Board seeks criminal investigation of Easley

Members of the State Board of Elections spoke in a unanimous voice Friday: Mike Easley should be investigated on suspicion of committing crimes while he was governor of North Carolina.

They imposed a $100,000 penalty against his campaign organization, saying the Mike Easley Committee broke laws when Easley took free flights and failed to disclose them.

They also said Easley's campaign illegally solicited $9,000 in donations for the state Democratic Party, while promising that the money would be funneled back to Easley's committee. The party is forfeiting that money.

Board members said new laws are needed to hold candidates responsible for their campaigns and expressed frustration that Easley's campaign is likely out of money and won't pay.

Reaction from all sides credited the board for putting campaigns and candidates on notice.

"It's a sad day when evidence justifies referring a governor for criminal investigation," said Bob Hall of Democracy North Carolina, a campaign watchdog group that filed a complaint about the state party. "But it's in the best interest of the public and of the thousands of candidates who are acting properly."

State Republican Chairman Tom Fetzer: "No one should take satisfaction in this embarrassing spectacle, the net effect of which has been to reduce and diminish the citizens' confidence in their government."

In asking a prosecutor to take up the case, the board's three Democrats and two Republicans singled out Easley and said that testimony over four days this week brought to light evidence of crimes.

The board's referral covers anyone who possibly broke laws in the case. The board did not specify which laws it thinks could have been broken.

Easley, a two-term Democratic governor, denies wrongdoing, and his lawyer said he welcomed more review by authorities, an acknowledgment that state and federal agents are already probing controversies that have stained his record.

The board watched and listened to Easley under oath this week for five hours. They asked about a free car, the free flights, campaign money and repairs to his house that he didn't pay for.

Easley gave answers on a range of subjects that differed significantly from the answers of others. He said he had little involvement with his own campaign.

The home repairs

Much of the contradictory testimony concerns home repairs that McQueen Campbell, the former chairman of the N.C. State Board of Trustees, oversaw on behalf of Easley in late 2004 and the middle of 2005. Campbell said he paid more than $10,000 for the repairs.

Campbell, a pilot and longtime friend of Easley's, outlined a scheme in which Easley didn't pay him from personal accounts.

Campbell said he understood a conversation with Easley to mean that he should bill $11,077.50 for repairs to the campaign, but file bogus invoices listing the payment as for travel.

Easley also accepted a $5,451 check on an insurance claim made against the repairs that Campbell paid for.

Easley contended that he thought Campbell was billing for reimbursement from a real estate management company that handled rental details on his home at East Lake Drive in Raleigh.

Easley said he thought the bogus invoices from Campbell were for past travel in the first case and future travel in the second.

Would have been legal

At the time, it would have been legal for Easley to have his campaign pay for the repairs. But submitting a false report would be illegal.

Elections director Larry Leake said he would not comment in detail on Easley's testimony.

"The only proper response to make is that the board referred the case to the district attorney -- and that would be suggestive of something," said Leake, a Democrat from Mars Hill.

Board member Anita Earls, a Democrat, said she had difficulty reconciling Easley's testimony with that of others, especially Campbell, his longtime friend.

"I could not conclude that this was a misunderstanding, a miscommunication," said Earls, who is on a short list for a federal judgeship in the middle part of the state.

She said there was evidence that Campbell told the truth. "My vote speaks to that, and that the board unanimously came to a conclusion, speaks to that," she said.

Board members said that, by law, they could not automatically honor Easley's surprising request Thursday to refer the case. They had to decide on their own that there was evidence of crimes.

Easley's lawyer, Thomas Hicks, said that he believes prosecutors will look just as strongly at the actions and behaviors of Campbell.

"For justice to be done appropriately, this matter needs to be completely reviewed by the agencies that have the resources to do it," he said.

Perks and freebies

Federal agents have been looking into a range of perks Easley accepted, as well as government action that in some cases appears connected. They include a $137,000 discount on a lot Easley bought in a coastal development; Campbell was involved in the deal and claimed in writing to have received faster permits from the Easley administration because of political contacts.

Reports in The News & Observer this spring about a free car Easley's son was driving and then Easley's secret flights prompted the elections board to open an investigation, officials said. At the time of an interview with The N&O and afterward, Campbell refused to provide invoices or other proof for why he got the $11,000 from the Easley campaign.

The board's five-month probe then turned up the allegation that they were actually for home repairs.

By the middle of the hearing, Easley and his campaign had all but conceded that the free flights were not properly handled. The campaign has cut checks that it says cover a portion of those. And the penalty leveled against Easley included $60,000 for the value of the remaining undisclosed flights and a $40,000 fine to pay for the investigation.

The state case now will be handled by a special prosecutor, William D. Kenerly, a Republican who is the elected district attorney in Rowan County. Kenerly said he has not donated to Easley's campaigns and his only knowledge of the case is from newspaper accounts.

Wake County District Attorney Colon Willoughby stepped aside because of a longtime friendship with Easley.

Staff writer Joseph Neff contributed to this report.

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