Robin Hayes’ indictment in insurance-gate scandal raises some big issues and questions — UPDATED

Robin Hayes

As several news outlets are reporting today, North Carolina Republican Party Chairman and former U.S. Congressman Robin Hayes was indicted today by a federal grand jury along with three other alleged co-conspirators (Greg Lindberg, John Gray and John Palermo) on several corruption charges. This is from Travis Fain of WRAL.com:

“North Carolina’s largest political donor and three others, including the chairman of the North Carolina Republican Party, have been arrested on bribery charges.

Greg Lindberg, two of his business associates and state GOP Chairman Robin Hayes were all indicted by a federal grand jury last month, but the indictments were sealed until Tuesday. They turned themselves in to the FBI in Charlotte on Tuesday and had first appearances before a U.S. magistrate judge.

They’re all accused of trying to bribe state Insurance Commissioner Mike Causey, who got in touch with federal investigators and recorded conversations quoted in the indictment. The alleged scheme would have traded more than $1 million in political contributions in exchange for regulatory help at the department.

Hayes, a former congressman and GOP candidate for governor, is also charged with three counts of lying to the FBI. On Monday, he announced that he wouldn’t seek another term as chairman of the state Republican Party, citing his health.”

If you get a chance, be sure to read the indictment which appears to be based in large part upon recordings that state Insurance Commissioner Mike Causey helped make after reaching out to law enforcement officials to let them know of the bribery scheme that Lindberg, Hayes and the others were attempting to perpetrate.

Among the many fascinating excerpts — many of which read at times like they’re out of a crime novel:

21. On or about November 13, 2017 HAYES sent an email to PALERMO regarding political matters stating, in part, “If u agree,I’ll suggest u put the money in the party and we will put it in races at your direction.”

And then there’s this one after Lindberg sought to have Causey hire Palermo as a top assistant:

38. The COMMISSIONER asked to speak to LINDBERG alone, and during that portion of the meeting, the COMMISSIONER asked LINDBERG, “What’s in it for me? What can you do to help that’s not gonna be…under the radar screen?” LINDBERG responded that he would create an independent expenditure committee to support the COMMISSIONER’s re-election and fund it himself with $1 million to $2 million.

Who is “Public Official A”?

One intriguing question that arises in the aftermath of the announcement today is: who is the person referred to in the indictment as “Public Official A”? At several points in the indictment, reference is made to the efforts of the conspirators to reach out to Public Official A in order to get him to pressure/intervene with Causey.

At one point in the indictment, reference is made to the fact that in February of 2018 Mr. Gray called Public Official A in order to get him to contact Causey.

27. GRAY later called Public Official A and, on or about February 5, 2018, sent a text message to LINDBERG stating “I have discussed our NCDOI matter with [Public Official A]. Please call before your trip to Greensboro today so we can discuss details. Excellent opportunity available for support here.” On the same date, LINDBERG made a $150,000 contribution to a political committee supporting Public Official A.

At another point, the indictment says that Palermo reported that he had lunch with Public Official A and that the official would be reaching out to Causey to “man-up and do what he agreed to” — i.e. make some changes asked for by Lindberg. Three days later, Public Official A texted Palermo that he would call Causey and then proceeded to do so on the same day.

UPDATE: Politico is reporting that Public official A is Congressman Mark Walker.

Two other preliminary conclusions

#1 – Insurance Commissioner Mike Causey appears to have acted honorably in this matter. There have been many legitimate criticisms of Insurance Commissioner Mike Causey since his upset election in 2016 — from his lack of experience as a regulator to his lax attitude toward consumer protection on several issues. In this case, however, it appears Causey has done the courageous and honorable thing by cooperating with law enforcement and bringing corruption in his own political party to light.

#2 – The scandal once more makes the case for publicly financed elections. There was a time, not that long ago, when North Carolina law provided for the public financing of several council of state races including the Commissioner of Insurance. Tragically, that law — which made eminent sense for an office that regulates a big money industry and that otherwise draws little interest from average voters — was later repealed by Republicans. If ever there was a concrete example of why the move away from publicly-financed elections was a grave mistake, this is it.

In response to today’s events, Bob Phillips Executive Director of Common Cause North Carolina issued the following statement:

We are deeply concerned about these serious allegations of attempted public corruption. This case is a sobering reminder of our broken campaign finance system in which wealthy donors are far too often given unfair access to elected officials. It’s time to enact common-sense reforms that will guard against the corrosive influence of money in politics. The public deserves a campaign finance system that ensures our government works for all people, and not just wealthy special interests. A key step would be re-establishing public campaign financing for state insurance commissioner elections and expanding the program to all Council of State offices.

Amen to that.

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