Progress NC Action files ethics complaint against McCrory

A liberal political organization asked the State Ethics Commission on Monday to investigate what it claims is a pattern by Gov. Pat McCrory of failing to fully disclose his financial interests.

Progress N.C. Action filed a 50-page complaint with nearly 400 pages of exhibits attached. The complaint focuses on three issues related to how the governor has filled out required statements of economic interest, two of which relate to stock holdings in Duke Energy and Tree.com that have been previously reported by the news media.

The group acknowledged it could not say that McCrory or his former business interests benefited in any way from how he handled the financial disclosures. Gerrick Brenner, executive director of the advocacy group, said taken together the issues raise suspicions.

“If this was just one example of one discrepancy or one omission you could give someone the benefit of the doubt,” Brenner said. “This is not one discrepancy. This is not one omission. This is a very strange, suspicious pattern, and the Ethics Commission should investigate.”

The governor and his office dismissed the allegations as politically motivated. McCrory said he would not discuss them in detail because he has already defended himself.

The new allegation concerns the Republican governor’s connection to McCrory & Company, a Charlotte-based sales consulting firm founded by the governor’s brother, Phil McCrory.

The complaint highlights that the governor has been listed in federal filings and on the consulting company’s website as a “partner” with the company, though he describes himself in lesser terms, as a consultant or contractor, in the required state ethics disclosures.

The ethics forms are designed to expose possible and actual conflicts of interests so that public officials can take steps to avoid them.

In one section of the required forms, officials must disclose if they have a financial interest valued at $10,000 or more in any nonpublic company or similar entity, such as a limited liability corporation or partnership. If they do, officials must also disclose if those companies or entities have contracts or business dealings with the state.

McCrory said he had no such stakes in a company or entity in forms filed in 2008, 2012, 2013 and 2014.

The complaint alleges that by not disclosing he was a partner, it did not allow regulators to fully examine the governor’s relationships and McCrory & Company clients for possible conflicts.

In a separate section of the forms, McCrory did list McCrory & Company as a source of income. He disclosed receiving commissions or fees of more than $5,000, noting in one filing that he was paid for “sales training” in 2012. He has described the income from McCrory & Company as a “consultant fee” or commission income.

The complaint says McCrory & Company had clients that also do state government business, based on current and archived versions of the firm’s website.

An archived version of the company’s website described McCrory as “partner” who had helped clients target public work.

“Pat has been instrumental in helping clients understand the unique complexities, as well as with the ‘situational fluency’ that are necessary to successfully sell to the public sector,” the company said after McCrory was elected governor.

Speaking during a news conference Monday to announcethe state’s deal to sell the Dorothea Dix property to Raleigh, McCrory said he hadn’t read the complaint and wouldn’t go into its accusations, preferring to stand on previous comments related to Duke Energy and Tree.com stock that he had not acted wrongly.

But the governor did address the question of whether he was a partner or not at his brother’s company.

He said he was a paid staff member at McCrory & Company until taking office.

Later Monday, the governor’s chief legal counsel, Bob Stephens, released a statement saying the governor has never had legal standing as a partner with the firm. Stephens called the complaint “political theater.”

“The governor is being attacked for work and compensation he earned prior to entering office,” Stephens said. “There are no facts to support the accusations made in this complaint.”

Stephens said the term partner was a “working title.”

The Progress N.C. Action complaint was filed the same day as a national non-partisan watchdog group, Citizens for Responsibility and Ethics in Washington, filed a complaint with the U.S. House Ethics Committee against U.S. Rep. Mark Sanford of South Carolina. The Associated Press first reported last month that McCrory and Sanford were granted restricted stock shares while at Tree.com.

This story was originally published January 12, 2015 at 11:44 AM with the headline "Progress NC Action files ethics complaint against McCrory."