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The elections board, LaRoque and his business

Turns out the N.C. Board of Elections took a brief peak into N.C. Rep. Stephen LaRoque’s economic development companies last year, when it held a hearing looking into a loan LaRoque gave his campaign out of his Kinston company.

LaRoque, a Kinston Republican and part of NC Speaker Thom Tillis’ leadership team, was fined $1,000 by the board last fall. The fine came for using LaRoque Management Group (his for-profit company) to lend his campaign $53,000 at zero percent interest in the 2008 election cycle. North Carolina elections law bars companies from lending money to candidates, unless it comes from financial institutions.  Go here to read the board’s findings of fact. (LaRoque initially tried to argue that his company was a financial institution.)

Here’s a bit of background. LaRoque uses LaRoque Management Group as an umbrella for his two non-profit economic development companies, the East Carolina Development Company and Piedmont Development Company. Both have taken in $8 million in federal funds since 1997, and he says he manages them through a contract that’s paid him up to $195,000 a year. An NC Policy Watch investigation “Public money, personal gains” published this week looked at LaRoque’s management of those non-profits and found he paid himself generous salaries while stacking his board of directors with immediate family members and making loans to close associates, including two N.C. lawmakers.

To see how these companies and non-profits overlap, take a look at this N.C. Policy Watch graphic that sums it up nicely.

He told Kim Strach, the head of campaign finance for the state agency, that LaRoque Management doesn’t require applications for loans, and that he is the sole decision maker when it comes to making loans from the company.

“All LMG loans are made with funds wholly owned by LMG and as the sole stockholder in LMG, the funds are owned by me,” LaRoque wrote in an April email to Strach.  N.C.Policy Watch received the documents through a public records request.

But LaRoque added later on in the email that the only other functions LaRoque Management has on top of running the two non-profits is to perform loan underwriting for a third non-profit and is involved in real estate sales.

And the only other loans he gave out a zero percent interest were to his wife and to himself.

6 Comments

  1. francesjenkins

    August 5, 2011 at 7:59 pm

    Why is there not a story on Hobbs by this justice seeking, poverty fighting, truth defining group? I can not understand this.

  2. James

    August 5, 2011 at 8:52 pm

    You want a story on Hobbs? Write it. In the meantime, the subject at hand is the sleazoid named Stephen LaRoque. Do you condone his actions? Is he the kind of person who should be holding public office?

  3. francesjenkins

    August 6, 2011 at 4:03 am

    But this group of justice seeking, poverty fighting, truth defining can not ignore Democrats like Hobbs. Can they do this, of course they can.

  4. francesjenkins

    August 6, 2011 at 7:31 am

    Hobbs has already been fined $150,000.00 for his illegally contributions to Perdue and others. Just read the article in the Pinehurst News.

  5. Sarah Ovaska

    August 6, 2011 at 8:55 am

    Frances (and James), thanks for your comments. I wanted to offer a bit of an explainer as to why we’re covering this, since Frances raised some questions about that.

    First off, this was an in-depth investigation that took a great deal of time, and posts like these are a way of following up on a story that received a lot of reaction around the state.

    Before our piece this week, there had been very minimal coverage of LaRoque’s management of these non-profits. As I started looking into it, I found some very troubling practices that I felt the larger public had a right to know about an elected official in such a prominent position in the state.

    As for the Hobbs investigation, that’s been covered pretty well this past week in various media groups, and it doesn’t seem like the story is going away anytime soon. My role as an investigative reporter at NC Policy Watch is to look into issues that aren’t being covered, and bring that to the public’s attention. I’ve heard this week from people from all sides of the political spectrum about my investigation into LaRoque, and most, nearly all, have expressed appreciation for the article.

    Hope this helps clear things up a bit.

    Sincerely,

    Sarah Ovaska

  6. Bill Bush

    August 7, 2011 at 1:37 pm

    When I taught school, it was a requirement that even a dime taken from a student had to be recorded in the duplicate carbon receipt book and turned over to the school treasurer that very day before leaving school, with a duplicate carbon form received and kept to match the student carbon. I could not retain those funds or use them as a “loan” until payday at zero interest, either. But what would I know? I was just a discredited government worker. Isn’t the granting of a zero percent loan a misuse of federal funds and a form of “income” by non-work and non-expense? Does a no-interest loan count as a “gift”? Is that not income if from government money? I could understand a family member giving a no-interest loan to a relative at his own discretion with his own money. But with my tax money? NO, NO, NO!