

A number of governors in other states, including Republicans in Florida and Georgia last year, moved their investments into a fund controlled by an outside person without their consultation. It is also common practice for presidents and members of Congress.

“If a public official has the power to issue contracts, then he or she either shouldn’t have investments in companies that will be seeking government contracts or his or her assets should be in a blind trust so the public official won’t know if the actions he or she is taking as a public official will affect his or her own financial interests,” said Brett Kappel, an attorney with Arent Fox in Washington who consults with elected officials on the issue.

In his financial disclosure form, McCrory lists more than $10,000 in stock from Duke Energy, his former employer; Spectra, a Duke Energy subsidiary; Lending Tree; and Kewaunee.

“I would hope that he would follow the precedent and put his holdings in a blind trust,” said Pinsky, who advocates for more transparent ethics rules.

McCrory’s spokesman declined to discuss whether McCrory is considering a blind trust.

Frank: 919-829-4698

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