Black caucus feels heat over scholarships

The Legislative Black Caucus is a force at the General Assembly.

It is a steady and sometimes effective advocate for causes, such as raising the minimum wage and funding historically black colleges, that at times face long odds. It can be a powerful voting bloc, particularly in the state House. Its members hold leadership positions on important legislative committees.

But this week, the caucus has faced more questions about its nonprofit foundation than about votes or legislative work. The foundation collects donations from politicians, political committees and corporations to pay for college scholarships and an annual dinner and education conference. At issue is the disclosure that relatives of five members of the caucus, all Democratic House members, received scholarships from the foundation in 2005 and 2006.

Some caucus members have defended the practice, with some wondering aloud why anyone would be troubled by it.

But government watchdogs criticized the scholarship awards. At least one caucus member, Sen. Charlie Dannelly, a Charlotte Democrat, questioned the appearance of recommending relatives for scholarships.

"It may not necessarily look good for a relative to get it, particularly a close relative," he said.

What troubles the watchdogs is that it is not readily apparent who has been footing the foundation's bills. The foundation's tax forms, in accordance with federal law, don't have to list details on donors.

As a result, corporate and individual donations to the foundation are not readily available. But public reports from political committees show that a range of Democratic politicians, including Gov. Mike Easley, have contributed from their campaign funds. Former House Speaker Jim Black, a Mecklenburg County Democrat, contributed $5,500 between 1995 and 2005.

Corporate gifts

Contributions came from companies such as Eli Lilly, which has contributed $2,500 from its political committee since 2002, and $3,500 from its corporate grant office in 2006. Blue Cross and Blue Shield of North Carolina made corporate contributions of $800 each year for the last two years, according to Lew Borman, a company spokesman.

The caucus foundation has taken money from the state Realtors PAC, state beer and wine wholesalers and the video poker industry, whose political committee gave $3,800 in 2005, $800 of that for a display table at the annual conference.

"They've supported us over the years and so we've supported them," said Fred Ayers, a Greensboro vending company owner.

Ayers said he did not know that some of the nonprofit's money went to college scholarships for relatives of five House members.

"That sure seems to be getting close to crossing a line," he said.

Caucus members haven't been shy about asking for contributions. A fundraising letter from a few years ago described a general contribution range from $50 to $400, and included a solicitation for an individual or corporation willing to pay $25,000 to underwrite a cabaret and reception.

Durwood Laughinghouse, a lobbyist for Norfolk Southern Corp., has contributed for years because he wanted to give to the scholarship fund and liked going to the conference. Laughinghouse gave money before he started working for the railroad. In the last few years, the corporation's foundation has given $800 a year, Laughinghouse said, the minimum to buy a banquet table.

Laughinghouse said he never felt pressured to give or that he was buying members' good will.

"I've always been welcome in their offices," he said.

The Legislative Black Caucus was formally organized in 1983, said Rep. Dan Blue of Raleigh, who was chairman from 1985 to 1989. He says the caucus secured funding for construction at the state's historically black universities and created minority economic-development initiatives in the late 1980s.