Commentary, Legislature, News

Government watchdog claims in new filing that Phil Berger broke state law with Raleigh townhouse payments

Longtime NC government watchdog Bob Hall

Bob Hall—government watchdog, ex-political journalist, and, according to one ludicrous GOP aide, reputed “bottom feeder” and “scumbag”—is pacing outside of the high-rise, downtown Raleigh condominiums that Sen. Phil Berger haunts when he’s in town.

The building, which is several blocks from the state legislature, is fronted by a dress shop and brewery. This dusty intersection hums with construction as insectile cranes lug materials for nearby mixed-use developments.

Hall, sporting a shaggy, grey beard, doesn’t look so much like a scumbag, more like a modestly annoyed philosophy professor. In his hands, he holds an official complaint he filed this afternoon with the General Assembly’s Legislative Ethics Commission, alleging that Berger “unethically transferred” $73,500 of campaign donors’ money to himself when he used it to pay the mortgage on a recently-sold north Raleigh townhouse he co-owned with his wife.

There’s no podium today, very little press assemblage, no fanfare, just Hall making major claims against NC’s most influential state lawmaker, a Rockingham County Republican who holds a throttle-grip on the Senate and, indeed, virtually every piece of legislation with any hope of passing in North Carolina.

Hall raised similar questions in November with a complaint to the State Board of Elections, questioning the use of campaign dollars.

NC officials have used campaign cash to pay rent on their homes-away-from-home before, Hall says, but it’s not proper for Berger to spend donors’ money on a property he owns. “That’s an investment,” Hall told Policy Watch Wednesday.

“He’s the most powerful legislator in the state, if not the most powerful politician,” Hall said. “He’s setting an example, and it’s a bad one. He needs to be stopped.”

NC Sen. Phil Berger

According to the complaint, the Republican state lawmaker and his wife, Patricia Berger, bought the Yarborough Park Drive townhouse in May 2016 for $250,000, signing off on a mortgage loan worth almost $225,000. In June 2016, Berger’s attorney filed the articles of incorporation for YPD Properties, LLC with Berger its manager.

From August 2016 through December 2019—when the Bergers sold the townhouse—the lawmaker’s campaign sent monthly payments to YPD Properties, most of them characterized as rent. The payments totaled $73,500.  Last September, the Bergers purchased a space in this West North Street condo downtown.

In other words, Hall says, Sen. Berger used one hand to pay the other, pointing out the legislator lists himself as a “member/manager” paying taxes on his income from YPD Properties on his Statement of Economic Interest (SEI), an annual report intended to prevent potential conflicts of interest for public officials.

Berger’s office, which almost never responds to Policy Watch inquiries, did not answer Wednesday afternoon when asked for comment. However, in a November News & Observer report, an aide to Berger slammed Hall for the elections board complaint, characterizing the ex-head of Democracy NC, a non-partisan government reform organization, as a partisan. For reference’s sake, Hall’s work cratered ex-state House Speaker Jim Black, a Democrat, more than a decade ago over allegations of corruption.

Hall’s latest complaint, which was filed with the Legislative Ethics Committee—a bipartisan panel of Republicans and Democrats—says Berger violated state General Statute 138A-31, which states that a legislator “shall not knowingly use [his or her] public position in an official action or legislative action that will result in financial benefit” for the lawmaker or their family.

It cites Berger’s alleged “unethical and corrupt conduct … in manipulating submissions to the State Board of Elections in order to personally gain tens of thousands of dollars for himself.”

Hall is asking the legislative committee to censure Berger for his “use of public office for private gain.”

The complaint notes the Bergers sold the townhouse to T. Tate Apodaca, a lobbyist and son of former Republican state senator Tom Apodaca, although it points out the asking price was comparable to other sales in the development.

Hall goes on to list what he suggests may be a second violation of state law:

Because these cleverly manipulated “rent” payments provided Sen. Berger with $73,500 toward the $250,000 purchase price of the YPD townhouse, his actual cost was closer to $176,500. Consequently, when lobbyist Tate Apodaca paid $330,000 for the townhouse, he helped Sen. Berger reap a profit in excess of $150,000 ($330,000 minus $176,500), which is far above the $80,000 average market price increase from 2016 to 2019 for properties in that development – and, therefore, arguably a handsome gift from the lobbyist, in violation of NCGS 138A-32. While this conclusion may seem like a stretch of the law, it’s important for the Committee to recognize that the public perception of Sen. Berger’s profit-taking, with the help of a lobbyist, can harm the reputation of all legislators if corrective action is not taken.

Policy Watch will keep you apprised of the complaint as it proceeds.

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