RALEIGH, N.C. – The prosecutor handling the campaign finance case of former North Carolina Gov. Mike Easley says he wants to decide by February whether to seek criminal charges against the two-term Democrat.

Rowan County District Attorney Bill Kenerly told The Associated Press on Thursday he understands Easley and the public want resolution in the matter as soon as possible.

The State Board of Elections has asked a local district attorney to examine whether Easley or others committed crimes stemming from some incorrect campaign finance reports.

The first prosecutor given the case asked to be removed because he and Easley are longtime friends.

RALEIGH, N.C. — The State Board of Elections wants campaign finance reform following the $100,000 penalty it handed the Mike Easley campaign committee for unreported flights.

Right now, the board can only penalize campaign committees for violations, not the candidate him or herself.

So in former Governor Mike Easley’s case, he is not personally responsible for the recent forefeiture and fine against his campaign committee.

The State Board of Elections unanimously approved an order asking the General Assembly to consider holding a candidate responsible for any penalties the candidate’s campaign committee can not cover.

Representative Deborah Ross, Vice Chair of the North Carolina House Election Law and Campaign Finance Committee, said “I can not imagine this would not be something that committee would look at closely.”

Fellow committee member Rep. Skip Stam (R – House Minority Leader) said he thinks changes in the law could happen during the short session.

“The candidate should be, if not aware of everything happening in the campaign, should be willing to take responsibility for everything that happens in the campaign,” said Stam.

To hear more from members of the Senate as well as Governor Bev Perdue, click on the video monitor above.

RALEIGH, N.C. — There will be no last minute campaigning from Cathy Truitt, candidate for the District 2 school board seat in Wake County. After an unsuccessful attempt to withdraw her request for a runoff against John Tedesco, Truitt announced she would accept the seat if elected.

But the controversial candidate said Monday she is finished with campaigning. She stayed in the race, she said, to ensure that the outcome of the election will be up to the citizens in her district.  Her withdrawal would have left open the possibility that the Wake County Board of Education would appoint a replacement to the position.

“My concern was whoever takes that seat next week, tomorrow, should be elected by the voters,” said Truitt. “[They] should not be appointed by this [school] board, they should be elected by the voters. And it should be a legitimate election.”

Truitt has been criticized by her opponent and her own Republican Party for the events of the last several weeks. Since her decision to withdraw from a runoff, she publicly endorsed her rival, John Tedesco. But after the State Board of Elections’ decision to continue the runoff, she agreed to remain a candidate, leaving many to wonder why.

“I’m hearing all kinds of conspiracy theories and there’s a political strategy going on,” she said. “There’s not been any conspiracy and there’s been no secret maneuvering.”

Truitt also clarified her stance on diversity, saying while she supports an end to forced busing, she believes the way to promote diversity is by offering families more choices throughout the school system, including high school career academies and expanded magnet school options.

“If you go strictly back to neighborhood schools, it means there won’t be magnets left,” she said. “There are other options, including not only maintaining and expanding magnets, relaxing the restrictions that are prohibiting many children from being able to get in them.”

Tedesco and three newly-elected school board members are advocating for neighborhood, or community schools, saying the county is much more diverse than when Wake’s policy on socioeconomic diversity was developed and that county oversight will provide for equal distribution of resources throughout the school system.

“These current policies are hurting these most vulnerable children the most,” said Tedesco. “I’m hoping to build a bridge and open relationships into other communities to get them in that dialogue.”

But local and state NAACP leaders disagree, saying the campaign for neighborhood schools could mark a return to segregation. Over the weekend, the NAACP hosted two “Get Out The Vote” rallies in Wake County, saying their goal is to make sure that everyone in District 2 has a voice in the election.

“District 2 is going to decide what happens in the Wake County Public Schools for the next several years,” said Ron White, president of the South Central Wake NAACP. “We’re trying to educate people and strengthen the idea that one vote will make a difference.”

Truitt said a victory in Tuesday’s election is an “improbability” for her. The important thing, she said, is that people exercise their right to vote and get involved.

“If he is elected, and I think probably he will be,” she said. “Will I support him? Absolutely. Will I offer assistance in any way? Yes, and I hope all parents will do that very same thing.”

Watch Easley Hearings Live All Week

RALEIGH, N.C. – The State Board of Elections wants more testimony before deciding whether North Carolina laws were broken by what some are calling a special Democratic Party campaign account for former Gov. Mike Easley.

More witnesses were to be called Tuesday as part of the board’s public hearing investigating Easley’s campaign committee and the state Democratic Party.

Key Easley fundraisers testified Monday the Easley campaign told them to give to the party as a way to help Easley win election. Individuals are limited in giving $4,000 to candidates but can give unlimited amounts to the party. Board chairman Larry Leake told reporters he believes a “special account” at the party existed but doesn’t know if it was dedicated solely to Easley campaign activities – which would be unlawful.

During her run for governor last year, Bev Perdue often talked about the need for campaign-finance reform.

She said the state needs to find an alternative to the current system, in which candidates for the state’s top offices raise many millions of dollars through private contributions.

Perdue even made the issue the subject of her first official act as governor. On Jan. 13, the new governor issued her first executive order. It established a task force charged with setting up an endowment that would be used to finance future gubernatorial campaigns.

But seven months later, that task force has not been appointed, and there has been virtually no work done on the proposed endowment, which is an extremely ambitious and untested idea.

A spokeswoman for Perdue said that the governor remains committed to the goal of campaign-finance reform. But the economic recession makes it difficult to try to build a large endowment right now, the spokeswoman said. And Perdue has devoted most of her attention so far to the immediate task of balancing the state budget.

“Given the economic challenges we are currently facing, it is difficult to put a timeline on the creation of the endowment,” the spokeswoman, Chrissy Pearson, said in an e-mail.
“Those who would financially support the endowment are struggling with the same economic downturn that has afflicted all of North Carolina and the country.”

Major campaign-finance reform will be difficult to achieve, especially in gubernatorial campaigns, which are traditionally the most expensive statewide races. En route to winning the governorship last year, Perdue raised or borrowed more than $18 million.

To replace the need for all that fundraising, Perdue wants to establish an endowment fund, which theoretically would be financed by donations from philanthropists, corporations and others. Future candidates for governor would get money from the endowment to run their campaigns, as long as they promised to run positive campaigns.

It’s unclear how “positive” would be defined, or what the consequences would be if a candidate receiving endowment money began running negative ads.
Executive Order No. 1, which Perdue issued just two days after her inauguration as governor, outlines the proposal and named Tom Lambeth of Winston-Salem to lead a special task force to establish the endowment.

Lambeth, the former head of the Z. Smith Reynolds Foundation, said that he has had a few informal conversations with people interested in campaign-finance reform.
But little has been done beyond that. Perdue is responsible for appointing the members of the task force, and she has not yet made any of those appointments.
Lambeth said he believes it was a wise decision for the governor to delay the start of the task force so that she could focus on the state’s recession-fueled budget gap.

“In the beginning, there were folks who had questioned whether or not this was simply a campaign statement or whatever, but I am convinced of her conviction that something ought to be done” on campaign-finance reform, Lambeth said.

He added that trying to solicit donations for a new endowment would be difficult during a recession.

No one knows whether enough money could be raised through donations to finance an endowment sufficiently large enough to pay for robust gubernatorial campaigns. Perdue said during her campaign that her long-term target for the endowment fund would be $50 million.

The endowment idea differs from other campaign-reform efforts in North Carolina, which have focused mainly on public financing. A new public-financing program took effect last year and was available to candidates for state insurance commission, state auditor, and state superintendent of public instruction. A bill in the General Assembly seeks to expand the program to the state treasurer.

According to some reform advocates, the advantage of a true public-financing system is that the state could designate a reliable revenue stream, with the money being distributed to candidates who meet certain thresholds.

An endowment financed through donations could be a less reliable source of cash.

“The risk is that the endowment may not accumulate enough money,” said Bob Hall, a veteran advocate for campaign reform and the executive director of Democracy North Carolina.

Still, Hall said that he sees the public-financing effort and Perdue’s proposal as complementing each other. Both are aimed at giving candidates a way to finance their campaigns other than soliciting donations from interest groups.

“They’re going to rely on special interests and wealthy donors unless we the public create an alternative,” Hall said.

CHAPEL HILL, N.C. — Town Council member Mark Kleinschmidt has been one of the most ardent proponents of the town’s new voter-owned elections program and its campaign-spending limits, the CH News reports.

RALEIGH, N.C. – The North Carolina Judicial Campaign Reform Act, which was passed in 2002 and created the nation’s first full public funding system for state Supreme Court and Court of Appeals candidates, is still highly favored by the voters of North Carolina, Public Policy Polling finds.

60% of respondents say that they favor the law, with 24% having an unfavorable opinion.

Of those who do favor it, 24% are strongly for it, whereas only 6% are strongly opposed. When asked if judicial candidates who accept funds from private interests such as lawyers and law firms can do so without creating a conflict of interest, 71% of respondents said no. However, 48% said that they are still unsure whether the law has helped to curb corruption in the judicial system, as opposed to only 28% who say it has, and 24% who say it hasn’t.

“North Carolina’s voters are clearly against judicial candidates funding their campaigns with money from entities that create conflicts of interest in the courtroom” said Jonathan Crook of Public Policy Polling. “The public funding law that is in place is there to stop that from happening, so the citizens are understandably in favor of it.”

PPP also found that 48% of respondents would be in favor of expanding a public finance program to candidates running for all Council of State positions, in addition to State Auditor, Insurance Commissioner, and Superintendent of Public Instruction elections, which already have such systems in place. 31% said that they do not favor expansion.

PPP surveyed 510 North Carolina voters from May 19th to 21st. The survey’s margin of error is +/-4.3%. Other factors, such as refusal to be interviewed and weighting, may introduce additional error that is more difficult to quantify.

Complete results are attached and can be found at www.publicpolicypolling.com.

RALEIGH, N.C.  – The North Carolina Senate debated a measure allowing big cities to use taxpayer money for local election campaigns, then postponed a vote until next week.

The Senate on Wednesday saw the Democratic majority jockey against Republicans opposing the bid to start voluntary public campaign financing programs in the state’s 15 largest cities. The measure was then set aside and rescheduled for a vote next Wednesday.

Candidates in nonpartisan elections would have to agree to accept fundraising restrictions in exchange for public dollars. Statewide candidates for appellate judges, the state auditor, insurance commissioner and schools superintendent already can receive public funding.

Chapel Hill will test taxpayer-assisted local elections this fall.

WASHINGTON – John Edwards’ mistress received $100,000 from his political action committee in an 18-week span in 2006, payments that raise this question: Can politicians use PACs as their own personal piggy banks?

From staging fundraisers in Las Vegas to financing ski trips, current and former lawmakers have spent PAC money on a broad range of seemingly personal activities over the years, all the while maintaining they are doing so for strictly political purposes.

In the wake of the disclosure of Edwards’ affair with videographer Rielle Hunter, Edwards has acknowledged a federal criminal investigation is under way into his presidential campaign fund.

But it was the former senator’s PAC – which is separate from the campaign – that paid $114,000 in 2006 and early 2007 to Hunter’s Midline Groove Productions. Hunter shot videos of Edwards as he spread the populist message he subsequently would adopt in his presidential campaign.

PACs like Edwards’ One America Committee have legal flexibility that campaign committees do not.

It is illegal under federal election law to convert campaign funds to personal use. But that prohibition doesn’t extend to PACs in most cases, according to the Federal Election Commission, which in March asked Congress to tighten the law.

The FEC “has seen a substantial number of instances where individuals with access to the funds received by political committees have used such funds to make unauthorized disbursements to pay for their own personal expenses,” the FEC said in its legislative recommendation to Congress.

Leadership PACs are “a form of giant slush fund; they should be banned,” said Fred Wertheimer, president of Democracy 21, a campaign money watchdog group.

Their political purpose enables PACs to receive tax-exempt status.

“If a politician uses a PAC as a piggy bank for personal expenses he better make sure to accurately disclose the payments on FEC forms and pay taxes on the income,” says Jan Baran, a top campaign finance lawyer in Washington and a partner at Wiley Rein LLP.

Edwards could face a number of issues in the criminal investigation, whose existence he confirmed on May 3.

Was the purpose of the PAC money to Hunter to pay for a handful of online videos on Edwards’ travels? That would seem to be the case based on the PAC’s reports to the FEC. The money to Hunter’s production company was for “Website/Internet Services,” the reports state.

But if the money were for some other purpose, that could amount to a criminal act by those who caused incorrect information to be filed with the FEC.

Another issue surrounds the final $14,000 PAC payment to Hunter on April 1, 2007, from One America, which didn’t have enough money on hand at the start of the day to make the payment, according to records filed with the FEC.

The Edwards presidential campaign injected $14,034.61 into the PAC that day for a “furniture purchase,” the records state. That put enough money in the political action committee account to pay Hunter $14,086.50 the same day.

The Edwards camp has said the money from the PAC was exchanged for 100 hours of unused videotape Hunter shot.

It could be a criminal act if the real purpose was something else, such as an effort to keep the videographer quiet about the affair.

When Edwards disclosed the existence of the criminal investigation early this month, he said in a statement that he was “confident that no funds from my campaign were used improperly.”

This week, Elizabeth Edwards seconded her husband’s assertion, saying that “it’s just not possible” that campaign funds were paid to Hunter.

“The way campaign funds are distributed is all a matter of record,” Elizabeth Edwards said on NBC’s “Today.”

The Justice Department prosecutes the personal use of campaign funds.

Among high-profile politicians who have gotten into legal trouble over personal use of campaign funds are former House Ways and Means Chairman Dan Rostenkowski, D-Ill., and former Rep. James Traficant, D-Ohio. Rostenkowski ultimately pleaded guilty to mail fraud; Traficant was convicted of taking bribes and kickbacks from businessmen and his own staff.

More recently, a former congressional candidate in Kansas pleaded guilty to misusing campaign funds to cover a check for the down payment on a home.

In her new book, Elizabeth Edwards describes her understanding of the first meeting between her husband and Hunter, writing that Hunter greeted Edwards with the come-on line, “You are so hot,” after waiting for him outside a New York hotel.

That was followed within months by Edwards going on the road, with Hunter accompanying him to key primary states. One America paid the videographer $100,000 from July to November 2006, seven weeks before Edwards declared his candidacy.