Former N.C. Sen. Robert Pittenger, Republican candidate for lieutenant governor, is running a TV ad against his Democratic challenger, state Sen. Walter Dalton.

What the ad says: Announcer: "Raleigh's pigging out. Take Senator Walton Dalton. Dalton gave Goodyear tax breaks...after they hired his brother-in-law. Dalton made state insurance pay for erectile dysfunction drugs...while Dalton's daughter was the drug company's lobbyist. Dalton gave Dell special tax breaks...while he owned Dell stock. Wasteful Walter Dalton. He made government work...For Walter Dalton."

"I'm Robert Pittenger, running for Lieutenant Governor, and I sponsored this message."

The ad features cartoon images of pigs prancing around with bags of money.

The background:

- In September 2007, the legislature passed an economic incentives bill that would give Goodyear more than $24 million over 10 years. On a strictly party-line vote, Dalton voted in favor; Pittenger against.

Goodyear hired Dalton's brother-in-law - former Republican legislator and gubernatorial candidate Chuck Neely - on Aug. 31, a day after Gov. Mike Easley vetoed an early version of the incentives bill. Dalton publicly supported that version. But when it passed the Senate overwhelmingly, he was absent.

- Under one version of the 2004 budget, drugs such as Cialis -- after a four-year absence - reappeared on a list of those eligible for coverage under the state health plan. Dalton, a chief budget writer, said at the time that the suggestion came out of a subcommittee. The measure passed the Senate but never became law.

Dalton's daughter, Elizabeth Dalton, was a lobbyist for Eli Lilly, which manufactured Cialis. Aides say Dalton also has voted against his daughter's clients, such as the N.C. Retail Merchants. And they say he voted for a similar drug provision in an earlier budget, when his daughter was still in college.

- In 2004, Dalton was among a majority of lawmakers who voted for $242 million worth of incentives to computer-maker Dell. Dalton had bought $10,000 worth of Dell shares in 1999. While the stock value rose after the incentives deal, he later sold it at a loss.

Dalton spokeswoman Kimberly Reynolds said the stocks were in a managed account and "daily decisions are made by his financial advisor without input from Sen. Dalton." She said Dalton has long supported measures he believes will create jobs.

Is the ad accurate? The votes are accurate. But the implication that Dalton voted because of family ties or personal benefit is subjective.

- Jim Morrill, The Charlotte Observer

Robert Pittenger is criticizing Walter Dalton's vote to give incentives to Dell.

In a UNC-TV debate Wednesday, Pittenger said Dalton had a "major conflict of interest" in the vote because he owned Dell stock at the time. Dalton said after the debate that he does not manage his own investments and that the stock did not affect his vote.

And he appears to have sold the stock at a loss.

In 2004, Dell was considering building a computer-assembly in the Triad that it said would employ 2,000 people. Lawmakers approved $242 million in incentives over 20 years if Dell were to meet certain benchmarks.

Dalton, a Democrat, voted for the incentives. Pittenger, a Republican, voted against them. They are running for lieutenant governor.

"Probably the biggest concern I have about our differences is that Senator Dalton, he voted for incentives — a $280 million incentive for Dell — at the same time that he owns stock in Dell. And I would say very clearly that's a major conflict of interest," Pittenger said Wednesday.

Dalton said it was still appropriate for him to vote. "The key there was I was voting for jobs for the people of North Carolina," he said.

A campaign spokeswoman said Thursday that, according to a preliminary review of records, Dalton bought about $10,000 worth of Dell stock in November 1999 and sold it for about $4,000 in February 2007.

Dalton has publicly disclosed owning the stock on his state ethics filings since the 1999-2000 election cycle. In his most recent filing, he listed stocks and options in about 25 companies.

State law generally allows legislators to decide for themselves whether a conflict of interest should keep them from voting.

Things at Dell are looking down.

The N.C. Institute for Constitutional Law is challenging the Goodyear incentives.

The Raleigh-based legal group filed a lawsuit Thursday challenging the $60 million given to Goodyear Tire & Rubber Co. in Fayetteville and Bridgestone Firestone in Wilson.

"The state constitution requires that any expenditure of state funds be for a public purpose. In the past, government and big corporations have said that massive corporate welfare was necessary to create jobs and they claimed that was a public purpose," said Jeanette Doran, senior staff attorney with the law group. "Now, North Carolina is just giving away $60 million and not requiring a single new job. There is no public purpose in that."

Earlier, the group lost a challenge to incentives for Dell. (N&O)

Bob Orr says he does not oppose all incentives.

In e-mail to Dome, the Republican gubernatorial candidate says that his rival, Bill Graham, misunderstands his position on attracting business to North Carolina.

Orr writes that he does not oppose all incentives, just those targeted at a specific company, such as Google, Dell, Goodyear or Lowe's Motor Speedway.

"However, an incentive policy that benefits a broad range of businesses or preferably all businesses is potentially acceptable," he writes.

He also argues that there is "general acknowledgement" that targeted incentives are bad public policy.

"I would encourage Bill to oppose this system which has exploited our state and local communities rather than fall into the trap of saying that some are OK," he writes. 

Bob Orr says the Dell lawsuit is an attempt to overturn judicial activism.

In response to a post on Dome yesterday, the former Supreme Court justice e-mailed to say that he thinks the 1996 decision to allow corporate incentives was "a real case of judicial activism."

"The majority overturned years of Supreme Court precedent to somehow authorize the expenditure of tax money to private companies, a ruling contrary to the established law for 50 years," he wrote Dome.

He defined judicial activism as failing to follow precedent, making result-oriented decisions and "playing fast and loose with constitutional limitations."

Orr was one of two dissenters in the 1996 case, Maready v. Winston-Salem, that allowed the state to use incentives to lure business.

In his dissent, he wrote that the majority was using the excuse that "everybody's doing it" to justify calling incentives constitutional.

The state Court of Appeals threw out Bob Orr's lawsuit on Dell.

The former Supreme Court justice and Republican gubernatorial candidate had filed a lawsuit on behalf of taxpayers arguing that incentives used to lure the computer maker were unconstitutional.

But a three-judge panel led by Judge Martha Geer wrote that the constitutionality issue was settled by Maready v. City of Winston-Salem in 1996. She wrote that the incentives issue is now up to the legislature and the governor.

Orr said he was confident that the N.C. Institute on Constitutional Law, which he formerly headed, would appeal the case to the state Supreme Court. 

"There's no point in stopping now," he said. 

The Eight Ball is magic, but its warranty is limited.

So we won't haul it out to test this claim on former N&O columnist Dan Gearino's new blog:

Eventually, one of the challenges to industry-recruitment incentives will succeed.

Gearino predicts that the N.C. Institute for Constitutional Law's challenge to Google incentives will fail, as did its challenge to Dell, "because courts are all about precedent."

But, "at some point," Gearino writes that the "social gag reflex" will kick in and "a court somewhere" will decide that huge tax breaks for corporations violate the spirit of equal protection under the law.

That may be, but it's beyond the power of the Eight Ball to test. That's Harry Potter magic.

Clarification: The Dell suit is still on appeal. 

A Raleigh group is suing over Google.

The N.C. Institute for Constitutional Law filed a lawsuit in Wake County Superior Court alleging that tax breaks given to the California-based company violate the state constitution.

Google will receive an estimated $90 million over 30 years for locating a server farm in Caldwell County. (N&O)

In May, a Wake Superior Court judge dismissed a similar lawsuit by the nonprofit over tax incentives for the Dell computer company.

The lawsuit has reverberations for the governor's race. The former head of the institute, former Supreme Court Justice Bob Orr, is running for the Republican nomination. (TBJ)

And the lawsuit was filed on behalf of Mike Munger, a Duke University political science professor seeking the Libertarian nomination; Barbara Howe, a former Libertarian gubernatorial candidate, and concerned citizen Mark Cares. (Char-O)

Correction: An earlier version of this post incorrectly named the county.