The Rusty Carter Network
The network built by Rusty Carter for giving campaign contributions was made possible by his company money, according to Carter's lawyers and a prosecutor who handled his guilty plea on Tuesday.
The N&O's analysis of the Carter network's giving since 1999 shows that Senate leader Marc Basnight has benefitted the most, getting more than $100,000 in campaign money over the years, J. Andrew Curliss reports on the Investigations blog.
In 2008, Carter gave the state Democratic Party $50,000. It is not clear if officials examined where that money came from.
Here's a breakdown of the giving that totals more than $10,000 total from Carter, his wife, Susan, and his employees.
Marc Basnight campaign: $109,000
Bev Perdue committee: $93,000
Mike Easley committee: $68,000
N.C. Democratic Party: $67,500
Julia Boseman committee: $45,000
Citizens for Higher Education: $25,565
Gov. Bev Perdue
2005: $20,000
2008: $44,000
Sen. Marc Basnight
Nov. 2003: $4,000
2006: $24,000
2008: $56,000
Sen. Julia Boseman
2006: $28,000
Marc Basnight Forfeits $84,000 Connected To Rusty Carter
N.C. Senate leader Marc Basnight forfeited $84,000 that his campaign received from contributors associated with Rusty Carter.
Carter, who runs a Wilmington packaging company, pleaded guilty today to charges related to accusations that he gave money to friends and employees to give to candidates, a violation of state law.
In his letter to the State Board of Elections, Basnight said he was not aware of Carter's scheme. The prosecutor handling the case said authorities do not believe the candidates were in on it, J. Andrew Curliss reports on the Investigations blog.
Basnight said in his letter that campaigns do not have the ability or authority to vet contributions such as those connected to Carter.
My campaign has always fully complied with our elections laws, and it has always been my expectation (and hopefully, the expectation of every candidate for office) that anyone who contributes to my campaign does so transparently, legally, and in good faith.
While it is a campaign’s responsibility to report every donation it receives, it is not in a campaign’s ability or authority to initiate investigations on the motives or actions of donors. That is why the Board of Elections is such an important resource for candidates and officeholders – and such a critical part of ensuring the integrity of our elections.
UPDATE:
During Carter's plea hearing, it came out that Perdue, who has already forfeited $48,000 of contributions related to Carter, received an additional $16,000 from contributors connected to Carter. A spokesman for Perdue's campaign said the campaign intended to forfeit that money as well.
Democrat's Donations Illegal; Strikes Deal With Prosecutors
A major Democratic fundraiser illegally funneled about $150,000 into the campaigns of Gov. Bev Perdue and Senate leader Marc Basnight, a judge ruled Tuesday.
Rusty Carter, who owns the Atlantic Packaging Corp. of Wilmington and who was on the UNC Chapel Hill board of trustees, struck a deal with prosecutors and entered an Alford plea to three misdemeanor counts of giving illegal donations.
Such a plea allows defendants to assert innocence while acknowledging the evidence is against them.
Carter said in a statement after Tuesday's court hearing that he has "accepted responsibility" for the violations.
Judge John J. Carroll III of New Hanover County accepted the deal. He ordered that Carter pay a $5,000 fine - an amount specified in the plea agreement - and prohibited Carter from making campaign donations for the next two years. A 30-day jail sentence was suspended.
Carter, 61, became a heavy hitter in political circles by raising large sums. He served for years on the UNC Chapel Hill board, an appointment he secured through his old fraternity brother, former Gov. Mike Easley.
His wife, Susan, was appointed by Perdue to the UNC Wilmington board of trustees last year; she resigned recently as news of the questionable contributions first surfaced.
Carter channeled money through some of his employees. He gave them bonuses from company accounts and directed the employees to use the money for political donations, according to his lawyers and a prosecutor.
It's illegal to give money to someone else for the purpose of evading the state's $4,000 per person contribution limit. Violations are a class 2 misdemeanor, the equivalent of failing to yield for an emergency vehicle.
It is also illegal in North Carolina for corporations to give money directly to a candidate - and Carter's lawyers acknowledged in an interview that federal tax implications still loom.
A lawyer for Carter, David Long of Raleigh, said there are tax questions related to the employee bonuses being used for political donations. But he said he could not comment.
Once the employees had the bonuses, they and some of their wives gave the maximum allowed contribution of $4,000 for an election campaign over and over - 24 times to Perdue and Basnight since 2006, records show.
Prosecutors and Carter's lawyers said that Carter came up with the method of giving to candidates on his own and that none of the candidates knew Carter was bypassing election laws.
Perdue, who was lieutenant governor before being elected governor in 2008, received $64,000 from Carter employees since 2005. Basnight, a Manteo Democrat who rules the Senate, took in $84,000.
Basnight forfeited the money Tuesday to state elections officials, saying the illegal aspects had been "unbeknownst to me."
Perdue has already forfeited $48,000 she identified as being questionable. A spokesman said Perdue's campaign would return the rest of the illegal money soon.
Bev Perdue Campaign Forfeits $48K
The campaign of N.C. Gov. Bev Perdue on Friday forfeited $48,000 for what it said were questionable campaign contributions from nine donors who all work for or are related to a major Democratic fundraiser.
The campaign of Perdue, a Democrat, said in a statement it was "concerned that some or all of the contributors involved may have been reimbursed by their employer." It is illegal in North Carolina for someone to provide another person with money to give to a campaign, or to pay them back for a donation.
The contributors are all linked to Rusty Carter, who owns the Atlantic Corp., a packaging company in Wilmington.
A review of campaign finance reports shows that the same nine people also made similar donations, totaling $44,500 in 2008, to the campaign of influential Senate leader Marc Basnight, a Manteo Democrat.
Basnight's chief of staff, Amy Fulk, said in an e-mail message that Basnight is seeking guidance from elections regulators on the contributions to him and whether they "were made unlawfully."
"If any such donations are found to have been unlawfully given, Senator Basnight will of course take the appropriate measures to remove them from his account," Fulk wrote.
The prohibition against "giving in the name of another" is aimed at ensuring that campaign contribution limits are followed and that the actual donors to a candidate are fully disclosed. Openness is a major goal of modern campaign laws.
It is also illegal for a corporation to make direct contributions to a candidate.
Efforts to reach Carter were unsuccessful. A lawyer for Carter's company said he and Carter were working to make full disclosures.
"We have already contacted the relevant authorities and offered to fully cooperate," lawyer Michael Murchison wrote in an e-mail message.
Murchison declined to answer questions about how the donations came about, how they were delivered to the campaign, or who organized the donations. "I'm not at liberty to discuss it," he said.
Most of the contributions to Perdue and Basnight were in 2008, though some are from 2005. Many of the donors, who were identified as being part of the management team at Atlantic Corp., have also given to other local and statewide candidates in the past decade.
The Atlantic Corp. has some business dealings with state government, but Murchison did not detail the scope, calling it "trivial."
State Board of Elections officials said they were aware of the developments, but declined comment.
Carter's connections
Carter has been a major campaign money-raiser for years, at times working closely with Wilmington developer Lanny Wilson to host fundraisers and bring in the tens of thousands of dollars that candidates need to finance statewide campaigns.
There are no requirements under state law for such people to disclose how much they raise for candidates, other than for members of the state Board of Transportation.
Wilson testified to making illegal contributions under questioning in an elections hearing last year that examined the campaign of former Gov. Mike Easley.
Carter, a fraternity brother of Easley's when they attended UNC-Chapel Hill, was also subpoenaed to testify at the hearing, but he was not called upon. A week before the hearing, the Easley campaign forfeited money related to a flight in 2004 on a plane owned by Carter.
Easley twice appointed Carter as a trustee at UNC-Chapel Hill.
Perdue appointed Carter's wife, Susan, to the board of trustees at UNC-Wilmington last year.
Examining the gifts
Perdue's campaign said it was "unable to make a firm factual determination" about what happened but that it made the forfeiture "because we have become concerned about the integrity of these contributions."
In recent months, Perdue's campaign has made similar disclosures about what it believed were questionable campaign receipts, mostly centering on flights Perdue took but that her campaign said had not been properly accounted for. Elections officials have been probing the campaign's reports, and Republicans have been demanding a thorough investigation.
In a news release Friday, Perdue's campaign officials said the latest forfeiture was not the result of the elections inquiry.
Rather, it said, the matter first came up through a news conference conducted by the Republican Party in which the coordinated contributions were highlighted.
"Their remarks about these contributions raised some questions which we felt needed to be examined," the Perdue committee said in the release. "At no time during the campaign were we aware of - nor would we have condoned - any efforts by any contributor to circumvent compliance."
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Sources: McClatchy Newspapers, WRAL, Google Maps
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