Former state Auditor Les Merritt said the N.C. State Ethics Commission has failed to keep government clean.

In an opinion piece published in the Fayetteville Observer, Merritt writes that the commission has been silent as multiple investigations focus on former Gov. Mike Easley.

However, in nearly three years of existence, the commission has done little to tackle real ethics issues in our state. Not a single resolution of note has come as a result of any Ethics Commission investigation, even though several dozen complaints have been submitted or referred. For example, the media have reported that former Gov. Mike Easley allegedly failed to disclose a seemingly inappropriate relationship on his Statement of Economic Interest, but this went undetected (or perhaps unchallenged) by the Ethics Commission.

Meanwhile, a Board of Elections investigation continues into alleged campaign finance violations by Easley, as well as a federal grand jury investigation of how his wife obtained her position (and subsequent 80 percent raise) at North Carolina State University.

None of these issues appears to have been surfaced or investigated by the Ethics Commission.

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The state auditor and the State Ethics Commission have ended a battle stemming from an investigation into the handling of then-Lt. Gov. Beverly Perdue's ethics files.

A state audit released today found that officials with the State Ethics Commission had not intentionally destroyed evidence in the matter, but did find that commission staff had not followed procedures in making the ethics statements available to the public, Dan Kane reports.

The case stems from a visit that Perdue's legal counsel, Will Polk, had made in October 2007, to review her ethics statements, which are an accounting of her financial interests. The statements are intended to help officials avoid conflicts of interest. Polk had been allowed to review the files behind closed doors. An aide, Amanda Thaxton, had noted in an electronic log that this was not the commission's policy; a staff email had told them not to let members of the public review ethics files without staff supervision.

Thaxton filed a complaint to the auditor's office, which then launched an investigation. She was later fired by the commission and has since filed a whistleblower's lawsuit that is pending in state court. The commission has denied that she was fired in retaliation. The audit did not address Thaxton's whistleblower claim. Copies of the log showed that her entry had been removed. But the auditor's report released today found that the change was made prior to the commission being notified of the auditor's investigation, so there was no evidence of tampering.

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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.

Louis Sewell, the Jacksonville businessman who stepped down from the state Board of Transportation last week, told his hometown newspaper that his resignation puts an end to a State Ethics Commission probe his steering public money to two transportation projects near properties that he or his son co-owned.

The Jacksonville Daily News reported Friday that Sewell said "he has been assured the N.C. State Ethics Commission will not investigate his decisions while on the BOT now that he has resigned," Dan Kane reports.

Ethics commission officials could not be reached by the Daily News or Dome, and typically they do not comment on investigations.

But Walker Reagan, the legislative staff attorney who crafted the ethics law, said unless Sewell is the subject of a criminal investigation, there's no reason for the commission to be digging into a possible conflict of interest. That's because worst civil sanction that can be handed down to a public official who runs afoul of the ethics law is removal from that position.

"You can't do anything more than get him out of office, and he already is out of office," Reagan said.

The ethics law, which took effect Jan. 1, 2007, gives the commission up to a year after a public official leaves office to conduct a criminal investigation. But even there, Sewell's case might not apply because his public actions involving his personal property took place from 2004 to early 2006.

State Auditor Les Merritt offered the following response to criticism earlier Friday by Robert Farmer, chair of the state ethics commission:

"The public should be extremely disappointed in Mr. Farmer's unmeasured rhetoric targeting the Office of the State Auditor especially when the Office of State Personnel and the Office of State Budget discovered similar internal problems at the Ethics Commission. The facts are that the Ethics Commission staff has sued to block the State Auditor's investigation into the altering of public records, special treatment for high level government aides, and the potential retaliatory firing of a commission employee for exposing the possible cover-up. The Commission staff's disrespect for public transparency by suing to block an investigation and now Mr. Farmer's unmeasured rhetoric only feed the speculation by the public and the news media: What are they trying to hide?"

State Auditor Les Merritt says an ethics probe is being blocked.

On Thursday, he released an "interim report" accusing the State Ethics Commission of unlawfully blocking his staff's investigation into possible preferential treatment of Lt. Gov. Beverly Perdue.

The report also backed findings by two other state agencies that found the commission lacked clear administrative policies and was strugling to perform its tasks.

Merritt, a Republican seeking re-election, said in a statement that his staff's report "paints a picture of potential destruction of evidence. I say 'potential' because the Commission is hiding facts from the public that may implicate or exonerate their past actions."

The investigation stems from a complaint from an office assistant who noted that a staffer for Perdue was allowed to review records alone in an office with the door closed. She was later fired after the N&O asked about the log. (N&O) 

A former State Ethics Commission employee who was fired after raising concerns about possible preferential treatment to Lt. Gov. Beverly Perdue filed a whistleblower lawsuit in state Superior Court today.

Amanda Thaxton, an office assistant, said the firing has hit her hard financially and she wants a judge to reinstate her immediately, Dan Kane reports. She said in the suit that she is also seeking an award of triple damages — as the state's whistleblower law allows — plus legal fees for being fired for reporting her concerns to the Office of the State Auditor and to the State Personnel Commission.

"This was this girl's first job out of college," said her lawyer, Michael C. Byrne of Raleigh. "She comes in from Elon University, gets a job from the state and then is abruptly fired for cooperating and engaging in protected activity. That's just not right."

Perry Newson, the commission's executive director, could not be reached for comment Tuesday. He has said that Thaxton, 24, was not fired in retaliation.

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A legal battle involving the State Ethics Commission and the Office of State Auditor could end up costing taxpayers $40,000.

The N.C. Attorney General's Office has determined that it has a conflict in representing either party in a lawsuit the commission filed earlier this month, reports Dan Kane.

So both sides are hiring private lawyers to handle the matter. Gov. Mike Easley authorized an initial cap of $20,000 for each party.

Noelle Talley, a spokeswoman for the attorney general, said chief deputy Grayson Kelley had unsuccessfully sought to mediate the dispute.

The battle is over whether the commission has to comply with the auditor's investigation into an allegation of preferential treatment for Lt. Gov. Beverly Perdue, the Democratic nominee for governor. A Perdue aide visited the commission's office to review Perdue's financial disclosure statements and was allowed to look at them alone in a vacant office.

Since then, a log noting the arrangement was altered and the employee who made the notation has been fired. Ethics commission officials say nothing was improper in the visit and the employee was not fired as a result of the notation.

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.

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Lt. Gov. Beverly Perdue said it was a clerical error that caused a Florida development company to be dropped from her financial disclosure statements in 2003 and 2004.

"I had somebody transpose from one statement to the next," Perdue said. "I assume it was an oversight. There was never any intent" to mislead, Dan Kane and Mark Johnson report.

Her general counsel, Will Polk, went to the State Ethics Commission in October to correct the error. But the visit exposed controversy within the commission. Polk was allowed to review Perdue's statements alone in a closed office, causing a staffer to note the unusual treatment in a visitor's log.

The staffer was fired last month — hours after The News & Observer asked about the log and the commission's policy regarding outside reviews of its records.

Ethics officials said nothing improper happened with Polk's visit. State Auditor Les Merritt is investigating.

The company, BBA Development Corp., was dissolved last month, according to a filing with the Florida Department of State's office.

It was based in Bonita Springs and developed a golf course community there, according to the business web site Manta.com.