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Morning Roundup: New fracking board raises ethical issues

Members of the new state board overseeing drilling and fracking in North Carolina is not required required to disclose whether they could potentially profit from the practice they oversee. The board chairman Ray Covington and his family own more than 1,000 acres of timberland in Lee County, considered to be a natural gas-rich pay zone and prime fracking territory.

Such issues are not specifically mentioned on the state’s ethics disclosure form, unforeseen by North Carolina’s ethics rules because for the simple reason that there is no history of oil and gas exploration here. Read more here.

More political headlines below.

Report: N.C. ethics laws get a C grade

More than 300 ethics complaints have been presented to the North Carolina Ethics Commission since it was tasked in 2006 with providing oversight of state government, acording to a report by State Integrity Investigation.

Only 18 investigations had been initiated through 2010 as a result of those claims, the report says, in part because investigations are run by state government officials and because investigations can only be pursued once "probable cause" of an ethics violation has been established.

The report suggests N.C. is hardly out of the ordinary.

Farmer blasts Merritt on ethics

State Ethics Commission Chairman Robert Farmer blasted State Auditor Les Merritt Friday, accusing him of leveling "bogus and spurious allegations" in an investigation that is a "total sham."

Farmer, speaking at the start of a commission meeting, lambasted Merritt's inquiry into the ethics commission's dismissal of an employee over an incident involving the lawyer for Lieutenant Gov. Beverly Perdue reviewing Perdue's file, Mark Johnson reports.

Farmer charged that Merritt released a recent report on his investigation without waiting for a pending court ruling on a lawsuit filed by the commission over that same probe, with Merritt saying he is exempt from such interference.

"In other words, he is above the law," Farmer said.

He also accused Merritt of violating government accounting standards, his own duties, his own confidentiality rules and the ethics act.

"Now he thumbs his nose at a court of law," said Farmer, a former judge, "by proceeding to file a report of an investigation that is the very subject of a lawsuit."

The commission later entered closed session to discuss the lawsuit with their lawyer.

Sewell resigns from transportation board

Louis W. Sewell Jr. a Board of Transportation member and fundraiser for Democratic candidates — including Gov. Mike Easley and gubernatorial nominee Lt. Gov. Beverly Perdue — has resigned from the transportation board.

Sewell has come under scrutiny since The News & Observer reported Sunday that Sewell steered about $375,000 in state road money to two projects in Jacksonville near property owned by Sewell or his son, Dan Kane and Ben Niolet report.

The projects went to roads that needed work, but were also adjacent to valuable land.

In a news release, Transportation Secretary Lyndo Tippett said: "Mr. Sewell has submitted his resignation today. I believe this action is in the best interest of the Board of Transportation, the department, the citizens and Mr. Sewell."

Tippett said last week that he was not aware of the extent of Sewell's real estate interests near the road work. Hours after a reporter explained Sewell's holdings last week, Tippett said he was forwarding the case to the N.C. State Ethics Commission.

In a news release announcing the resignation, Tippett included descriptions of the road work in question. The descriptions included the department's justification for the road work.

More after the jump.


Sewell hosting Perdue fundraiser

Sewell fundraiserLt. Gov. Beverly Perdue said today she supports a State Ethics Commission investigation into an N.C. Board of Transportation member's steering of roughly $375,000 of public money to projects adjacent to properties that he or his son co-owned at the time.

But she was unclear about whether she intends to attend a fundraiser that the board member, Louis Sewell, is hosting for her Thursday night.

"I need to think about that," Perdue told The Charlotte Observer's Jim Morrill.

According to a copy of the invitation, the event is being held at Sewell's home in Jacksonville at 5:30 p.m. Perdue, a New Bern Democrat, has confirmed that Sewell is a fundraiser for her gubernatorial campaign.

On Sunday, The News & Observer reported the connections between Sewell and his son's real estate interests and Sewell's efforts to secure public money for transportation projects. Sewell has said he only sought the funding to take care of the public's interest.

Perdue did not answer whether she would reappoint Sewell to the board if she is elected governor.

"Lord have mercy," she said. "I'm trying to win the governor's race."

Update: W. Douglas Parsons, an attorney in Clinton, said this afternoon that the fundraiser has been canceled.

"I think it is in the best interest of my family and everybody involved to cancel the event," Sewell said in a statement forwarded by Sewell.

More after the jump.


House approves bill on ethics rules

The House passed a bill requiring ethics opinions to be issued on a more timely basis.

Under the legislation, the N.C. State Ethics Commission would be required to publish advisory opinions on ethical issues within 30 days of being issued. Currently, they are published once a year.

State Rep. Rick Glazier, a Fayetteville Democrat who sponsored the bill, said that would help other legislators learn from the problems of their colleagues.

It would "speed up the process so that we can all understand what our obligations are, which is hard to do until we have the full opinion issued," he said.

The bill also makes hundreds of technical changes to ethics rules which Glazier said came up over the past year. He said they were all approved unanimously by a bipartisan House ethics committee.

The House approved the bill 109-1 on its third reading. It now heads to the Senate.

The lone vote against the bill came from Republican Rep. John Blust of Greensboro. 

A year of complaints

So what has the Ethics Commission been up to?

State law requires the commission to keep secret much of its work. But once a year, the commission makes public the number of complaints it receives.

In 2007, the commission received 73 complaints. That's a lot, said Executive Director Perry Newson.

Only five of those met the legal requirments to move forward. Newson explained that many people seemed confused about what the commission does. Lots of complaints were against people the commission doesn't regulate, such as complaints filed against divorce lawyers by upset clients, Newson said Friday.

Others were improperly filed and the complainer dropped the matter, perhaps not wanting to swear to the allegations.

Of the five the commission accepted, two were dismissed after some investigation. Three remain pending before the commission.

Senator Who?

Dome came close to ferreting out secret information this morning.

Okay, it wasn't any super-sleuthing on Dome's part. A member of the state Ethics Commission almost spilled the beans about an ethics case involving a senator.

By law, the commission has to consider ethics matters in closed session and even the names of people involved are secret.

But early in Friday's meeting, when commissioners received their standard reminder about conflicts of interest, member Jerry Blackmon raised his hand. He said he may have a potential conflict of interest when it comes to the matter of "Senator..."

That's when Commission chairman Robert Farmer and Executive Director Perry Newson stopped him. They would discuss the potential conflict in closed session, Newson said.

Trying to divine who Blackmon was talking about could be tough. Blackmon was a Mecklenburg County Commissioner in the 1980s and was a state senator through much of the 1990s. He was appointed upon the recommendation of senate leader Marc Basnight and has served on various boards.

After the ethics commission concluded and before the closed session began, Farmer suggested to reporters that they lobby the legislature to open up ethics proceedings.

Binker: Ethics forms should be online

Mark Binker says online sunshine should start with the N.C. Ethics Commission.

The Greensboro News-Record reporter writes Dome from South Carolina, where he's following the presidential race, to point out that the financial disclosure forms are not accessible.

"The documents don't really serve their intended purpose of allowing voters to see potential conflicts if they're sitting in the basement of the (Department of Administration) building," he writes.

The forms list real estate, stocks and corporate ownership that might present conflicts of interest for an elected official. (For an example, click here.)

The offline documents are somewhat accessible to the capital press corps, who are mostly based in Raleigh and have the time and energy to go pay a few dollars to get copies from a clerk.

But Binker points out that the forms are filed by district attorneys, judges and legislators from across the state. Their local reporters, political opponents and interested citizens shouldn't have to drive to Raleigh to get the documents, he says.

Previously: The principles of online sunshine.

Merritt: I work for free

Les MerrittLes Merritt says he's not getting paid by Four Oaks Bank.

In response to a letter from campaign finance activist Joe Sinsheimer, the state auditor said his only salary as a member of the Zebulon bank's board of directors is $150 for each bimonthly meeting, which he has waived.

In the interest of "full transparency," Merritt said he requested advice from the N.C. Ethics Commission and sent them a letter indicating that he would accept the position.

"I consider it an honor to serve my local community in this type of service," he writes. "I am proud of the good work that Four Oaks Bank is doing and I am eager to contribute my gifts and talents to serving my growing community."

Sinsheimer had criticized Merritt for doing outside work while state auditor.

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