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.