NC Court of Appeals sends case against lobbyist back to trial court

ablythe@newsobserver.comApril 2, 2013 

— Don Beason, once recognized as one of the state’s most influential lobbyists, continues his fight against paying one of the highest fines ever levied against a North Carolina lobbyist.

On Tuesday, the state Court of Appeals issued a ruling that sends part of his protracted legal case back to Wake County Superior Court.

The ruling is the first reported decision interpreting the Ethics in Government legislation, a law that was adopted nearly seven years ago.

The case is rooted in allegations that arose several months before Beason decided to take a hiatus from the lobbying profession in 2007.

Beason had a scarred reputation after it was revealed he had provided a $500,000 interest-free loan to Jim Black, the former state House speaker and a Democrat who went to prison on a public corruption charge.

In 2010, the Secretary of State, Elaine Marshall, hit Beason with a record-setting $110,000 fine, accusing him of failing to disclose clients, a violation of state laws.

According to Marshall’s office, Sigma Corp., a New Jersey pipe-fitting company with a warehouse in Hamlet, received money from four other companies and a trade association in India that eventually was funneled to Beason.

The goal was to repeal the state’s “Buy America Act,” which prohibited the state Department of Transportation from using foreign steel and iron.

State lobbying laws require that lobbyists disclose their clients, but only the New Jersey company showed up on Beason’s list.

Beason has stated that he was unaware the other companies had chipped in to pay him and has fought the fine.

An administrative law judge reduced the fine to $6,000, but Marshall bumped it back up to $30,000.

Then Wake County Superior Court Judge Paul Ridgeway threw out the case, saying North Carolina’s 2007 lobbying reform law was ambiguous and that the Secretary of State had overreached in fining him.

Ridgeway noted a peculiarity of the lobbying law: The law gave the state Ethics Commission the authority to interpret the act, and the Secretary of State the power to administer it. The Ethics Commission has not heard any cases since it was formed, Beason’s attorney said.

Because of that, Ridgeway ruled, the Secretary of State overstepped her authority.

The state attorney general appealed that decision, arguing that the Superior Court had overstepped its bounds.

The three-judge Court of Appeals panel touched on that in their three-pronged ruling on Tuesday.

The Secretary of State’s office, the three-judge panel ruled, “… had no authority to interpret the statutes it was charged with administering.”

“It’s a pretty extraordinary thing to say what you did was absolutely without authority,” said Jack Nichols, the Raleigh attorney representing Beason and his son, Mark, who worked for his father and was also implicated in the case.

The appeals court also determined that the statutes were penal in nature and needed to leave no ambiguity in their construction.

The law, according to the appeals court panel, included no definitions of “coordinated efforts” or “acting in concert,” though the Secretary of State’s accusations included such allegations. The Secretary of State, according to the ruling, “… had impermissibly expanded the definition of lobbying.”

The appeals court judges decided that Ridgeway was within his bounds to decide whether the activities that Beason was accused of engaging in constituted lobbying.

Mark Beason seemed to be unaware of the activities at the time, the appeals court panel ruled, and therefore any allegations against him should be dismissed.

Don Beason is currently registered as a lobbyist for G2 Communications.

The state attorney general could ask the state Supreme Court to review the appeals court ruling. If not, the case against Don Beason could be scheduled to be heard in Wake County Superior Court in several months.

Blythe: 919-836-4948

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