State Auditor subpoenaed in Easley case

May 27, 2009 6:53:35 PM PDT
Federal investigators have served a subpoena on North Carolina State Auditor Beth Wood and her office as part of the investigation of former governor Mike Easley and his wife Mary.Click here to read the subpoenas (.pdf)

The subpoena's request information about an investigation done by the Auditor's office last fall on a controversial trip that Mary Easley made overseas that was sponsored by the Department of Cultural Resources.

In that report, the Auditor's office found more than 100,000 taxpayer dollars were spent by the former first lady and four state employees in Russia, Estonia and France. The State Auditor at the time - Leslie Merrit - said nearly half the expenses were unreasonable and excessive and called it "a clear abuse of state dollars charged to taxpayers."

The subpoenas also seek information about Mary Easley's job at NC State University. While the subpoenas deal only with Mary Easley, they're clearly linked to the larger investigation involving her and her husband.

"Given that we looked at the expenses, I'm assuming they think we looked at the job part of it which would have political connections of course to her husband - being the governor's wife, the governor is always there in whatever you do, so it's obviously tied into the same investigation they're doing with the grand jury," offered Dennis Patterson with the North Carolina State Auditor's Office.

The state auditor's office says it's cooperating with federal authorities in the investigation.

"They're asking if we have it, to provide documentation, if we do, we will," Patterson said.

While Patterson says he can't confirm or deny that there was ever an investigation into either, N.C. State Chemistry Professor and Faculty Senate Chair Jim Martin says on September 3, 2008, two men from the state auditor's office asked him questions about Mary Easley's position.

He says the conversation lasted at least an hour and the men told him they were also going to be talking to the Provost Larry Nielsen about the former first lady. Nielsen has since resigned over the matter and was ordered to testify before a federal grand jury.

Martin says he has never heard anything else from the auditor's office.

"The fact that people have been out talking to people does not mean that we're doing an investigation or an audit," Patterson said.

But, Republicans say they want to know what happened to the audit that would have been started under Merritt. They want to know what Wood did with the investigation surrounding the Easley's --who are Democrats.

"I think there appears to be at least from our perspective some foot dragging and refusing to push forward to getting answers to questions," Senate Minority Leader Phil Berger said. "There are all sorts of reasons why an audit would not be presented. You reach a point where you have to say what's here?"

However, Merritt wouldn't confirm the Mary Easley investigation; he would only say there were some "good topics" being audited when he left office by non-partisan career staffers who are still working there today. But the question remains whether they're still working on an investigation or if it was finished and never made public --something federal authorities says they will be looking into.

Patterson says when an audit is finished a report is made public whether there were violations or not. He says nothing's been swept under the rug.

Former Governor Easley and his family are the subjects of wide ranging investigations by both federal officials and the North Carolina Board of Elections.

Officials are looking at trips the Governor may have made on private planes, his relationships with car dealers, and a land deal.

Trips investigated

Last Wednesday, the investigation of trips Governor Easley took on private planes led to the resignation of a top transportation official.

North Carolina Department of Transportation board member Cameron McRae told Governor Beverly Perdue that he would step down effective immediately.

According to reports in the Raleigh News and Observer, McRae gave Easley airplane flights that neither man disclosed in campaign records - a possible violation of state law.

North Carolina law requires the disclosure of gifts over $200. The law also prevents corporations from donating to campaigns and limits individuals to giving $4,000 to a candidate in an election cycle. The market value of many of the flights appears to be over $4,000 or enough to top the legal limit when combined with other contributions. It can cost up to $1,300 an hour to charter the kind of private plane the governor needs to travel.

Easley appointed McRae to a third four-year term on the transportation board in early January, just days before he left office.

Free cars investigated

The State Board of Elections and a grand jury are also looking at an arrangement where Easley's wife and son drove cars provided by car dealerships for free. In a past interview with Eyewitness News, Easley said he owned the cars, but DMV records show Easley bought a used GMC Yukon which his son had been driving two days after our interview.

Mary Easley also drove a car that was characterized as "a loaner" for months.

Land deal investigated

Investigators are also scrutinizing a Carteret County real estate development in which the former Governor bought a lot in 2005.

Some reports say the purchase of a lot in the Cannonsgate development amounted to a "sweetheart deal."

Newspaper reports say Easley got a choice waterfront lot a much lower price than similar lots were going for at the time. Easley appointed the developer and three others involved in the project to major state boards.

Easley reaction

Former Governor Easley has refused interview requests, but in a statement released to the media that he was "comfortable" with the scrutiny of his affairs.

"I am comfortable with the federal authorities collecting and reviewing all records relating to my 30 years of public service to the people of North Carolina," Easley said. "I am confident of the outcome, and we look forward to moving on with our private lives," he wrote.

NC State involved

The Easley case has also focused attention on a job Mary Easley was given at NC State University.

The former first lady Mary Easley appeared at a news conference last Thursday to defend her hiring to a $170,000 a year position at the school.

There have been repeated calls for her to step down following allegations the job was given to her as a political quid pro quo. The controversy has already forced the resignations of two high level school officials.

Easley did not speak for herself Thursday, but her attorney Marvin Schiller vigorously denied her hiring was anything but above board and said she brought valuable skills to the job.

"The indisputable evidence is that Mary is doing an outstanding job for NC State and the state of North Carolina," he said.

In 2005, Easley got a three-year contract at $80,000 a year. That was later turned into a 5-year contract worth $850,000 to run a campus speaker series and a public safety center.

NC State officials deny that there was any political dealing to get Mary Easley her job. Still, both UNC President Erskine Bowles and NC State Chancellor James Oblinger have both called on her to step down, saying the controversy has become too much of a distraction at the university.


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