Progress NC Action files formal ethics complaint against Gov. Pat McCrory

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Gov. McCrory has shown a clear pattern of deceptive omissions of income, stock ownership and even simple membership and affiliation with private corporate interests. With these omissions, McCrory has hidden clear conflicts of interest from the public. The State Ethics Commission should investigate.

Progress North Carolina Action today filed a formal ethics complaint with the State Ethics Commission against Gov. Pat McCrory, detailing the governor’s clear pattern of deceptive omissions of income, stock ownership, and conflicts of interest between his private financial ties and his public duties as governor.

As numerous press reports have shown, Gov. McCrory has omitted key financial information from his Statements of Economic Interest in several places:

  1. McCrory initially failed to accurately disclose ownership of more than $10,000 in Duke Energy Stock on his 2008 and 2014 Statement of Economic Interest (SEI).

  2. McCrory failed to disclose more than $185,000 of income from dividends and director fees from Tree.com on his 2014 SEI.

  3. McCrory failed to even disclose membership on the board of directors of Tree.com on his 2013 SEI.  Tree.com’s mortgage business is regulated by the state.

The 50-page ethics complaint also details other clear discrepancies between public documents of other private firms and McCrory’s ethics disclosure forms. Specifically, Gov. McCrory has described himself as a “consultant” to the firm McCrory & Co., a sales consulting firm founded by McCrory’s brother, Phil McCrory.  But public documents filed with the federal Securities and Exchange Commission describe Gov. McCrory as a “partner” at McCrory & Co. McCrory’s & Co.’s own website and press releases have identified Gov. McCrory as a “partner” of the firm. In describing himself as only a “consultant,” McCrory has avoided the requirement to disclose that McCrory & Co. has material business dealings with the state of North Carolina. Such a disclosure would acknowledge a clear conflict of interest. McCrory & Co. has a number of clients who have government contracts with the state of North Carolina. At least one of those clients, Bentley Systems, has paid Gov. McCrory directly and contributed over $500,000 to the Republican Governor’s Association to help elect McCrory as Governor.

“A governor could be forgiven for one mistaken omission on an ethics form, but McCrory’s clear pattern of omitting key financial information reveals a public official who is either recklessly careless with the value of government transparency, or one who is intentionally hiding private financial ties and conflicts of interest,” said Gerrick Brenner, Executive Director of Progress NC Action.

Intentionally failing to disclose financial interests on Statements of Economic Interest is a felony crime. Just as troubling, Gov. McCrory’s reaction to reports of his erroneous ethics forms has been to attack the media with claims of false reporting and to offer comments which themselves are patently false.

“I followed all the instructions on the questionnaires,” McCrory told WSOC-TV in Charlotte on Dec. 17, 2014.

“We did nothing improper. We did nothing unethical. We followed all the rules of North Carolina,” McCrory told WRAL-TV in Raleigh on Dec. 18, 2014. (Video of those soundbites can be found at http://youtu.be/y96HWKUM3EA)

But the facts fly in the face of these comments:

  1. The SEI clearly requires officials to disclose sources of income of more than $5,000, yet McCrory omitted more than $185,000 in payments from Tree.com in 2013. In fact, McCrory received more money from Tree.com in 2013 than his salary as governor.

  2. McCrory had to amend his 2014 SEI twice because he failed to disclose ownership of  Duke Energy stock after Duke Energy’s coal ash spill into the Dan River.

  3. The SEI clearly asks if the governor is a board member of a private company. On his 2013 SEI, McCrory fails to disclose he is a board member of Tree.com. A follow-up question asks if the business is regulated by the state. Tree.com’s mortgage business is regulated by the NC Banking Commission. Gov. McCrory has appointed a majority of the members of the Banking Commission.

“Attacking the media and the messengers will not change the clear facts that Gov. McCrory has repeatedly failed to disclose key financial ties,” said Brenner. “Are these repeated omissions simply incompetence, or are they part of a scheme to hide income and conflicts of interest? An investigation by the State Ethics Commission will hopefully help to get to the bottom of this reckless disregard for government transparency.”

Click here to view a copy of the full ethics complaint.

Click here to view a copy of the ethics complaint exhibits.


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