Veteran government watchdog files new complaint against Sen. Phil Berger over townhouse purchase

Sen. Phil Berger

Bob Hall cites recent ethics rulings which bar elected officials from using campaign funds, public reimbursement to purchase real property

North Carolina state President Pro Tem Phil Berger (R -Rockingham) should reimburse the state for at least $50,000 in subsidies that he received for living expenses in recent years according to a new complaint filed today by veteran government and elections watchdog, Bob Hall.

Hall’s complaint cites a May 20 memo from the Legislative Ethics Committee which seems to proscribe arrangements like the one Berger had. The memo states: “It is unethical for a legislator to accept per diem from the General Assembly for lodging and receive reimbursement for the same lodging from some other source.”

Hall says Berger has accepted more than $50,000 in such payments over a period of years in which his Raleigh townhouse was being paid for by other sources. In a news release, Hall cited a provision in the Ethics Committee memo which states that “Any legislator who has inappropriately accepted the subsistence allowance or travel allowance may repay such amounts to the Legislative Services Office via Financial Services.”

Hall says records indicate that Berger’s campaign stopped reimbursing the senator for lodging after the May memo appeared, but he wants Berger to be held accountable for prior payments.

As Policy Watch reported back in February, Hall has been complaining for some time about Berger’s dealings to purchase the townhouse. Originally, Hall focused on Berger’s use of campaign funds to buy the property. This is from the February report:

“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 [to T. Tate Apodaca, a lobbyist and son of former Republican state senator Tom Apodaca]—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.”

In today’s news release Hall highlighted a new campaign finance rule adopted by the State Board of Elections that took effect August 1 which bars the practice complained of in February – using campaign funds to purchase property.

The new campaign finance rule that took effect on August 1 bans politicians from using campaign money to ‘purchase, lease, rent, or make mortgage payments on residential real property,’ even if it’s a second home they occupy while in Raleigh on legislative business.

Hall said he petitioned the State Board of Elections in January to adopt the rule because of evidence that Sen. Berger was using campaign donations to ‘personally enrich himself’ with the purchase of a townhouse in Raleigh.

‘If state regulators let Berger continue to funnel money from his political donors into his pocket, then other legislators would do it, too, and we’d wind up in a cesspool of corruption scandals,’ said Hall.”

Hall says the new rule, which was unanimously adopted by the State Board of Elections in June and unanimously approved by the state Rules Review Commission in July, supersedes an informal 2016 directive from former Election Board executive director Kim Strach, in which she gave Berger the go-ahead by saying that she was unaware of any state law that proscribed the purchase scheme.

While the new rule appears to bar arrangements like the one Berger made use of going forward, it does not appear to be retroactive. Still, Hall says, Berger’s use of per diem funds for the condo was also unethical and must be addressed. Again, this is from today’s release:

“‘I focused my February complaint on the unethical use of campaign funds, but the [Legislative Ethics] Committee essentially said I should have focused on the unethical per diem payments,’ said Hall. ‘I’m filing a new complaint with that focus today, and I hope the Committee has the courage to order Sen. Berger to repay at least some of the money he unethically took from taxpayers for his personal enrichment.’

According to Hall’s complaint, Berger requested and received at least $50,000 in per-diem lodging payments from June 2016 through May 2020. That includes $44,940 that Hall confirmed with the General Assembly’s Legislative Services Office for payments for 642 days in 2017, 2018 and 2019 or an average of over 200 days per year. Hall estimated Berger accepted at least another $6,000 in lodging per diems in the 12-month period from June to December 2016 and January to May 2020, while he was receiving money from his campaign for the housing.

‘I hope Berger doesn’t try to justify his use of tax money by saying he needed the per diems to subsidize his housing costs over the last 48 months,’ Hall said. ‘He’s taken in over $3,000 a month for housing because of his campaign payments when you include the $80,000 gain on the townhouse purchase and sale that the campaign money made possible. Plus, he’s been personally gaining equity in a luxury condominium with that campaign and tax money.’

‘I wish Berger would just admit that he made a mistake by seeking and receiving government welfare payments he didn’t deserve,’ said Hall.”

Click here to read Hall’s news release, the new rule adopted by the Board of Elections, and Hall’s new complaint.

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Veteran government watchdog files new complaint against Sen. Phil Berger over townhouse purchase