An indictment of NC political fundraising

On Monday, the day before his indictment was announced, Robin Hayes said he was stepping down as chairman of the North Carolina Republican Party because of health issues. By Tuesday, the public learned that what was driving Hayes from office wasn’t only his ailments, but the ill health of North Carolina’s system of political fundraising.

The indictment handed up by a federal grand jury accuses Hayes of trying to funnel bribe money to state Insurance Commissioner Mike Causey on behalf of Greg Lindberg, a major political donor who owns a business subject to regulation by the insurance commissioner. Hayes, a former congressman, is also charged with three counts of making false statements to the FBI. Lindberg and two other people were also charged following an investigation that started when Causey, a Republican, took his concerns about attempted bribery to the FBI.

The details are still emerging and those indicted maintain they didn’t break the law. But the outlines of the case and actions that are not in dispute show a system of political fundraising that invites corruption and may be rife with it. The central problem is that while donors are limited to $5,400 in contributions to a state candidate, they can make unlimited contributions to a state political party.

That distinction encourages donors to get around individual contribution limits by giving large amounts to the party with a tacit understanding that a hefty share of that contribution will find its way to a specific candidate. That winking agreement is a constant temptation in the Democratic and Republican parties. In this case, the indictment says Hayes gave into it by helping Lindberg channel $250,000 to Causey’s campaign from contributions he had made to the state Republican Party. The trouble Hayes and Lindberg ran into, investigators say, is that their intention was revealed during calls and meetings, at least some of which Causey recorded.

The obvious fix would be to place limits on how much individuals can gave to state political parties. That bill should be offered as soon as possible. Another improvement would be to restore and expand public financing for elections. The insurance commissioner, other Council of State offices and appellate court races were eligible for public financing before the Republican-led legislature ended the program in 2013.

But this case also occurs in a wider context in which unlimited donations are a threat to the integrity of government.

The Supreme Court’s Citizens United ruling allowed corporations and unions to give unlimited amounts to groups that support but are not working in conjunction with candidates. Meanwhile, there are too many ways for businesses, unions and individuals to give money in support of candidates and officeholders without their identity being disclosed. This so-called “dark money” has shaped elections and increased cynicism about whether government is responsive to the public or to unknown political contributors.

The actions described in the indictment show the rot in the system of funding campaigns. Lindberg contributed heavily to both the state Republican and Democratic parties — and former Democratic Insurance Commissioner Wayne Goodwin, now the state Democratic chairman. Members of the General Assembly received his largesse, and Lt. Gov. Dan Forest was Lindberg’s greatest beneficiary.

Hayes’ indictment shocked many in the capital, but those who deal in increasingly unlimited and undocumented political funding should have been surprised only that charges took this long to come. Campaign finance laws do not adequately protect the public trust. Until that changes, the public will have to rely on the conscience of officials like Mike Causey.