A federal grand jury has indicted North Carolina Republican Party Chairman Robin Hayes and a major GOP campaign donor on conspiracy and bribery charges for their alleged attempts to influence N.C. Insurance Commissioner Mike Causey.
The indictment accuses Hayes, a former congressman, of trying to funnel bribe money to Causey’s re-election campaign. Hayes is also charged with three counts of making false statements to the FBI. Hayes had announced Monday that he wouldn’t seek another term as NC GOP chairman, a decision he attributed to health concerns.
The indictment comes amid an investigation into the political donor, Greg Lindberg, by U.S. Attorney Andrew Murray. Lindberg has given millions of dollars to Republican groups in recent years, McClatchy newspapers have reported. He has also given money to Democrats.
Four people — Hayes, Lindberg, John D. Gray and John V. Palermo — were charged in the case, and all four made their first appearances in court Tuesday, the same day the indictment was unsealed. The four are accused of trying to bribe Causey with $2 million in campaign contributions to get him to take actions favorable to one of Lindberg’s companies — including the removal of an insurance department employee responsible for regulating that firm.
They’re charged with conspiracy to commit honest services wire fraud (a charge generally associated with the behavior of public officials) as well as bribery concerning programs receiving federal funds and aiding and abetting.
Appearing in Charlotte’s federal courthouse Tuesday, each of the four pleaded not guilty.
Each of the four people charged was released on $100,000 bond, on the condition that they turn in their passports and report any travel to federal probation officials.
The indictment says Causey contacted federal law enforcement officials with concerns about political contributions in January 2018 and has cooperated with the ongoing FBI investigation since then.
In an interview Tuesday night, Causey said he worked with FBI agents because “I looked at it as doing my job.”
Despite being face-to-face with people who authorities now say were trying to bribe him, Causey said, “I was never nervous about anything.”
The indictment mentions another person in contact with Lindberg and Causey — “Public Official A” — but doesn’t name them or mention charges. Politico reported Tuesday that the official is Republican U.S. Rep. Mark Walker of Greensboro. Politico identified Walker using the indictment and records from the Federal Election Commission, the outlet reported. Between 2017 and 2018, Lindberg gave $233,600 to Walker and groups backing him.
Walker’s press secretary, Jack Minor, said Tuesday that the congressman “is not and never has been a target of this investigation, and has committed no wrongdoing. He has assisted the DOJ.”
Causey declined to comment on the identity of “Public Official A,” saying he hadn’t read the indictments and didn’t want to speculate.
Hayes denies charges
Hayes, 73, represented a congressional district that stretched from Charlotte to Fayetteville from 1999 to 2009. He appeared in federal court Tuesday using a walker. His lawyers told federal magistrate David Keesler that he had surgery in February and that his mobility is limited.
One of Hayes’ attorneys told the judge that he is eager to “clear his name.”
The NC GOP has been cooperating with the federal investigation for months but didn’t learn about the indictments until early Tuesday, party legal counsel Josh Howard said in a statement Tuesday afternoon.
“Early this morning, the North Carolina Republican Party was made aware of several indictments surrounding the conduct of a major donor to both major political parties and two of his associates,” Howard said in the statement.
“The Party has been cooperating with the investigation for several months, including staff members providing statements and responding to various document requests,” he said. “The Party, which has its day to day operations managed by professional staff under the direction of the NCGOP Central Committee, remains fully operational and focused on its mission at hand.”
How the alleged scheme unfolded
Lindberg owns Durham-based Eli Global, LLC, an investment company, as well as Global Bankers Insurance Group, a managing company for several insurance and reinsurance companies. Gray is a consultant for Lindberg and Palermo is vice president of special projects for Eli Global.
Causey previously rejected a $10,000 campaign donation from Lindberg. That was in 2017, according to the indictment. In August 2017, the indictment says Hayes texted Causey and suggested “I think u should consider a face to face (with Lindberg).”
In November 2017, Gray told Causey that Lindberg had contributed $500,000 to the NC GOP and earmarked $110,000 for Causey’s campaign, according to the indictment. Federal campaign finance laws prohibit state organizations from earmarking general donations for specific candidates, as McClatchy previously reported in a story about Hayes.
In an email to Lindberg and Gray on Feb. 12, 2018, according to the indictment, Palermo wrote, “Just between the 3 of us ... [Public Official A] has already made two calls on our behalf and is trying to help us move ball forward. I was also told the $150K will be going to [Public Official A].” Lindberg sent $150,000 to the Walker Victory Committee on Feb. 17, 2018, according to FEC records.
Walker’s spokesman, Minor, said, “The February contribution went to the Republican National Committee and did not benefit Walker’s campaign.”
On Feb. 14, 2018, Causey met with Lindberg and Gray in a conference room at the Concord Regional Airport. During that meeting, Lindberg complained about a senior deputy insurance commissioner who he contended was trying to hurt his reputation, according to the indictment. Lindberg and Gray suggested that Causey hire Palermo to replace or supervise the senior deputy commissioner, the indictment says.
In a March 5 meeting in Statesville, Causey confirmed his ability to hire Palermo. During that meeting, Lindberg told Causey that he’d support him with up to $2 million in campaign contributions, according to the indictment.
In March 2018, Causey told Lindberg that he didn’t think it would be a good idea to hire Palermo since Lindberg’s company was “liable to end up in the newspaper,” the indictment says. Lindberg agreed, the indictment says, and suggested an alternative move of transferring one of Causey’s senior deputies to a different division.
Around June 19, 2018, Gray told Causey that a political committee had been funded with $1.5 million, the indictment says. However, about 10 days later, Lindberg told Palermo that he was “shutting down donations until we see some improvement in the NC DOI staff,” the indictment says.
In July 2018, Palermo told Lindberg he had lunch with “Public Official A” and talked to him about the issues in the insurance department, the indictment says. Palermo then quoted “Public Official A,” saying that Causey “needs to man-up and do what he agreed to.” The indictment says the public official then contacted Causey and said Lindberg, Gray and Palermo “seemed anxious to find out” if Causey had made staffing changes.
Lindberg denies the allegations, his attorney, Anne Tompkins, told McClatchy in an email.
“Greg Lindberg is innocent of the charges in the indictment and we look forward to demonstrating this when we get our day in court,” the email said.
Hayes and the FBI
The indictment also contends that Hayes repeatedly lied to FBI agents.
Hayes, for instance, wrongly told FBI agents he’d never spoken to the insurance commissioner about Lindberg or about personnel problems at the insurance department, the indictment states. In fact, Hayes had spoken to the commissioner about contributions from Lindberg being funneled through the state Republican Party to the commissioner — and about Lindberg’s request that the commissioner move certain personnel within the department, according to the indictment.
The indictment also states that Hayes lied about a $500,000 contribution that Lindberg made to the state Republican Party, claiming he never talked with Lindberg about where he expected that money to go. In reality, the indictment alleges, Lindberg and one of his consultants had directed Hayes to transfer $250,000 to the commissioner’s campaign.
The indictment says FBI agents interviewed Hayes in August 2018 and specifically asked whether Hayes was aware of “expectations” Lindberg might have had for a $500,000 donation he made to the party. “Absolutely not,” Hayes responded, according to the indictment.
Murray, the U.S. attorney who was appointed by President Donald Trump, thanked Causey for helping his investigators uncover the alleged scheme.
“Improper campaign contributions erode the public’s trust in our political institutions,” Murray said. “We will work with our law enforcement partners to investigate allegations of public corruption, safeguard the integrity of the democratic process, and prosecute those who compromise it.”
Assistant Attorney General Brian Benczkowski referred to the group’s alleged actions as “a brazen bribery scheme in which Greg Lindberg and his coconspirators allegedly offered hundreds of thousands of dollars in campaign contributions in exchange for official action that would benefit Lindberg’s business interests.”
Lindberg was among the biggest political donors in North Carolina over the last few years, the News & Observer has previously reported.
His political contributions numbered in the millions of dollars and went to politicians on both sides of the aisle. He mostly avoided giving directly to candidates, whose donors are capped at $5,400, and instead gave to super PACs and political parties.
Bob Hall, the former head of government watchdog group Democracy NC, told the N&O he has identified roughly $5.5 million in political contributions from Lindberg to North Carolina politicians, political parties and super PACs since 2016, and another $500,000 from Lindberg’s businesses and employees. He said any politician or group that received those contributions should disown them.
“To avoid being linked to Lindberg’s apparent use of campaign money to buy political favors, I would urge politicians and partisan committees to send amounts equal to Lindberg’s donations to the State Board of Elections for deposit in the public school forfeiture fund,” Hall said in an email.
Nearly half the money Lindberg gave, $2.4 million, went to two groups supporting Republican Lt. Gov. Dan Forest. Forest is considering running for governor in 2020. Lindberg also gave hundreds of thousands of dollars to both the Republican Party and the Democratic Party. In 2016 he gave $525,000 to a super PAC supporting Wayne Goodwin, who is now the chairman of the N.C. Democratic Party and was at the time the state insurance commissioner. He gave another $500,000 to a different super PAC in 2018, the N&O has reported.