Executive Privilege

Executive Privilege: The Perks of Power

The News & Observer in 2009 disclosed new information about the actions of Gov. Mike Easley, a Democrat and former state attorney general who served as governor from Jan. 2001 until Jan. 2009.

The coverage led to the criminal conviction of Easley on a felony charge of breaking campaign finance laws, and forced the resignations or firing of several high officials, including the chancellor at N.C. State University. 

Easley's conviction was part of a three-way plea deal reached with state and federal prosecutors who had pursued Easley for nearly two years. Easley was fined $1,000 as part of the plea agreement. Easley is the first governor in state history convicted of a felony. The plea agreement brought criticism from some members of the public.

In addition, Easley's legal team criticized the N&O's coverage as full of insinuation, and said it had helped turn the public against Easley. None of the reports was disputed.

How it began

The coverage of Easley had grown from reporting by the N&O of the Easley administration's final years that included in-depth reporting showing failures in the state's mental health system, the probation system and a lawsuit filed by the newspaper against Easley in 2008 over deletion of emails and documents the paper said were public records. Easley issued an order on his last day in office to preserve emails.

As Easley left office, the N&O continued to pursue records, including about travel by Easley while he was governor, a request the N&O first made in 2005. Easley's administration had denied the request several times over the years, citing a law that keeps certain state security plans a secret.

By March, the N&O had obtained records and conducted interviews that led to a story and follow-ups that raised questions about free vehicles provided by auto dealers and a free Florida trip for Easley paid by NASCAR titan Rick Hendrick, who also has interests in state government.

Two-part series

In mid-May, the newspaper published a two-part series, Executive Privilege: The Perks of Power.

N&O frontpage: Easley's secret flights skirted the law

Part One disclosed that the governor took free flights from supporters and spent plenty of time at the coast at a big cost to taxpayers. It also showed the state Democratic Party was an apparent conduit for some donations, which were later forfeited.

One of the flights disclosed in the part one story would later form the basis for Easley's felony conviction.

Part Two outlined serious questions about one of the supporters, Raleigh real estate broker McQueen Campbell, who was also chairman of the board at N.C. State University. The story detailed how Campbell and the Easley family each benefitted from a coastal land purchase for the Easleys at a development called Cannonsgate; how Campbell was helped by the Easley administration; and raised questions about how a job for the governor's wife was created at the university.

Fall out begins

The university's provost, who all officials had said acted alone in forming the job for the first lady, resigned within days of the series. So did Campbell. The FBI began serving subpoenas. State elections regulators also launched a criminal investigation.

N&O frontpage: Mary Easley, Oblinger out; ex-governor pushed hiringBy June, more reporting would reveal a secret settlement deal for the provost. On June 8, email messages were released that showed the governor helped create the job for his wife. The chancellor was forced to resign and NCSU fired the former first lady as questions persisted about her work.

N&O frontpage: Easleys got $137,000 break on coastal lotContinued reporting showed that Easley accepted a six-figure discount on the coastal land at Cannonsgate. He also took a $50,000 benefit from one of the state's most exclusive private golf clubs. Records showed his office was involved in the club's successful request during the severe 2002 drought to pump water from a creek that feeds a drinking water reservoir to save the golf course's grass.

In October, the state Board of Elections held hearings that for the first time put the campaign and actions of a North Carolina governor under formal scrutiny.

In four days of hearings, Campbell admitted under oath flying the governor from 1999 to 2006 without getting paid, saying the flights were valued at about $102,000.

Campbell also alleged that he and the governor were part of a scheme to use $11,077 in campaign money to pay for home repairs on Easley's personal residence in Raleigh that Campbell oversaw. Testimony showed that Easley also accepted a $5,400 insurance check for repairs that Easley didn't pay for. Easley denied knowledge of Campbell not getting paid for flights, and said he in no way was part of any scheme to use campaign money to fix his house.

Elections officials act

The state elections board, made up of three Democrats and two Republicans (three of them Easley appointees), took unanimous action. Board members determined that evidence suggested crimes were committed by Easley while he was in office, and made a formal criminal referral to a state prosecutor.

They fined the Easley campaign $100,000, determining that his campaign broke election laws by taking the flights and not reporting them. They also said the Easley campaign funneled illegal donations through the state Democratic Party.

N&O frontpage: Easley campaign paid for home repairesN&O frontpage: Board seeks criminal investigation of Easley

In addition, state elections board members formally called on legislators to pass laws that ensure candidates can be held financially responsible for misdeeds within their campaign. There were other vows of reforms by lawmakers and executive orders issued by Gov. Beverly Perdue aimed at improving government ethics and transparency.

By December, records and interviews would show that Easley had created a new state program to speed up environmental permits for developers, who pushed for the plan while giving him campaign donations.

Board members had wanted to speak with one of Easley's longtime aides, Ruffin Poole, because records and testimony showed he was involved in shepherding permits and other regulatory matters while also having a hand in fundraising for Easley. Poole refused to testify, invoking his right against self-incrimination, and he would resign from the board of the foundation that distributes millions in tobacco money and leave his job at the McGuireWoods law firm, where Easley now works.

An N&O report in late December showed that Poole made unusual contact on the permits at Cannonsgate.

Easley aide indicted

On Jan. 21, 2010, Poole was indicted on 51 corruption charges, including extortion and money laundering. The charges include that Poole was a short-term investor at Cannonsgate, receiving $30,000 in about four months, while he also took official action to ensure the project got needed permits. The indictment also described how Poole and Campbell were especially close.

N&O frontpage: Poole indicted on 51 corruption charges

Six more charges were added two months later. Poole initially fought the charges and a trial date was set for May 3. Then, on April 19, Poole reached a plea deal with prosecutors. He pleaded guilty to a single count of tax evasion and agreed to cooperate with the ongoing probe that surrounds Easley.

Meanwhile, depositions taken as part of the 2008 e-mail lawsuit led by The N&O revealed in February that Easley wanted e-mail messages to and from his office deleted so they would not become public. The testimony from Easley aides also revealed a secret Easley private e-mail account.

Easley convicted as felon

The state prosecutor assigned to the case was William Kenerly of Salisbury, a Republican who did not seek re-election in 2010 and planned to retire after handling the Easley case.

The federal prosecutor overseeing the case was George E.B. Holding, a Bush appointee who was up for replacement by the Obama administration. There had been political maneuvering around Holding's job for months, until U.S. Sen. Richard Burr, a Republican, announced he would use a Senate procedure to keep Holding on until the probes of Easley, and former U.S. Sen. John Edwards, were completed. U.S. Sen. Kay Hagan, a Democrat, had also said she wanted Holding to stay on the job, but she had not announced her intentions on whether she would block his replacement.

On Nov. 23, 2010, the N&O first reported that a plea deal had been reached.

Easley appeared in a state court on Nov. 24. He acknowledged responsibility for the campaign, and pleaded in an Alford guilty plea to violating six campaign laws, a felony. All stemmed from a $1,600 helicopter flight taken with McQueen Campbell in 2006.

Easley's campaign did not disclose the flight in 2006. It also was not disclosed on amended reports filed in 2009. Those amended forms were filed in order to disclose that a vehicle driven by Easley's son had been a campaign vehicle.

Court records showed that at least one other charge was considered prior to the plea deal.

Kenerly said that justice was served by having Easley convicted of a felony, acknowledging that he would be criticized for not seeking harsher penalties than the fine. He expressed concern about an immunity law that may have given Easley cover from even being prosecuted.

Holding folded his part of the case. A major factor was the U.S. Supreme Court's decision in June 2010 to throw out an "honest services" fraud law as being too vague.

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