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November 1997 – Political Giving by Board of Transportation Tops $2 Million

November 24, 1997


As patronage and ethics at the Board of Transportation come under increased scrutiny, a new study shows that recent Board appointees, along with their families and key business partners, poured more than $2 million into state and national politics from 1990 through 1996.

That works out to about $60,000 for each of the 34 members appointed since 1993 by Gov. James Hunt, House Speaker Harold Brubaker, or Senate President Pro Tem Marc Basnight.

Gov. Hunt received the most support from BOT members — $652,428 for his 1992 and 1996 campaigns. Democratic Party committees and leadership PACs took in $483,477 while Republican Party committees and related PACs got $85,243.

The report says that BOT donors sometimes gave together, pooling their money from across the state to give as much as $65,000 to a single candidate on a single day. Such activity would be illegal if it was coordinated by DOT officials.

Board members during this period included Sam Hunt of Burlington, who left his post as Board chair and DOT secretary in 1995 to head Hunt’s re-election fundraising campaign, and Lyndo Tippett of Fayetteville who is treasurer of the state Democratic Party. At least 15 other Hunt appointees have served as chairs or finance chairs of his county campaign committees.

Despite this Democratic tilt, many BOT donors gave thousands of dollars to candidates or committees of both parties, a funding strategy that critics say highlights the bipartisan nature of the Board’s patronage system and the deeper problem of “quid-pro-quo campaign financing.”

“It’s less about Democrats and Republicans than about money and power,” said Pete MacDowell of Democracy South, a Chapel Hill watchdog group that released the study. “A seat on the Board means you control billions of road dollars and can determine the path of future development. Donors invest heavily and broadly to get that much power, and until our campaign finance system fundamentally changes, they’ll be rewarded handsomely at taxpayers’ expense.”

Democracy South cited several interesting examples of bipartisan giving:

** Thomas Darden II of Cherokee Sanford Brick Company, an appointee of Republican Harold Brubaker, and his wife gave $3,500 to Gov. Hunt’s 1996 re-election campaign.

** Carolyn W. Grant, a former president of the Greater Raleigh Chamber of Commerce and a Hunt appointee to the BOT, donated $5,075 to various Republican candidates and committees compared to $5,175 for Democrats, plus $5,000 to Hunt.

** Charles M. “Chip” Shelton Jr., another Brubaker appointee, gave $9,000 to Hunt. His father, Charles Sr. (a former BOT member), and Uncle Ed head a construction and real-estate development company, where Chip works. They also head the largest donor family to North Carolina politics – not counting those with a candidate in the family, such as the Hayes-Cannon clan. Charles Sr. gave the Randolph County Republican Party, which Brubaker controls, $25,000 in April 1996, and he now chairs another Brubaker fundraising arm, the House Republican Committee. But Charles Sr., Ed and their families have also given $110,800 to Hunt since 1991.

** Douglas Galyon, a Hunt appointee, and his boss Charles A. Hayes of Guilford Mills are strong Democratic supporters, but they’ve given $1,850 to state Rep. Joanne Bowie, who co-chairs the Transportation Oversight Committee, and $6,275 to U.S. Rep. Howard Coble; Hayes even gave Newt Gingrich $2,000 in 1995.

According to Democracy South, the BOT is more dominated by big political donors and political dealmaking than any other board in state government.

Reformers say the patronage system must be ended as part of the changes now being discussed for the Department of Transportation. “Seats on the Board are basically auctioned off to the biggest donors, who then get absolute power to push road projects within their districts,” said Joe McDonald, president of the N.C. Alliance for Transportation Reform, a grassroots federation of local groups fighting unwanted highways.

“The make-up and power of the Board must be totally changed to return power to local communities and begin comprehensive transportation planning for the next century,” he said. “We also need effective campaign finance reforms that can break the link between donor and politician and stop the special favors that waste tax money.”

Democracy South cited an estimate from former Highway Administrator Billy Rose that about 10 percent of the DOT budget goes for road projects designed to satisfy what he called “political favoritism or just plain old greed.”

That amounts to about $200 million a year.

Other findings from the campaign finance data:

** Rep. David Price got the most money from North Carolina in his 1994 campaign on May 5, 1994 – thanks to 23 BOT donations totaling $15,250. Most of the other money recorded that day came from real-estate developers and 8 executives of S.T. Wooten, a road-paving company and major DOT contractor. In 1994, Price was in line to become chair of the House Appropriations Transportation Subcommittee.

** On December 22, 1994, the Hunt campaign logged in $68,800 from 28 BOT-related donors, including 10 checks of $4,000 each. A year later, on Dec. 11, the campaign got 15 BOT-donor checks for $25,350. Hunt typically holds a breakfast or luncheon for the BOT in December.

** Other politicians involved in investigating or reforming DOT received big donations: $68,350 to Atty. Gen. Mike Easley; $18,300 to Auditor Ralph Campbell; $43,700 to Basnight.

** Not all BOT members have equal power. The 14 designated as district reps have final say over projects, as well as their own discretionary money – and they are the top BOT donors; the smallest donors are a public-transit expert and the N.C. Railroad Council chair.

** Total fundraising tied to BOT members could be $4 million or more, said Bob Hall of Democracy South. “We only included three non-family business partners in our study – just the ones who supervise BOT members and often coordinate giving with them. The best example is Charles Hayes, boss of BOT member Doug Galyon. But we didn’t include $126,700 given by other Guilford Mills executives.” Nor did the report include the more than $600,000 connected to the Fayetteville-based Lithotripter network, with which BOT member Lyndo Tippett has close ties.

An earlier study coordinated by Hall found that the board members appointed by Gov. Jim Martin gave or raised $3.5 million to GOP candidates and party committees during his tenure.

Democracy South is a regional non-partisan research and education organization that advocates comprehensive election law reforms, including a Clean Money option for candidates who voluntarily accept spending limits and take no private money. It is funded with grants from the Schumann, Carnegie, Z.Smith Reynolds, and other foundations.