State records show that former House Speaker Richard Morgan took $465,000 in campaign money for personal use over the course of his legislative career, nearly all after he left the House in January.

Morgan's latest campaign finance report shows that he received more than $356,000 from his campaign, money raised from contributors while he was one of the House's most powerful members. A review of his reports going back to 1990 shows that Morgan also collected $109,000 in interest by charging his campaign above-market interest rates for loans that he made to his campaign.

State officials say none of Morgan's actions with his campaign money were illegal.

Efforts to reach Morgan, an insurance broker and cattle farmer from Moore County, were unsuccessful. His campaign treasurer, Donna Haywood, also could not be reached.

Morgan lost in the 2006 Republican primary, ending a 16-year run in the legislature. He raised much of his campaign money while he was chairman of the powerful House Rules Committee from 1995 to 1999 and then while he was co-speaker with Democrat Jim Black in 2003 and 2004.

A campaign finance watchdog called Morgan's conversion of campaign money for personal use unethical.

"It's just greed," said Joe Sinsheimer, a former Democratic operative who founded the JimBlackMustGo.com Web site. "There's no other way to describe it."

Last year, state lawmakers sought to end the practice of elected officials and candidates using campaign contributions for personal expenditures. It was among the many reforms lawmakers passed in the wake of the scandals surrounding Black.

Black and Decker

What helped drive the legislation was Black's bribing of another lawmaker in 2003 to win his vote for speaker, a move that allowed Black to hold onto the office. Black raised more than $50,000 in campaign contributions for former Rep. Michael Decker of Forsyth County, who used the money on a variety of personal expenses, including a van. Decker later admitted he extorted the money in exchange for the speaker vote and a legislative job for his son. Black and Decker are now serving time in federal prison.

A News & Observer review of lawmakers' campaign reports in December 2005 also showed that others have taken tens of thousands of dollars in contributions when they left office. None appear to have paid themselves as much as Morgan.

The prohibition on converting campaign contributions to personal use began Oct. 1, 2006.

In the days leading up to the law's taking effect, campaign finance records show, Morgan pulled $356,000 in contribution money out of his campaign account. In his campaign finance report, Morgan labeled the move a "refund for distribution." Morgan's campaign also paid Morgan an additional $182,000 that he later said amounted to repayment of a $100,000 loan that he made to his campaign in 1998, plus $82,000 in interest.

$533,000 deposit

A month after the new law took effect, campaign finance records show that Morgan deposited $533,000 into his campaign account, calling it a loan.

Morgan said in an interview at the time that the move made the money more liquid. Morgan, who had lost in the Republican primary a few months earlier, said possible uses might include another run for office or for reimbursement of legal fees stemming from a political battle with an old foe, former Republican state Rep. Art Pope of Raleigh.

But his most recent campaign report shows that, earlier this year, Morgan took $533,000, plus another $12,200 in interest, out of his campaign account. The reason listed for the transaction was "loan reimbursement."

Morgan has charged his campaign interest of 8 to 9.5 percent, according to his finance reports. That's a rate of return on a relatively risk-free, liquid investment that's hard to find in the current market, said Bill Dix, president of Fortune Management, a Raleigh investment management firm.

"If I knew where I could get 8 or 9 percent on a relatively risk-free basis, I'd be all over that," Dix said. "That just ain't out there."

Campaign finance experts say other candidates have charged interest on money they loaned to their campaigns, but not at that high a rate. They also say that those loans often are repaid quickly.

State election law does not prohibit candidates from charging interest on loans they make to their campaigns. It also does not say how much interest a candidate can charge.

"To keep the money in when it's not really needed, and also to charge a higher-than-market interest, just raises serious questions about how proper that is," said Bob Hall, research director for Democracy North Carolina, a campaign finance watchdog.

Disclosure spotty

Morgan's reports show that he did not always disclose loans that carried over from one election to the next, or the interest he charged when they were made. Kim Strach, the State Board of Elections' deputy director for campaign finance, said she contacted Morgan on Thursday and he told her he plans to provide the missing information.

If he doesn't, she said, he could face fines from the board.

Contributors to Morgan's campaigns had mixed reactions to what he did with his political money.

"It's not my cup of tea," said Zeb Alley, one of the state's top-ranked lobbyists and a former lawmaker. Alley gave $500 in the 2006 election.

"There's no way I could have known that he was going to do that," he said, "and I don't know what I would have done if I had known that."

Sherry Leigh Thomas, senior vice president for the Association for Home & Hospice Care of North Carolina, gave $2,500 to Morgan in the 2006 election.

"That's really up to that person running for office, what they do with the campaign donation," she said.

Morgan's latest campaign finance report showed that he had $35,500 left in his account, and another $100,000 loan that has yet to be repaid. The report indicates he plans to pay himself back plus 9.5 percent interest. But for that to happen, he would have to raise more money.

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