Calls for campaign reform after guilty plea

May 5, 2010 9:00:00 PM PDT
A day after a Wilmington businessman was fined $5,000 and given probation for illegal donations Gov. Beverly Perdue and two state senators, some are calling for a change in the law.

Rusty Carter, owner of the Atlantic Corp. packaging company, entered an Alford plea to three misdemeanor campaign donation laws in New Hanover County.

An Alford plea allows a defendant to acknowledge the state's evidence could result in a conviction without a defendant having to admit any guilt. Prosecutors say Carter made illegal donations to Perdue, Senate leader Marc Basnight, D-Dare, and Sen. Julia Boseman, D-New Hanover.

Carter did not speak to reporters after the hearing.

According to Tom Old, an assistant district attorney in New Hanover County, more than a dozen employees at Carter's company contributed to three campaigns since 2003. Attorneys said $84,000 went to Basnight's campaign, $64,000 to Perdue's campaign and $28,000 to Boseman's campaign.

Carter's lawyers said the employees were given a bonus knowing that some of it would be contributed to political campaigns. State law caps individual campaign contributions at $4,000 and businesses cannot contribute directly or indirectly to a candidate. Old said the campaigns were not aware of the violations when they accepted the contributions. Perdue's campaign said March 19 it had forfeited $48,000 in contributions from 2005 to 2008 because her campaign was worried the donors may have been unlawfully reimbursed by Carter's company.

Perdue campaign spokesman Marc Farinella said a check for the additional $16,000 in tainted contributions was being cut. "We're obviously very anxious to turn those over to the state board," Farinella said.

Another problem for Perdue is that she appointed Carter's wife to the Board of Trustees at UNC Wilmington. Critics, including North Carolina GOP Chairman Tom Fetzer, say it's a blatant example of pay to play politics.

"It's fairly obvious to me that Rusty Carter was buying himself a seat on the UNC Board of Trustees both for he and his wife," Fetzer said.

Ruster Carter was named to the UNC-Chapel Hill Board of Trustees by Former Governor Mike Easley and served two terms. His last term expired in 2008. Susan Carter resigned from the Board of Trustees at UNC Wilmington earlier this year.

Perdue has said that she had no idea how Carter raised the money, but Fetzer says she should have.

"If you're raising that kind of money and you get 12 employees in a company, common sense would force you to ask the question, are all these people capable of giving at that level," Fetzer said.

But Perdue points to the sheer number of people who gave to her campaign and when she learned about the dirty money, she returned it.

"I'm very adamant about working with the DA to make sure that any kind of person who does this is not guilty of a misdemeanor but a felony," Perdue said. "It should be a felony."

Meanwhile, Basnight on Tuesday sent the State Board of Elections a check for $84,000 for 24 donations.

"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," Basnight wrote in a letter to state officials. "I am divesting all contributions that have been, unbeknownst to me, improperly made to my campaign."

Wednesday, Republicans called Carter's punishment a slap on the wrist and said the law has to change.

"This was a naked attempt to in a corrupt and illegal manner affect the outcome of three different elections," Fetzer said.

Fetzer said he's been calling foul on Carter's fundraising for months.

"This should be a felony. They should change the law in North Carolina that if you spend a couple hundred thousand dollars illegally to affect the outcome of the elections, you should get more than a slap on the wrist and a small fine," he said. "What we're talking about here is a misdemeanor. It's like running a stop sign. It's like a traffic violation."

Ethics watchdog Jane Pinsky agrees the punishment should be steeper.

"It certainly should have a steep fine and it should be a felony and it should at least have a lot of community service," she offered.

Thursday, Governor Perdue also weighed in, saying she agrees that the law needs to be toughened up.

"I'm very adamant about working with the General Assembly to make sure that any kind of person who does this is not guilty of a misdemeanor but a felony. It should be a felony," she said.

Basnight, for whom Carter raised some of the illegal money, says he too thinks the laws should be stronger and says a committee is studying the matter. In the meantime, there are three ethics bills that could come up in the legislative session that starts next week.

Basnight says those may have to wait because of the budget. Fetzer says that's unacceptable.

"They could pass reform legislation in one session in one day and then move on to the budget," he claimed.

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