State Politics

7 legislators failing to detail campaign payments to themselves

Senate Rules Chairman Tom Apodaca was among seven state legislators who paid themselves thousands of dollars from their campaign accounts without detailing what the reimbursements were for.
Senate Rules Chairman Tom Apodaca was among seven state legislators who paid themselves thousands of dollars from their campaign accounts without detailing what the reimbursements were for. hlynch@newsobserver.com

Seven state lawmakers in North Carolina, including Senate Rules Chairman Tom Apodaca, have reimbursed themselves for thousands of dollars in campaign spending without reporting details of those expenditures.

The State Board of Elections says candidates are required to itemize those reimbursements so that state auditors and voters can tell exactly how the money was spent. House Speaker Tim Moore recently had to re-file his reports because auditors found unitemized credit card charges.

A News & Observer review of legislators’ latest campaign reports found that most legislators meticulously detail expenses they pay with campaign donations. Meal charges list the date, amount and the name of the restaurant. Travel expenses usually list where the legislator went and why.

But those details are missing from seven legislators’ 2015 reports. Instead, the reports show they paid themselves thousands of dollars as reimbursement for “expenses related to holding public office” – a method of reporting that appears to skirt the requirements of campaign-finance law.

“They have to be able to provide enough information for the public to know how they spent the money,” said Kim Strach, director of the State Board of Elections.

Without itemized expense reports, she said, “there is no way for the public or us to know if the expenditures are compliant.”

It is likely that auditors will flag these reports and require more details, Strach said.

State law allows campaign money to be spent only for certain purposes – and personal use is not one of them. The money must go for expenses related to campaigning or to cover “expenditures resulting from holding public office.”

The N&O’s review of legislators from both political parties found payments without an itemized listing of the expenditure this year to Apodaca; Rep. Kelly Hastings of Cleveland County; Rep. Hugh Blackwell of Morganton; Rep. Rob Bryan of Charlotte; Sen. Dan Soucek of Boone; Rep. Julia Howard of Mocksville and Sen. Warren Daniel of Morganton. All are Republicans.

Those lawmakers listed chunks of spending under the broad purpose of being for campaign use or as a result of holding office.

‘It’s a nightmare’

Apodaca received about $8,500 from his campaign during the first half of 2015, saying it was to “reimburse campaign expenses,” according to his latest report. He says he believes that’s an acceptable way to report the spending.

Apodaca said that listing each individual expenditure would be problematic.

“From an accounting standpoint, it’s a nightmare,” he said. “Plus I don’t like my credit card data floating around either.”

He said he’s always done it that way and that campaign treasurers “can’t get a clear answer from the Board of Elections” on the issue.

Apodaca said he would provide a detailed breakdown of expenses after his treasurer returns at the end of the month. He said much of the reimbursement was for food at Senate Republican caucus meetings, a new iPad and travel expenses for an out-of-state conference he attended.

“I didn’t feel like it’s right to charge them to the state,” so he billed his campaign, he said.

Of the seven legislators contacted about a lack of expense details, only Hastings and Bryan provided a listing of expenses and amounts.

Others said they would try to produce them but wouldn’t be able to do so immediately.

Howard said her treasurer was working to file an itemized list of campaign credit charges in the coming weeks. Soucek said his reimbursements were nearly all for mileage and cellphone bills.

Daniel declined to answer questions about the $1,300 he paid himself this year from campaign funds, which were listed on reports as being for “campaign expenses” and “gifts for campaign volunteers.” He said he would only provide additional details of expenditures if he gets a request from the Board of Elections.

Blackwell billed $1,163 to his campaign during the first half of this year. His campaign report says “see attached explanation” next to the payment, but no attachment appears with the report online. He said most of that reimbursement is for mileage traveled to campaign and other events, meals and charitable contributions.

“I’ve had three different treasurers who went through the (state board’s) training, and I don’t think any one of them ever suggested that we need to do that differently,” Blackwell said.

Furniture and TV

Hastings’ campaign report for the first half of 2015 lists about $15,000 in reimbursements for “in-kind contributions” provided to the campaign by the candidate, his wife, his parents and his mother-in-law.

No further details about the contributions are provided on the report.

Hastings provided The N&O with a list that detailed the reimbursements to his family members.

His wife, Anika, was paid $397 to cover mileage, meals and hotel expenses they say were incurred when she took their daughter to Raleigh for his January swearing-in ceremony, according to his records. Anika, who is a dentist, also received $450 because she “had to pay a dentist to fill in” at her job to attend the ceremony.

The campaign also paid her $252 to purchase office supplies and $1,100 to buy furniture for Kelly Hastings’ Raleigh apartment.

Hastings said he believes reimbursing his wife for travel meets the legal standard for an acceptable campaign expense. “We wouldn’t have that expense if not for holding public office, and that’s the way the statute reads,” he said.

Hastings, who has been in office since 2010 and represents an area west of Charlotte that includes Cherryville and Shelby, says he and his wife bought a new mattress, TV and recliner for his Raleigh apartment this year because the furniture he’d been using “was about to fall apart,” and the TV was too small.

“We upgraded the TV, we upgraded the recliner, we upgraded the mattress,” he said. “I think it’s fair that we come down there and live in a decent lifestyle. I don’t think it’s fair that we go down there and live in a pup tent. ... It’s not inexpensive to buy a television while you’re there to keep up with the news.”

Hastings reimbursed his mother-in-law $177 for mileage when she bought supplies for his Raleigh office, and the campaign paid his parents about $500 for mileage when they drove to Raleigh to help him move at the start of the legislative session.

The bulk of the unitemized payments on Hastings’ campaign reports were reimbursements to himself that totaled $12,197 in the first half of the year.

He provided records showing that most of it involved mileage reimbursements. In addition to mileage attending events and meetings, Hastings supplements the 29-cent-per-mile state payment so that he receives the federal reimbursement rate of 57.5 cents per mile.

“I can’t operate a car on 29 cents a mile,” he said. “It’s just not feasible.”

Hastings received about $9,100 from his campaign to increase his “per diem” living expenses allotment to the federal government’s daily rate of $163; legislators receive a $104 per diem from the state for each day they’re in session.

“I try to recoup the costs of serving, doing a fairly consistent methodology,” he said.

‘Lack of clarity’

Bryan’s report shows he paid himself $4,043 in campaign funds in the first six months of 2015 for “holding public office expenses.”

“I’ve been under the general impression that some of those things can be collapsed together” in the reports, he said.

Bryan, a two-term member whose district is a wedge of Charlotte that runs from the center of town south toward the I-485 loop, provided a spreadsheet listing his expenses by category for the first quarter of the year. More than half was for travel expenses, with office supplies, phone bills, and professional dues and memberships also on the list.

He said he’ll have his campaign treasurer call the Board of Elections to check if he needs to file the reimbursements differently.

“I think there has been some lack of clarity from the state board on them,” he said. “I don’t know if you always get the same answers.”

Howard, a 14-term member whose district includes Mocksville in the center of the state, also says she’s heard conflicting messages from the board’s staff over the years. Her latest report listed $2,186 in unitemized credit card payments this year; a previous report listed Bank of America as the recipient of a $125 “contribution.”

Howard said she’d previously attached a detailed list of the expenses with her reports. “Three or four years ago, they (the Board of Elections) said you can’t do that anymore because the form doesn’t lend itself to an attachment,” she said. “Then I started using the credit card.”

Howard said she primarily uses her campaign card to pay for postage and charitable contributions. She plans to file an itemized report in the coming weeks. “We’re fixing it” after hearing about the audit involving the House speaker, she said.

‘Never ... decline disclosure’

Strach said her staff wouldn’t have told a campaign not to report details. “We would never, ever decline disclosure,” she said.

The board this year took action against a state senator, Fletcher Hartsell, who had not been itemizing expenses. After an investigation, the state board determined that campaign funds were being used for personal expenses and referred the case to prosecutors.

Jane Pinsky of the N.C. Coalition for Lobbying and Government Reform said detailed public campaign reports provide transparency and make it less likely that elected officials will use campaign money for questionable spending.

She noted that Rep. Jason Saine was criticized earlier this year when his reports showed more than $18,000 spent at a high-end tailor for suits.

“That’s why you have to have transparency,” Pinsky said. “It’s just so important that citizens not think that they’re feathering their own nest.”

Both Strach and Pinsky said campaign spending will become easier to track when the state starts requiring electronic finance report filing in 2017. Currently, some campaigns file handwritten reports by mail, forcing Board of Elections auditors to enter the data.

The new requirement will allow auditors to flag questionable contributions or spending patterns, and it will help clear the board’s audit backlog – a delay that means some campaigns go years without an audit.

“Electronic filing will benefit everyone,” Strach said. “I think the committees benefit when they get audited earlier.”

Colin Campbell: 919-829-4698, @RaleighReporter

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