May 7, 1999
Contact: Bob Hall 919-489-1931

"CRIMES AGAINST DEMOCRACY" SHOWS NEED
FOR CAMPAIGN FINANCE REFORM

Recent news articles about illegal contributions in North Carolina point out the need for fundamental changes in the state's campaign finance laws, says the government watchdog group whose complaint prompted the investigation by the SBI and Forsyth County District Attorney Tom Keith.

Our news release from March 1998 provided more details on the scope of political giving by A. Steven Pierce, the former rest-home chain owner charged with conspiracy to violate election laws. Also see the Charlotte Observer's story on bundling and "straw donors" from June of 1998.

Among the contributions not yet discussed by the media are four donations made on October 1, 1996 from Pierce relatives to the state Democratic Party totaling $20,000.

According to Democracy South's research, Pierce and 13 related donors (10 relatives and 3 other executives in his businesses) gave a total of $205,850 from 1991 through 1996 to N.C. state-level candidates and party committees. So far, press reports have only discussed $101,000 in contributions requested back from four candidates: Gov. Jim Hunt, Lt. Gov. Mike Wicker, state Sen. Beverly Perdue, and state Sen. Betsy Cochran.

It is unlikely that DA Tom Keith will go after much of the money given before 1996 because of North Carolina's two-year statute of limitation for prosecuting misdemeanor violations of election law. "That's a big problem," said Democracy South's executive director Pete MacDowell. He pointed out that a 5 year statute of limitation might capture another $100,000 in illegal Pierce donations.

MacDowell also said that Keith is the exception to the norm:  Local District Attorneys, who the state Constitution gives the sole power to prosecute crimes, "generally do not pursue campaign finance abuses." MacDowell said Democracy South's June 1997 complaint about Pierce included four other cases of apparent violations by other donors, but none of the cases was investigated by local District Attorneys (in Guilford, Mecklenburg, and Wake counties).

In addition to lengthening the statute of limitation to 5 years, MacDowell said stronger enforcement could result if the legislature created an investigative staff within the Board of Elections or Attorney General's office to develop cases and provide expertise to local DA. Such a provision is now part of a draft Omnibus Campaign Finance Act being developed by Sen. Roy Cooper, Sen. Wib Gulley, Rep. Phil Baddour and others. MacDowell said campaign reformers strongly endorse such these changes.

Besides tougher enforcement, MacDowell urged lawmakers to continue developing an alternative source of campaign money for candidates who accept strict fundraising and spending limits and who receive voter authorization to get public financing. "We need a clean source of money that eliminates the need for special-interest donors, that prevents corruption, and that gives voters real ownership of elections," MacDowell said.

The Clean Election Act (HB 1402) was introduced in the House on April 29 with 33 sponsors - more than a fourth of the 120 members. "We're very pleased with the broad diversity of support," MacDowell. said. "This is not a conservative versus liberal issue. It's an issue of who controls elections: wealthy special-interest donors or ordinary voters. Mr. Pierce, with his tainted money, exemplifies everything that's wrong with the current system

UPDATE!

The following people were convicted in the Pierce case:

› William Roy Hammonds of Kernersville, four counts of conspiracy to exceed campaign contribution limits.
› James Edwin Holt of New Bern, one count of conspiracy to exceed campaign contribution limits.
› Roy Lee Holt Jr. of New Bern, one count of conspiracy to exceed campaign contribution limits.
› A. Stephen Pierce of Kernersville, five counts of conspiracy to exceed campaign contribution limits, five counts of exceeding campaign contribution limits.
› Guy Stephen Pierce of Kernersville, four counts of conspiracy to exceed campaign contribution limits.
› Brian Odell Smith of Wilmington, three counts of conspiracy to exceed campaign contribution limits.
› Robert Joyce of Winston-Salem, one count of exceeding campaign contribution limits.