Ethics panel, auditor at odds

Judge is asked to curb inquiry

The State Ethics Commission is asking a Superior Court judge to prevent state Auditor Les Merritt from investigating a claim of preferential treatment for Lt. Gov. Beverly Perdue, the Democratic nominee for governor, that ultimately may have led to a commission staffer's firing.

The suit claims that Merritt's office has a conflict of interest because its investigations chief, Frank Perry, left the ethics commission a year ago. The suit also claims that Merritt, a Republican seeking re-election, "denigrated" the commission in an hourlong interview with radio station WPTF.

It may also be the first time the Office of State Auditor has been sued by another state agency.

"The commission welcomes an independent and impartial investigation by an appropriate entity that is free from actual and/or perceived conflicts of interest," the suit said.

Merritt's office released a statement contending that the commission is trying to keep the matter out of the public eye.

"The State Auditor's office believes that it is truly unfortunate that Commission staff filed suit instead of working with auditors to resolve hot-line complaints and public reports of abuse of power (favoritism), possible evidence tampering and the possible retaliatory firing of an employee," the statement said.

The auditor began investigating the commission after receiving a tip in the fall of 2007 that Will Polk, Perdue's general counsel, visited the office and was allowed to look at her financial disclosure statements alone in a closed office. Ethics commission officials said visitors typically review the files in an open conference room, at times with a staffer observing. The conference room was in use when Polk visited.

Penalties possible

The financial disclosure statements are intended to inform the public about possible and potential conflicts of interest that public officials may face. Recent scandals in state government led to a new ethics law that requires public officials to disclose their financial interests, and the officials can face criminal penalties for lying or providing misleading information on their statements.

In July, The News & Observer inquired about Polk's visit and learned that a staffer, Amanda Thaxton, had made a notation about Polk's closed-door review in an electronic visitor's log. That notation had been removed by Kathleen Edwards, an assistant commission director, who said it didn't belong in the log.

Abrupt firing

Hours after The N&O's initial inquiry about the log, commission Executive Director Perry Newson fired Thaxton. She said she was given no explanation for the firing and thinks it was in part retaliation for making the notation. She also thinks she was fired for cooperating with an Office of State Personnel review of the commission's work environment. The review found the environment dysfunctional and distrustful.

Newson has said Thaxton was not fired in retaliation, but he has not explained why she left, saying it is a personnel matter that is considered private under state law. The law allows an exception for agency heads to make personnel matters public when the agency's integrity is in question.

Thaxton has contested her firing in a filing before the state Office of Administrative Hearings.

Kris Bailey, the deputy state auditor leading the investigation, said that Perry has recused himself from the case and that the commission is misrepresenting Merritt's radio interview.