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The state Department of Public Safety on Monday disclosed it had "ethical and legal concerns" that prompted it to fire former Alcohol Law Enforcement Director John Ledford after he demoted himself to agent.

Ledford had no legal authority to transfer a vacant position in Wilmington to Asheville, where he is from, and then essentially assign himself to that spot at an "advanced competency" salary level far in excess of what the position pays, according to a letter to Ledford by DPS Commissioner Frank Perry.

Retired Rear Admiral Edward “Sonny'' Masso has been named the new chief operating officer for the Department of Public Safety.

Masso served 32 years in the Navy and Navy Reserve including assignments as commander of the Navy Personnel Command/ deputy chief of Navy Personnel; deputy commander, Naval Surface Force U.S. Atlantic Fleet, vice commander Naval Surface Forces Command; and assistant deputy chief of Naval Operations (Manpower, Personnel, Training and Education.)

More recently, Masso has served as a senior fellow at the Potomac Institute for Policy Studies in Washington D.C.

New state Department of Public Safety Secretary Kieran Shanahan has named former FBI agent Frank Perry to be his interim chief operating officer. He replaces COO Mikael Gross, who was dismissed on Monday.

UPDATED

Former state auditor Les Merritt has formed a nonprofit foundation dedicated to rooting out public corruption.

The Foundation for Ethics in Public Service opened its doors in May and exists to help expose corruption across the nation, Merritt said. Unlike his time as auditor, Merritt won't have the advantage of being able to order agencies to cooperate. He said the foundation will rely on the same tactics and methods used by investigative journalists — good tips and public records.

"We need more watchdogs you just can't get too many out there," Merritt said.

Merritt, a Republican, lost his seat last year to Democrat Beth Wood.

The foundation will rely on anonymous tips for many of its investigations. Others may come from journalists, who because of staff cuts, don't have the time to pursue stories in detail. The foundation can check things out and turn the information over to reporters, he said.

Frank Perry, a retired FBI agent and former investigations chief under Merritt will direct investigations for the foundation.

Merritt said the foundation has a funding pledge from the John William Pope Foundation, which is directed by conservative patron and former lawmaker Art Pope.

Merritt says that his organization will be nonpartisan. Merritt said he does not plan to run for auditor again.

"I honestly believe this can be more worthwhile," he said. "I don't ever plan on running agin. It's certainly not helping me get set up that way. This can be a whole lot more fun."

Auditor-elect Beth Wood said she plans to keep on board Frank Perry, a former FBI man, who was investigations chief for departing auditor Les Merritt.

Perry, who previously led the FBI's Raleigh office, had a higher profile than most employees of the auditor's office. He was named in a lawsuit filed by the State Ethics Comimssion. The commission, which had a running jurisdictional feud with Merritt, claimed in its lawsuit that Merritt had a conflict of interest because Perry once worked for the ethics commission.

Merritt was investigating whether the commission gave preferential treatment to a staff member for then-Lt. Gov. Beverly Perdue.

Wood said in a recent interview that she met with several employees of the auditor's office and decided to give Perry a shot in her administration.

As an FBI agent for 22 years, Perry was involved in the public corruption investigations of former state Agriculture Commission Meg Scott Phipps and former U.S. Rep. Frank Ballance. He retired in 2004.

The State Ethics Commission is asking a Superior Court judge to prevent State Auditor Les Merritt from investigating a claim of preferential treatment for Lt. Gov. Beverly Perdue, the Democratic nominee for governor.

The suit claims that Merritt's office has a conflict of interest because its investigations chief, Frank Perry, left the ethics commission a year ago. The suit also claims that Merritt, a Republican seeking re-election, "denigrated" the commission in an hour-long interview with a radio station.

It is a rare case in which one state agency is suing another, reports Dan Kane.

"The commission welcomes an independent and impartial investigation by an appropriate entity that is free from actual and/or perceived conflicts of interest," the suit said.

More after the jump.

A former FBI agent is joining Les Merritt's staff.

Frank Perry, once the top agent for the FBI's Raleigh office, will head the inevstigative division of the state auditor's office starting Sept. 1.

For the past year, he has been education director for the State Ethics Commission, where he helped teach thousands of elected officials and state workers about new ethics laws.

As an FBI agent for 22 years, he was involved in the public corruption investigations of former state Agriculture Commission Meg Scott Phipps and former U.S. Rep. Frank Ballance. He retired in 2004.

In a statement, Merritt said that Perry will help take the investigations division "into new directions."

Perry will earn $94,164 a year in the position.