N.C. Rep. Stephen LaRoque is facing criminal charges of stealing money from two federally-funded economic development non-profits he ran in order to buy personal luxuries like from Faberge eggs, and an ice-skating rink.
But the 72-page grand jury indictment also raises questions about whether LaRoque also dipped into federal money to help fund his political campaigns. LaRoque, a Kinston Republican, resigned from the N.C. General Assembly Wednesday.
The indictment details how LaRoque and his wife Susan transferred money from the non-profit to LaRoque’s personal bank account, a business account and the campaign account over a month’s time in 2008. Susan LaRoque was also serving as her husband’s campaign treasurer, according to court records.
From the indictment:
Kim Strach, who heads the campaign finances division at the N.C. State Board of Elections, said she plans on reviewing the federal indictment and then passing on information to the board.
“I’ll go back over what we did and see what needs to be provided to the board,” Strach said.
LaRoque was indicted July 17 on federal charges of stealing money from a federal program and making financial transaction with money gotten through criminal means.
Through his attorney Joe Cheshire, LaRoque has denied the charges and any wrongdoing. He’s expected to make his first appearance in court on Aug. 6.
The grand jury indictments states that LaRoque and his wife, who also served on the non-profits’ board of directors, wrote out two $25,000 checks from the East Carolina Development Company’s bank account . One was made out to LaRoque’s personal bank account, and the other made out to LaRoque Management Group, a business account he ran.
Less than three weeks later, LaRoque then made a $25,000 loan from LaRoque Management Group to the Committee to Elect Stephen LaRoque.
Most of that loan is still outstanding – only $9,000 of the loan was paid off, according to LaRoque’s campaign records
The N.C. State Board of Elections had already fined LaRoque’s campaign $1,000 for the two 2008 loans mentioned in the indictment. (Click here to read an Aug. 5, 2011 post about LaRoque’s dealings with the elections board.)
North Carolina campaign law doesn’t allow businesses (or non-profit organizations) to make direct contributions or loans over $4,000 to political campaigns, unless the loan is from a bank or financial institution.
Before the elections board conducted their 2010 probe, Strach had asked LaRoque if his company (the one that written the check to the campaign) got any money from the non-profit groups LaRoque ran.
“Did LMG receive any funds from non-profit organizations?,” Strach asked in a April 2010 email to LaRoque.
LaRoque responded, via email: “I have a management contract with the two non-profit organizations to manage both of them in all aspects with the primary responsibilities including Administration, Marketing, Loan Packaging and Loan Servicing. LMG performs loan underwriting for another non-profit organization on an as needed basis for a fee.
No mention was made of the $50,000 worth of the non-profit’s checks LaRoque and his wife wrote out to LaRoque’s personal bank account and business in October 2008.
(Click here to read the entire 2010 email exchange between Strach and LaRoque, obtained last year by N.C. Policy Watch through a public records request).
For more background, N.C. Policy Watch published “Public money, personal gains,” an August 2011 investigation that looked into LaRoque’s non-profits and found that he received big paychecks, up to $195,000 a year, from a non-profit that was supposed to be providing low-interest loans to struggling businesses. The non-profit’s board of directors consisted, for many years, of just his brother and wife and loans of the public money were made to LaRoque’s close associates, including his attorney and two fellow N.C. legislators.
LaRoque will make his first court appearance on the federal charges on Aug. 6 in Raleigh.