Heard on the Street Posted: Thursday, May 21st, 2009 Big doin’s in the Capitol City this week and most of it involved the Easley’s. But lest we forget the legislature is still in town, even though lawmakers are recuperating from their marathon crossover madness in which one or the other house passed more than 300 bills. Hear more discussion about what they did and didn’t pass on this week’s NC SPIN.
House budget news
Sometimes it is better to be lucky than smart. House leaders released targets for the budget they will pass in the next couple of weeks but much of the reaction got buried by news about the Easley’s. House Leadership didn’t seem to mind.
The House says they will pass a budget that spends $17.5 billion, almost 4 billion less than the budget they passed one year ago and almost 3 billion less than the Senate passed a few weeks ago. The drop in spending corresponds to projections that revenues for the year will be slightly less than $16 million. House leadership says they plan to cut spending without raising taxes in this recession.
Some think this is a ploy by House members to present such an austere budget that others (especially state employees) will revolt and beg them to raise taxes and ease the pain. The two big areas reported to be cut are education and health care, raising cries from supporters in both camps. But, in truth, these are the two biggest areas of appropriations in the state budget, accounting for some 80 percent of the total budget.
And there’s no way they can make these big cuts without it affecting teachers and state employees. So if the House budget is purely cuts and no new taxes there will have to be cuts, either in across the board pay cuts or reductions in force. NC Policy Watch’s Chris Fitzsimon says this would take us back to 2005 and would be disastrous . As you might expect, John Hood from the John Locke Foundation says the roof won’t collapse if the House doesn’t raise taxes.
The NC SPIN panel will also discuss the state budget issue this week. Be sure to catch this show.
Easley mess gets worse
Reporters are having a hard time keeping up with the Easley story because it changes so fast. Former first lady Mary Easley called a press conference today to announce she wasn’t going to resign her post at NC State. Was she actually there or was it a cutout of Mary? She didn’t open her mouth, either during the statement or in taking questions from reporters present. She looked tired and, for someone as accustomed to being in the limelight as she is, very uncomfortable. Who wouldn’t? If the purpose of having Mary present was to garner some sympathy for the stress she is under it worked.
Her attorney, Marvin Schiller, read commendation after commendation from then provost Larry Nielsen, her immediate supervisor at State, the chancellor and UNC President. They alluded to the great influence she wielded for the University, even as they lauded her for a job well done. If you listened between the lines in their communications with Mrs. Easley was the very real implication that having the First Lady working for the University was a great benefit.
The drama continues. Mary Easley has essentially called their bluff in this game of show-down poker. Her position is carefully crafted. She has done nothing wrong, her lawyer maintains. She got her job based on her merits, not because she was Mrs. Governor. She is and has done her job admirably. She intends to continue to do so. Some speculate is that she is posturing so as to secure a handsome buyout of her $850,000 contract. If so, today’s press conference will hasten those negotiations.
Everyone knows how this will end. Most all state contracts have a “non appropriation clause” stating that if funding for the lease, program, or employment is eliminated the contract is voided. We have not seen her contract but it would be a further point of criticism in this saga if her contract did not contain such a provision. So, if Mary Easley doesn’t resign, UNC (or the legislature) will cut the funding for her program and, one way or another, she will be gone.
But the stew is thicker now. Why did the chair of the NCSU Trustees resign? Why did the Provost of NCSU resign? Was it, as they said, for the good of the university? Maybe. We suspect we haven’t heard all that story yet.
Jim Oblinger is one of the best chancellors NCSU has had. He is an outstanding person. But he ISN’T convincing when he tells us he simply cannot remember the chairman of his board of trustees suggesting to him that he hire the wife of the sitting governor of our state.
In like manner Larry Nielsen was a great provost for the university but he cannot sell us on the fact there was no influence from anyone in his hiring, then giving an 88 percent pay increase to Mary Easley. Trustee chair McQueen Campbell wanted her to have the job. Chancellor Oblinger has said that if Campbell had suggested Mary Easley’s name for a position he would have forwarded it to Nielsen. Are we to believe that Nielsen felt no pressure to hire the wife of the governor when the Trustees chair and the Chancellor suggested it?
And by the way, if nothing untoward happened, why do the former provost and the Chancellor say they need more time to produce records? That’s the reason they gave the grand jury for not appearing today.
A year ago when the issue was raised before UNC President Bowles and the Board of Governors, Bowles, you might remember, emphatically stated there wasn’t a shred of evidence to indicate any political influence was used in giving Mary Easley the job or the 88 percent pay increase.
What we got here is a whole pack of dogs (or should we say wolves) that won’t hunt. Here are the questions that beg answering. Would Mary Easley have gotten this job if she had not been the Governor’s wife? Would she have gotten this huge pay increase and elevated to a new position had she not been Mrs. Easley?
The shame of this all is that Mary Easley is an outstanding woman. She is very intelligent, very articulate and extremely capable. She could, and we hope will, be able to find significant employment in any number of places without being First Lady. But few people will ever believe the story that she got this job on her own merit.
The fallout
Insiders have been asking how the fallout of the Mary Easley job crisis might impact Chancellor Oblinger, NC State, the University System and President Erskine Bowles. NC State and the UNC System have been damaged at a time when they are fighting for funding and support in the legislature. This cannot help as legislators are cutting budgets.
State did take a great step in getting former Lt. Governor Bob Jordan to become the next chair of the Trustees. He may not serve long, but Jordan’s squeaky-clean reputation will give State a leg up in trying to rebound from the Mary Easley crisis.
There’s plenty of speculation that Chancellor Oblinger may not be able to survive this. Without exception people start off by saying what a marvelous job he has done, then quickly say that he bungled the Mary Easley situation badly and continues digging the hole deeper every time he opens his mouth. It will take massive damage control to salvage his position.
President Erskine Bowles (“when do I get to vote for you [Mary]) needs to purge himself and the University System of this affair, and the sooner the better. We want to know what he knew and when. Even if it appears damaging to him, the Board of Governors, Oblinger or NC State he needs to come clean quickly so this boil doesn’t continue to fester. The public will allow mistakes, but not cover ups.
Conflicts of interest
WRAL revealed an important element in this unfolding saga several days ago. When the UNC Board of Governors reviewed Mary Easley’s new pay arrangement, they tried some damage control by saying that she would have to go out to raise the funds to pay for part of her salary. Nobody really said much about it but it’s for sure nobody really thought this through very well.
Where was Mary going to get the money? Who would be willing to fund a start-up program that was unproven? As it turns out AT&T, Progress Energy and Blue Cross were willing to contribute big bucks. Each of these corporations does plenty of business with, is regulated by, and curries favor with the Governor, the state and the University. This whole affair doesn’t pass the smell test. There are conflicts of interest all over this that need investigation. We put a House Speaker in jail for “pay for play” activities. How different is this?
Hagan does the right thing
Kay Hagan may be a freshman Senator but she proved she has political savvy yesterday by announcing that U. S. District Attorney George Holding will hold on to his job until after he’s finished with the Easley and Edwards cases. Hagan said she didn’t want to politicize the cases. But that’s exactly what would have happened had she and President Obama pulled Holding from the task before the investigations and trials were finished.
These cases are not likely to be wrapped for awhile. Next year is an important election year, especially in our state legislature. A political misstep here could cost Democrats badly needed seats, even though Republicans are poorly organized and financed.
So Hagan wisely waits. At the appropriate time she and the president nominate a new DA. Nobody will squawk. Winners get to name their team to key positions and Holding is a holdover from the Republican administration. Good play by Hagan.
Republican chairman’s race gets nasty
While on the subject of politics the race to become the next chairman of the State GOP has gotten quite nasty, we hear. There have been all sorts of accusations going back and forth about the candidates in this hotly contested race.
This is not what Republicans need. A party already in disarray doesn’t need another schism among supporters, but it appears that’s what is happening. The election comes next month.
Records missing
The State Highway Patrol is another group getting a black eye from the Easley investigations. Doesn’t anyone in the whole organization have any recollection of what happened to a whole year of records? Who has the authority to trash them? How can they have other years (even though some of them aren’t complete either) and lose a whole year?
This is another case that doesn’t pass the smell test. Anyone who has been around state government very long knows that perhaps DMV and DOT are any more political than the Patrol.
Time to close the money loopholes
The shame of all the Easley troubles is that our state has some serious problems that deserve our full focus and attention right now. One of the issues that screams for attention is further ethics reform. If something can be a conflict of interest we (unfortunately) must assume there will be a conflict of interest.
Face it, we live in a pay to play culture. If we don’t like it we need to change it.
Unfortunately, this legislature has demonstrated an unwillingness to police and clean its own house. It won’t until there are enough new faces to do so, and that won’t happen until laws are changed that allow unlimited contributions to political parties that can then give unlimited amounts of money to individual politicians. NCBlogger.com will speak to this issue later today.
The $2 million, 62 year old, un-respected victim
Republican Representative Cary Allred just keeps stirring the pot. A House committee investigating his recent activities has determined that Allred acted inappropriately in embracing a House page. Testimony by Republicans and Democrats alike called Allred’s conduct on that evening revolting, reporting that he smelled of alcohol, was argumentative and, as one female Democrat said the hug Allred gave that page was the closest thing she had seen to sexual battery.
Allred was missing from the House during the week, therefore unable to receive the report on his conduct. Nonetheless he responded by saying this was a witch hunt and that he is considering changing parties. "I am 62 years old, and I'm worth $2 million. People ought to show me respect. If this is what they think of me, then I don't know how I can work with these people," Allred told the News and Observer .
He’s right. Just another poor victim. Don’t let them treat you this way, Cary. You change your party affiliation. By the way, the Democrats have voted. They don’t want you. That leaves the Independents and unaffiliated. How many of them are there in the legislature? Hmmm. More victims. You’ve got work to do, Cary boy.
Growler rumors
Last night was the annual “Growler,” the party lobbyists stage each year. We’re told the buzz around the room was that the Grand Jury investigations now going on my have expanded to include an investigation into how the lottery was passed. ");
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