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STATE OF NORTH CAROLINA COUNTY OF WAKE

BEFORE THE NORTH CAROLINA STATE ETHICS COMMISSION

COMPLAINT CONCERNING UNETHICAL CONDUCT AND POTENTIAL STATUTORY VIOLATIONS REGARDING PATRICK LLOYD “PAT” McCRORY STATE OF NORTH CAROLINA, OFFICE OF THE GOVERNOR

INTRODUCTION North Carolina General Statute (“N.C. Gen. Stat.”) § 138A-21 of the State Government Ethics Act states the purpose of disclosure of the financial and personal interests applicable to Patrick Lloyd “Pat” McCrory, the current Governor of North Carolina (“Governor McCrory”), is to assist he and those who he appoints, elects, hires, supervises, or advises (or receives advice from) to identify and avoid conflicts of interest and potential conflicts of interest between Governor McCrory’s private interests and his public duties. It is critical to the integrity of governance that Governor McCrory examines, evaluates, and discloses those personal and financial interests that could be, or could cause, a conflict of interest or potential conflict of interest between his private interests and his public duties. Governor McCrory is statutorily obligated to take an active, thorough, and conscientious role in his disclosure and review process, including having a complete knowledge of how his public position or duties might impact his private interests. More importantly, Governor McCrory has an ongoing affirmative statutory duty to provide any and all information that a reasonable person would conclude is necessary to carry out the purposes of the public disclosure of economic interests and fully disclose any conflict of interest or potential conflict of interest between his public and private interests by timely, accurately, and fully filing a Statement of Economic Interests. Governor McCrory’s selective disclosure, omissions and incomplete disclosure on Statement of Economic Interests raise critical questions for public trust in government, to the true origin, purpose, or intent of compensation, gifts, favors, appointments and executive regulatory decisions.

SUMMARY As demonstrated within this Complaint, Governor McCrory has failed to meet his statutory disclosure obligations and duties to the people of North Carolina on multiple occasions. In examining Governor McCrory’s numerous filings, continuing a pattern of incomplete disclosure commencing with his very first ethics filing in 2008, as previously discussed in other ethic complaint filings. 

Continuing his pattern of incomplete and erroneous ethics filings, McCrory failed to properly disclose a number of trips paid for by the Republican Governors Association (“RGA”). These Annual Meetings, “Executive Roundtable Meeting” and “Corporate Policy Summits” were conducted behind closed doors with undisclosed corporate sponsors and donors at some of the country’s most luxurious and expensive hotels.



The cost of these trips, paid for “scholarships” funded by out-of-state corporate donors, must be disclosed under Question 17 of the North Carolina Statement of Economic Interest (“SEI”). McCrory has had numerous previous errors on his SEIs that appear to have concealed conflicts of interests and personal payouts.



Recent news reports make it clear that McCrory failed to properly disclose he has flown around the country for closed-door meetings at luxury resorts, paid for by corporate donors, some doing business with the State of North Carolina, others seeking state business.



The citizens of North Carolina should care about Governor McCrory’s failure to disclose these meetings because “The Republican Governors Association, which is raising money to maintain the party’s power in a majority of the nation’s capitals, has routinely promised donors special access to top leaders, documents show. Donors were offered the opportunity to lobby state leaders who have power over health care, energy production and other regulatory and contracting matters important to business. The most access went to those who gave at least $250,000, including Aetna Inc., the third-largest U.S. health insurer, Pfizer Inc., the largest U.S. drug maker and Exxon Mobil Corp., the largest U.S. energy company.” [Exhibit 1 – Selway, William. “Republican Documents Show Access to Governors for Donors” Bloomberg Business 25 September 2014



At these meetings, corporate contributors to Republican Governors Association got “exclusive” access to Governor McCrory and his senior staff in exchange for their contribution. “Last year, the Republican Governors Public Policy Committee allowed corporate donors to make their cases on how to carry out the Affordable Care Act; discuss hydraulic fracturing, an oil- and gas-exploration method regulated at the state level; and hash over state budgets just as coffers began to

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loosen.” [Exhibit 2 – Weisman, Jonathan. “G.O.P. Error Reveals Donors and the Price of Access” New York Times 24 September 2014 Governor McCrory’s filing multiple and differing Statements of Economic Interests in both 2013 and 2014 raise serious questions. The citizens of North Carolina are still unclear what Governor McCrory’s personal and financial interests are. Are there possible conflicts of interest between his private interests and his public duties? What special access do RGA corporate donors receive? Equally unclear is whether further conflicts of interest exist from yet undisclosed facts, given Governor McCrory’s past and current unwillingness to fully disclose his stock holdings, work history, income sources, business relationships, or potential conflicts of interest.

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COMPLAINT CONCERNING UNETHICAL CONDUCT Consequently, the undersigned Complainant, files this Complaint with the North Carolina State Ethics Commission (“Ethics Commission”) concerning Patrick Lloyd “Pat” McCrory, the current Governor of North Carolina (“Governor McCrory”) for potential criminal violations, as outlined below, of North Carolina General Statutes (“N.C. Gen. Stat.”) §§ 14-230 for willfully failing to discharge duties; 14-231 for failing to make reports and discharge other duties; 14-234 for receiving a gift, favor or reward in exchange for awarding of contracts; 133-32 for gifts and favors; and 138A-26 for concealing or failing to disclose material information, all of which are Class 1 misdemeanors, potential perjury charges for violations concerning 138A-24, as well as 138A-27 for providing false information, which is a Class H felony (collectively, the “Potential Criminal Violations”). Further, Complainant files this Complaint with the Ethics Commission concerning Patrick Lloyd “Pat” McCrory, the current Governor of North Carolina (“Governor McCrory”) for potential civil violations, as outlined below, of N.C. Gen. Stat. §§ 138A-22 and 138A-24 for failing to file correct and accurate statement of economic interests as required, 138A-31 for use of public position for private gain, 138A-32 for receipt of anything of value, 138A-33 for compensation in conjunction with advice or assistance given, 138A-34 for use of information for private gain, and 138A-35 for failure by Governor McCrory to make a due and diligent effort before taking any action to determine whether he has a conflict of interest. If Governor McCrory was unable to determine whether a conflict of interest existed, he had a duty to inquire of the Ethics Commission as to that conflict (collectively, the “Potential Civil Violations”). Upon receipt of a complaint concerning unethical conduct by a covered person, the Ethics Commission is charged with conducting inquiries of such complaints. Therefore, Complainants request the Ethics Commission take the following actions: (a) Exercise its authority under N.C. Gen. Stat. § 138A-12 and conduct an inquiry and investigation into whether Governor McCrory’s administrative policies, filings, non-filings, actions, inactions, statements or misstatements resulted in any Potential Criminal and Civil Violations. (b) Exercise its authority under N.C. Gen. Stat. § 138A-12 to hire an investigator and issue subpoenas and subpoenas duces tecum, as necessary, in order to adequately and fully investigate the Potential Criminal and Civil Violations (c) Exercise its authority under N.C. Gen. Stat. § 138A-12(h) & (i) and hold a public hearing concerning Governor McCrory and the Potential Criminal and Civil Violations. (d) Exercise its authority under N.C. Gen. Stat. § 138A-12(k)(1) and upon finding substantial evidence of Potential Criminal Violations by Governor McCrory refer the matter to the

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North Carolina Attorney General for investigation and referral to the Wake County District Attorney for potential prosecution. In conjunction with filing this Complaint, the Complainant(s) hereby submit and incorporate by reference into the Complaint, the following to the Ethics Commission: an outline of narrative facts; media news accounts; attached materials [Exhibits 1 – 21]; and specific questions concerning these materials, facts and news account raise for consideration during the Commission’s investigative and deliberative process of the Potential Criminal and Civil Violations.

THE REPUBLICAN GOVERNORS ASSOCIATION AND McCRORY’S STATEMENT OF ECONOMIC INTEREST FILINGS 1.

Pat McCrory has a long standing relationship with the Republican Governors Association (“RGA”), even prior to being elected governor. In October 2008, McCrory hosted a private reception and dinner for the RGA in Charlotte. [Exhibit 3 – 13 October 2008 McCrory RGA Invitation]

2.

The RGA spent over $4.8 million supporting Pat McCrory’s 2008 campaign and $5.6 million for his 2012 election, or a total of $10.4 million in electing Pat McCrory North Carolina Governor. [Exhibit 4 – Hall, Bob. “As Coal Ash Controversy Intensified, Duke Gave Another $437,000 to Help GOP Causes in 2013.” 14 February 2014 Democracy North Carolina]

3.

On April 9, 2013, Governor McCrory executed and filed the first of two 2013 Statement of Economic Interest (“First 2013 SEI”) for calendar year 2012 with the Ethics Commission, filed under N.C. Gen. Stat. § 138A-22(d) requiring an SEI filing for a candidate for an office subject to the State Government Ethics Act. [Exhibit 5 – 9 April 2013 McCrory SEI]

4.

In signing his First 2013 SEI, Governor McCrory certified that he had read his statement and that, to the best of his knowledge and belief, the statement was true, complete and accurate. His certification also provided that he had not transferred, and would not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein.

5.

On April 15, 2013, Governor McCrory executed and filed the second of two 2013 Statement of Economic Interest (“Second 2013 SEI”) for calendar year 2012 with the Ethics Commission, filed under N.C. Gen. Stat. § 138A-22(d) requiring an SEI filing for a candidate for an office subject to the State Government Ethics Act. [Exhibit 6 – 15 April 2013 McCrory SEI]

6.

In signing his Second 2013 SEI, Governor McCrory certified that he had read his statement and that, to the best of his knowledge and belief, the statement was true, complete and accurate. His certification also provided that he had not transferred, and would not 5

transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein. 7.

On April 15, 2014, Governor McCrory executed and filed the first of three 2014 Statement of Economic Interest or Supplements (“First 2014 SEI”) for calendar year 2013 with the Ethics Commission, filed under N.C. Gen. Stat. § 138A-22(d) requiring an SEI filing for a candidate for an office subject to the State Government Ethics Act. [Exhibit 7 – 15 April 2014 McCrory SEI]

8.

In signing his First 2014 SEI, Governor McCrory certified that he had read his statement and that, to the best of his knowledge and belief, the statement was true, complete and accurate. His certification also provided that he had not transferred, and would not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein.

9.

On May 16, 2014, Governor McCrory executed and filed the second of three 2014 Statement of Economic Interest or Supplements (“Second 2014 SEI”) for calendar year 2013 with the Ethics Commission, filed under N.C. Gen. Stat. § 138A-22(d) requiring an SEI filing for a candidate for an office subject to the State Government Ethics Act. [Exhibit 8 – 16 May 2014 McCrory SEI]

10.

In signing his Second 2014 SEI, Governor McCrory certified that he had read his statement and that, to the best of his knowledge and belief, the statement was true, complete and accurate. His certification also provided that he had not transferred, and would not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein.

11.

On August 13, 2014, Governor McCrory executed and filed the third of three 2014 Statement of Economic Interest or Supplements (“Third 2014 SEI”) for calendar year 2013 with the Ethics Commission, filed under N.C. Gen. Stat. § 138A-22(d) requiring an SEI filing for a candidate for an office subject to the State Government Ethics Act. [Exhibit 9 – 13 August 2014 McCrory SEI]

12.

In signing his Third 2014 SEI, Governor McCrory certified that he had read his statement and that, to the best of his knowledge and belief, the statement was true, complete and accurate. His certification also provided that he had not transferred, and would not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein.

13.

The RGA spent over $4.8 million supporting Pat McCrory’s 2008 campaign and $5.6 million for his 2012 election, or a total of $10.4 million in electing Pat McCrory North Carolina Governor.

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14.

All SEIs required an answer to Question No. 17, “During the preceding year (but only the time period after you were appointed, employed, or filed or were nominated as a candidate) have you 

Accepted a “scholarship” exceeding $200 from a person or group of persons acting together and



Those person(s) were outside North Carolina and



the scholarship was related to your public position? A “scholarship” is a grant-inaid to attend a conference, meeting, or similar event.”

15.

In response to the SEI Question 17, Governor McCrory checked the “No” answer on all of his filed SEIs with the State Ethics Commission.

16.

However, on at least three occasions since being elected governor, McCrory attended political conferences hosted by the Republican Governors’ Association: Reported McCrory Out-of-State Political Events Date 5/14/13 9/17/13 11/20/13

Location New Orleans, LA Charleston, SC Scottsdale, AZ

Event RGA “Corporate Policy Summit” RGA “Corporate Policy Summit” RGA Annual Conference

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17.

All three 2013 conferences were held by the Republican Governors Association (“RGA”). The RGA confirmed on Tuesday, March 3, 2015 to WSOC-TV that it paid for McCrory’s hotels stays and meals for those conferences. [Exhibit 10 – Bradley, Jim. “McCrory faces ethics allegations” WSOC-TV 3 March 2015]

18.

The RGA paid for McCrory trip to conference in Scottsdale, Arizona. “McCrory scheduled the five-day trip to coincide with the Republican Governors Association annual meeting, which began Tuesday outside Phoenix. The governor’s office said the state paid for the first two days of the trip to California but the RGA will pay expenses related to its meeting in Arizona.” [Exhibit 11 – News & Observer 20 November 2013]

19.

The hotel Governor McCrory Stayed at in Arizona was featured on “Lifestyles of the Rich and Famous” with rooms Starting at $400 per night. According to the Associated Press, the Scottsdale RGA conference was held at the Phoenician Resort. The Phoenician is a 5 star 250 acre resort, formerly featured on “Lifestyles of the Rich and Famous,” built with, “white marble was imported from Carrera, Italy, for the lobby; the ceiling was etched in 24-karat gold, and 11 rare Steinway pianos, which grace the hallways, the presidential suites and The Thirsty Camel Lounge, were purchased. In addition, workers from the Island Kingdom of Tonga were hired to create the lush tropical landscape that complements the resort’s Sonoran backdrop.” (Exhibit 12 – Sign, Christopher. “Republican Governors Association: Republican governors meeting in Scottsdale” Associated Press 20 November 2013; The Phoenician, accessed 6 March 2015)

20.

The RGA Corporate Policy Summit took place at The Roosevelt in New Orleans, a Waldorf Astoria Hotel. A stay in any room at the Roosevelt starts at over $200 a night. [Exhibit 13 – Republican Governor’s Association, “RGA Corporate Policy Summit”; Roosevelt New Orleans, accessed 6 March 2015 ]

21.

“S.C. Gov. Nikki Haley – who made transparency in government a central theme of her campaign three years ago – refused to allow media inside a Republican Governor’s Association (RGA) meeting in Charleston, S.C. this week. The meeting – attended by Haley and six other GOP governors – was held at the luxurious Charleston Place Hotel, a facility which as of last February owed taxpayers $23 million for loans it received in the mid1980s.” According to the Hotel’s website it is known as “Charleston’s finest accommodations ” with rooms starting at over $250 per night. [Exhibit 14 - FitsNews, 17 September 2013; Belmond Charleston Place, accessed 6 March 2015]

22.

None of these three grant-in-aid “scholarships” during 2013 are listed on any of Governor McCrory’s three (3) 2014 SEIs.

23.

As he has done previously, Governor McCrory blamed his chief legal counsel, Bob Stephens and the ‘confusing forms’ for the misreporting. 8

“After inquiring of the Ethics Commission staff, I have changed my interpretation and concluded expenditures by the RGA should be reported on the appropriate SEI form. To the extent that supplemental information should be filed, we intend to do so,” said Bob Stephens, Chief Legal Counsel to McCroy. “There are some bureaucratic forms that definitely need to be changed to insure there is consistent interpretation by even lawyers in the state,” said McCrory. [Exhibit 10 – Bradley, Jim. “McCrory faces ethics allegations” 3 March 2015 WSOC-TV] 24.

Governor McCrory’s obfuscation regarding statutory interpretation is misplaced. The statute upon which he relies for bolstering his argument is quite clear: N.C.G.S. § 138A-24. Contents of statement. (a) Any statement of economic interest filed under this Article shall be on a form prescribed by the Commission. Answers must be provided to all questions. (emphasis added)

25.

Many other elected officials exhibit no difficulty in interpreting the law, understanding SEI Question 17, or reporting travel paid for by a third party, including former North Carolina House Speaker Thom Tillis, current North Carolina President Pro Tempore Phil Berger and North Carolina Attorney General Roy Cooper. Each of their SEIs reflect reporting travel paid for by a third party. [Exhibit 15 – 2011 Berger SEI 14 April 2011; 2012 Berger SEI 16 March 2012; 2012 Cooper SEI 14 March 2012; 2012 Tillis SEI 16 March 2012]

26.

Additionally, it appears on at least four other occasions since being elected governor, McCrory may have attended other political conferences hosted by the Republican Governors Association and not reported on his multiple 2013 and 2014 SEI filings: Additional Potential McCrory Out-of-State Political Events Date 11/14/12 5/15/13 7/24/13 11/19/13

27.

Location Las Vegas, NV New Orleans, LA Aspen, CO Scottsdale, AZ

Event RGA Annual Conference [Exhibit 16] RGA “Executive Roundtable” [Exhibit 17] RGA “Executive Roundtable” [Exhibit 18] RGA “Executive Roundtable” [Exhibit 19]

In a previously unreported RGA Annual Conference, Governor-elect McCroy (who is subject to SEI reporting from the date elected, not when sworn-in) appears to have been made available to RGA’s corporate donors in a special meet and greet: 9

Las Vegas FRIDAY, NOVEMBER 16, 2012 9:00 a.m. – 10:00 a.m. Networking Breakfast with the new Governors-elect Speakers: Governor Bob McDonnell, VA, RGA Chair Governor-elect Pat McCrory, NC Governor-elect Mike Pence, IN [Exhibit 16 – Republican Governors Association, “2012 Annual Conference Agenda”] 28.

What other grant-in-aid or scholarship amounts to attend conferences, meetings, or similar events has Governor McCrory received since November 2012? The public and the Commission do not know because his SEIs are incomplete.

29.

Deficient SEI reporting does not appear to be limited to Governor McCrory, but extends to his gubernatorial staff and administration as well. McCrory staff and administration members attended a “policy conference” at a California resort paid for in part by corporate sponsors of the RGA through The Republican Governors Public Policy Committee (“RGPPC”) is the policy arm of the Republican Governors Association and the official policy organization of the nation’s Republican governors. The RGPPC is organized under section 501(c)(4) of the Internal Revenue Code.

30.

The 21-page agenda for the Republican Governors Public Policy Committee’s Education Symposium held at the Omni La Costa Resort & Spa in Carlsbad, California from July 9 – 13, 2013, list some of the corporations that attended, who represented them and what they contributed. The most elite group, known as Statesmen, whose members donated $250,000, included Aetna; Coca-Cola; Exxon Mobil; Koch Companies Public Sector, the lobbying arm of the highly political Koch Industries; Microsoft; Pfizer; UnitedHealth Group; and Walmart. The $100,000 Cabinet level included Aflac, Blue Cross Blue Shield, Comcast, Hewlett-Packard, Novartis, Shell Oil, Verizon Communications and Walgreen.” [Exhibit 2 – Weisman, Jonathan. “G.O.P. Error Reveals Donors and the Price of Access” New York Times 24 September 2014]

31.

The McCrory staff and administration listed as attending the RGPPC Education Symposium, with corporate donors being given “exclusive” access to their work: 

Blannie Cheng, Advisor to NC Governor Pat McCrory on Jobs & the Economy, North Carolina



Hugh Johnson, Policy Analyst, North Carolina



Carol Steckel, Director, North Carolina



Dion Terry, Senior Policy Analyst, North Carolina 10

[Exhibit 20 – Republican Governors Public Policy Committee, “Republican Governors Public Policy Committee’s Education Symposium”; Exhibit 2 – Weisman, Jonathan. “G.O.P. Error Reveals Donors and the Price of Access” New York Times 24 September 2014] 32.

Of the McCrory staff and administration officials who attended the RGPPC Education Symposium in July 2013, only Dion Terry filed a 2014 SEI covering this period. She responded receiving no “scholarship in aid” to attend conferences in 2013 on her SEI, Question 17. Who paid for Ms. Terry’s and the other attendees travel costs? [Exhibit 21 – 2014 Terry SEI 11 June 2014]

33.

Additionally, there may be further reporting omissions on either Governor McCrory’s SEI or North Carolina State Board of Elections reports. McCrory’s campaign committee reported reimbursing the state $2,735.10 on December 19, 2013 for use of the state plane, but it is unclear from McCrory disclosures what trips this might have covered. [Pat McCrory Committee, Year End 2013 Report, North Carolina State Board of Elections]

34.

McCrory’s campaign reported spending $6,715 on a corporate jet service based in Ft. Lauderdale, Florida on December 16, 2014, while the report does not make it clear whether this was travel to the Florida RGA event or other events. [Pat McCrory Committee, Year End 2014 Report, North Carolina State Board of Elections]

35.

Both Governor McCrory’s, nor his administration officials or staff’s travel costs to RGA sponsored events do not appear to be broken out on either the Pat McCrory Committee’s finance reports, the North Carolina Republican Party’s finance reports or reported on anyone’s SEIs filed with the Commission.

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POTENTIAL STATUTORY VIOLATIONS

1. Pat McCrory’s 2014 Statement of Economic Interests (“SEI”) filings failed to disclose “scholarships” or grants-in-aid from out-of-state interests. He was statutorily required to report these amounts. Further, Governor McCrory checked “No” on Question 17 as to whether he received any amount exceeding $200. These failures potentially violate N.C. Gen. Stat. §§ 138A-24, 138A-26 and 138A-271. 2. These failures to disclose violate N.C. Gen. Stat. §§ 138A-24, 138A-26 and 138A-27. Further, depending on the results of the State Ethics Commission’s investigation, these actions potentially violate N.C. Gen. Stat. §§ 14-217, 14-234, 133-32. 3. Governor McCrory has consistently said he sees no conflict of interest in his role as elected official and individual corporate shareholder. These denials, failure to disclose and to examine his conflicts of interest potentially violate N.C. Gen. Stat. §§ 138A-24, 138A-26, 138A-27, 138A-31, 138A-34 and 138A-35. Complainants hereby respectfully request the Ethics Commission exercise its authority under N.C. Gen. Stat. § 138A-12 and conduct an inquiry and investigation into whether Governor McCrory’s administrative policies, filings, non-filings, actions, inactions, statements or misstatements have resulted in any statutory criminal and civil violations. Submitted this 9th day of March, 2015 Contact Information: Complainant Progress North Carolina Action Gerrick Brenner, Executive Director PO Box 41306 Raleigh, NC 27629 [email protected]

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Attorney for Complainant Michael L. Weisel Bailey & Dixon, LLP PO Box 1351 Raleigh, NC 27602 919.828.0731 [email protected]

Statutory references are described in greater detail in following Appendix. 12

SWORN COMPLAINT

I hereby swear or affirm, under penalty of perjury and other penalties established by North Carolina law, that the information provided in this complaint is true, correct, complete, to the best of and my own personal knowledge, or if not, upon my own information and belief, believing the information to be true based upon North Carolina State Ethics Commission and North Carolina State Board of Elections filings, media news stories and commentary, along with public internet postings.

Progress North Carolina Action

A North Carolina nonprofit corporation

Gerrick Brenner Executive Director

Gerrick Brenner, Individually

March

9f.IJ 2015

STATE OF NORTH CAROLINA COUNTY OF WAKE

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,

I, a Notary Public in and for said County and State, do hereby certify that both indivi ually, and on behalf of Progress North Carolina Action, Gerrick Brenner, its Executive Director, personally appeared before me this day and acknowledged the due execution of the foregoing Complaint. SWORN TO and subscribed before me this day. WITNESS my hand and official stamp this !l!!!day of March, 2015 .

My Com m issio n Exp i res:

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APPENDIX APPLICABLE OR POTENTIALLY APPLICABLE STATUTES 1. N.C. Gen. Stat. § 138A-21 outlines the purpose of Section 138A: “The purpose of disclosure of the financial and personal interests by covered persons is to assist covered persons and those who appoint, elect, hire, supervise, or advise them identify and avoid conflicts of interest and potential conflicts of interest between the covered person's private interests and the covered person's public duties. It is critical to this process that current and prospective covered persons examine, evaluate, and disclose those personal and financial interests that could be or cause a conflict of interest or potential conflict of interest between the covered person's private interests and the covered person's public duties. Covered persons must take an active, thorough, and conscientious role in the disclosure and review process, including having a complete knowledge of how the covered person's public position or duties might impact the covered person's private interests. Covered persons have an affirmative duty to provide any and all information that a reasonable person would conclude is necessary to carry out the purposes of this Chapter and to fully disclose any conflict of interest or potential conflict of interest between the covered person's public and private interests, but the disclosure, review, and evaluation process is not intended to result in the disclosure of unnecessary or irrelevant personal information. 2. N.C. Gen. Stat. § 138A-24(a) provides “Any statement of economic interest filed under this Article shall be on a form prescribed by the Commission. Answers must be provided to all questions. … (c) Each statement of economic interest shall contain a certification by the filing person that the filing person has read the statement and that, to the best of the filing person's knowledge and belief, the statement is true, correct, and complete. The filing person's certification also shall provide that the filing person has not transferred, and will not transfer, any asset, interest, or other property with the intent to conceal it from disclosure while retaining an equitable interest therein. …(d) All information provided in the statement of economic interest shall be current as of the last day of December of the year preceding the date the statement of economic interest was due.” 3.

N.C. Gen. Stat. § 138A-26 states “[a] filing person who knowingly conceals or knowingly fails to disclose information that is required to be disclosed on a statement of economic interest under this Article shall be guilty of a Class 1 misdemeanor and shall be subject to disciplinary action under G.S. 138A-45.”

4.

N.C. Gen. Stat. § 138A-27 states, “A filing person who provides false information on a statement of economic interest as required under this Article knowing that the information is false is guilty of a Class H felony and shall be subject to disciplinary action under G.S. 138A45.”

5.

N.C. Gen. Stat. § 138A-31 states a “covered person or legislative employee shall not knowingly use the covered person's or legislative employee's public position in an official action or legislative action that will result in financial benefit to the covered person or legislative employee, a member of the covered person's or legislative employee's extended family, or business with which the covered person or legislative employee is associated.

6.

N.C. Gen. Stat. § 138A-32, (a) provides a “covered person or a legislative employee shall not knowingly, directly or indirectly, ask, accept, demand, exact, solicit, seek, assign, receive, or agree to receive anything of value for the covered person or legislative employee, or for another person, in return for being influenced in the discharge of the covered person's or legislative employee's official responsibilities, other than that which is received by the covered person or the legislative employee from the State for acting in the covered person's or legislative employee's official capacity. … (d) No public servant shall knowingly accept a gift from a person whom the public servant knows or has reason to know any of the following: (1) Is doing or is seeking to do business of any kind with the public servant's employing entity. (2) Is engaged in activities that are regulated or controlled by the public servant's employing entity. (3) Has financial interests that may be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public servant's official duties.”

7.

N.C. Gen. Stat. § 138A-33 states a “public servant or legislative employee shall not solicit or receive personal financial gain, other than that received by the public servant or legislative employee from the State, or with the approval of the employing entity, for acting in the public servant's or legislative employee's official capacity, or for advice or assistance given in the course of carrying out the public servant's or legislative employee's duties.”

8.

N.C. Gen. Stat. § 138A-34 states “a public servant or legislative employee shall not use or disclose nonpublic information gained in the course of, or by reason of, the public servant's or legislative employee's official responsibilities in a way that would affect a personal financial interest of the public servant or legislative employee, a member of the public servant's or legislative employee's extended family, or a person or governmental unit with whom or business with which the public servant or legislative employee is associated. A public servant or legislative employee shall not improperly use or improperly disclose any confidential information.”

9.

N.C. Gen. Stat. § 138A-35 provides other rules of conduct: (a)

A public servant shall make a due and diligent effort before taking any action, including voting or participating in discussions with other public servants on a board on which the public servant also serves, to determine whether the public servant has a conflict of interest. If the public servant is unable to determine whether or not a

10.

(b)

conflict of interest may exist, the public servant has a duty to inquire of the Commission as to that conflict.

(c)

A public servant shall continually monitor, evaluate, and manage the public servant's personal, financial, and professional affairs to ensure the absence of conflicts of interest.

(d)

A public servant shall obey all other civil laws, administrative requirements, and criminal statutes governing conduct of State government applicable to appointees and employees.

N.C. Gen. Stat. § 133-32 in which gifts and favors are regulated and (a) “It shall be unlawful for any contractor, subcontractor, or supplier who: (1) Has a contract with a governmental agency; or (2) Has performed under such a contract within the past year; or (3) Anticipates bidding on such a contract in the future to make gifts or to give favors to any officer or employee of a governmental agency who is charged with the duty of: (1) Preparing plans, specifications, or estimates for public contract; or (2) Awarding or administering public contracts; or (3) Inspecting or supervising construction. It shall also be unlawful for any officer or employee of a governmental agency who is charged with the duty of: (1) Preparing plans, specifications, or estimates for public contracts; or (2) Awarding or administering public contracts; or (3) Inspecting or supervising construction willfully to receive or accept any such gift or favor. (b) A violation of subsection (a) shall be a Class 1 misdemeanor.

11.

Executive Order No. 24 issued by Governor Perdue on October 1, 2009 incorporated N.C. Gen. Stat. § 133-32 to cover and prohibit all State employees in the Cabinet agencies and Governor’s office from receiving gifts or favors from contractors, subcontractors, or suppliers to State agencies. It remains in effect.

12.

N.C. Gen. Stat. §14-230 for willfully failing to discharge duties; N.C. Gen. Stat. §14-231 for failing to make reports and discharge other duties; and N.C. Gen. Stat. §14-234.1 involving misuse of confidential information, all of which are Class 1 misdemeanors.

13.

N.C. Gen. Stat. § 14-217(a) provides “[i]f any person holding office, or who has filed a notice of candidacy for or been nominated for such office, under the laws of this State who, except in payment of his legal salary, fees or perquisites, shall receive, or consent to receive, directly or indirectly, anything of value or personal advantage, or the promise thereof, for performing or omitting to perform any official act, which lay within the scope of his official authority and was connected with the discharge of his official and legal duties, or with the express or implied understanding that his official action, or omission to act, is to be in any degree influenced thereby, he shall be punished as a Class F felon. … (d) For purposes of this section,

a thing of value or personal advantage shall include a campaign contribution made or received under Article 22A of Chapter 163 of the General Statutes. 14.

N.C. Gen. Stat. § 14-234(a) provides “no public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract…no public officer or employee may solicit or receive any gift, favor, reward, service, or promise of reward, including a promise of future employment, in exchange for recommending, influencing, or attempting to influence the award of a contract by the public agency he or she serves. …(4) A public officer or employee derives a direct benefit from a contract if the person or his or her spouse: (i) has more than a ten percent (10%) ownership or other interest in an entity that is a party to the contract; (ii) derives any income or commission directly from the contract; or (iii) acquires property under the contract. … (e) Anyone violating this section shall be guilty of a Class 1 misdemeanor.

EXHIBITS

                     

 

Exhibit 1   

 

Republican Documents Show Access to Governors for Donors by William Selway 12:01 AM EDT September 25, 2014 Sept. 25 (Bloomberg) -- The Republican Governors Association, which is raising money to maintain the party’s power in a majority of the nation’s capitals, has routinely promised donors special access to top leaders, documents show. Dozens of fundraising invitations, meeting agendas and other records compiled by the Citizens for Responsibility and Ethics in Washington, a watchdog group, chronicle how corporate executives and other donors are rewarded with the chance to meet governors and their aides in functions at ski lodges, resorts and other venues not open to the public. Donors were offered the opportunity to lobby state leaders who have power over health care, energy production and other regulatory and contracting matters important to business. The most access went to those who gave at least $250,000, including Aetna Inc., the third-largest U.S. health insurer, Pfizer Inc., the largest U.S. drugmaker and Exxon Mobil Corp., the largest U.S. energy company. “Access is the name of the game,” said Bill Allison, the editorial director of the Sunlight Foundation, a Washington nonprofit that tracks money in politics. “What an organization like the RGA does is offer access in return for donations and that allows them to push their agenda.” Aetna makes public its political contributions in an annual report showing it gave $300,000 to the Republican Governors Association -- and an equal amount to its Democratic counterpart.

Sharing ‘Views’ “We have never hesitated to share our views on issues of importance to our business and our customers,” Cynthia Michener, a spokeswoman for Hartford, Connecticut-based Aetna, said in a statement. “We support organizations and political candidates of both parties who generally share our views on how to best address the issues we face.” Alan Jeffers, a spokesman for Irving, Texas-based Exxon, described the company’s involvement with the governors group as part of its lobbying strategy. “We have a responsibility to our customers, employees, communities and shareholders to represent their interests in public policy discussions that impact our business,” he said by e-mail. Joan Campion, a spokeswoman for New York-based Pfizer, didn’t respond to a request for comment on the contributions in a telephone message left after regular business hours.  

 

Defend Control The Republican Governors Association, led this year by New Jersey Governor Chris Christie, is raising money to help the party’s candidates for the top state elected position. In November, elections will be held in 36 states -- 22 now with Republican governors. Seven more Republicanled states aren’t choosing governors this year. Jon Thompson, a spokesman for the Republican Governors Association, didn’t respond to an email and telephone messages seeking comment on the contributions. The records were first reported yesterday by the New York Times. The promise of access in return for political contributions isn’t limited to Republicans. The Democratic Governors Association also hosts exclusive gatherings out of public view where contributors can mingle with top officials. The Democratic group raised $26 million in the first six months of the year, according to Internal Revenue Service filings. The Republican Governors Association, in the same period, raised more than $46 million, which it’s using for advertising campaigns to bolster the party’s gubernatorial candidates in states including Florida, Wisconsin and Illinois, where close contests are being waged. “Both parties have been doing this probably since the start of the republic,” Allison said.

Courting Contributors The documents offer a look at how the Republican Governors Association has courted its contributors, which include Koch Industries Inc. and hedge-fund billionaire John Paulson. Derrick Crowe, a spokesman for Citizens for Responsibility and Ethics in Washington, said the organization discovered the records online, where they may have been opened to public view by mistake. The governors association doesn’t disclose the details about its fundraisers. Among them are a series of 2008 records describing the larger perks given to top contributors. For example, so-called Governors Club members who gave at least $250,000 received private meals with the governors and their chiefs of staff, as well as access to other events with governors throughout the year. Contributors of at least $5,000 were told they would receive two tickets to the Republican Governors Association’s annual Washington fundraiser and seats for breakfast policy sessions with governors’ staff members.

Ski Package In 2010, Utah Governor Gary Herbert and then-Mississippi Governor Haley Barbour hosted an event in Park City, Utah, where the agenda describes a reception with governors after time for skiing or snowmobiling. The group that year also sponsored policy summits on health care, debt, taxes and jobs open to donors, according to one schedule.

 

 

Aimee Edwards, a spokeswoman for Herbert, said the governor was traveling and wasn’t available to comment. Barbour, who has since left office, couldn’t immediately be reached late yesterday. The attendees at one such event last year included more than a dozen members of the Republican Governors Public Policy Committee -- a so-called social welfare organization that serves as the governors association’s nonprofit policy arm, which doesn’t have to disclose its donors. Subjects to be discussed during the two-day meeting included the implementation of President Barack Obama’s health-care overhaul and the benefits of the energy-production boom for states including Ohio, Texas and Louisiana, according to the agenda. To contact the reporter on this story: William Selway in Washington at [email protected] To contact the editors responsible for this story: Stephen Merelman at [email protected] Pete Young, Justin Blum          

 

 

Republican Governors Association Money Markets Health Energy Washington Politics Connecticut Texas New York

 

        Exhibit 2   

G.O.P. Error Reveals Donors and the Price of Access - NYTimes.com

POLITICS

By JONATHAN WEISMAN

SEPT. 24, 2014

Access to governors was one of many benefits for donors at the Republican Governors Association’s 2012 conference in Las Vegas. Monica Almeida/The New York Times

WASHINGTON — In politics, it is sometimes better to be lucky than good. Republicans and Democrats, and groups sympathetic to each,

http://www.nytimes.com/2014/09/25/us/republicans-corporate-donors-governors.html?_r=0[3/8/2015 9:43:48 PM]

G.O.P. Error Reveals Donors and the Price of Access - NYTimes.com

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