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LENOIR
At the urging of Gov. Mike Easley's office, a state environmental board approved $13.5 million (in 2003) to buy thousands of acres in the Caldwell County foothills.
The governor's 2004 re-election campaign soon got a financial boost.
On a single day three weeks after the land changed hands, 10 donors contributed a total of $40,000. An additional $16,000 from three more contributors and one of the original names rolled in over the next 10 months.
All 13 people had connections to the owner of the Caldwell County land.
More than half of the donors are registered Republicans. Easley is a Democrat. Each gave $4,000, the most allowed for a single election. Two of the donors were 19 and 20 at the time, barely old enough to vote.
None had contributed reportable amounts to Easley's previous state campaigns.
The donors willing to comment say they simply liked the governor.
Easley's staff says the governor knows none of them and knew nothing about the land buy until it came before the Council of State, a few days before the state took ownership.
Sherri Johnson, Easley's communications director, said the sellers never offered money for the governor's campaign. An executive order signed by Easley prohibits public officials from using their position to reap direct or indirect financial benefits.
If there had been any hint of impropriety, Johnson said, “Gov. Easley would have stopped this deal in its tracks.”
Easley's staff wouldn't make the governor available for an interview. As a result, his perspective on the land sale and campaign contributions is not known.
But the acquisition shows how political access can influence how public money is spent. And it reveals some of the pressures on the Clean Water Management Trust Fund, which quietly doles out about $100 million in grants each year and provided most of the money for the Caldwell County land.
How the deal developed
Set on the eastern lip of the Blue Ridge 15 miles north of Lenoir, the forested Caldwell County property sweeps across high ridges surrounded by steep ravines and valleys. A portion extends into Wilkes County.
Streams flowing through the property form part of the headwaters of the Yadkin River. The Buffalo Cove Game Land, as it is now called, is open to the public for hunting, fishing and hiking.
The property had been owned by a family trust, the Mingo Tribal Preservation Trust. Trustee Jesse Horton, who lives near the mountain community of Deep Gap, said the trust was set up in the early 1990s to assemble and preserve large blocks of land.
Mingo, Horton said, refers to an Indian tribe from which his family descended.
The trust also owns other property in Western North Carolina - tax records show more than 3,300 acres in Wilkes County alone - as well as in West Virginia and Idaho, Horton said. The N.C. Wildlife Resources Commission had agreed to pursue 3,550 acres of the same Caldwell County tract in 1999, officials said, but the deal fell through.
The land buy resurfaced in 2003, this time involving about 5,600 acres. That August, the wildlife commission again voted to pursue the purchase. The agency's staff then applied for a Clean Water grant. Support for the grant from Easley's office helped Horton, who was the state's primary contact from the trust. Horton, who lives in Wilkes County, wanted to sell quickly for tax purposes and had met with Easley advisor John Merritt to pitch the deal.
A member of Easley's senior staff called the chairman of the Clean Water board, who later told his colleagues that the acquisition of the Caldwell County land was “the governor's top priority.”
The board approved its second-largest grant to help buy it.
The application for the money leap-frogged others before the Clean Water board. Some members complained they were being hurried into a decision at a time when the trust fund was financially strained.
A former board member from Mecklenburg County, who voted against the grant, said the pressure from Easley's office made her uncomfortable.
The executive director of the wildlife commission said the governor's legal counsel, Ruffin Poole, had also expressed hope the commission would “step up to the plate” in supporting the buy. That didn't take much arm-twisting, director Richard Hamilton added, since the commission had tried to buy part of the same tract before Easley took office.
Johnson, the governor's spokeswoman, said the sale unfolded like most state conservation purchases: It fit the state's goal of protecting natural areas. It had the backing of conservationists and local elected leaders. And it was approved by the state's top elected officials.
Johnson initially told the Observer the governor's staff had supported buying the land in response to broad support from environmental groups.
But three of the four groups she cited say they never advocated for the acquisition. Easley's office then said its first answer was based on a former staffer's faulty memory.
Support did come from the Conservation Fund, a national group with an N.C. office that brokered the land sale to the state.
In applying for the Clean Water grant, the wildlife commission lauded the land's wildlife and trout streams, as well as its protection of the Yadkin basin.
While the 5,621-acre tract was a rare find because of its size, some state environmental agencies called it unremarkable. One recommended against buying it.
Clean Water staff endorsed the purchase but, in evaluating the land's ability to protect streams, gave it only average marks.
New donors had tie to trust
Apart from their generosity, Easley's newfound campaign donors had one thing in common. All had direct or indirect connections to the Mingo Tribal Preservation Trust.
The relatives of two Mingo trustees, two Mecklenburg County lawyers associated with the trust and a woman whose company had sold land to the trust gave money to the Mike Easley Committee after the sale went through.
“I like the guy,” said trustee Robert Testa, a Wake County real estate investor who contributed along with his wife, daughter, brother and sister-in-law. “He's a hunter - he takes his son hunting. He's a family guy.”
Bob Hall of Democracy North Carolina, a campaign-finance watchdog group, said it's hard for him to believe that the gifts from the 13 donors were coincidental. With two exceptions, none had ever given reportable amounts - more than $100 - to any state-level candidate in the past decade.
“It is very suspicious to see a name that suddenly gives $4,000 and doesn't show up as having given to anybody earlier,” Hall said. “That's the kind of situation that begs for an explanation. People just don't give $4,000 who are not regular political donors” without specific reasons.
Trustee had sale deadline
Horton said he and Charlotte lawyer David Johnston, general counsel for the Mingo trust, met with Merritt, the Easley advisor, before the Clean Water grant was made. Easley's office confirms the meeting but said the governor's staff wasn't involved in negotiations for the property.
Horton offered to sell the land to the state - but only if the deal could be closed by the end of 2003.
He said he wanted to reinvest money from the sale in more real estate, a commonly used transaction that defers capital gains taxes. Tax law says the new land has to be purchased within six months of selling the old property.
Given the rising price of mountain land, Horton said, “We felt like it was a great opportunity for the state.”
He said he got no commitments from Easley's senior assistant, John Merritt, and decided to “just let the process work its way through.”
Merritt said he referred Horton to the state's natural resources agencies but didn't brief Easley on the meeting and never talked to Horton again.
Horton, a political independent, said he likes Easley but has never met or contributed to him. Two sons and a daughter-in-law, however, donated a total of $12,000 six months after the sale.
Len and Steven Horton aren't involved in the Mingo trust and didn't know about the land sale, their father said. Neither could be reached.
Horton said his family wasn't part of a plan to repay the support from the governor's office. It's illegal in North Carolina to make political contributions in someone else's name.
“If anybody was going to give a contribution, I would have been the one to do it,” Horton said.
“I can only say that what my sons do as it relates to the political process, and who they choose to support, is their choice. I didn't put them in a position where I said, ‘You've got to do this or do that.' “
Horton didn't return later phone calls.
Deal called a steal for N.C.
The Mingo trust paid about $2 million for the tracts it sold to the state, says an appraisal Horton commissioned, although some transactions didn't reflect the lands' true value.
Horton's appraisal, which envisioned the land being developed for resort homes, put its market value at $27.6 million. He accepted the lowest of two state appraisals, $21.5 million.
The state's Ecosystem Enhancement Program, which offsets damage to streams and wetlands from road construction, paid the remaining $7.5 million needed to close the deal. That's the second-highest amount the three-year-old program has paid for land. The state Natural Heritage Trust Fund contributed $1 million.
Dick Ludington, who negotiated the purchase on behalf of the national Conservation Fund, said the state got a steal.
Increased development makes it rare to find such a big block of raw land relatively close to Piedmont cities. Just north of the Mingo tract, home sites at the new mountain development of Laurelmor start at $500,000.
“We are not going to be buying (mountain) land at $3,800 an acre again in our lifetime,” Ludington said. “I look back on this as one of the great property acquisitions of the past five years.”
Not all were keen on deal
But state scientists weren't as enthusiastic.
Clean Water staff scored the land 90 on a 165-point scale, about average for the 16 other acquisitions the board funded during the same period. The state Division of Water Quality recommended against the acquisition because of the “bits and pieces” of streams that would be protected.
The state's Natural Heritage Program rated the tract as only of county significance, the lowest of four rankings.
Still, Clean Water Chairman Robert Howard repeatedly told his board colleagues that Easley wanted the sale to go through. The governor appoints seven of the board's 21 members. House Speaker Jim Black appointed Howard.
“I got a telephone call from the governor's office that relayed to me that this is the governor's top priority, and it's also the wildlife commission's top priority,” Howard told trustees at an August 2003 meeting, according to a transcript.
In an interview, Howard said the governor's office told him environmental groups supported the sale. Howard said Easley's staff asked him to do “the best I can” on the grant if it met the trust fund's criteria.
Clean Water Executive Director Bill Holman said Poole of the governor's staff occasionally asked about the status of the grant, but that he didn't find the interest unusual.
As state environment secretary in 2000, Holman had lobbied Howard on behalf of former Gov. Jim Hunt, who wanted the state to buy mountain land slated for development within DuPont State Forest. The Clean Water board approved a $12.5 million grant for the deal.
Some were wary of pressure
The Mingo application came before the Clean Water board when the trust fund was already under financial pressure.
The state had just transferred $12 million from the fund to settle a lawsuit over DuPont State Forest. Its available balance was only $17 million.
“That was the only pressure I've felt, to try to capitalize on this wonderful opportunity while at the same time trying to fund the other grant applications before us,” Howard said. “I feel like we did the appropriate thing for the state.”
At a September 2003 meeting where the grant was approved, some board members objected.
To meet Horton's deadline, the grant had been considered two months early. It was a lot of money, board members said, and a decision had to be made quickly.
Former Mecklenburg board member Maggi Markey, one of three members to vote against the grant, said she felt it was unfair to consider the Mingo request before other applications.
“I really was uncomfortable, frankly, about the pressure being put on us and that's why I voted against it,” said Markey, a former Mecklenburg County commissioner who now lives in Colorado. “I just felt it was more (pressure) than we had been subjected to before.”
Moving the application ahead, she said, exposed the board - and the governor - to the appearance of favoritism.
Winston-Salem trustee William Hollan, who also voted against the grant, said he was more concerned about the rush to make a decision than the worthiness of the purchase.
“If every seller could say my project is urgent, we would never be able to set our own priorities,” he said.
But as mountain land prices soar, Hollan added, the buy now “looks like a heck of a deal.”
Even board members who approved the grant voiced reservations, the meeting transcript shows.
Said Dickson McLean Jr. of Lumberton: “I do hope (Easley's) acting in the best interests of the state in putting this much priority on this one project.”
