A bribery, fraud and political money scandal in North Carolina rocked the state’s Republicans on Tuesday with federal indictments of party insiders, including former Rep. Robin Hayes, and the case may reverberate yet on Capitol Hill.
Federal prosecutors have charged Hayes, chairman of the state’s Republican party, and three others, including big donor Greg Lindberg, founder and chairman of Eli Global, in connection with an effort to bribe the state insurance commissioner with campaign donations, according to a federal indictment unsealed Tuesday.
“The indictment unsealed today outlines a brazen bribery scheme in which Greg Lindberg and his co-conspirators allegedly offered hundreds of thousands of dollars in campaign contributions in exchange for official action that would benefit Lindberg’s business interests,” Assistant Attorney General Brian Benczkowski said in a release.
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Adding intrigue on Capitol Hill, the indictment references a “Public Official A,” who allegedly met with those charged. The indictment offers a clue about that official’s identity, saying that on or about Feb. 5, 2018, Lindberg made a $150,000 contribution to a political committee supporting Public Official A.
Lindberg made a $150,000 donation, dated Feb. 17, 2018, to the Mark Walker Victory Committee, a joint fundraising committee, according to Federal Election Commission records. Rep. Mark Walker is a North Carolina GOP congressman and vice chairman of the House Republican Conference. State campaign finance donation records do not show any $150,000 donations from Lindberg in the first quarter of 2018.
Jack Minor, a spokesman for Walker, said he did not know whether Public Official A was a reference to his boss. Minor did stress that Walker “is not and has never been a target of this investigation.”
Hayes was charged with five counts, including wire fraud, bribery and aiding and abetting. The indictment accuses Hayes, who represented North Carolina’s 8th District in Congress from 1999 to 2009, of helping to funnel $250,000 in bribes to the re-election campaign of state Insurance Commissioner Mike Causey.
Hayes had announced the previous day that he would not be seeking another term as state GOP chairman and would be stepping down in June.
The indictment also named Lindberg and two of his business associates, John Gray and John Palermo Jr. Lindberg has been under federal investigation for alleged financial crimes and for his contributions to North Carolina politicians.
The indictment outlines how the four defendants allegedly developed a scheme “to defraud and to deprive North Carolina and the citizens of North Carolina of their intangible right to the honest services of the commissioner, an elected official, through bribery.”
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.
According to the filing, the four offered campaign donations in exchange for “specific official action favorable to GBIG, including the removal of the Senior Deputy Commissioner of the NCDOI responsible for overseeing the regulation.”
The indictment also says that on or about Feb. 7, 2018, Public Official A called a state insurance commissioner “to explain that LINDBERG was doing good things for North Carolina business.” The indictment added that on Feb. 12, 2018, Palermo sent an email to Lindberg and Gray, “stating, ‘Just between the 3 of us. . . . [Public Official A] has already made two calls on our behalf and is trying to help us move the ball forward. I was also told that the $150K will be going to [Public Official A].’”
The indictment further alleges that Palermo reported having lunch with Public Official A in July 2018 and that he “took the opportunity to talk to him about our issue” with the North Carolina Department of Insurance, adding that he expected Public Official A to reach out to the commissioner over the weekend.
The indictment also stated that the individuals involved in the alleged scheme set out to establish an independent expenditure committee aimed at helping their cause.
“The allegations, if proven, would undermine Justice Kennedy’s rationale in Citizens United, where he held that independent expenditures by their very nature cannot be corrupting,” said Brett Kappel, a partner in the law firm Akerman, who focuses on political law and campaign finance matters, referring to former Supreme Court Justice Anthony M. Kennedy in the landmark 2010 campaign finance case.
Anne Tompkins, an attorney for Lindberg, said her client was “innocent of the charges in the indictment.”
“We look forward to demonstrating this when we get our day in court,” she said in an emailed statement.