Pat McCrory's campaign accepted a $4,000 contribution from a nonregistered PAC that appears questionable, 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 PAC in North Carolina nor federal PAC -- a requirement for a candidate to accept a contribution.
Seeing it, Greg Flynn, a Raleigh campaign finance watchdog, filed a complaint against McCrory's campaign with the 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), state law appears to allow contributions from groups without a business interest and not established by a business if the entity doesn't receive more than 10 percent of their total revenues in a calendar year from corporations.
An official at the American Federation for Children sent a signed letter to McCrory's campaign saying no more than 10 percent of its revenues came from businesses or corporations. McCrory's campaign asked the state elections agency about the donation before accepting it and provided the state a copy of the letter, said Kim Strach, a deputy director.
Strach, who expects to resolve Flynn's complaint soon, said her agency makes nonprofits aware of this provision when they ask about making donations, but most can't satisfy the 10 percent requirement.
Flynn still questions whether a letter is enough to prove whether a nonprofit complies with the rule -- particularly if the group's donors are kept secret. "Anyone could write a letter," he said in an interview. "There's no accountability. What will it take to trigger an audit and request this (donor) information."
A separate 501(c)3 nonprofit related to American Federation for Children receives money from at least seven donors who gave the maximum $4,000 to McCrory's campaign, Flynn found.
One overlapping donor is John Kirtley, a Florida venture capitalist and school choice advocate who spoke to a delegation of N.C. lawmakers (including House Speaker Thom Tillis) during a controversial trip to Miami last year.