Politics & Government

‘Could be more indictments,’ Causey says as NC GOP deals with indictment fallout

Robin Hayes, NCGOP chairman and campaign donor indicted in federal court

A federal grand jury has indicted Hayes on conspiracy and bribery charges for their attempts to influence N.C. Insurance commissioner Mike Causey.
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A federal grand jury has indicted Hayes on conspiracy and bribery charges for their attempts to influence N.C. Insurance commissioner Mike Causey.

Federal indictments against the chairman of the North Carolina Republican Party, a top political donor and two of his associates on bribery charges could be just the beginning of the scandal that’s rocked the state’s political landscape once again.

“There could be more indictments to come,” said Republican Insurance Commissioner Mike Causey, the public official who the four are accused of trying to bribe. “We don’t know what may happen. And with a case this complex and complicated, it may takes months and months and months or years to get everything sorted out.”

Causey, in an interview with The Charlotte Observer, acknowledged the existence of recorded conversations between him and political donor Greg Lindberg, associates John D. Gray and John V. Palermo, and NC GOP chairman Robin Hayes — the four men indicted for attempting to bribe Causey through campaign contributions from Lindberg funneled through the state party.

The bribery case was outlined in unsealed indictments in a federal courthouse in Charlotte on Tuesday.

Hayes, a former congressman, relinquished his control of the state party Wednesday, tapping Aubrey Woodard to serve as acting chairman.

That move was not enough for at least one member of the NC GOP central committee who called for Hayes to resign. Others called for the same thing, though the state party’s lack of succession plans and complex meeting rules made resigning less of an option, several Republican officials said.

“He should in the interest of the party divorce himself completely from the party,” said Carl Mischka, the GOP chairman in the 3rd District. “Robin’s got to resign. We’ve got to be able to create a distance between his indictment and the party and go on with the party work.”

Longtime Republican strategist Carter Wrenn said it would be best for the party and for Hayes if he stepped aside.

“A volcano eruption, you don’t know where it leads,” he said. “Whether it is for the Republicans across the state, you don’t know that yet. As far as the state party goes, this qualifies as a volcano eruption.”

Republican legislative leaders Senate Leader Phil Berger, House Speaker Tim Moore and Sen. Brent Jackson react to the indictment of NC Republican Party Chairman Robin Hayes and donor Greg Lindberg on federal conspiracy and bribery charges .

Causey was elected in November 2016, becoming the first Republican insurance commissioner in state history. He narrowly defeated Democratic incumbent Wayne Goodwin, who had defeated Causey in 2012. Goodwin is now the chairman of the North Carolina Democratic Party.

Causey, who began working with federal investigators and cooperating with their probe in 2018, declined to say how the recordings were made, saying he did not want to jeopardize the federal case.

Causey said his involvement with Lindberg began in 2017 when the insurance department was conducting a routine financial examination of one of Lindberg’s companies. Ensuring financial solvency of insurance companies is one of the department’s chief responsibilities.

Lindberg is the founder of Eli Global, which he touted as having $3 billion in revenue on his website. Under its Global Bankers brand, Lindberg acquired more than a dozen insurance companies since 2014 with more than $9 billion in life insurance and annuity assets, according to his website.

“There were questions on some of the financials,” Causey said.

Lindberg, fast on his way to becoming one of the largest campaign donors in the state, donated $10,000 to Causey’s campaign in early 2017. Causey said the donation came “out of the blue,” but he directed his campaign finance director to return the money.

“It might not look right,” he said.

Later that year, Causey said he was told that Lindberg wanted to host a fundraiser for him. Causey declined.

“We were still engaged in the ongoing financial examination,” Causey said. “And it just didn’t look right.”

By then, he said, officials at the department had questions about the practices and financial health of Lindberg’s companies.

“There were loopholes being exploited,” Causey said.

For example, he said, a standard guideline in the industry is for no more than 10 percent of an insurance company’s money to be invested in affiliated companies. But under former commissioner Goodwin, the insurance department loosened the rules, allowing a larger percentage — close to 40 percent — to be invested in affiliated companies, Causey said.

Lindberg donated at least $9,500 to Goodwin in 2016, according to state records.

Goodwin did not return a call and a text from The News & Observer on Wednesday.

But in a statement issued through spokesman Greg Behr, Goodwin said that on complex regulatory matters he deferred to experts within the department “like my predecessors of many years.”

“Any suggestion that I have ever taken any action in return for contributions is categorically false,” Goodwin said.

He also said in the statement that he has talked with the investigators and that he is not a target.

Election of new chairman

Dallas Woodhouse, executive director of the NC GOP, testified before the federal grand jury in December. He said other members of the party staff did as well and some spoke with FBI agents. Woodhouse said he is not a target of the probe.

Woodhouse said he’s never met or spoken with Lindberg.

Hayes is also charged with three counts of making false statements to the FBI. Hayes has denied the allegations.

Under NC GOP bylaws, the party’s chairman “may delegate authority to District Chairs to act on his behalf on any matter.”

Hayes looks forward to clearing his name from the allegations, his attorney, Kearns Davis, said in a statement.

“Meanwhile Mr. Hayes, in accordance with NCGOP Rules, will allow others to lead while he heals from recent health setbacks,” Davis said.

Delegates will elect a new chairman at the four-day NC GOP state convention that begins June 6 in Concord. John Lewis, general counsel for the NC GOP and a former member of the State Board of Elections, and Lee County GOP chairman Jim Womack are declared candidates for the unpaid position.

Former Union County GOP chairman Dan Barry said he is “strongly considering” a run, as is Gaston County energy consultant Michael Whatley.

The indictment of Hayes comes just weeks after the State Board of Elections ordered a new election in North Carolina’s 9th Congressional District, claiming election fraud by a Republican political operative working for Mark Harris during November’s election.

“I have said for two years that the North Carolina Republican Party has a branding issue and this has exacerbated that,” Barry said. “All of it combined is an extraordinary challenge for the party’s brand.”

Woodard is the party’s 11th District chairman. The 11th District includes much of far western North Carolina.

“While I empathize with Mr. Hayes and believe in him, this is the best move for the NCGOP during this brief time of transition,” Woodard said in the statement. “I look forward to helping the NCGOP as we head into the State Convention.”

News & Observer staff writer Will Doran contributed.
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Paul “Andy” Specht reports on North Carolina leaders and state politics for The News & Observer and PolitiFact. Specht previously covered Raleigh City Hall and town governments around the Triangle. He’s a Raleigh native who graduated from Campbell University in Buies Creek, N.C. Contact him at aspecht@newsobserver.com or (919) 829-4870.
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Ames Alexander, an investigative reporter for the Observer, has examined corruption in state prisons, the mistreatment of injured poultry workers and many other subjects. His stories have won dozens of state and national awards. He was a key member of two reporting teams that were named Pulitzer finalists.
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