May 7, 1999
Contact: Bob Hall 919-489-1931
"CRIMES AGAINST DEMOCRACY" SHOWS NEED
FOR CAMPAIGN FINANCE REFORM
Recent news articles about illegal contributions in North Carolina point out the
need for fundamental changes in the state's campaign finance laws, says the government
watchdog group whose complaint prompted the investigation by the SBI and Forsyth
County District Attorney Tom Keith.
Our news release from March 1998 provided more details on the scope of political
giving by A. Steven Pierce, the former rest-home chain owner charged with conspiracy
to violate election laws. Also see the Charlotte Observer's story on bundling
and "straw donors" from June of 1998.
Among the contributions not yet discussed by the media are four donations made
on October 1, 1996 from Pierce relatives to the state Democratic Party totaling
According to Democracy South's research, Pierce and 13 related donors (10 relatives
and 3 other executives in his businesses) gave a total of $205,850 from 1991 through
1996 to N.C. state-level candidates and party committees. So far, press reports
have only discussed $101,000 in contributions requested back from four candidates:
Gov. Jim Hunt, Lt. Gov. Mike Wicker, state Sen. Beverly Perdue, and state Sen.
It is unlikely that DA Tom Keith will go after much of the money given before
1996 because of North Carolina's two-year statute of limitation for prosecuting
misdemeanor violations of election law. "That's a big problem," said
Democracy South's executive director Pete MacDowell. He pointed out that a 5 year
statute of limitation might capture another $100,000 in illegal Pierce donations.
MacDowell also said that Keith is the exception to the norm: Local District
Attorneys, who the state Constitution gives the sole power to prosecute crimes,
"generally do not pursue campaign finance abuses." MacDowell said Democracy
South's June 1997 complaint about Pierce included four other cases of apparent
violations by other donors, but none of the cases was investigated by local District
Attorneys (in Guilford, Mecklenburg, and Wake counties).
In addition to lengthening the statute of limitation to 5 years, MacDowell said
stronger enforcement could result if the legislature created an investigative
staff within the Board of Elections or Attorney General's office to develop cases
and provide expertise to local DA. Such a provision is now part of a draft Omnibus
Campaign Finance Act being developed by Sen. Roy Cooper, Sen. Wib Gulley, Rep.
Phil Baddour and others. MacDowell said campaign reformers strongly endorse such
Besides tougher enforcement, MacDowell urged lawmakers to continue developing
an alternative source of campaign money for candidates who accept strict fundraising
and spending limits and who receive voter authorization to get public financing.
"We need a clean source of money that eliminates the need for special-interest
donors, that prevents corruption, and that gives voters real ownership of elections,"
The Clean Election Act (HB 1402) was introduced in the House on April 29 with
33 sponsors - more than a fourth of the 120 members. "We're very pleased
with the broad diversity of support," MacDowell. said. "This is not
a conservative versus liberal issue. It's an issue of who controls elections:
wealthy special-interest donors or ordinary voters. Mr. Pierce, with his tainted
money, exemplifies everything that's wrong with the current system
The following people were convicted in the Pierce case:
William Roy Hammonds of Kernersville, four counts of conspiracy to exceed
campaign contribution limits.
James Edwin Holt of New Bern, one count of conspiracy to exceed campaign
Roy Lee Holt Jr. of New Bern, one count of conspiracy to exceed campaign
A. Stephen Pierce of Kernersville, five counts of conspiracy to exceed
campaign contribution limits, five counts of exceeding campaign contribution limits.
Guy Stephen Pierce of Kernersville, four counts of conspiracy to exceed
campaign contribution limits.
Brian Odell Smith of Wilmington, three counts of conspiracy to exceed campaign
Robert Joyce of Winston-Salem, one count of exceeding campaign contribution