Groups file ethics complaints against McCrory, Sanford

RALEIGH, N.C. — Advocacy groups filed ethics complaints Monday against North Carolina Gov. Pat McCrory and U.S. Rep. Mark Sanford of South Carolina over six-figure stock payouts they received while in office from an online mortgage broker.

The complaints followed an Associated Press report last month revealing that the two Carolinas politicians were granted restricted stock shares while board members at Charlotte-based LendingTree. Both resigned shortly after taking office, which should have rendered the shares worthless. But the company's board gave them the payouts anyway. Neither official fully described the transactions on their ethics forms.

McCrory and Sanford, both Republicans, have previously denied any wrongdoing.

Progress North Carolina Action, a left-leaning nonprofit group in Raleigh, filed its complaint against McCrory with the N.C. Ethics Commission. The complaint against Sanford was filed with the U.S. House Ethics Committee by Citizens for Responsibility and Ethics in Washington, a non-partisan watchdog group that tracks the political clout of special interests.

In Charlotte Monday afternoon Gerrick Brenner of Progress NC Action accused McCrory of deception and failing to properly report money he received from companies he worked for before taking office, including Duke  Energy, Tree.com and his brother’s consulting company McCrory and Company.

“There’s all sorts of omissions, all sorts of errors in the information which covers up conflicts of interest,” Brenner said.

Asked about the complaint at an event Monday, McCrory said it would be "inappropriate" to respond to "a left-wing, very politicized group."

"I've not had a chance to see those and my focus is on creating jobs," McCrory said.

McCrory’s legal counsel Bob Stephens issued a statement calling the complaint’s allegations “unsubstantiated.”

Sanford did not respond to messages Monday from AP.

AP reported Dec. 16 that McCrory received more than $185,000 in cash and stock from LendingTree in early 2013, eclipsing the $139,590 salary he earned as governor that year. Most came in form of 10,063 restricted stock shares that were vested the day before McCrory's resignation from the company, even though thousands of the shares had not been due to vest for another 16 months.

McCrory also received $14,438 in fees and cash dividends from LendingTree. Though state ethics forms direct officials to disclose sources of stock dividends and fees exceeding $5,000, McCrory's staff says the governor wasn't required to disclose his cash compensation from LendingTree.

The governor also didn't disclose his "business association" with LendingTree, even though he remained on the board for nearly a month after his swearing in. A spokesman for McCrory has said the wording of the question was unclear.

As governor, McCrory appointed a majority of the members on the N.C. Banking Commission, which regulates mortgage brokers. LendingTree has faced scrutiny from regulators in other states.

The ethics complaint also questioned McCrory's ownership of stock in Duke Energy, where he worked for 29 years before becoming governor. AP reported last year that McCrory held the Duke stock while his administration made regulatory decisions involving his former employer, including appointing utility commissioners who set electricity rates.

In light of the massive coal ash spill from a Duke plant into the Dan River on Feb. 2, the complaint alleges that "any executive government action or inaction" McCrory took in regard to Duke would impact the value of Duke stock, including his own.

"It is critical to the integrity of governance that Governor McCrory examines, evaluates, and discloses those personal and financial interests that could be, or could cause a conflict of interest or potential conflict of interest between his private interest and his public duties," the complaint said. Instead, McCrory's "selective disclosure, omissions and incomplete disclosure" damages public trust and raises questions about "the true origin, purpose or intent of compensation, gifts, favors, appointments and executive regulatory decisions."

Sanford resigned from the LendingTree board effective May 16, 2013, the day after he was sworn in to Congress. A month later, on June 19, the board retroactively vested his $108,539 in restricted shares, backdating the transaction to the date of his resignation.

Anne Weismann, the interim executive director of CREW, said the payout likely violated a ban on members of Congress accepting gifts exceeding $350 from non-family members. Sanford didn't detail the transaction on his ethic forms, which Weismann said should prompt a House Ethics Committee investigation.

"At the time he resigned, the stock was not of any value to him because it hadn't vested," Weismann said. "Then they retroactively vested it. We believe that represents a gift to him with a value of over $100,000. Given that LendingTree has lobbyists that lobby on issues that are likely to be before Rep. Sanford, we think this is exactly the type of situation that the gift rules were designed to prevent."

___

Associated Press reporter Gary D. Robertson contributed from Raleigh. Weiss reported from Charlotte.

WSOC