Politics & Government

Steak dinners, travel, HOA fees: How some NC legislators spend campaign donors' money

New clothes and shoes. Dinner at a pricey steakhouse. A second home in Raleigh.

Donors to Republican and Democratic campaigns might be surprised to hear what some of their favored candidates did with their money in the off-season.

In 2017, Rep. Ed Hanes' campaign spent nearly $28,000 — much of which went to Hanes himself.

On 45 separate occasions, Hanes, a Democrat from Winston-Salem, billed the campaign for "meeting legislative colleagues," ranging from $10.70 at a place he didn't specify to a $130.42 bill at Raleigh's Sono Sushi. His donors footed the $1,670.75 bill for those get-togethers.

Another 40 times his campaign paid for meals with political advisers or with constituents from his district in the neighborhoods north of downtown Winston-Salem. The campaign also paid for staffers' food, and for catering.

In total, Hanes' campaign spent more than $10,000 on those meals last year. The campaign spent an additional $8,800 on travel expenses, which included hotel stays, gas, airplane tickets, parking fees and more. Donors paid nearly another $1,000 for his dry cleaning and a tire change.

Campaign finance law allows legislators to use political donations to pay expenses that come along with being a legislator. They can use campaign contributions for housing, travel, and other expenses associated with working as lawmakers and spending part of the week in Raleigh. Spending on suits and other personal items is allowed for legislators who would otherwise have no need for them.

Republican Rep. Josh Dobson of McDowell County in Western North Carolina cited that principle to explain why his campaign spent $600 on a bar tab at the Raleigh sports bar the Players' Retreat.

That was for a reception after a basketball game that takes place every other year between members of the North Carolina and South Carolina legislatures. Dobson said he has taken on a leadership role in that game, which includes paying for the reception.

As part of those responsibilities, Dobson also paid $450 to outfit the North Carolina team with jerseys.

In a patriotic spending spree, Rep. Mitchell Setzer, a Republican from Catawba County, bought $6,500 worth of flags and flag accessories in 2017. Setzer says he gives flags — usually state flags, but sometimes American flags — to constituents to mark significant events, births, deaths, or teacher retirements.

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Fines, jail time

Earlier this year, Hanes' campaign was forced to forfeit more than $1,000 to the state, after an audit found evidence of improper donations as well as improper personal spending in 2016. Hanes used his campaign to pay for gym fees and souvenirs on an overseas trip in 2016, that audit found, and in an email statement to The News & Observer he thanked the state for alerting him to the improprieties.

"I greatly regret any negative appearance that may have arisen from my previous reporting efforts," Hanes said. And in 2017, he didn't have a repeat of any of the same 2016 personal expenditures that got him in trouble. However, audits into candidates' 2017 spending have not yet been made public.

Sometimes candidates face more than just fines.

Former state Sen. Fletcher Hartsell was recently released from prison after an eight-month sentence that started with an investigation into the use of campaign money for personal expenses. Those included haircuts, shoe repairs, membership to the Carolina Club at UNC-Chapel Hill, a trip to Charleston, S.C., with his wife’s handbell choir, tickets to the musical “Jersey Boys,” a vacation with his wife in Edenton, his granddaughter’s birthday party and driver’s license renewal.

Hartsell, a Cabarrus County Republican, pleaded guilty in federal court to one count of mail fraud and two counts of filing false tax returns.

Bob Phillips, executive director of Common Cause North Carolina, said it's up to each state candidate to determine whether spending from campaign accounts on personal items could withstand scrutiny from constituents.

Use of campaign funds for living expenses points to the inadequacy of legislator pay, Phillips said.

"It does partly speak to the issue of compensation," he said. "I think that's really what we need to look at."

State lawmakers have been getting the same pay since the mid-1990s, which for most is $13,951 a year. They also receive an expense allowance and, while in session, a daily stipend.

Gary Bartlett, former executive director of the state Board of Elections, remembers the biggest complaints to the office were about legislators spending campaign money on clothes. Lawmakers justified the expenses by pointing to General Assembly dress codes that require a jacket and tie for men on the floor of the House and Senate chambers, Bartlett said.

But the office would find legislators would spend $500 or $600 for a suit rather than choose lower-priced alternatives, he said.

When candidates stop running for office and close their finance committees, they must donate goods to another candidate or party committee, or sell them at fair market value. Candidates cannot keep the money from sales for themselves.

The law says that anything of value purchased with campaign funds belongs to the campaign committee. For most campaigns, the candidate is the only member of the committee. "That's when you scratch your head," Bartlett said.

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Spending on housing

Legislators all get $104 a day when they're in session to pay for their housing and meals. But many who live outside of Raleigh also use their campaigns to pay for hotels or houses in Raleigh.

Rep. Donny Lambeth, a Republican from Winston-Salem, used his campaign funds to pay more than $1,200 in homeowners’ association fees on a Raleigh townhome in 2017. After spending $40,000 last year — including more than $10,000 paid to Lambeth personally as reimbursements — his campaign had $121,000 on hand going into 2018.

Lambeth said state officials told him it's OK to use campaign donors' money to pay his homeowners association fees, and that he has an experienced campaign treasurer sign off on his spending.

"The cost I am reimbursed for relate to my duties as a legislator," Lambeth said. "HOA fees were approved by the elections audit staff."

In 2016 Dobson made headlines in his hometown paper, The McDowell News, for spending $7,000 of his donors' money on hotel rooms that year. At the time he told the paper that in his defense, "It’s cheaper to stay in a hotel than stay in an apartment."

A few months later, his campaign began renting a downtown Raleigh apartment.

"It was easier to do it that way," he said in an interview Monday.

His new apartment complex bills itself as "the best of urban living," and Dobson's campaign spent more than $16,000 on the apartment last year. Most of that was rent; the rest was for furniture, utilities, parking and more.

His campaign also spent $850 on hotel rooms last year, mostly at hotels in Raleigh near his apartment. All four Raleigh hotel stays were in January, and Dobson said they were for days he had to be in Raleigh but his apartment wasn't yet ready.

Rep. Debra Conrad, a Republican from Winston-Salem, used her campaign funds to pay $600 a month in rent last year to a Raleigh lobbyist, Debbie Clary. Clary is a former Republican legislator.

Lobbyists can’t give money to legislators, but Conrad said it doesn’t violate any rules for a legislator to give a lobbyist money, including for rent.

She also noted that she’s transparent about her payments, publicly documenting them on her campaign finance reports.

“The rent is the fair market rate for one of the three bedrooms in the townhouse.” She added: “As a single female legislator, I do not feel safe staying in a hotel or leaving my property stored at a hotel when not in Raleigh.”

State candidates face looser restrictions on personal spending than candidates for federal office.

For example, candidates for Congress cannot use campaign funds to pay mortgages, rent or utility bills for personal residences.

Spending on tickets to sporting events, plays and concerts is prohibited unless the event is connected to a specific officeholder or campaign activity.

Candidates for federal office cannot use campaign money to buy their clothes, pay country club dues, or purchase food, unless it's for a fundraiser or campaign meetings.

But those rules don't apply to candidates for the legislature.

Meals and snacks

Hanes' campaign spent just $8.80 on advertising last year, but it also paid:

  • $550 to his college fraternity, Kappa Alpha Psi.

  • $729.55 for dry cleaning.

  • $252.83 for a tire change.

Hanes' campaign spent nearly $20,000 on food and travel, including $367.90 for two meals at the Sullivan's Steakhouse at Raleigh's Crabtree Valley Mall.

He still had nearly $12,000 on hand going into 2018 — a massive advantage over his little-known Republican opponent, Reginald Reid. As of March 10 Reid has not reported raising any money except for a $207 donation from the state GOP to pay for his filing fee.

Hanes is far from the only politician whose campaign finance reports are filled with food.

Stop by Rep. Jason Saine's legislative office, and the Republican from Lincolnton might suggest you talk over lunch, or at least offer you a snack. Saine spent more than $8,700 of his campaign funds on food in 2017, a sum that does not include catering expenses, but does count more than $600 he spent in from January to June on refreshments for his office.

Saine dines out regularly with fellow legislators, staff, supporters and others, sometimes picking up the tab. He also purchased food for himself. Entries for June 5 show a payment for lunch en route to a GOP convention and another charge for lunch when he got there.

Saine said in an email he purchased lunch that day for two sets of convention attendees and himself.

Saine also paid monthly dues for City Club of Raleigh, located at the top of downtown's Wells Fargo Capitol Center, from his campaign account. The City Club membership allows him to keep state business and political activities separate, Saine said. "City Club Raleigh has proven to be an affordable meeting space for me to discuss political activities with individuals and groups in Raleigh," he wrote.

Guns and NRA memberships

Several state and national legislative candidates over the past decade have used their campaign funds to buy NRA memberships.

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It appears the only one to do so in 2017 was Rep. Sarah Stevens, a Republican from Surry County who paid the NRA $100 from her campaign.

Also last year, Republican Rep. Trudy Wade of Greensboro spent $2,200 from her campaign buying a shotgun that she later raffled off at a fundraiser, and Republican Rep. Larry Yarborough of Person County bought a $450 handgun for personal protection using his campaign funds. He defended the purchase, saying he never thought he needed to carry a gun until the interactions he experienced in his role as legislator.

"One evening while out in my district, I had a scary situation and decided that I needed to be safer," he told The N&O in February.

Planes, parades and more

Among other spending in 2017:

  • Rep. Carl Ford, a Rowan County Republican who is running for an open Senate seat, spent more than $600 on parade-related items, including candy, decorations, gas and entry fees.

  • Sen. Rick Gunn, a Burlington Republican, used $1,002 in campaign funds to reimburse himself and his wife for hosting “Tomato Sandwich Day,” the annual event in which Gunn offers free tomato sandwiches at the Legislative Building.

  • Sen. Ralph Hise, a Mitchell County Republican and chairman of the Senate Redistricting Committee, paid Parker Poe Adams and Bernstein law firm $7,700 in connection with a campaign finance audit by the state board of elections. Hise also paid his treasurer $9,000 for the audit.
  • Rep. Bobbie Richardson, a Louisburg Democrat, spent more than $2,000 on travel.

  • Rep. Greg Murphy, a Greenville Republican, spent more than $5,500 on travel outside his district, including several trips to Asheville and a trip to the Council of State Governments conference in Las Vegas. He used about $6,000 to pay his Raleigh living expenses.

  • Rep. John Bell, a Goldsboro Republican, spent about $1,100 on travel in Little Rock, Arkansas.

  • Sen. Jerry Tillman, an Archdale Republican, gave $500 every month or two to his church, Archdale Friends Meeting. His donations to the meeting were among Tillman's top expenditures, and came to $4,500 for the year. State law allows candidates to give campaign money to charities.
Will Doran: 919-836-2858; Twitter: @will_doran
Lynn Bonner: 919-829-4821; @Lynn_Bonner