Economy, Easley May Haunt Democrats In 2010
North Carolina's awful economy and a new chapter of campaign and ethics investigations made governing difficult for Democrats in 2009.
Those same troubles threaten to shift the state's political landscape away from Democrats if the issues stick around for most of 2010.
State Democrats contend their tough decisions on the budget headed off worse problems, but Republicans believe that and probes of former Gov. Mike Easley and other Democrats give them an opportunity to run the majority party out of power in November.
"The cycle of corruption in this state, in which the Democrats have been largely if not wholly responsible for, and the billion-dollar tax increase in the middle of the recession - those are going to be the two cornerstones of our message in 2010," said state GOP Chairman Tom Fetzer. "I think North Carolinians are ready for a sea change."
But Republicans have had a hard time persuading voters and donors they'd do any better at the helm.
Democrats have held the Executive Mansion since 1993 and have maintained a majority in both legislative chambers for all but four years since the late 1890s. They've also knocked off three GOP incumbents in federal races since 2006, including Sen. Elizabeth Dole. Now they're aiming for GOP Sen. Richard Burr's seat next year.
State Democrats argue tough decisions on taxes and spending stopped the state economy from a free fall while protecting public education and the state's treasured top marks from the nation's bond-rating agencies.
"If we had not raised taxes this year, we would have had a disaster in this state," said new Senate Majority Leader Martin Nesbitt, D-Buncombe.
As for Republicans, he added, "They've got no real record to run on."
How North Carolina perceives Congress and President Barack Obama's handling of the economy - and how quickly any recovery reaches the state - also will play a role in how party candidates perform next year.
"They key is what the state's economy is like come next November," said David McLennan, a Peace College political science professor. "There's a lot that could happen in the meantime."
The state's economy shows no signs of a roaring recovery in 2010, which should mean less revenues for state government and likely more budget cutting for Democratic Gov. Bev Perdue and the Legislature. Lawmakers reconvene in May to adjust the second year of a two-year state spending plan they approved last summer.
Some Democratic budget-writers are worried the current-year budget shortfall could be between $400 million and $800 million, requiring them to make deeper cuts for the budget starting July 1.
Perdue believes the shortfall will be around $400 million, and she's already ordered agencies to withhold money to handle a budget gap. That would mean cuts would be far less than those required after the $3 billion shortfall Perdue faced last year. Perdue and Democratic lawmakers passed a budget last summer that generated $1 billion in new revenues, including higher sales and income taxes.
"We've made tough, hard decisions that positioned this state to come back as quickly as any other state," said Perdue, who has three years left in her term. "The pain's not over. I've been very honest about that. But do I think we're moving in the right direction? Yes I do."
House Speaker Joe Hackney said he doesn't believe taxes will have to be raised to close next year's budget gap in part because a recovery will begin to take hold. "There'll be some optimism by the fall of next year that we are turning this thing around," said Hackney, D-Orange.
GOP legislators said voters should be angry because last year's tax increases were symptomatic of too much spending in 2006 and 2007 and a failure by Democrats to set aside enough reserves.
"It just would have been less painful if we had enough set aside in the budget for those rainy days," said Sen. Eddie Goodall of Union County, the Republicans' joint caucus leader.
Far-reaching legislation - such as an overhaul of the state's tax system - will be difficult to pass during an election year before the once-a-decade drawing of legislative and congressional district boundaries in 2011.
Meanwhile, the continuing state and federal investigations of Easley and his associates could last throughout next year if charges are filed.
A local prosecutor examining whether Easley or others should be charged based on evidence uncovered in a state elections probe said recently it could take several months before he decides.
Republicans would need to wrest from Democrats six seats in the Senate and nine in the House to control those chambers. Several incumbent Democrats representing swing seats or districts that lean Republican have chosen not to run.
In federal races, all 13 U.S. House seats are up for election, but the biggest race will be for Burr's job. Secretary of State Elaine Marshall, former state Sen. Cal Cunningham and Chapel Hill lawyer Kenneth Lewis are mounting Democratic primary bids.
Peace College's McLennan said a bruising and costly Democratic primary battle should stand to help Burr, who had nearly $3.5 million in campaign coffers in September.
"It's going to be a real tough road for Democrats to hoe," he said.
Longtime state Democratic consultant Brad Crone said the outcome of the 2010 elections will depend on which party can attract independent voters and whether black voter turnout approaches levels seen during the 2008 election when Obama was on the ballot.
"The good news is we've got time to get back on our offensive game," Crone said.
Jennifer Roberts Supports Park Helms' $9,000. ABC Deal Dinner...NC Corruption
Mecklenburg ABC Board Chairman Parks Helms insisted Wednesday that the agency did not mislead the public about its relationship with an international liquor company that treated officials to a $9,000 holiday dinner.
The board paid more than $11 million to Diageo Americas from January to November, according to documents obtained by WCNC, the Observer's news partner.
Agency officials previously released a statement saying it "has no business relation with Diageo other than selling its products in ABC stores in Mecklenburg County."
The disclosure comes as the state Alcohol Law Enforcement Division is investigating the Nov. 18 dinner for 28 people paid for by London-based Diageo, which makes brands such as Smirnoff vodka and Johnnie Walker Scotch. State ABC Commission officials have authority to remove local board members and employees who violate state laws against accepting gifts.
Last week, Helms announced that he and other top staff paid back the cost of the meal at Del Frisco's steakhouse in south Charlotte.
In his first public remarks since the disclosure about payments to Diageo, Helms defended himself and accused political rivals of spreading falsehoods.
Helms said there is no link between the holiday party and payments to the company. The board pays $47 million a year to Diageo and dozens of other vendors for the purchase of their products, he said.
"It's disappointing to me we are going down the road of making innuendo accusations," Helms said.
But Helms' assurances failed to quell criticism from some county commissioners, who appoint members of the local Alcoholic Beverage Control Board.
The agency's statement did not explain that it not only sells liquor, but also makes direct payments to Diageo.
Commissioner Karen Bentley said that Helms should resign.
The board's previous statements about its relationship with Diageo "was at minimum, misleading," Bentley said. "At maximum, it was completely false."
County Commission Chair Jennifer Roberts also said the ABC Board's previous statement was "misleading."
Distillers lobby the state ABC commission to keep their products in its central warehouse through which local stores buy their liquor.
ABC stores are run by local boards across the state. Distillers also try to persuade local panels to stock their brands in the stores.
Local boards place orders from the central warehouse and after the alcohol arrives, the board has 30 days to make payments to liquor companies.
Records show the Mecklenburg ABC Board wrote 22 checks to Diageo from January to November. The board is Diageo's biggest customer in North Carolina.
Helms said Mecklenburg officials decide which brands to carry in their 21 stores based on sales.
A 1996 memo from the state ABC Commission prohibits manufacturers or vendors from giving local ABC boards money "or any other thing of value."
The Mecklenburg ABC Board has previously said that "unsolicited meals is an accepted business practice" and excluded from the law barring gifts.
Helms, who attended with his wife, was the only board member at the dinner. He has said he is repaying $1,000. Board CEO Calvin McDougal, who went with his wife, is repaying $4,000. They agreed to cover the tab for ABC employees for whom repayment would be a hardship. Others must pay $330 each.
On Wednesday, Helms said he did not know who was hosting the dinner before he arrived. He said that the ABC Board has dealings with 60 to 70 vendors whose brands are sold in Mecklenburg County stores.
But commissioner Bentley said Helms "should know better."
"If he didn't violate the policy, he violated the spirit of it," Bentley said.
Roberts, the commission chair, said she did not know if the board would take action against Helms. However, she noted, that he has repaid the company for the dinner.
"They have made things right," Roberts said. "The dinner was mistake and it is not going to happen again."
2nd Fired Exec Claims NC Security Co. Connected To Sen. Tony Rand Broke Law
A second former board member for a small, politically connected security gear maker said the company's chairman tried to persuade him to join an insider trading scheme.
Law Enforcement Associates Corp. reported former sales director and board member Martin Perry's claims of multiple legal violations to the Securities and Exchange Commission.
Perry said company board chairman and state Sen. Tony Rand, D-N.C., invited him to join a plan to manipulate the company's stock. Perry said he and fired Chief Executive Paul Feldman were interviewed by FBI agents about their claims in September.
A letter Perry wrote to the U.S. Labor Department which outlines the charges closely tracks earlier allegations by Feldman.
Perry, like Feldman, said Raleigh-based LEA also may have violated export laws by working with a company in which LEA founder John Carrington had an ownership interest.
Both the company and Rand denied Perry's allegations.
"It's basically just a rehash" of Feldman's earlier claims, Sen. Tony Rand said Wednesday. "Any allegation of wrongdoing are absolutely untrue."
Rand said LEA's directors plan to meet Thursday, and will likely discuss what an outside attorney has learned about the allegations.
The company said in its filing with the SEC that it does not believe Perry's allegations, "nor does the company believe the resolution of these matters will have any material effect upon the financial statements or other information contained in its reports to the SEC."
LEA said it believes the two former executives were seeking federal whistle-blower protections available under federal securities law.
Carrington, a former Republican state senator from Raleigh, pleaded guilty in 2005 to violating U.S. export laws when Sirchie Finger Print Laboratories, a company he once headed and that spun off LEA in 2001, illegally shipped more than $1.2 million in equipment to China through middlemen. Carrington agreed to a denial of export privileges for five years.
Perry and Feldman said they warned the LEA directors against the company doing business subsequently with Safe Source Inc., because Carrington had an ownership stake in the company.
Perry and Feldman said dozens of state politicians owned stock in LEA.
Gov. Beverly Perdue bought about $1,000 worth of LEA stock in 2002 when she was lieutenant governor, her spokeswoman said earlier this month. The stock was not listed on her ethics disclosure form until 2006, when its value topped the $10,000 minimum threshold for reporting, spokeswoman Chrissy Pearson told The News & Observer of Raleigh. Perdue still owns every share of the stock she purchased in 2002, Pearson said.
Perdue has asked at least four state agencies to examine nearly $200,000 in buys of surveillance equipment from LEA since Rand became the company's chairman in 2003. Some gear was bought without competitive bidding.
Rand has said he is leaving the Senate this month to become Perdue's parole chief.
Jennifer Roberts, Part of the Problem
I think I’m done cutting Roberts any slack on this DSS mess. For her to obstruct and slam the attempts of other commissioners to find out what is going on with county’s massive, $200m. DSS operation is too much. And for Roberts to suggest that a closed session airing of DSS’s dirty laundry is not her preferred way to go is an insult to the intelligence of all Mecklenburg County taxpayers.
The only reason Commissioner Bill James and the other GOPers are suggesting the closed session route is in response the “disclosure” stonewall County Manager Harry Jones has erected around the investigation — a construction effort aided and abetted by Jennifer Roberts. Fine. Let’s hear DSS chief Mary Wilson answer questions in open session. Super. Next.
It will also be interesting to see if Commissioner George Dunlap’s confirmation that a federal grand jury probe is underway of DSS shakes anything new loose. Why it took a full month for the probe’s existence to be reported remains a mystery, but at least everyone in town has caught up to the story.
However, it would be wrong to assume that the probe will result in any indictments, both as a matter of fairness and institutional inertia. Prosecutors are political animals and will require some slam-dunk, smoking gun type evidence of wrongdoing for them to move on a DSS devoid, until very recently, of adult supervision of its funds.
On the third hand, not all gross mismanagement rises to the level of criminality. This is why the county commission must itself reestablish public trust in one of its largest ongoing budget expenses. Jennifer Roberts needs to help that process or get out of the way.
Parks Helms Still At Large. Still.
Keep yapping, Parks. Every word is a mini-indictment.
The guy takes over the ABC board and within months a liquor company is treating ABC officials to a $9000 steak dinner. And Parks has the stones to suggest the ethics of such a thing are ambiguous and uncertain. The contempt this man has for his fellow citizens knows no bounds. In fact, Helms’ dissembling over Steakgate recalls nothing so much as his good buddy Jim Black’s infamous fruitcake and canned ham soliloquy, in which the soon-to-be convicted felon lampooned concerns about ethics in government.
When that evil man dies in prison I plan to celebrate with fruitcake and canned ham.
As for Parks, if the Mecklenburg County Commission cannot muster up the votes to remove the guy from the ABC board, we might as well shut down representative government around here. This is not a close call. Only Helms’ long, kingmaking reach has stayed the hand of Democrats on the board who should — and no doubt do — know better.
The sole purpose of a $9000 steak dinner is to buy influence. Period. The ABC operation has one job, buy and sell liquor. Period. ABC has monopoly authority to do so, and suppliers accordingly have tremendous incentive to curry favor with the monopolists. All that is required is a monopolist with enough ego and hubris to accept such favors.
Ladies and gentlemen, I give you Park Helms. Please take him.
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Sources: WRAL, McClatchy Newspapers, Charlotte Observer, Miami Herald, The Meck Deck Blog, John Locke Foundation, Under The Dome, NC General Assembly, Google Maps
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