As the FBI builds its public corruption case against Patrick Cannon, investigators are taking a close look at campaign finance records that the former mayor filed with the Mecklenburg County elections board.
But making sense of those public reports won’t be easy.
An Observer review of Cannon’s campaign records since 1999 found reports with misleading, inaccurate and missing information that makes it difficult to tell where the former mayor got much of his money. State law requires that candidates disclose the name, address, occupation and employer of any donor who gives at least $50.
In about 100 cases since 2011, no job title was listed for donors to Cannon’s campaigns. In about 250 cases, no employer is listed.
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Even when that information is contained in reports, it’s often hard to tell how the donor makes money – or why the person might be interested in supporting his candidacy.
After a Sept. 9, 2013, contribution to Cannon, Jerry Richardson wasn’t described in a finance report as the owner of the NFL’s Carolina Panthers. Instead, the disclosure form listed him as Jerome J. Richardson, CEO of Flagstar, the food service company he retired from in 1995.
Earlier that year, the City Council agreed to give the Panthers $87.5 million for stadium renovations.
“We had a hard time telling how he was raising his money and how he spent it,” said Edwin Peacock, a Republican who lost the mayoral race to Cannon on November 5. “ When we saw the Jerry Richardson thing, we just said ‘Wow.’ ”
The Mecklenburg County Board of Elections is responsible for auditing local races. Told of the Observer’s findings, board director Michael Dickerson acknowledged his office needs to improve its oversight of finance reports.
“We obviously have not scrutinized as closely as we should as far as employer and occupation information,” he said.
The state Board of Elections is now reviewing Cannon’s most recent finance reports, said Joshua Lawson, the agency spokesman.
Cannon was arrested March 26 on charges of taking $48,000 in bribes, including cash, a Las Vegas trip and use of a luxury apartment in SouthPark. In exchange, Cannon promised he could help an undercover FBI agent – posing as a businessman – with issues related to permitting, zoning and alcohol licenses.
In the federal affidavit, Cannon is portrayed as soliciting campaign donations from an undercover agent.
Search warrants made public Wednesday show federal agents seized records from Cannon’s mayoral campaign and a manilla folder with “Cannon for Mayor” checks or copies of checks.
James Wedick, who headed the FBI’s corruption squad in Sacramento, Calif., before retiring in 2004, said he used publicly available campaign finance records in every corruption case he handled.
And he said it’s likely that FBI agents will compare campaign records seized from Cannon with those he filed publicly.
“Those records are probably the heart of anything they’re looking at,” he said. “ They’re looking for discrepancies.”
Reached by phone on Friday, Cannon said he could not answer questions about his campaign reports or any aspect of his case.
His campaign treasurer, George Free, defended the reports as accurate and complete. He said he filled out reports with information that donors provided.
When contributors listed little or no information, Free said he called them or used the Internet to find the name of their employers.
Asked about information for Richardson and other donors, Free said he didn’t know they had other occupations. He said he didn’t realize it was the Jerome Richardson who owns the Panthers.
“Maybe once or twice we had to amend our expenses,” Free said. “It was minor.”
‘State is overwhelmed’
Campaign disclosure laws are designed to allow the public to track who gives money to candidates and determine whether the donor stands to benefit financially from government action.
In about 38 percent of cases since 2011, the information about Cannon’s donors didn’t include either job title or employer.
By comparison, a 2013 report for Peacock had missing employers or job titles fewer than 10 percent of the time.
The missing information is troubling because money plays such a prominent role in elections, said Bob Hall, executive director of Democracy North Carolina, which advocates for government transparency.
“The campaign finance system is set up to be very close to a pay-to-play system,” Hall said. “The candidates have to raise lots of money. And companies with special interests want to cozy up and use that need of the candidate.”
But the public boards that monitor campaigns are usually understaffed, experts said.
In North Carolina, the state Board of Elections is charged with looking into complaints for all state and local campaigns. It has two employees assigned to do investigations.
The agency is supposed to conduct routine audits on as many as 10,000 annual finance reports for state races, but officials said there is a 10-year backlog due to short staffing.
“The state is overwhelmed,” Hall said. “They say they want to do reviews, but they don’t.”
State election officials have authority to levy fines on candidates who file late finance reports. They can force office-seekers to surrender improper donations. But there is no fine for failing to disclose donors’ jobs or employers.
The Mecklenburg elections board performs routine audits for local races to ensure candidates did not receive illegal donations, file late reports or fail to comply with other rules.
But information contained in Cannon’s filings calls into question how closely Mecklenburg reviewed the documents.
After large donations from William Bodenhamer Jr., an owner of Charlotte’s Yellow Cab, finance reports described his job title variously as “real estate,” “business owner” and “business man.” In one case, his employer was described as “property development.” In another case, it was blank.
In 2011, Yellow Cab won a city contract that made it one of three taxi companies that can operate at Charlotte Douglas International Airport. Other taxi companies that lost access to the airport have complained the selection process was rigged and questioned whether Cannon was impartial.
Another Yellow Cab owner who gave to Cannon, Neal C. Nichols, is described as a “non-profit fund manager.” But Nichols’ business interests appear to dwarf the small, low-profile foundation that he runs in Arlington, Va.
Records show Richardson, the Panthers owner, gave money to Cannon and his mayoral primary opponent, fellow Democrat James “Smuggie” Mitchell.
On Mitchell’s campaign finance report, Richardson is listed accurately – as the Panthers’ owner and founder.
The negotiations between the Panthers and the city over renovations to Bank of America Stadium became an issue for Cannon during the mayor’s race.
Cannon recused himself from voting because his parking management company, E-Z Parking, has a contract with the team. But an Observer report revealed that Cannon had attended three of the four closed-door sessions.
Dickerson, the Mecklenburg elections director, said his agency should have done a better job of monitoring reports filed by Cannon and other candidates. He said workers use a checklist to audit reports, but they are not trained investigators.
The agency, with a $4 million annual budget, employs 21 people and adds temporary seasonal workers. Officials are stretched thin during election season, performing voter registration and assuring voting machines are working properly, Dickerson said.
Dickerson said his office overcomes staff shortages by posting campaign finance reports to the Internet as quickly as possible – usually the same day they are filed. That allows the candidate’s opponents and citizens to report problems.
“It’s a self-policing type of industry,” he said.
Level playing field?
In interviews last week, Peacock contended that the county elections office appeared to watch his financial filings more closely than Cannon’s.
Dickerson strongly denied Peacock’s statement, saying, “We do not play favorites.”
Peacock’s treasurer provided the Observer with a computer image from the elections board website on Feb. 3, three days after the Jan. 31, 2014, filing deadline for last November’s election. Three of Cannon’s campaign reports are not shown on the image.
The county’s website now shows the filings were submitted on time.
County officials said Friday that Cannon’s campaign reports were not late. However, a glitch in the board’s Internet connection prevented the reports from displaying on the website, said Kristin Mavromatis, public information manager for the elections board.
Mavromatis said the glitch also stopped reports from showing for Mecklenburg County Commissioner George Dunlap and Charlotte City Council member Al Austin. When contacted, Dunlap and Austin said they weren’t aware that their finance reports hadn’t posted promptly.
Peacock wasn’t buying the election board’s explanation, saying, “It sounds like the ‘dog ate my homework’ excuse.”
Reporter Gavin Off and researcher Maria David contributed.