Heard on the Street Posted: Thursday, October 1st, 2009 Easley back in the news
The State Board of Elections, as expected, announced they will hold hearings in October to discuss former Governor Mike Easley`s campaign finance reports and whether or not he violated state laws. The public hearings, which could take as long as a week, will begin on October 26th. You can read this to mean the Board of Elections has enough on Easley to find him guilty of violations and perhaps enough to recommend that Wake District Attorney Colin Willoughby for possible prosecution, much as was the case with former House Speaker Jim Black. We understand the former Governor will be subpoenaed to appear in person. Speculation is whether or not we will see him present. The atmosphere at these hearings is anything but pleasant if you are the one being investigated, even worse than a courtroom.
Perdue needs to take charge
Gary Pearce is one of the state`s most astute political campaign consultants. A recent article on his “Talking About Politics” blog suggests that Governor Perdue might regain her popularity with the voters by….”devoting her next two years to what common sense would tell you could be political suicide: sweeping tax reform.” Pearce says that the recent rash of boom and bust budgets need to be abated by serious tax reform legislation, adding that right now nobody knows what she stands for.
We hate to disagree with Pearce, but we believe there is an issue even more important that could solve Perdue`s popularity problem with voters and would genuinely do good for the state: Ethics reform. There are far too many examples where public servants have abused the public trust. If North Carolina is going to restore faith in government we must first start with ethics reforms that make it clear we have a zero tolerance policy accompanied by strong penalties when public officials do not do the right thing. This is neither a partisan party issue nor a liberal vs. conservative issue. It is a good government issue and it should be top priority for the Perdue administration. Not only should we talk the talk but Perdue must walk the walk by outlining a stringent list of do`s and don`ts. Some of these could be implemented by executive order; others require reform legislation. The Governor can use her bully pulpit to urge legislators to awaken to the crisis in confidence rank and file citizens have in their government. Once she has truly done the job she can begin other positive steps like tax reform, budget reform and government reform.
It seems like every rock you turn over uncovers another problem with ethical violations in state government. Verizon Business` revelation that they spent more than $21,000 entertaining DMV employees over four years is just the tip of the iceberg. The company volunteered the information, adding that they had also entertained employees in the Department of Transportation and Department of Environment Health and Natural Resources. There is the issue about computers purchased which might not have been received. We hear the case may be further expanded. Word is that the NC Department of Justice was also involved with Verizon Business. Is this how they got to be “America`s largest and most dependable 3-G network?”
Kevin Siers, the cartoonist in The Charlotte Observer, is most always on target with his barbs. His offering today would be hilarious if not so accurate.
A close friend who has served this state in several capacities, both elected and appointed, commented this week that he was embarrassed and ashamed of our state, adding he never thought he would live to see the day when there was so much corruption by public officials. His suggestion is that this must be cleaned from the inside out…those currently in positions of responsibility must take responsibility and clean house, regardless of how high up the ladder it takes to sweep things clean.
Cowell doesn`t go far enough
State Treasurer Janet Cowell, in response to allegations of improper actions from the state`s former chief investment advisor, has modified policies within her department to prevent future possible breaches in ethics. She didn`t go far enough.
Having worked in this department closely with former Treasurer Harlan Boyles I have some knowledge about the issues and temptations in this department. Perhaps more than any other department of state government this discussion is highly important and it doesn`t end with just financial institutions wanting investments from the state. It should include bond counsel, department employees going to work for bond houses who underwrite public financing, insurance and other companies wanting to get business from state employees, companies seeking “finder`s fees” for escheat refunds. In short, most everything the Treasurer`s office does has some potential for outside influence and corruption. Reforms need to be comprehensive, transparent, and effective.
There are many who would take the investment authority away from the State Treasurer on the grounds that political influence can determine who gets state money and who doesn`t. It is a legitimate concern. But those who would strip the authority from the Treasurer have been unable to come up with a system which is any less susceptible to political influence. If this constitutionally elected officer`s duties are to remain, however, we (the public) must have absolute faith and confidence that the absolute minimum in political influence is being exerted. This means we must have total faith in our Treasurer`s honesty.
If we are to have faith in this important department it must begin at the top with Treasurer Cowell. She must make it clear there is zero tolerance for anything that resembles improper action and that violators, no matter their position, will be fired. Next, she must demonstrate she is willing to walk the walk. It is time to restrict the amount of money these financial institutions donate to elect our Treasurer. It was always a source of amusement within the department when investment houses questioned why Harlan didn`t regularly “shake them down” with fundraisers. The only time Boyles ever asked for money was at re-election time and the biggest contributions were usually $1,000. Now $1,000 is a lot of money but we don`t believe it enough to throw large investments to one firm or another. Treasurer Cowell can set the tone right now by declaring her intention to restrict campaign contributions even beyond state law. Perhaps this is one office where public campaign financing might help.
There is little reason why department employees should be making trips anywhere to talk with potential investment houses. If they want business (lucrative business for them, we might add) they should come to Raleigh to make their case, bringing with them whoever and whatever support they might need. Additionally, there are plenty of conferences sponsored by The National Association of State Treasurers, the National Association of Auditors, Controllers and Treasurers and other non-profit groups that instruct the public in the latest trends in investments and there are publications aplenty that do the same. Go to them but cut down or cut out all these junkets. In the rare event travel is necessary the department should book it, pay for it and get reimbursed for it, if applicable.
The two year ban on consulting involving those who leave the department is good. It must also follow that no employee can solicit anyone who does business (or wants to do business) with the state for any charitable or other causes. This is touchy ground. We don`t want to discourage employees from participating in valuable charities but the temptation is great.
The big problem here is that we have other elected officials, especially legislators, guilty of these same practices of which Pat Gerrick is accused. How can you restrict her and not all? That`s a lawsuit waiting to happen.
Like we said, this is the issue Governor Perdue should get out in front of.
Activity vs. action
Governor Perdue is preparing for a trade mission to China, a trip being questioned by many as perhaps a waste of money and time. In past years state officials sometimes had one or two plant relocation announcements lined up in advance so that the mission would appear successful. We will be waiting to see if this trip bears fruit. If not, Governor Perdue can count on seeing it replayed in campaign ads in 2012.
Meanwhile the Guv will be in Washington today at a fundraiser staged by the Democratic Governors Association. She hopes to get the ear of President Obama about money to replace the Yadkin River Bridge. Then it`s on to New York calling on investment houses to recruit them to move to our state.
You have to give Perdue credit. She isn`t just sitting in the Capitol or doing woodwork or flying to Southport. However, no one should confuse activity with action.
Alcoa issue bubbles
The proposed takeover of Alcoa`s Yadkin River hydroelectric plants keeps getting more interesting. Governor Perdue, on behalf of the state, says the reasons for giving Alcoa the licenses are gone and the permits should be revoked. If the Federal Energy Regulatory Commission revokes the permits it will be the first such action ever taken. NC SPIN will have a great discussion on this issue this week. Be sure to tune in.
Vance-Aycock dinner
Despite all the noise last year about Governor Charles B. Aycock being a racist, the event sans name change will be held this weekend in Asheville. Democrats will have great weather to talk about….maybe not so much else in a positive vein. They gather amid scandals in state government, a federal government mired in debt and debate about health care reform, and a pretty rotten mood in the electorate.
During off-year events there usually are not as many hospitality rooms where candidates serve food and liquor for party faithful. That is generally where you can hear the “buzz.” No doubt party leaders will put as pretty a face as they can on the event but privately they are worried about the mid-year elections of 2010, both on the national and state front.
Bubba ain`t happy
We talked above about the sour mood many people are in. Much of that has to do with the big banks who have raised credit card rates without warning to customers…sometimes as high as 9 percent or more. The way bubba sees it, the big guys at the top of these large banks are being paid millions while sticking it to the working guy.
Lewis is leaving
It should come as no surprise that Bank of America`s Ken Lewis announced he was leaving the bank and leaving the board by the end of the year. You could see this coming when the feds forced half the board to resign. Lewis has been a lightning rod for the big deals, big bonuses, and big problems, a caricature for the abuses and arrogance seen in the financial sector. Don`t worry about Ken, however. This guy will have a parachute lined with loot.
The Charlotte Observer raises the question about the banks future and Charlotte`s future. Good reading. Charlotte is already reeling from a reported $650 million drop in income this past year and from the fall from grace of Wachovia and now BofA.
Recycle those bottles
The new laws taking effect today require that all plastic bottles be recycled. As we previously reported there is no enforcement or penalty set up to make sure it happens. Crazy? See what the NC SPIN panelists have to say about the matter on this week`s show.
Correction:
Last week we incorrectly linked SEANC, the State Employees Association of North Carolina, with UNITE HERE, a union that represents hospitality and service workers. SEANC is actually associated with Service Employees International Union. SEANC and their director, Dana Cope, had endorsed Wake School board candidates who advocated neighborhood schools over the current diversity policies of the Wake Board. UNITE HERE contradicted that endorsement, advocating for the current policies.
Certificate of need case before court
After last week`s discussion about court cases now being considered by appellate courts a regular reader of this newsletter wrote to remind us that the Court of Appeals is also considering a case regarding North Carolina`s Certificate of Need Law. According to the lawsuit, the law delegates authority to make determinations of need to a group of private individuals comprised largely of employees of existing healthcare providers, a potential conflict of interest and in violation of the Constitution.
Next week`s NC SPIN
Make plans now to catch next week`s program. Our panel will include the former Attorney General of our state, Rufus Edmisten, and the former Supreme Court Justice and now head of the NC Institute for Constitutional Law, Bob Orr. The program will be devoted to court cases that include the Johnson and Wales case, challenge to the state on funding charter schools, the abovementioned Certificate of Need challenge and the recent ruling about the powers of the Governor regarding managing the budget. This should be a really interesting show.
On the note of the Governor`s budget authority the Winston-Salem Journal ran an enlightening editorial, essentially saying that the Appeals Court was right in restraining the Governor. A reprint ran in the Charlotte O and that`s where we picked it up. Read on.
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