November 13, 1997

GROUPS CALL FOR PROSECUTION OF TRANSPORTATION OFFICIALS

Four organizations from across the political spectrum today called for the resignation of Department of Transportation Secretary Garland Garrett and the felony prosecution of Board of Transportation members caught profiting from road projects they promoted.

The same groups - including the liberal Democracy South and the conservative John Locke Foundation - had earlier called for a comprehensive audit of DOT by the state Auditor's office, which Auditor Ralph Campbell recently announced he will undertake.

The move today increases the pressure to overhaul the Department of Transportation and hold its Board members accountable for their misdeeds.

"The Governor is talking tough about crimes committed by juveniles, even holding a special session of the legislature to stiffen penalties," said Bob Hall of Democracy South. "It's simply hypocritical not to pursue those DOT officials who have broken the law or diverted millions of tax dollars for their own use."

The groups' letter was sent to Governor James B. Hunt, Attorney General Michael Easley, and Wake County District Attorney Colon Willoughby, who is charged with prosecuting crimes by state officials in Raleigh.

One of the laws cited in the letter says Board members can be held liable for three times the cost of transactions they profited from, such as a road contract they approved that enhanced their property. Two board members, Carroll Edwards and Odell Williamson, recently resigned after news accounts revealed they benefited from new roads worth more than $5 million.

The groups say that money should be returned to taxpayers.

They also want Sec. Garrett, who chairs the BOT, removed for violating another law which says officials are not permitted "to use his position to influence elections or the political action of any person." Garrett has admitted he talked with Columbus County contractor J. A. Cartrette about campaign money for the Jim Hunt re-election committee, and the next day Cartrette's son delivered 3 checks totaling $8,000 to Garrett's office at DOT headquarters.

The letter contrasts the treatment given white and African American officials caught in various DOT-related scandals, and says "full prosecution of DOT law violators is all the more important in light of Governor Hunt's recent focus on tougher punishment for juvenile delinquents."
"We are now learning," the letter says, "that the best way for someone to profit from roadbuilding money is to sit on the Board of Transportation."

Contacts:
· Bob Hall, Democracy South, 919-489-1931
· John Hood, John Locke Foundation, 919-828-3876
· Joe McDonald, NC Alliance for Transportation Reform, 910-281-5272
· Warren Murphy, NC Alliance for Democracy, 919-779-5337

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A CALL FOR ACCOUNTABILITY

November 13, 1997

Governor James B. Hunt
The State Capitol
116 W. Jones Street SENT BY FAX
Raleigh, NC 27601-8001

Attorney General Michael Easley
Department of Justice
PO Box 629
Raleigh, NC 27602

C. Colon Willoughby, Jr.
Wake County District Attorney
PO Box 31
Raleigh, NC 27602-0031

Dear Sirs:

We write regarding the recent resignations of members of the Board of Transportation and the need to vigorously enforce existing laws affecting the behavior of Department of Transportation staff and policymakers. Simply put, should we allow a robber who gets caught to walk away freely, without any punishment or remedial action?

In the savings-and-loan scandal, the public learned in gruesome detail that the best way for someone to rob a bank was to own one. We are now learning, again in gruesome detail, that the best way for someone to profit from roadbuilding money is to sit on the Board of Transportation. In both cases, huge amounts of public dollars get diverted for private gain. In both cases, decisions by lawmakers in need of campaign cash illustrate how they become captive to the wishes of their donors. And in both cases, the relatively lenient punishment of white-collar lawbreakers raises serious questions about a double standard in our criminal justice system.

Fair and full prosecution of DOT law violators is all the more important in light of Governor Hunt's recent focus on tougher punishment for juvenile delinquents. What message is sent to our youth and their parents if we allow people of wealth and privilege to divert millions of public dollars for their own benefit, yet we prosecute a teenager for stealing a $95 pair of shoes?

This morally corrupting double standard is compounded by the contrasting punishment violators receive based on their race. What else explains the different treatment of BOT member Charles Grady and DOT official Alexander Killens? Grady got a 20-day suspended sentence, 40 hours of community service and a $250 fine for admitting his real-estate firm made $45,000 on a land sale he promoted to the DOT. He could have been charged with the felony violation of a law against BOT members profiting from their official actions. Instead, he was charged with a misdemeanor, despite an earlier controversy over his firm marketing property near a proposed road he was championing as a BOT member.

Alexander Killens, by contrast, got a 45-day suspended sentence, 5 years probation and a 5-year ban from holding public office in N.C., 125 hours of community service, and a $300 fine. He pled guilty to a misdemeanor charge of obstructing justice, stemming from his interference in a criminal investigation of DOT employee Algie Toomer. Judge J.B. Allen admitted he gave Killens a "harsher" penalty than normally called for because, he said, "When young people see our officials violating or bending the law, it sets a precedent for future leaders."

In another case -- more a matter of legislative scrutiny than of judicial prosecution -- contrast the attention given the $100,000 settlement awarded Algie Toomer, an African American, with the lack of investigation of the $3.7 million right-of-way payment that DOT Highway Division Director Larry Goode awarded Steven Stroud and Carlton Midyette's Carolantic Realty, an award state and federal appraisers say is wildly exorbitant and violates the public interest. Why is Goode not held accountable for his action?

There are numerous state and federal laws that address the diversion of public dollars for private gain, abuse of public office, and improper political campaigning by employees and appointees. We believe that rigorous enforcement of these existing laws will send an important message to the public and to potential lawbreakers -- and will be far more effective than piling new ethical regulations on top of those not now being enforced.

We call your attention to two state laws specifically aimed at DOT officials:

1) Chapter 136-14 of the NC General Statutes says, "No member of the Board of Transportation shall . . . profit in any manner by reason of his official action or his official position, except to receive such salary, fees and allowances as by law provided. Violation of this section shall be a Class I felony which may include a fine of not more than twenty thousand dollars ($20,000), or three times the value of the transaction."

This is the statute that could have been used to prosecute BOT member Charles Grady -- but wasn't. We believe it should be used in the cases involving Carroll Edwards and Odell Williamson, two BOT members who recently resigned following documentation that they financially benefited from their official actions related to road projects worth over $5 million. Moreover, we believe the State should seek to recover all public funds used for DOT projects that benefited these BOT members, using the triple value provision in the law.

Pursuant to NCGS 114-11.6, we therefore ask that the resources of the SBI and the Special Prosecution Section of the Attorney General's office be made available to the Wake County District Attorney and to other District Attorneys with jurisdiction in these matters; and we ask that the District Attorney(s) fully utilize these (and all other available) resources to vigorously investigate and prosecute each case involving a BOT member.

2) Chapter 136-13.1 of the NC General Statutes says, "No member of the Board of Transportation nor any officer or employee of the Department of Transportation shall be permitted to use his position to influence elections or the political action of any person."
It would seem difficult not to conclude that DOT Secretary Garland Garrett violated this law. Garrett is also BOT chairman. His own statements and his phone records confirm that, while at his office in Raleigh, he engaged in campaign fundraising with James Allen Cartrette of Columbus County. He apparently told Cartrette that he would get "a seat at the table" for increasing his political contributions to the Jim Hunt reelection campaign -- and the next day, Cartrette's son delivered three checks totaling $8,000 to Garrett's office at DOT headquarters. Even if these actions don't constitute selling a seat on the BOT, they certainly had an influence on Cartrette's political action. Other state laws also prohibit the use of state equipment and supplies for political fundraising.

Mr. Garrett should be held accountable for his behavior. In accordance with NCGS 143B-16, we therefore ask that the Governor request Garrett's immediate resignation as Secretary of DOT and BOT Chair. This is a time when DOT needs strong ethical leadership. Given Garrett's own actions, the public will rightly question his ability to fully implement a proposed examination of BOT members for conflict-of-interest activities and unethical behavior.

Garrett's latest proposal to spend up to $300,000 for an outside audit of DOT's management structure also raises a number of serious issues, especially since the state Auditor has already announced his office will undertake such an investigation. These funds should be provided to the state Auditor's office to conduct a thorough study of DOT and the BOT, completely independent of DOT supervision or specifications.

Dramatic action is needed to restore public confidence in the Department of Transportation. Far-reaching structural changes are needed to completely overhaul the current decision-making system, which favors political patrons, road builders and development interests, as well as overhaul the current quid-pro-quo campaign financing system. At the same time, individuals must be held accountable for their actions; a simple resignation can not absolve someone of responsibility, including the responsibility to repay the public in full for misspent money.

If we want juveniles to know they can't flaunt the law, or escape the consequences of their actions, then we must show them the judicial system is swift and fair, not arbitrary or biased to protect a certain race or class.

To slightly modify your recent statement, Governor Hunt, "We need to make sure all young [and old] offenders see, first time and every time, that breaking the law carries consequences, both in and out of court."

We therefore respectfully request that each of you act immediately to use your authority to enforce the law fully and to change the management of DOT at its highest level.

Sincerely,

Bob Hall, Research Director, Democracy South 605-A NC 54 West, Chapel Hill, NC 27516 John Hood, President, John Locke Foundation 1304 Hillsborough St, Raleigh, NC 27605
Joe McDonald, President, NC Alliance for Transportation Reform, PO Box 70, Hoffman, NC 28347
Warren Murphy, President, NC Alliance for Democracy, 917 Seventh Avenue, Garner, NC 27529