Nearly 10 years ago, state legislators championed a series of reforms for the scandal-plagued N.C. Board of Transportation that were intended to take the politics out of building roads.
Future appointees would have to disclose their political fundraising. Five of the 19 seats would be reserved for people with special skills in such fields as the environment and mass transit. Members would have to avoid even the appearance of a conflict of interest.
"The board's policies, effectiveness and integrity are important to almost every citizen," Beverly Perdue, then a state senator, said on Sept. 23, 1998, the day the bill cleared the legislature. "The public has demanded reform, and this bill lays the groundwork."
That groundwork has proven a weak foundation. A decade after Perdue hailed the reform law, the 19-member DOT board remains a plum spot for big political fundraisers who continue to ignore conflicts of interest and the wider needs of the state beyond their own districts.
For example:
* The fundraising disclosure rule is toothless. The only fundraising that board members must disclose is contributions directly handed to them. Asking people to give to a campaign or holding fundraisers -- two common ways to raise campaign money -- aren't considered fundraising on disclosure forms.
* Two of the five seats intended to bring more professionalism to the board have been given to fundraisers best known for running restaurant chains.
* Conflicts of interest continue to surface. Last month, board member Thomas Betts Jr. of Rocky Mount resigned after he sought to raise $20,000 in campaign money from country singer Randy Parton and the others behind the struggling performing arts theater in Roanoke Rapids. Betts had directed $2.5 million in road work to the theater over the previous year. He sought campaign money for Perdue, now lieutenant governor, who is seeking to be the next governor.
* Some at-large members, who are supposed to look out for the entire state, are steering their discretionary money to their home districts.
The board oversees a department with a $3.8 billion budget and a serious public image problem. A chorus of lawmakers, public policy advocates and even transportation department employees say that the department is dysfunctional -- at a time when the state's transportation needs are growing dramatically. A special "blue ribbon" legislative panel is meeting to figure out how to get the department back on track.
The department even bungled trying to fix itself. It hired a consultant at a cost of $3.6 million to help assess its strengths and weaknesses and foster change. But the department refused to disclose the terms of the contract and any findings until Gov. Mike Easley ordered them made public.
The board's makeup and activities have emerged as a campaign issue in the gubernatorial election. Perdue's rival for the Democratic nomination, State Treasurer Richard Moore, has made it a key part of his campaign. Last month, among other proposals, he announced that he would not appoint fundraisers to the board. Perdue has not called for banning fundraisers from the board.
Ten years ago, Perdue's DOT reform bill won favor over a stricter bill initially filed in the House that would have banned fundraisers from the board, required five experts in various areas, and taken away the governor's power to appoint the transportation secretary.
Last month, Easley said trying to ban fundraisers from the process would just push the money underground.
"When you get into the fundraising business, if people want to participate, they'll find a way, just like the squirrel into the bird feeder," Easley said. "I want to know how much somebody's given who's been appointed and I think people want to know as well."
Finding wiggle room
But when Easley was elected governor in 2000, two years after the reform bill passed, he quickly found wiggle room in the transportation reform law. Easley's counsel, Hampton Dellinger, asked Grayson G. Kelley, a senior deputy attorney general, for an interpretation of what made someone a fundraiser under the new law. (Dellinger is now a Democratic candidate for lieutenant governor.)
Kelley focused on the phrase "personally acquired" in the law. He said that meant the only disclosure required was of "funds the appointee personally accepted from a donor and physically transferred to the campaign, executive committee or political committee."
To make sure he had understood the intent of Perdue and other sponsors, Kelley said, he talked to the legislative staff who drafted the law. He said they support his view "that a narrow construction of the disclosure provision was intended."
Perdue declined to be interviewed for this report. Her spokesman, David Kochman, released a statement saying the legislation was a "starting point" for reform and stronger than the version passed by the House. Easley also declined to be interviewed.
With the opinion in hand, Easley's staff advised his appointees to the board in a memo that they did not have to disclose fundraising if it did not involve collecting the checks.
Shortly afterward, appointees Louis W. Sewell Jr. of Jacksonville and D.M. "Mac" Campbell of Elizabethtown wrote "none" on their fundraising disclosure forms. Interviews with other Easley fundraisers, and an internal Easley campaign document obtained by The News & Observer, show that Sewell helped meet a $125,000 fundraising goal in Onslow County, while the campaign counted on Campbell to help raise $50,000 in Bladen County. (An Easley spokesman, Seth Effron, said neither Easley nor Dave Horne, the campaign treasurer in 2000, could confirm the document's authenticity. Effron said Easley declined to comment on the information within it.)
Another Onslow County fundraiser for Easley, Joe Henderson, said that he, Sewell and another man solicited contributors by phone and held a reception for Easley at an inn that has since been torn down.
Sewell, who also served on the board under former Gov. Jim Hunt, did not return messages left at his home or at work. He is a retired executive with the Golden Corral steakhouse chain. In 2005, Easley awarded him one of the state's highest honors, the Order of the Long Leaf Pine.
Campbell confirmed that he raised money for Easley in 2000 and 2004 by holding fundraisers at his lakefront cottage, but he did not have to disclose his efforts because he did not collect the checks. He cited the Easley memo.
Another appointee, Lanny T. Wilson of Wilmington, said in his 2000 disclosure form that he would follow up with information about his fundraising, but no such documentation is on file with the legislature or the Governor's Office. Wilson said he doesn't remember whether he provided it and said he didn't have to anyway because he did not "personally acquire" contributions.
In the disclosure he filed for his reappointment in 2005, Wilson listed totals he raised for 17 candidates, including Easley. He also wrote that he held a fundraiser for Easley. But other than family members, Wilson does not list the names of any contributors. The form asks for the names of contributors; the law says that appointees are required to disclose contributions.
Some report fully
Three other DOT board members members provided more information.
Cameron W. McRae of Kinston, who owns a string of Bojangles' restaurants, provided a spreadsheet that listed not only contributors, but also everyone he solicited. They contributed $126,000 for Easley in 2000.
G.R. Kindley, the former mayor of Rockingham and a builder, and Paul Waff Jr., an Edenton contractor and developer, also provided lists of contributors. They raised $38,000 and $24,000, respectively.
"I wanted everybody to know who was contributing," Kindley said in an interview. "I think it's important to know."
Waff, who left the board in 2002, said he was appointed after he went to R.V. Owens -- a renowned fundraiser for Easley, state Senate leader Marc Basnight and other Democrats -- to express an interest in a seat.
Easley's appointee for transportation secretary, Lyndo Tippett, a CPA from Fayetteville, was also required to fill out the disclosure form. Like Sewell and Campbell, Tippett wrote "none" where the form asked for the names of those he had collected campaign contributions from. He attached an explanation that said he delivered bundles of contribution checks to the campaign in Raleigh, but he did not collect them from individual contributors. He said in an interview that he did not look to see who wrote the checks or the amounts.
Tippett said his disclosure was a "textbook" example of complying with the law.
Tippett was a member of the Cumberland County steering committee for the campaign, which held two fundraising events. In an interview, Tippett said that he helped organize at least one fundraiser, which Easley attended. He said he had a file on the fundraiser, but he couldn't remember what it contained. He said he didn't know if the file was still available.
"I don't know if it's still there," he said. "The shredder came through town a few months ago and shredded all the files whether it was personal or business. I have no idea at the moment."
The transportation secretary also said it was not his concern what board members reported regarding their fundraising.
"They don't report that to me, so I don't have a problem with that," Tippett said. "Not my issue."
Easley named Sewell and McRae to two of the five newly created at-large seats on the board. Though the three other at-large members were required to have "expertise" in environmental issues, mass transit or government-related finance and accounting, the two seats Sewell and McRae took did not have to meet that requirement. Sewell had to have only "broad knowledge of and experience in transportation issues affecting rural areas." McRae had to be "familiar with the State ports and aviation issues."
The reform law requires Sewell, McRae and the other at-large members to represent the interests of the entire state. But records of an economic development discretionary fund that lawmakers created in 2005 shows that Sewell, McRae and another at-large member, Larry Helms of Union County, have so far directed their allotments -- a total of $5.5 million -- to their home transportation districts. Original article ...
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