New North Carolina campaign spending rule ends practice Berger used

Published 7:12 am Thursday, August 13, 2020

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By Gary D. Robertson, Associated Press

North Carolina legislators can no longer spend campaign committee dollars toward buying or renting homes or condos that they or family members own – a practice that powerful state Senate leader Phil Berger used for years.

An administrative rule from the State Board of Elections that took effect this month bars such transactions for all state candidates or their campaign committees. The prohibition applies even if the residence is used as the result of holding office or if the payments are made to a business that the politician or officeholder owns.

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And the Legislative Ethics Committee also quietly approved new guidance in May that makes it “unethical” for a lawmaker to receive a daily expense check to cover lodging expenses while serving in Raleigh if the lawmaker gets them covered through another source.

The guidance doesn’t mention Berger, currently the longest-serving senator in the chamber and elected Senate president pro tempore in 2011. Like most other legislators, Berger receives state-funded payments for room and board while serving.

The changes come months after retired campaign reform group leader Bob Hall first filed a complaint with the elections board questioning real estate activity by Berger, a Rockingham County Republican.

Transactions started in 2016, when Berger and his wife bought a townhouse in Raleigh, according to records. Berger’s campaign committee ultimately paid $1,500 a month to a limited liability company that Berger manages toward leasing the house.

At the time of Hall’s complaint last November, Berger’s campaign cited emails from the board’s previous executive director saying there was no prohibition on the practice. Those monthly payments to YPD Properties LLC continued when the Bergers bought a Raleigh condominum, then sold the house to a lobbyist in December.

Berger said earlier this year he was prepared to comply with whatever campaign finance or ethics rules were in place, spokesperson Pat Ryan said Tuesday. The latest Berger campaign finance report, filed in early July, showed no rental payment to the LLC for June.

“He has followed through on that commitment,” Ryan said in an email.

While pleased with the panels’ decisions, Hall said on Tuesday he had filed another legislative ethics complaint demanding Berger refund the taxpayer-funded per diem he received for housing while rent was paid with campaign dollars. Hall said taking the per diem, which he estimated exceeded $50,000, was “unethical double dipping.”

“I applaud public officials for finally taking action to stop Sen. Berger’s gross misuse of payments he’s received from taxpayers and political donors since mid-2016, but it’s important for him to at least repay taxpayers for his private use of public money,” Hall said in a news release.

On May 20, the bipartisan Legislative Ethics Committee approved the new guidance on legislators who accept the daily, tax-free $104 expense checks for lodging and food. The committee’s guidance also said that any legislator who “has inappropriately accepted” the per diem can repay those amounts to the legislature.

On the same date, the committee dismissed another ethics complaint Hall filed against Berger in February. This one alleged he misused his public position through the rental payments and that the profit off the sale price of the townhouse amounted to an illegal gift from a lobbyist.

The dismissal document said the sale was made in the normal course of business and that the elections board had not prevented the use of candidate committee funds for residential real estate for the period being reviewed.

With Tuesday’s complaint, Ryan wrote, Hall is “using the exact same facts to accuse Sen. Berger of a violation which the Legislative Ethics Committee already dismissed months ago.” When asked if Berger would return per diem money, Ryan replied: “It is not reasonable to expect somebody following the rules for years to take retroactive action whenever there’s a change in rules.”

Hall petitioned the Board of Elections, composed of three Democrats and two Republicans, to create the new rule about residential property. After a public comment period, the final rule was approved last month by the Rules Review Commission.



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