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Democracy NC questions TV studio donated to Lt. Gov. Forest

November 14th, 2017

— A left-leaning good-government group called Tuesday for a formal state inquiry of a “possible illegal donation” to Lt. Gov. Dan Forest from “a shadowy campaign operation” embedded in the Lieutenant Governor’s Office.

Democracy North Carolina worked off a Sunday report from WRAL News, which detailed a little-known nonprofit connected to the Lieutenant Governor’s Office, a group allowed under IRS code to accept anonymous donations and avoid public scrutiny on its spending. The group, funded at least in part by a major Forest campaign donor, purchased some $60,000 worth of television equipment, enough to build a studio in Forest’s state office.

“This loan of sophisticated TV equipment appears to be a political donation,” Democracy NC Executive Director Bob Hall wrote in a Monday letter to the head of the State Board of Elections and Ethics Enforcement. “A reasonable person would recognize that it is meant to influence and materially assist Forest’s political career and campaign.”

Hall argued that the studio “is not dissimilar” to a major campaign contributor providing a jet plane on loan to fly a politician around the state to promote his or her agenda.

A spokesman for Forest has said the North Carolina Promotion and Development Fund was started by the Lieutenant Governor’s Office and is headed by David Longo, a Charlotte businessman and one of Forest’s more generous campaign donors. It is registered as a 501(c)(4) nonprofit under IRS rules.

These are often called “dark money” groups because of their spending rules. They’re required to focus on social welfare causes but can spend some of their money on political causes.

Forest Chief of Staff Hal Weatherman told WRAL News the group hasn’t done any political spending but helps augment the office budget, avoiding requests from the smallest agency in state government for new funding from the taxpayers. In addition to the television equipment, the group has paid for catering at various official events, Weatherman said.

There is no full, publicly available, accounting of the group’s spending.

Weatherman provided 990 tax forms for the group that indicate it collected less than $50,000 a year in recent years. Those forms don’t break down donors or spending, but Weatherman said Longo helps fund the entity. The spending doesn’t appear on Forest’s campaign disclosures or the statements of economic interest North Carolina elected officials are required to file.

Weatherman said these are neither campaign donations nor gifts to a public official from a lobbyist or other person covered under disclosure rules for the statements of economic interest. The studio equipment is owned, he said, by NCPDF.

Attorneys who deal in campaign finance and in 501(c) tax law told WRAL News they’ve never seen an arrangement like this but that it appears to abide by federal and state regulations, provided Forest doesn’t use the group’s donations for political purposes.

He does not, Weatherman has said.

The arrangement may be unique in North Carolina government. Other officials WRAL News spoke to had not heard of such an arrangement, and Weatherman said he believed it to be a first.

“It’s one thing for an independent 501(c)(4) operation to promote the agenda, views and political future of a politician; it’s quite another to allow the (c)(4) to be set up and operate within the politician’s government office, use government resources and coordinate its operation with government staff, all for the advancement of the politician, not the general public,” Hall wrote in his letter.

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