The Republican Governors Association is running an ad linking Lt. Gov. Beverly Perdue, the Democratic nominee for governor, to corruption and scandal.

What the ad says: Announcer: "Bev Perdue took thousands of dollars from political fat cats who needed her.

"A sweetheart deal to rest home owners, costing millions. A slush fund costing millions more.

"Perdue's insider friends, corruption, conflicts of interest. One in jail. Two resigned from a state board. Even Democrat Richard Moore says 'Status Quo Bev' is..."

Moore: "So typical of someone who has led the go-along, get-along club in Raleigh for 20 years."

The ad flashes newspaper headlines and words such as "conflict of interest" over shots of shadowy figures engaged in various activities. The ad concludes with a statement made by Richard Moore at a debate during the Democratic primary for governor.

The background: Although the ad isn't specific, a spokesman for the Republican Governors Association said the sweetheart deal claim refers to the 1999 state budget, which included $3.7 million to pay for a rate increase for rest homes. Draft copies of that budget disappeared, apparently because they didn't contain the provision, lobbyists for the industry told The News & Observer. Perdue was a chief senate budget-writer then.

The industry said the increase reflected the acutal cost of running the homes.

Three years earlier, Perdue's campaign received $19,000 from a rest home operator and his family members. Prosecutors charged the operator with trying to circumvent the state's contribution limit by giving donations in others' names. Perdue's campaign returned the money and a prosecutor said there was no evidence that Perdue knowingly accepted illegal contributions. The prosecutor made similar findings about the governor, lieutenant governor and another senator.

The "slush fund" claim refers to the fiscal 1997 and 1998 state budgets. Editorial writers criticized Democratic and Republican legislative leaders over a provision that allowed them to spend $21.3 million on building renovations and other pet projects not approved by the full legislature. Critics called it a "slush fund." Perdue defended it as a way to pay for projects when the legislature wasn't in session. Spending would still need approval from a committee.

Former Speaker of the House Jim Black is serving a five year sentence after he pleaded guilty to taking thousands in cash payments from chiropractors interested in issues before the legislature.

Two Perdue fundraisers have quit the state Board of Transportation this year. Thomas Betts quit after he was found to have pressured a city official in Roanoke Rapids to raise money for Perdue's campaign. She said she was not aware of how he was trying to raise money. Louis W. Sewell Jr. quit the transportation board after revelations that he steered road work to areas near property he or his son co-owned.

During a debate in the primary, Moore, the state Treasurer, made the statement about Perdue when she challenged him to explain why Roanoke Rapids was allowed to borrow money for a theater project featuring country music performer Randy Parton. After the primary, Moore endorsed Perdue in an e-mail, although he has done little else publicly to help her campaign.

Is it accurate? Not entirely. It's true that two men with ties to Perdue have quit the transportation board. Other than belonging to the same political party, Perdue had no strong ties to Black. The legislature, including Perdue as a budget writer, did give a rate increase to rest home operators.

It's a stretch to blame Perdue alone for the pet projects included in the budgets. Republican and Democratic leaders in the legislature were responsible for the provision.

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.

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Richard Moore will not be sending Eliot Spitzer's donations back.

At a press conference today, the Democratic gubernatorial candidate was asked if he would return the $4,000 from the former New York governor and his wife, Silda Wall Spitzer.

He responded by noting that his rival, Beverly Perdue, has not returned contributions from former Board of Transportation member Thomas Betts.

"I would love to talk about returning campaign contributions when the lieutenant governor returns all of the DOT bundling money that she's been taking," he said.

He was then asked about his thoughts on Spitzer, who once held a fundraiser for him and had praised Moore at an event in Asheville.

"I feel very sad for his family," he said. "I think most of you know that Silda has a lot of connections to North Carolina as a native and a graduate of Meredith. I really feel for she and their three daughters. It's a sad time."

Lt. Gov. Beverly Perdue said today that the Board of Transportation reform law that she championed in 1998 was intended to require full disclosure of fundraising activity by board appointees.

"When the law was passed we intended for it to have full disclosure," said Perdue, who officially became a Democratic candidate for governor this morning by filing the required forms at the State Board of Elections. She did not specify what full disclosure would entail, reports Dan Kane.

The News & Observer reported on Feb. 3 that two current board members—D.M. 'Mac' Campbell of Elizabethtown and Louis W. Sewell Jr. of Jacksonville—raised money for Gov. Mike Easley's 2000 campaign, but said on disclosure forms they were required to file with the state that they were not fundraisers.

Their responses on the forms came after Easley obtained an attorney general's opinion of the reform law that said fundraisers did not have to disclose their efforts unless they personally accepted contributions from individuals. That meant that typical fundraising activities such as holding receptions and soliciting people for contributions were not considered fundraising.

Perdue was asked if she was surprised that the law had led to a narrow interpretation of fundraising.

"I was interested in the different way different members have interpreted the law," she said, "so I think the key for us in North Carolina is to have one standard for everybody."

Read more after the jump. 

In the audio below, Perdue answers Dan Kane's questions while filing for office, while her campaign spokesman, David Kochman, says it's not the time.

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