McCrory blasts Associated Press

by Craig Jarvis, News and Observer, December 17, 2014.

The day after a wire service reported that North Carolina Gov. Pat McCrory received a six-figure stock payout from an online mortgage broker that is regulated by the state, the governor’s emphatic reaction to the story nearly eclipsed the news itself.

McCrory spent Wednesday denouncing the article, which documented his receipt of early vested restricted stock from Tree.com when he left the company’s board of directors soon after taking office in early 2013. The Associated Press reported Tuesday that McCrory didn’t disclose on state ethics reports the full extent of payments from the company, the Charlotte-based corporate parent of the website LendingTree.

Paul Colford, director of media relations for The Associated Press, said the wire service stands by its reporting.

McCrory’s communications staff first swung into action Tuesday evening after the story hit the Internet, issuing a blanket statement calling the report “partisan drive-by journalism that deliberately misrepresents the facts.” That was followed three hours later with what the governor’s office presented as a point-by-point rebuttal.

To further underline their objections, McCrory’s office released a statement from the governor on Wednesday afternoon taking a more aggressive stance:

“The story is misleading, riddled with factual errors and flat out misrepresentations, and is a disservice to the public,” McCrory said. “It was written with malice and the intent to do harm without any factual consideration given.”

On Wednesday evening, the governor’s staff escalated further by distributing a 34-page assault on The Associated Press’ coverage of how the McCrory administration has handled the threat of coal ash pollution over the past 10 months.

McCrory has been quick to strike back against what he sees as unfair news media coverage. Earlier this month he went on TV and radio to criticize a “60 Minutes” segment on coal ash as “deceptive.” In August, the governor criticized a story in The News & Observer about his failure to disclose his ownership of Duke Energy stock as “malpractice.”

Even as Democrats were quick to pick up on the story, spreading the AP story on social networks, McCrory’s re-election campaign kicked into action. The campaign emailed supporters asking for donations “to help Governor McCrory fight back and ensure that the citizens of North Carolina know the real story.”

In response to the story, North Carolina Republican Party Chairman Claude E. Pope Jr. issued a statement calling it a “smear campaign.”

Andy Taylor, a political science professor at N.C. State University, said it was doubtful that the dispute will be politically harmful to the governor, unless it becomes a pattern of controversies over time.

“He did come in saying this is going to be a squeaky-clean administration after decades of Democratic administrations that were ethically challenged,” Taylor said. “That in some ways always puts you in a vulnerable position.”

The governor’s fact check on the AP story raised questions about eight issues. The communications staff, which prepared the list, answered questions about it on Wednesday.

Here are highlights of the more substantive issues the governor has raised:

Disclosure filings: The AP story said McCrory didn’t fully describe in state ethics statements the payments he had received from Tree.com. The governor’s office says the forms were done properly.

On his statement for 2012, McCrory indicated he had Tree.com stock worth more than $10,000. He indicated in another part of the statement that he had no business associations, although he was on the Tree.com board of directors in 2012.

McCrory was elected governor in November 2012, and took office in January 2013. He resigned from the Tree.com board in January after the board voted to accelerate the vesting of his shares of restricted stock 16 months earlier than they were due. McCrory received $185,509 from the company in 2013, the AP reported.

On his statement for 2013, the governor again indicated he had Tree.com stock worth more than $10,000. But he didn’t list director fees and cash dividends he received that year. A Securities and Exchange Commission filing indicates McCrory was paid $14,438 in fees and dividends.

The governor’s office says it has followed state ethics laws. It says the source of that income was listed in another part of the statement, which was included in the AP story, along with the fact the office called some of the instructions on the ethics form unclear. The office noted the state has since rephrased the question.

Conflict of interest: The Associated Press said the governor didn’t recuse himself from appointing the commissioner of banks and eight banking commissioners around the time of his Tree.com stock payout. The commission regulates mortgage brokers like Tree.com.

The governor’s office said he wasn’t required to recuse himself, and pointed out he reappointed the commissioner of banks, who was originally appointed by Gov. Bev Perdue. The office said there is no evidence that Tree.com benefited from McCrory’s connection.

Anonymous sources: The story said AP reporters interviewed more than a dozen securities lawyers and ethics experts, who said stock payouts such as this were uncommon for elected officials. The governor’s office criticized the story for not naming them – although one was quoted by name regarding McCrory – as the basis for calling them anonymous sources.

On Wednesday, the governor’s office added that the story didn’t name anyone who said McCrory might have broken the law, and instead used innuendo. The story said the experts had different opinions about whether laws were broken.