North Carolina is held up as a national model because it provides state judicial candidates with a viable public financing alternative to the private money chase. The pioneering program has earned acclaim from reformers, the American Bar Association, and NC judges across the political spectrum. A blog entry today by Mark Binker at the Greensboro News & Record notes that Republican leaders in the NC General Assembly plan to keep the program, but delete a rescue-funds provision that mirrors one struck down by the US Supreme Court. The public grants and a state voter guide are not funded from the NC General Fund. A similar program for some Council of State offices will be suspended because it only has money from the General Fund; efforts last year to provide an independent source of funding for that Voter-Owned Elections program were stymied.

    ● In the past 10 years, Pope has pumped $3 million into state and national politics and $35 million in a network of North Carolina nonprofit think tanks and advocacy groups that push a libertarian and ultra-conservative agenda.

    ● In addition to these funds, he has invested millions in national conservative organizations that he helps lead as a board member, trustee or advisor (see second part of chart of foundation grants). At the top of this list is a $2.2 million investment over the past decade in Americans for Prosperity, where Pope is one of the four board members along with its founder, David Koch. AFP is credited with financing and nurturing the national Tea Party movement; one of AFP’s strongest chapters is in North Carolina.

    ● Pope’s biggest investment by far has been in the John Locke Foundation, which he co-founded and helps direct from his board position; his family foundation accounts for $19.7 million or 79% of JLF’s $25.0 million income for FY 2001-2010.

    ● Pope is also a board member and the source of over 90% of the funds for the Pope Civitas Institute, named for his father ($8.0 million over the past decade); the NC Institute for Constitutional Law ($3.3 million); and Pope Center for Higher Education ($3.0 million).

    ● Pope family members frequently bundle their campaign contributions together, beginning the practice when Art’s father (John W. Pope, now deceased) was a prominent Republican donor. In the landmark 2010 election, Art provided NC General Assembly candidates with bundled contributions (totaling up to $16,000 per candidate) from himself, his wife, his mother, and his sister; 21 GOP legislative candidates received a total of $252,000 from these bundles in 2010.

    Another measure of Pope’s power comes from an analysis by the Institute for Southern Studies of his influence in the pivotal 2010 election. Along with his family’s donations to candidates, Pope helped lead and finance three organizations that spent money on mailers and attack ads in selected races; the combined investment totaled $2.2 million in 22 pivotal legislative contests. Republicans won 18 and took control of the General Assembly. Pope’s Variety Stores gave $470,000 to the three groups (Real Jobs NC, Civitas Action, and Americans for Prosperity), and Pope is an officer of each or its nonprofit, c-3 affiliate. The Institute is continuing its investigation of “Pope’s empire” on its special website, ArtPopeExposed.com.

   Former State Senator Marc Basnight, backed by the money of oil baron Walter Davis, reigned for many years as the state’s top political heavyweight – but Davis is dead, Basnight has retired from politics, and the NC General Assembly is now controlled by Republicans. Some thought North Carolina would never see another person with Basnight’s clout, but Art Pope could have a bright future as kingmaker and behind-the-curtain Wizard of GOP.

   You’re invited to sign a Democracy NC petition against the kind of corporate interference in public elections epitomized by Pope’s use of his corporation’s money.

     Next ID advocates say, “The majority of states require voters to show an ID, and NC should, too.” Yes, 30 of the 50 states require some kind of ID, but even after the big push by GOP legislatures, only 7 states have a law as restrictive as H-351. Legislators in the other 43 states are just as concerned about fraud, but they recognize Big Government intimidation is not needed. Another argument goes, “The vast majority of North Carolinian favor requiring an ID.” Yes, it’s popular and makes common sense until you consider all the facts. In the same poll (page 14), 10% of respondents said it would “decrease their ability to vote.” If just 2% were pushed aside, that’s well over 100,000 people penalized at a huge expense for no real increase in voter security.

     Finally, we’re told, “Voter turnout in Georgia was not hurt by its strict photo ID requirement.” It’s tough to isolate what factors influence changes in voter turnout, but look at this evidence: In the five presidential elections (1988-2004) before 2008, the voter turnout rate in North Carolina exceeded the rate in Georgia by 3 to 5 percentage points. But in 2008, after Georgia adopted its ID law, our turnout rate was 6.6% higher – 61.3% of voting-age adults cast ballots compared to 54.7% in Georgia. Georgia is now 30% African American, compared to 22% in North Carolina, so you’d think Georgia would have experienced a bigger surge than NC with the Obama factor in 2008. But that didn’t happen. There was an increase over 2004, but it was tamped down by something. No doubt, some people would like a big turnout tamped down in NC in 2012. A 1.5% decrease in turnout among the 7.2 million adults in NC means 100,000 voters who would not have their voices heard.

Americans for Prosperity Plan Counter Protest Nearby

The Durham-based good government group Democracy North Carolina is sponsoring a rally tomorrow, Wednesday July 13th, to protest GOP attempts to override Gov. Perdue’s veto of the voter photo ID bill plus several still-pending bills that would eliminate Same Day Registration, slice a week off Early Voting and cut NC’s successful youth voter pre-registration program. Partisan redistricting efforts will also be addressed at the rally. The rally begins at 11:00 AM in front of the General Assembly. A short speaker program will be followed by a 10-minute silent protest in the Senate Gallery.

The conservative group, Americans For Prosperity, have announced their own General Assembly rally at the same time to urge GOP leaders to override Governor Perdue’s recent vetos of GOP-sponsored legislation.

Protect & Respect Our Vote Rally
Wednesday, July 13, 2011 ● 11:00 AM
NC General Assembly Building
16 W. Jones St. ● Raleigh, NC

For more information on the rally, please contact Democracy North Carolina Organizing Director Adam Sotak at (704) 277-8340.

For Release Monday, May 30, 2011

Contact: Bob Hall, 919-489-1931

Shotgun Merger of Agencies Shields Officials from Scrutiny, Hundreds of Campaign Reports Are Already Not Audited

A nonpartisan watchdog group is sharply criticizing a proposal in the state Senate’s budget bill to merge and cut the funding for three agencies that now oversee the ethical conduct and campaign activities of state legislators, thousands of other public officials, and hundreds of lobbyists.

The proposal would combine the State Board of Elections, State Ethics Commission and the lobbying regulation division of the Secretary of State’s office into a new agency by January 1, 2012, and put it under the control of General Assembly leaders. The newly created State Board of Elections and Ethics would have a smaller staff, less money and a nine-member board with six members appointed by legislative leaders and three by the governor.

“These are the agencies that guard the public’s trust in government. They hold officials accountable for the honest performance of their duties, and they’re already straining to do their jobs right with limited resources,” said Bob Hall, executive director of the Democracy North Carolina. “The way this merger is being pushed so rapidly, crammed inside a budget bill without a thorough study, is completely irresponsible and highly suspicious. You have to wonder if the Republicans are trying to cripple these agencies and throw them into a state of confusion during the upcoming election.”

The new agency would have 20 fewer positions (15 currently filled) and $1.4 million less a year* to register voters, administer elections, oversee the conduct of public officials and political appointees, regulate lobbying and campaign financing, and enforce more than a thousand pages of state law.

Hall said his concern over the merger was heightened after discovering one area where funding cuts are already blocking public accountability and transparency. A review by Democracy North Carolina of files at the State Board of Elections found that hundreds of campaign finance reports for candidates to the General Assembly in 2010 have not yet been audited, in violation of state law.

“The public has a right to know how money is moving through our election system, who’s cheating and who wants to buy influence,” said Hall. “More cutbacks and this shotgun merger will just shield politicians from scrutiny and reduce transparency, just the opposite of what Republicans promised.”

NC General Statute 163-278.24 says campaign reports must be examined “within four months after the date of each election” to “determine whether the statement conforms to law and to the truth.” Candidates file up to six reports during an election cycle to disclose details about their contributions and campaign spending. But due to budget cutbacks, the State Board of Elections has been forced to lay off clerical and other staff, leading to a large backlog of reports to analyze.

Democracy North Carolina discovered that 651 (44%) of the 1,492 reports filed by the winning and losing legislative candidates in the 2010 general election have not even been entered into a database for preliminary analysis by the Board of Elections staff, much less been audited for errors, missing information, and possible criminal violations.

Paper copies can be viewed through the Board’s website, but some are illegible and it’s impossible to perform the required audit until the information is keyed into the Board’s database. Getting the information from the disclosure reports into the Board’s database is the first step of the auditing process and also makes campaign contributions accessible in a searchable format on the Board’s website.

Hall noted that the Board’s database still does not contain any of the campaign reports for 2009 or 2010 for 49 of the 170 General Assembly winners, including Senate Majority Leader Harry Brown and House Majority Leader Paul Stam. Paper copies of the reports were submitted but they remain unprocessed.

Altogether, 405 of the 960 reports filed by the 170 legislative winners in 2010, or 42% of the reports, have not been entered into the database for processing and have not been audited.

In addition, hundreds of reports for political action committees (PACs) and local and state political parties have also not been entered into the Board’s electronic files for processing.

(You can view a committee’s report at http://www.app.sboe.state.nc.us/webapps/cf_rpt_search/ and see if the report is only an Image of the paper report or if the Data has been entered into the Board’s data file.)

“There’s a perception that record amounts of money flooded the General Assembly elections in 2010, but we still don’t have a handle on where it all came from, who deserves kudos for reporting accurately, and who’s violating the law by withholding information,” said Hall.

“The 2012 election will be unbelievably expensive, with hot national and state contests and more spending by secretive groups, corporations and unions following the Supreme Court’s decision in the Citizens United case,” he said. “Some politicians, but not all, are just as happy to keep us in the dark.”

Hall noted that many freshmen Republicans were elected on a promise to increase transparency in government, but they submitted their disclosures report in paper form only, rather than expedite the audit process by filing them electronically.

“Instead of crippling agencies charged with protecting honest government, more candidates should be required to file reports electronically to expedite the auditing process,” he said.

*The Senate’s proposed state budget would make the following cuts:

AGENCY                                           FUNDS CUT        STAFF POSITIONS CUT

State Board of Elections                   $1,002,408    14 positions (10 currently filled)

State Ethics Commission                  $   219,519      2 positions (1 currently filled)

Sec. of State Lobbying Division        $   200,791      4 positions (4 currently filled)

Totals                                                  $1,422,718    20 positions (15 currently filled)

A List of Legislators and the Status of Reports Entered into Database as of May 15, 2011 is included  in this downloadable  file.

Contact: Bob Hall, 919-489-1931

Legislation to Increase Charges on Small Loans Follows Surge in Contributions from Consumer Finance Industry

A campaign finance watchdog organization is raising questions about whether an unusual pattern of contributions given by donors in the consumer loan business is connected to a bill now moving through the North Carolina General Assembly that will benefit their industry.

During the last election, donors with consumer finance companies gave most of their campaign contributions to Democratic legislators until late August 2010, when they suddenly switched and began pouring more than $100,000 into the campaigns of 15 Republican newcomers challenging Democrats in hot races, as well as the top three Republican leaders in the General Assembly.

“The industry made a substantial gamble in 2010 by shifting its money from incumbent Democrats to Republican challengers and now it appears to be reaping the benefits of that investment with a bill to enrich the industry,” said Bob Hall, director of Democracy North Carolina, a nonpartisan watchdog organization that has filed campaign finance complaints against both parties in the past.

Click here for the industry’s top donors and recipients. Click here to see all its 2010 donations.

Harry Melton, president of Amity Finance in Gastonia, told Hall that his industry’s trade group, the Resident Lenders of NC, gets recommendations from its lobbyists in Raleigh about who to support with donations. “We have lobbyists that make recommendations to us,” said Melton. “On an individual basis, they let us know who would be favorable to our industry.”

Melton has served on the Resident Lenders PAC committee, but like many industry leaders, he gave more personal donations to legislative candidates in the two months after August 15, 2010, than in the past decade – including to candidates far from his home – with the goal of electing “friendly” state legislators. He is now following progress on a bill in the state House to help his industry.

The bill, H-810, would allow consumer finance companies to raise interest rates to 36% on small loans and increase other fees. The companies say they need to earn more from their loans, but the head of the state North Carolina Banking Commission says the industry is profitable and the legislation is not needed. Representatives of military bases in North Carolina and a coalition of consumer groups also oppose the legislation.

Hall said Republican leaders have kept the bill moving forward despite the formidable opposition. In April, House Republican leaders changed plans and decided to skip routing the bill through the Finance Committee, where its fate seemed in question because of bipartisan opposition.

“It’s hard to explain what’s driving this legislation without following the money,” said Hall.

The new Republican House Speaker Thom Tillis and Majority Leader Paul Stam received $27,200 from consumer finance company donors, including $2,000 after the election was over from Security Finance Corporation PAC, the political action committee of a South Carolina loan business.

In the spring of 2010, Security Finance PAC gave 100% of its money to incumbents, with 75%

going to Democrats, but in late August it changed strategies and began giving all its money to Republicans, with 75% going to 14 challengers of incumbent Democrats.

“That’s very unusual,” said Hall. “More than 90 percent of PAC money goes to incumbents in North Carolina, because those officials are in a position to deliver benefits immediately and when they run for reelection, they have better than a four-to-one chance of winning.”

The Residents Lenders PAC, which represents commercial loan companies, also began giving to Republicans challenging Democrats in September 2010. Six Republican challengers received a total of $4,000 from the PAC, plus $3,500 from Security Finance PAC and more than $25,000 from individuals associated with finance companies in North and South Carolina.

Altogether, 19 Republican legislative candidates – and no Democrats – received five or more donations from finance company PACs and executives, many living hundreds of miles from the candidate’s district. Many donors had not given in a legislative contest in the previous 10 years.

According to the analysis by Democracy North Carolina:

● Consumer finance executives and their PACs donated $65,600 to 15 Republican legislative candidates in highly contested races, including 12 held by Democrats and three open seats. Only 3 of the 134 donations to these 15 candidates were made before the middle of August 2010.

● In addition, these donors made 47 contributions totaling $45,450 to the soon-to-be Senate President Pro Tem Phil Berger, House Speaker Thom Tillis and House Majority Leader Paul Stam. All but 2 of the contributions were made after mid-August.

● By contrast, incumbent Senate President Marc Basnight, Speaker Joe Hackney and Majority Leaders Martin Nesbitt and Hugh Holliman received a total of only $3,600 after mid-August – four  donations from the Resident Lenders PAC and nothing from consumer loan executives.

● Before mid-August 2010, the consumer finance donors and their PACs gave more money to Democratic legislative candidates and committees than to Republicans – $15,550 versus $12,300.

● After August 15, the donors gave $126,670 to Republican legislative candidates – more than seven times the $17,400 they gave to Democratic candidates in the final months of 2010.

● Altogether, these consumer finance donors and their PACs gave $172,320 to legislative campaigns in the 2010 election cycle, compared to $30,250 in 2008 and $77,500 in 2006.

● House Speaker Thom Tillis and Republican Majority Leader Paul Stam received nothing from consumer finance donors for the 2010 election until late August. After that, they received nearly three dozen industry-related contributions – a total of $13,950 for Stam and $13,250 for Tillis.

● Of the 17 finance company executives who gave four or more donations to different legislative candidates in 2010, 8 had not made a reported donation to a legislative candidate in the past decade (L. Elmer Britt, David S. Hicks, R. A. “Pete” James, Harry R. Melton, Larry W. Shive, Thomas D. Payne, Daniel L. Thompson, and R. Wayne Smith ) and 6 gave at least 4 times as much as they had given to legislative candidates in any previous election cycle this decade (Gail N. Blanton, Priscilla D. Butler, Glen H. Hall, Royce E. Everette Jr., Al J. Pridgen Jr., and R. David Reese).

● In addition to 3 Republican candidates who won open Senate seats (Thom Goolsby, Brent Jackson, and Bill Rabon), 12 Republicans running against incumbents received multiple donations from finance company donors, often from individuals many miles away; all 12 won: For House – Jeff Collins, Ralph Hise, Stephen LaRoque, Tim Moffitt, Tom Murry, Norman Sanderson, and Mike Stone; for Senate – Jim Davis, Rick Gunn, Wesley Meredith, Louis Pate, and Dan Soucek.

The NC House Insurance Committee has taken up a controversial bill (H-115) that gives insurance companies a large role in overseeing how consumers will be able to buy “affordable” insurance coverage through a state-level “health benefits exchange” to be created under the new national health reform law.

The bill’s biggest supporter is Blue Cross and Blue Shield, NC’s largest insurance company. It gets to help name at least one representative to the new exchange. Notably, sponsors of the Insurance Exchange Bill are top recipients of Blue Cross contributions. Other reserved seats on the Exchange are being earmarked for other special interests and big donors of the bill’s sponsors.

No consumer groups or public health or health-related organizations have been designated seats on the exchange.

Download the full report, including top donors of Blue Cross donations here:

http://www.democracy-nc.org/downloads/BlueCrossRecipients-4-2011.pdf