Politics & Government

Ex-GOP Chair Hayes could testify against others in scheme: ‘They should be worried.’

Under a deal with federal prosecutors, North Carolina’s former state Republican chairman could testify against other defendants in the state’s largest-ever case of political bribery.

Robin Hayes would plead guilty to a single felony count of lying to the FBI under the deal. He’s scheduled to formally enter his guilty plea in federal court Wednesday.

The plea agreement calls for Hayes to cooperate with prosecutors. That includes testifying against his co-defendants.

“They should be worried because . . . that’s clearly a risk to them,” said Jessica Tillipman, an assistant dean at George Washington University Law School and an expert on corruption cases. “It always raises the chance that you can be convicted.”

Hayes, a former member of Congress, was one of four men indicted last March on multiple charges of conspiracy and bribery. Also indicted were Durham businessman Greg Lindberg — one of the GOP’s biggest campaign contributors — and two associates, John Gray and John Palermo. All four pleaded not guilty at the time.

Lindberg owns Durham-based Eli Global LLC, an investment company, as well as Global Bankers Insurance Group, which manages several insurance and reinsurance companies. Gray is a Lindberg consultant. Palermo is a vice president of Eli Global.

Jessica Tillipman.jpeg
Jessica Tillipman Courtesy of Jessica Tillipman

All were accused of bribing state Insurance Commissioner Mike Causey with $2 million in campaign contributions in an attempt to get him to remove the department official responsible for regulating one of Lindberg’s companies.

Hayes was originally indicted on bribery and conspiracy charges as well as three counts of making false statements to investigators.

Neither Hayes nor his attorney, Kearns Davis, could be reached Monday. Nor could attorneys for Lindberg or Palermo. Gray’s attorney, Jack Knight, refused to comment.

In pleading guilty to the single count, Hayes is expected to get a sentence of anywhere from zero to six months in prison. Prosecutors said in the agreement that they’ll recommend a sentence “at the low end of the . . . range.” But the sentence won’t be decided until later.

“His ultimate sentence may depend on what he says or may not say,” said Steve Ward, a former longtime Mecklenburg County prosecutor who now teaches law at Belmont Abbey College.

Hayes likely would testify against Lindberg and the two other defendants. In the indictment, prosecutors describe a scheme to funnel $2 million to Causey’s re-election campaign in an effort to dump his senior deputy commissioner. Some of the money was to go through the state Republican Party. According to the indictment, Hayes was a willing participant in the scheme.

“Whatever you all want to do, we’ll do,” it quotes him as telling Gray, Lindberg and Causey.

Hayes’ testimony could be valuable to prosecutors.

“When the federal government gets somebody to plea, then that person will cooperate and provide more information,” said Carl Tobias, a law professor at the University of Richmond. “It helps the federal government build a case.”

Legal experts say the defendants may already ace an uphill battle.

Public corruption cases are a top priority for federal prosecutors. Several legal experts told the Observer in April that at least some of the defendants will likely plead guilty instead of going to trial. That’s what happens in 97% of federal criminal cases, according to Harvard Law School professor Nancy Gertner, a former federal judge.

In 2017, federal prosecutors charged 863 people in public corruption cases and convicted 837, according to a U.S. Justice Department report.

Lindberg’s attorneys have asked the court to dismiss the charges, saying he “was exercising his right to engage in political speech, to advocate for a robust yet fair regulatory environment for his company.” Prosecutors have asked a court to reject the request.

The alleged $2 million in bribes would make it North Carolina’s priciest political scandal, according to longtime government watchers. Lindberg has given $5.5 million to state candidates, political parties and PACs since 2016. Though he’s donated to both parties, most contributions have gone to Republicans and their allies.

A trial is scheduled for Nov. 18. Pretrial motions are due Friday.

Jim Morrill, who grew up near Chicago, covers state and local politics. He’s worked at the Observer since 1981 and taught courses on North Carolina politics at UNC Charlotte and Davidson College. To subscribe to The Observer, go to: www.charlotteobserver.com/jim.