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NC Rep. Hilton mum about running, says LaRoque loan not a factor

State Rep. Mark Hilton may not seek a seventh term in the state legislature, and says a loan he received from fellow state Rep. Stephen LaRoque has nothing to do with it.

Hilton, one of two GOP legislators that took out loans of federal money from an economic development run by Stephen LaRoque, gave some cryptic answers when his hometown paper The Hickory Daily Record asked whether he’ll run next year. He told the paper he’d issue a statement next week about his decision.

“I’ve made a decision, but I have not announced it,” Hilton told the paper. “I’m going to put out a statement to address whether or not I will run again.”

LaRoque was not in the legislature at the time of the July 2007 loan – he had been voted out of office in the 2006 elections and did not return until being swept in by the Republican tide during the 2010 state elections. That election transferred control of the state legislature to GOP hands after more than 100 years with Democrats. LaRoque was given a place in N.C. House Speaker Thom Tillis’ leadership team as co-chair of the powerful House Rules Committee.

Hilton told the Hickory paper that his business dealings with LaRoque will have no bearing on Hilton’s decision to run.

“My decision has nothing to do with LaRoque,” Hilton said. “He was not in the legislature at the time he gave me the loan.”

As reported in our August investigation “Public Money, Personal Gains” into LaRoque’s questionable management of two economic development non-profits, Hilton received funds in 2007 from Piedmont Development Company, the smaller of the two non-profits run by LaRoque. The East Carolina Development Company and Piedmont Development Company have received $8 million in U.S. Department of Agriculture funds as part of a program that’s supposed to help create jobs in rural areas.  The NC Policy Watch investigation found that LaRoque received generous pay, as high as $195,000 a year, at times without the knowledge of past board members; brought in immediate family members to serve on his boards; and gave loans to close associates. The USDA had scant oversight, going four years without conducting field visits and with officials unaware of the high salaries LaRoque received. LaRoque also gave his for-profit company a $200,000, no interest loan in 2010 from the non-profit, a potential violation of IRS tax laws that prevent charity officials receiving personal benefits.

Hilton got $165,000 in two loans from Piedmont Development Company, a non-profit whose entire board of directors solely consisted for many years of LaRoques –  the state lawmaker, his wife and brother.

(We initially reported Hilton received one loan worth $150,000 but subsequent public information requests from USDA and searches through the Catawba County Register of Deeds revealed Hilton’s company Hilton Ventures received two loans worth $165,000 from the Piedmont Development Company. The $150,000 came out of USDA federal funds, according to USDA records, while the $15,000 loan appears to have come out of revolved funds at the non-profit. Click the following links to see the 2007 deeds of trust for the $150,000 loan and the $15,000 loan).

The loans were to allow Hilton Ventures, a company Hilton owns with his father, to buy 41 mobile homes. In an application to USDA, LaRoque claims the loan would retain two jobs and create one other job. The USDA released limited information from Hilton’s loan application, which can be viewed here but contains significant redactions from the federal agency.

Hilton told the Hickory newspaper he was on the brink of paying off his six-year loan, which he got a six-percent interest. The U.S.D.A. had refused to disclose the interest rate when NC Policy Watch requested the information earlier this fall

Tillis, at the request of Minority Leader Joe Hackney, has asked a bipartisan Legislative Ethics Committee, to review allegations of misconduct by LaRoque to see if his management of the non-profits violates the rules of conduct for lawmakers.

That committee meets in secret, and no timeline has been given as to when their review will conclude. LaRoque has hired Joseph Cheshire, a high-profile Raleigh criminal defense attorney known for his work in the Duke lacrosse case as well as for defending embattled politicians like former Democratic Gov. Mike Easley, convicted of a felony last year for filing a false campaign report.

2 Comments

  1. Eunice

    December 5, 2011 at 6:04 am

    The bigger story here is why we are entrusting the USDA to be making these ridiculous loans with little or no oversight. The original purpose of many of the federal agencies has been lost, and now they are absorbed in doling out federal money for ridiculous projects. I saw an article recently that the USDA was giving some rural sheriff’s department six new police cruisers for almost $200,000 which is absolutely crazy.

  2. david esmay

    December 5, 2011 at 7:09 pm

    I can’t believe I’m saying this, but, I don’t totally disagree with you, although the USDA has been doing it for farmer’s for years. Because of reductions in force, most agencies are overwhelmed by the sheer work load they face, conservatives want to continually shrink the government and this is a by-product of that philosophy. As someone who has to deal with the myriad of forms required to insure the tax payer is getting what they pay for on construction projects, I can see to a certain extent how time consuming and labor intensive it is.