The North Carolina bribery case unveiled by prosecutors Tuesday shows federal authorities continue to target financial malfeasance in the campaign industry.
Campaign finance attorneys tell C&E it’s difficult to draw a legal trend line between the case in North Carolina and other recent federal enforcement against practitioners, but there is one commonality.
In last year’s indictment of Democratic consultant Dale Emmons in Kentucky, the earlier California conviction of consultant Ravneet “Ravi” Singh and in North Carolina this week, practitioners became entangled in legal trouble through their close relationships with a single local rainmaker.
In September 2017, Singh was sentenced to 15 months in prison and fined $10,000 for helping Mexican businessman Jose Susumo Azano Matsura channel $600,000 to influence elections in San Diego.
In August 2018, Emmons was charged with one count of conspiracy and making corporate campaign contributions in a case based on work he had done allegedly on behalf Alison Lundergan Grimes’ 2014 Senate campaign, which wasn’t reported to the FEC. Grimes’ father, Jerry Lundergan, paid Emmons for the work, according to the feds.
Emmons and Lundergan pleaded not guilty last September. Their case is set to go to trial in August.
The North Carolina public corruption and bribery case centers on Greg Lindberg, a Durham-based insurance executive who headed Eli Global and owned Global Bankers Insurance Group (GBIG). An investigation by the Wall Street Journal in February found that Lindberg donated “$670,000 to national Republican organizations” and spread $5.4 million in contributions around in North Carolina between 2017-18. Those donations primarily went to the GOP.
Lindberg is now charged with “conspiracy to commit honest services wire fraud and bribery.” Two of his co-defendants are state GOP Chairman Robert Cannon “Robin” Hayes, a former congressman and gubernatorial candidate, and John Palermo, a vice president at Lindberg’s company, Eli Global, and the chairman of the Chatham County GOP.
Lindberg was facing increasing scrutiny from the North Carolina Department of Insurance, which since 2016 has been led by state Insurance Commissioner Mike Causey (R). The official scrutiny focused on Lindberg’s use of at least $2 billion from his insurance companies to finance his purchase of other businesses and fund a lavish lifestyle, according to the Journal.
In the indictment unsealed Tuesday, the feds allege that Lindberg, together with Hayes, Palermo and John Gray, an Eli Global consultant, attempted to bribe Causey to take action in favor of Lindberg’s companies, in part, by removing or stymieing a senior deputy commissioner who had oversight over GBIG.
The bribe was in the form of $2 million in financial support for Causey’s 2020 reelection campaign. In fact, $250,000 of that money was channeled to Causey’s campaign in 2018 through the Hayes-led state GOP. In total, the state party received $500,000 from Lindberg, who also donated $1.5 million to an IE supporting Causey. (Lindberg and his wife also donated $5,000 to Causey’s campaign directly, but he returned those contributions.)
Moreover, Hayes is charged with three counts of making false statements to the FBI who interviewed him about the donation during their investigation.
The men met at least five times to discuss the quid pro quo: in exchange for the financial support, Causey would hire Palermo to either replace or oversee the work of the commissioner’s deputy handling GBIG. During some of those meetings, Causey secretly recorded the conversations.
Prosecutors thanked him for taking that “voluntary” action and reporting the “alleged scheme to violate our federal public corruption laws.”
"Everything I did was in cooperation and with direction of the federal investigators,” Causey told the AP.
In a release, Special Agent in Charge John Strong said the men “crossed the line from fundraising to felonies when they devised a plan to use their connections to a political party to attempt to influence the operations and policies of the North Carolina Department of Insurance.
“The FBI will root out any and all forms of public corruption. We remain committed to ensuring those who violate the public’s sacred trust are held accountable.”
U.S. Attorney Andrew Murray stated: “Improper campaign contributions erode the public’s trust in our political institutions.”
A lawyer for Hayes said his client denied the allegations. Lindberg’s attorney said he’s innocent.
Meanwhile, North Carolina Rep. Mark Walker (R) was also linked to the case. He received financial backing from Lindberg in the form of a $150,000 contribution to a PAC supporting his reelection, according to the indictment. Walker, identified in the filings as Public Official A, subsequently called Causey to say that Lindberg was “doing good things for North Carolina business.”
Walker’s spokesman told Politico he’s cooperating with the probe.