State Politics

SEANC Executive Director Dana Cope’s spending decisions draw fire

Dana Cope, executive director of the State Employees Association of North Carolina, speaks during a 2011 news conference in front of the N.C. Legislative Building.
Dana Cope, executive director of the State Employees Association of North Carolina, speaks during a 2011 news conference in front of the N.C. Legislative Building. 2011 NEWS & OBSERVER FILE PHOTO

In March 2014, the State Employees Association of North Carolina wrote a check for nearly $19,000 to Perspective Concepts LLC, a defunct computer company in Washington, D.C.

But the check was cashed by Perspective Landscape Concepts, a new Apex company that was also working at the home of Dana Cope, SEANC’s executive director.

Cope says the check was for emergency work for irrigation and drainage at the SEANC office.

SEANC’s own files suggest otherwise. A memo justified the check as computer work done by the D.C. company with a name very similar to the local landscaping company. The owner of the computer company said he closed the firm in 2003 and never worked in North Carolina. Cope and SEANC’s general counsel admit the memo is phony but will not explain beyond saying it’s a personnel matter.

There was irrigation work done at the SEANC building four months later. But that work cost $685.25 and was done by a long-established company in Garner, records show.

Since last March, Cope has directed SEANC to write checks totaling $109,078.50 to Perspective Landscape Concepts, the company also working on projects at Cope’s Raleigh home, or to its owner, Perry Pope.

The landscaping bills are one of several spending practices that are being questioned by some former members of SEANC’s executive committee. They question whether Cope has blurred the lines between his personal finances and the finances of an organization largely supported by dues from its members, 55,000 current and retired state employees.

SEANC, at Cope’s direction, has also:

• Hired Tree2Key, a division of the company that renovated Cope’s home in 2013, for $342,000 worth of work on the SEANC building, even though the company specializes in building and renovating private homes and has no apparent commercial experience.

• Spent at least $8,000 on flight lessons for Cope and has $13,000 on deposit with the same aviation training firm; Cope says it allows him to fly with a flight instructor and to travel cheaply and efficiently on SEANC business.

• Allowed Cope to put thousands of dollars of personal spending each year on SEANC credit cards. In a series of interviews, Cope has given contradictory accounts about how much of the money he has repaid but has said he has paid everything he owes.

In six interviews with The News & Observer, Cope said he has done nothing wrong. He said no SEANC money had gone to any work at his home, and he provided canceled personal checks showing payments exceeding $250,000 for landscaping and renovations.

Further, he said the SEANC executive committee had investigated and found no improprieties or misappropriation of funds.

“You can question how we spend money,” Cope said, “but we have a process, and the process has been followed.”

He blames his troubles on political enemies inside and outside of SEANC.

“The politics in this organization are brutal,” he said.

SEANC is a private nonprofit organization, and most of its records are not public. Many of the documents for The N&O’s investigation were provided by a former SEANC treasurer, Betty Jones, who works in Raleigh as a Medicaid analyst in the Department of Health and Human Services.

Jones, a Lumberton native whose license plate reads “PSALMS 37:5,” said she’s bringing Cope’s behavior to light in an attempt to save the organization.

“SEANC is needed by state employees,” Jones said. “We need a voice. We don’t need a leader that’s self-serving.”

Searching the records

Cope, 45, has been SEANC’s executive director for 15 years; he was paid $97,300 in 2011, according to the most recent records available. He is known as a pugnacious leader who has taken on powerful politicians.

He also has experienced difficult times personally. He filed for personal bankruptcy in 2011, financial problems he blamed on maintaining multiple residences while trying to establish his sons in a sought-after school district.

The bankruptcy proceeding, which ended in 2014, wiped out $109,000 in credit card debt. In the past two years, he’s had a complete remodeling of his home with extensive landscaping and is currently building a backyard swimming pool.

He says the financial turnaround is the result of a substantial inheritance his wife, Melinda, received after her mother’s death in 2013.

“I don’t have to use SEANC money for my own purposes,” Cope said.

Jones said she began to question Cope’s leadership last spring because of his handling of a SEANC contract with Purchasing Power. The company sells computers and other consumer goods to state employees who pay by payroll deduction.

Purchasing Power is not a good deal for state employees, Jones said. As treasurer, she had interviewed other vendors who offered state employees better prices.

The program, however, is good for SEANC. According to an internal presentation, SEANC receives annual revenue of at least $288,000 in commissions and fees from Purchasing Power.

Jones asked to see copies of the checks from Purchasing Power to SEANC. She said this led to a clash with Cope and that she never received satisfactory answers.

“I started looking at things a little closer,” Jones said. “If they are going to hide this, what else are they hiding?”

Cope has defended Purchasing Power as a program of last resort for state employees who would otherwise be shopping at a pawn shop or other high-interest lenders.

As treasurer, Jones had a practice of signing checks on Tuesdays and Thursdays, when she went to the SEANC office. She began looking at large checks that carried her signature dated on other days of the week, or large checks with the names of vendors unfamiliar to her.

She came across an August 2014 payment for $15,000 made out to “Blue Line LLC” paid from the retiree recruitment fund; she obtained a copy of the check from the State Employees’ Credit Union.

The address on the check matched Blue Line Aviation, a flight training school in Morrisville. An earlier August 2013 check to Blue Line for $6,400 was paid from staff training funds.

“No one told me that my signature stamp would be used on a check for flight school,” Jones said. “Our president is doing something with Blue Line that the members don’t know anything about.” She said she sometimes approved checks when she was out of the office but required someone to provide her with proper documentation.

Cope obtained a Student Pilot Certificate from the Federal Aviation Administration on Aug. 27, 2013. He said he has been using the flight lessons as an inexpensive way to fly on business to places such as Asheville or Washington, D.C. He said SEANC pays only for fuel and the instructor. He said he personally paid for some flight lessons but would not say how much.

John Armstrong, who sells the Diamond planes that Cope is learning to fly, said he knows of hundreds of executives who use student pilot licenses to fly state-of-the-art planes. He said they use less fuel than an SUV, cruise at 170 mph and almost fly themselves, like a Google self-driving car.

“It is the most cost-effective, time-efficient way to travel,” Armstrong said.

The SEANC checks went to the organization’s account at Blue Line. As of Jan. 7, Cope had used $8,191.91; the account held an additional $13,208.09, according to a Blue Line memo.

Cope told SEANC’s executive committee about the flight lessons only after The N&O inquired about them in January. First Vice President Ross Hailey Jr. said the board gave a retroactive approval to the lessons.

Cope said he did not have to tell the board about the flight lessons or other spending in advance. He allowed The N&O to review the part of his contract that gives him authority to “take entire charge of the business and operation of SEANC, exercise supervision over the whole of SEANC, employ such assistance as may be necessary, (and) expend funds on behalf of SEANC.”

Cope said he’s using the lessons for SEANC’s benefit and is not making much progress toward a pilot’s license.

“I don’t get to take off and land,” he said. “I’m an executive guy, on the six- to seven-year plan.”

A phony invoice

Another set of checks caught Jones’ attention.

Her signature stamp was on a March 2014 check to a company called Perspective Concepts for $18,987.50. The accompanying memo began with “Design and build member portal database with traceable inputs to include real-time dataform interactives for non-dues active members.”

Jones said she knew nothing about that. She found a company with the same name and address, but the phone number listed was out of order.

The N&O located Frank Stovicek, who had owned the firm, who said he was shocked by the invoice. He said he closed the company in 2003 and never did any work in North Carolina. He said he hoped law enforcement would track down whoever was using his former company’s identity and address.

The check was cashed by Perspective Landscape Concepts, which incorporated on Feb. 26, 2014, state records show. The company had done extensive landscaping at Cope’s house on Sturbridge Court, in the Blenheim neighborhood off Glenwood Avenue inside the Beltline, before the home was part of the 2014 Remodelers Home Tour in late April.

Cope said he paid for all landscaping at his home and produced a canceled personal check for $40,886 as proof. It was written on Feb. 5, 2014.

In four interviews in January, Cope said the March check for $18,987.50 was for emergency repairs to the SEANC irrigation and drainage system, which was leaving standing water around the building. Jones said she saw no such work being done at that time.

Rainy Days Irrigation did irrigation repairs at SEANC in July and August. For $685.25, the firm replaced sprinkler heads and rewired the system so it would run on a timer, records provided by Jones show.

On Tuesday, The N&O showed Cope the check to Rainy Days and the accompanying invoice. Cope was asked why SEANC would hire an irrigation repair company in July after paying Perspective Landscape Concepts far more for emergency irrigation work in March.

“It was a different type of work,” Cope said. Perspective Landscape is “not licensed to do irrigation work. ... It was not just irrigation work.”

Thomas Harris, SEANC’s legal counsel, said the organization’s executive committee is satisfied with how the money has been spent.

“We paid money to the Perspective Landscape Concepts for work that has been done and has yet to be done,” Harris said. “The replacement of the irrigation system is one of the things still to be done in the future.”

On Sept. 12, SEANC issued a check to Perry Pope LLC for $29,845. There is no such LLC registered with the state, but Pope is the owner of Perspective Landscape Concepts LLC. The organization wrote a check to Perspective Landscape Concepts for $29,843 on Sept. 29, accompanied by an invoice that lists Cope’s home address, not SEANC headquarters.

In all, SEANC wrote five checks in 2014 to the firm totaling $109,078.50.

The company has done landscaping work at SEANC, tearing out holly bushes, planting trees and shrubs, spreading pine straw, and constructing a stone water course for drainage. Betty Jones said the work began in September, six months after the initial check.

SEANC is getting its money’s worth for landscaping, Cope said. “They did that work and they were good.”

But he would not explain the phony March invoice for computer services, saying it was a personnel matter. The name and signature of Lynn Cote, SEANC’s director of member action, are on the invoice. Cote also declined to answer questions, saying it was a personnel matter.

Cope acknowledged that he awarded the SEANC landscaping work without a bid, which he can do under his contract. And he said he only mentioned the landscaping work “in passing” at a Sept. 16 meeting of the SEANC executive committee.

Former executive committee member Art Anthony was at that meeting and said there was no discussion of landscaping or of a substantial contract with Perspective Landscape Concepts.

Anthony said the committee did consider two bids on repairs to the SEANC building. It chose Tree2Key, a company owned by the two men who also own WS Builders.

WS Builders had done a major renovation on Cope’s home, which was highlighted in the April home show. Anthony said Cope did not disclose that the company had worked on his house.

According to its website, Tree2Key and its related companies specialize in new homes and home renovation, not commercial work. The SEANC contract with Tree2Key now stands at $342,495.

Cope defended his decision for SEANC to hire contractors who had also worked on his home. They did good work at a reasonable price, he said, and he trusted them.

Steve Percy, an owner of Tree2Key, declined to answer questions.

Pope, the owner of Perspective Landscape Concepts, declined to say whether SEANC money had paid for work at Cope’s house.

“I don’t want to answer that question,” Pope said. “I don’t have to answer that question.”

Broadway and Vegas

The N&O reviewed nine of Cope’s SEANC credit card statements from the past four years, about one in 10 of the statements during that period.

Cope’s contract gives him wide leeway to use his credit card for SEANC business: “The Executive Director is entitled to reasonable independent authority as to what expenditures are necessary to conduct SEANC business and the SEANC General Treasurer shall take into consideration much leeway of the Executive Director’s judgment.”

That authority has allowed Cope to buy tickets to Broadway touring shows, spend $1,700 at a nightclub in Las Vegas, and buy meals at expensive restaurants to network and make deals during national conventions of the Service Employees International Union. A recent wine tour in California landed SEANC a $400,000 grant, he said.

He acknowledged using SEANC credit cards for personal items: five purchases totaling $1,113.93 at Best Buy, $57 for an eyebrow wax at European Wax Center and $1,425.36 at Ticknors Men’s Clothier, one of Raleigh’s more expensive men’s stores.

Cope has given inconsistent answers about how much he has reimbursed SEANC for the personal purchases, but he said he has repaid everything he owes.

Cope said he repaid at least $2,442 in 2013, yet SEANC’s internal accounting system shows a single reimbursement of $74.99. He said he repaid $7,410 in 2014, but SEANC records show payments of $6,238.

He recently wrote a $262.50 check to pay for online video games purchased from 2011 until last year.

Cope dismissed the spending issues as the sour grapes of disgruntled members. He said Jones, Anthony and a third board member, Stanley Gales – all former executive committee members – were voted off the board at the last SEANC convention in September.

“They were resoundingly rejected,” Cope said. “They have an ax to grind.”

Jones had the opportunity and responsibility to challenge any spending she found improper but failed to raise the issues when she was treasurer, Cope said.

Jones said she and her allies were pushed off the board because she had started raising questions about Cope, who used his power to replace them with his supporters. Jones said she believed in SEANC’s management when she joined the board and did not begin digging into Cope’s finances until the last six weeks of her term.

Jones and Anthony said they know that coming forward with their allegations could hurt SEANC in the short run.

But Anthony said there’s no choice because of Cope’s actions: “He’s killing the organization from within.”

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