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Pat McCrory's campaign accepted a $4,000 contribution from a nonregistered PAC that appears inappropriate at face value, but may be allowed under a little-known caveat in the state's campaign finance law.

The check came Oct. 20 from the American Federation for Children, a 501(c)4 nonprofit that advocates for school choice, based in Washington with a related PAC under a different name in Indiana. It is not a registered state PAC or federal PAC -- a requirement for a candidates to accept a contribution.

Seeing it, Greg Flynn, a Raleigh campaign finance watchdog, filed a complaint against McCrory's campaign with the N.C. State Board of Elections. But state election officials are leaning toward dismissing the complaint, citing a provision in the law that would seem to allow any non-PAC entities to make direct campaign contributions if they aren't tied too closely with a business.

Under Ch. 163-278.19(f) of state election law appears to allow contributions from entities without a business interest and not established by a business if they don't receive more than 10 percent of their total revenues from corporations.

Document(s):
McCroryAFC.pdf

Spending by third-party groups in North Carolina legislative races appears to have been more even than in the previous election cycle, even as Republicans dominated individual and caucus fundraising, Scott Mooneyham at The Insider reports.

IRS documents and state campaign finance reports seem to indicate that the spending by the two major 527 groups in North Carolina -- Real Jobs NC, which backed Republican candidates, and Common Sense Matters, which backed Democratic candidates, spent similar amounts. Those reports show Real Jobs NC spending $812,605, compared to $773,641 for Common Sense Matters.

Republican Pat McCrory continued his moderate transformation during Wednesday's debate, shedding his tea party and conservative cape as he said legislation restricting abortions and cracking down on illegal immigration won't appear on his agenda if elected. At the same time, Democrat Walter Dalton made a bold pledge to lower the employment rate as much as 3 percent in his first year. Pundits say the debate isn't the game changer Dalton needed. Read more here and see four fact checks from the debate.

More political headlines:

--In a new development that raises questions about Debra Goldman's judgment, another police report surfaced showing that the GOP state auditor candidate called 911 after a fellow board member yelled at her during a heated Wake school board meeting.

With help from organized labor and its own candidates, the N.C. Democratic Party has continued to outraise the state Republican Party, but the GOP has narrowed the gap from earlier elections, new reports show.

The Democratic Party has raised $5.7 million through mid-October compared to $4.4 million for the GOP. But the Republican Party has raised twice as much as it had for the same period in 2008 and three times as much in the last mid-term election year of 2006, Jim Morrill reports.

The Democratic Party, on the other hand, is almost $2 million shy of what it took in 2008 and $1 million behind what it raised in 2006.

Both parties relied on wealthy donors and their own candidates. The Democratic Party got money from many of its candidates. Senate Finance Committee Co-Chairman Dan Clodfelter, who represents a Democratic-leaning Charlotte district, gave the party $110,550 from his campaign fund.

The Teamsters’ union political action committee gave $32,500.

The GOP also tapped its members. The campaign of Sen. Tom Apodaca of Henderson County gave $120,000. Sen. Harry Brown of Onslow County gave $175,000.

Both parties spent the money on election-related activities.

Supporters of publicly financed elections are using revelations from the State Board of Elections hearings into former Gov. Mike Easley to push their cause.

In publicly financed elections, taxpayer dollars provide candidates with money for advertising and campaigning. To qualify, candidates must demonstrate they have a minimum base of support and must agree to spending limits and restrictions on fundraising.

Municipal elections in Chapel Hill, appellate judge races and some Council of State races use the system. 

That's exactly the type of election the state needs in the wake of revelations that Easley's gubernatorial campaign planned to funnel money through the N.C. Democratic Party to circumvent the state's campaign finance limits, said Chase Foster, director of N.C. Voters for Clean Elections.

"More and more, North Carolina leaders see Voter-Owned Elections as the obvious answer to the rising cost of elections,” Foster said in a news release.

Foster released a scorecard tracking votes on publicly financed elections bills. Foster said the scorecard shows that lawmakers are increasingly supportive of the election changes.

A bill that would create a pilot program for more publicly financed municipal elections cleared the House this year. The Senate approved a bill that would expand the program to more Council of State races.

Opponents to such elections say taxpayers would be forced to fund political speech, and that political contributions would instead be given to special interest groups to spend.

Gov. Beverly Perdue signed another seven bills Friday, including four that make changes to the state's election process or administration.

HB 1111: Clarifies when a candidate becomes covered by the state's campaign finance laws and places some limitations on the types of donations a candidate can receive for a legal expense fund. So that probably won't be relevant to anyone in state government any time soon.

HB 908: Allows teenagers to register to vote early. Their voter registration becomes active automatically when they turn 18.

HB 907: Tweaks the law regarding publicly funded campaigns. The law limits emergency money that is meant to help a candidate respond to another campaign in that emergency money won't be paid in response to a campaign ad that mentions all candidates. That change would have prevented a case where the state had to provide judicial candidates money when they were both mentioned favorably in a Democratic mailer.

SB 253: Makes it easier for military personnel to vote absentee.

Cities who want public financing of election campaigns would have to pay for it, under a bill moving through the House.

The bill would allow cities and towns to create public finance programs in which qualified candidates would use taxpayer money to run for office. The programs would be similar to those used in judicial and council of state elections. It is up to the city or town's elected leaders to decide whether to set up a program.

The State Board of Elections would monitor and administer the elections and the number of municipalities participating would be limited by the funds the board has to administer the elections.

The idea behind public financing is to make running for municipal office easier, proponents say.

"It is in essence about good government," said Rep. Rick Glazier, a Fayetteville Democrat and co-sponsor of the bill.

Rep. Paul Stam, an Apex Republican, said he opposes the bill because it would force taxpayers to pick up the tab for political advertising that could be false, offensive or even racist.

"This is a solution in search of a problem," Stam said.

Dallas Woodhouse, state director of Americans for Prosperity, a libertarian group, said that the bill won't take the money out of campaigns. It will steer it to groups such as his, which will still be involved in elections.

Russ Stephenson, a Raleigh City Councilman said he had to raise $60,000 to win his at-large council seat. He said he would like to have the option for publicly financed elections. Running for council, a part-time job that pays $11,000, has become more difficult.

"It is increasingly a high-stakes endeavor, a high-cost endeavor," he said.

North Carolina received a B-minus on campaign finance disclosure.

In a regular report card by the Campaign Disclosure Project, the state Board of Elections received higher marks on campaign finance laws and accessibility of its Web site. Last year, the state received a C-plus, and in 2003 it received a D-plus.

The state was graded well for requiring detailed information about contributors of more than $50, including occupation and employer data, as well as vendors used by candidates.

However, it received lower marks for its electronic filing program, which is required of statewide candidates who raise $5,000 or more but not legislative candidates.

A redesign of the Board of Elections Web site was praised.

"The site offers a fair amount of contextual information, such as detailed candidate lists and a thorough campaign finance manual explaining the state’s disclosure requirements and contribution limits," the group wrote.

North Carolina was ranked 23 of U.S. states. 

The legislature made some changes to election laws.

Bills that passed this session will:

Allow people who cast ballots during the early voting period to register and vote on the same day.

Allow the town of Chapel Hill to start a pilot program of publicly financed campaigns.

Start a pilot program to publicly finance candidates for state auditor, superintendent of public instruction and insurance commissioner.

Require candidates for state legislature, board of county commissioners and school board to disclose whether they have been convicted of a felony.

Rep. Paul Stam tried to sink a public campaign financing bill today.

The House minority leader proposed an amendment to count newspaper endorsements of a publicly funded candidate's opponent when determining how much money he or she could receive from the state. He would base the value on the paper's advertising rates.

Members of a House committee on elections laws objected, arguing it would be prohibitively expensive and create constitutional problems. Rep. Deborah Ross, a Raleigh Democrat who sponsored the bill, called it a "catfish amendment" designed to kill the pilot program.

Stam, an Apex Republican, withdrew the amendment, admitting he was trying to make a point.

"The arguments against it illustrate why the bill itself is completely unworkable," he said.

The bill passed the committee, 10-6, and heads to the Appropriations committee.