YES! Weekly | February 6, 2013
Armed with a veto-proof majority and emboldened a fellow party member in the Executive Mansion, Republican lawmakers in Raleigh rushed out a flurry of conservative bills when the General Assembly convened last week for the long session.

That includes legislation to reduce benefits to unemployed workers, to block Medicaid expansion that would provide extend healthcare coverage to the uninsured and to place constitutional amendments before voters to enshrine North Carolina’s status as a right-to-work state and guarantee that union elections are held by secret ballot. Republican lawmakers have pledged to reintroduce controversial legislation requiring voters to present photo ID before exercising their franchise. Critics have charged that it would disproportionately affect poor people, people of color, students and the elderly.

Meanwhile, the NC Senate leadership has floated a plan to eliminate corporate and personal income taxes, replacing the revenue through an expansion of the sales tax and through business license fees. The plan proposed by President Pro Tem Phil Berger (R-Rockingham, Guilford) and Sen. Bob Rucho (R-Mecklenburg) largely reflects the recommendations in a report released by the Civitas Institute in December. Arthur Laffer, the report’s author, told lawmakers during a recent legislative training session, according to the policy outfit: “If you tax the rich and give the money to the poor, soon you’ll have more poor people and no rich ones.”

He concluded by telling them that tax reform was their obligation and destiny.

Art Pope, whose family foundation is the primary benefactor of the Civitas Institute, was appointed deputy budget director by newly elected Gov. Pat McCrory in December. Surprising critics, Pope recently distanced himself from the Senate tax reform plan.

“A gross transaction tax, without any regard to whether you’re actually making any money on taking that income, I think that’s going to hurt the economy,” he said. “It is regressive in nature, absolutely no doubt about it.”

Over the past two years, Democrats have been able to put the brakes on part of the GOP agenda through prolific vetoes on legislation by then-Gov. Bev Perdue. The Republicans held only a simple majority in the House, meaning that the GOP needed to coax support from at least a handful of Democrats to pass bills over Perdue’s vetoes. But in 2012, North Carolinians elected a Republican governor, and Republicans obtained a supermajority in the House, now holding 77 out of 120 seats.

Rep. Larry Hall, a Durham lawmaker who serves as the Democratic leader, gauged the shift during a press conference last week.

“Certainly we know that there’s a different makeup of the General Assembly this session than there was last session,” he said. “We know there’s no veto threat. There’s no potential to negotiate and defeat bills and have them reconsidered with more input by our caucus. This is a different environment.”

Republicans have rapidly consolidated control of the General Assembly since flipping the two chambers during the 2010 elections, raising greater amounts of money from wealthy and corporate donors and funneling the dollars with laser-like precision into campaigns to defeat vulnerable incumbent Democrats and protect their gains.

A management consultant from northern Mecklenburg County named Thom Tillis, who had served only two terms previously, surprised many with his election as speaker, supplanting Rep. Paul Stam, a more senior lawmaker from Wake County, in the top Republican position in the House. Tillis had raised $416,540 in that election cycle — more than any other Republican House member. He ran unopposed in 2010, and funneled $368,000 into other Republican candidates’ campaigns or to the Republican House Majority Fund, where the money was then distributed among candidates. Stam raised $234,750 for the caucus — the second largest amount — followed by Rep. Ruth Samuelson, another Mecklenburg County lawmaker, who raised $123,275. Stam was elected majority leader, and members voted to make Samuelson the majority whip. All three positions give the members extraordinary influence over setting the caucus’ agenda, managing the flow of legislation and advising members on which bills they may vote their conscience and on which ones they must toe the party line.

The Republican House Caucus Plan of Organization, adopted in 2009 — the year before Tillis’ party won the majority — describes the responsibilities of the Republican House Campaign Committee as “future planning, recruiting candidates and raising funds for use in electing Republicans to the North Carolina House.” The plan of organization requires members wishing to be appointed to the campaign committee to meet minimum fundraising targets. The leader and whip must raise $25,000. Freshman lawmakers are required to contribute $2,000 and all other members must contribute $5,000. The leader is a mandatory member of the committee.

“Republican and Democratic legislative leaders maintain bank accounts within their state political parties that can receive and spend unlimited amounts,” the election watchdog group Democracy North Carolina explained in a report last week. “Democrats perfected the system under Senate leaders Marc Basnight and Tony Rand, but Republicans used the method in 2012 to raise record amounts from caucus members and spend record amounts on hot races to help them hold their majority. The system helps build caucus solidarity and often reflects and reinforces the hierarchy among members.”

Running unopposed again in 2012, Tillis quadrupled his fundraising receipts, topping out at $1.7 million. He directed $1.3 million to the NC Republican Party and to individual GOP candidates. The party, in turn, funneled $132,566 to Rob Bryan, a Republican candidate who spent $368,786 to pick off Democrat Martha Alexander, a 20-year veteran in the House. The party gave a total of $250,342 to help Tim Moffitt, including a $15,000 electronic-funds transfer and about $15,000 for direct-mail pieces in the week before the election, to help the one-term lawmaker fend off a challenge from Democrat Jane Whilden.

Samuelson raised $318,55 for the caucus — the second largest amount — and was elected conference leader. Stam ranks third, with $203,838, and serves as speaker pro tem. Nelson Dollar, a political consultant in Cary, raised $112,000, and was promoted to the top position on the powerful House Appropriations Committee. Justin P. Burr, a 27-year-old bail bondsman in Albemarle serving his third term, raised $60,000 for the caucus and was appointed chairman on Appropriations — a second-tier position under Dollar, the senior chairman.

Majority Leader Edgar V. Starnes, an investor in Hickory who ran unopposed, raised $46,350 for the caucus. A wide range of business interests from across the state financed his campaign. Majority Whip Mike Hager, a former Duke Energy Employee from Rutherfordton, raised $51,740 for the caucus. The utility contributed $8,000 to Hager’s campaign, and was only one of a number of business, industry and corporate political action committees that donated.

The most prominent positions in the House are not always matched to the legislator who raises the most money for the caucus. Rep. Julia Howard (R-Davie, Forsyth) might be the most powerful member as senior chairman of the Finance Committee considering the focus in this session on rewriting the state’s tax code. She contributed only $16,800 to help other candidates. Notably, she’s the most senior member of the chamber, now serving her 13th term. Howard is the primary sponsor of the legislation to reduce unemployment benefits, and the Finance Committee passed the bill over Democratic objections on Thursday, moving it to a floor vote in the full House on Monday. [UPDATE]

Generally, committee appointments reflect seniority and experience, but not always. Virtually every House member who has served at least four terms has been assigned to chair a major committee. An exception is Rep. John Blust (R-Guilford), now serving his seventh term, who serves as vice-chairman on Justice and on Homeland Security, Military and Veteran Affairs, along with chairing the Judiciary Subcommittee A.

Then, too, some candidates whose campaigns relied on significant financial assistance from the caucus received prestigious appointments. Moffitt, the Asheville lawmaker who received $250,342 from the caucus to pull out his race, chairs Regulatory Reform. Rep. Tom Murry, of Morrisville, whos netted $178,981 in contributions from the caucus and other candidates, chairs Commerce and Jobs Development. Mike Stone, a Sanford lawmaker who received $124,547, was appointed to chair the Government Committee.

The matter of whether campaign fundraising influences committee assignments surfaced during a candidate event sponsored by the Winston-Salem Chamber of Commerce in September.

Debra Conrad, a seasoned local politician who was running against an outmatched Democratic opponent, commiserated with fellow Republican Donny Lambeth, who was running unopposed, about the pressure they each felt to raise money for the caucus. She told a table full of business leaders that she hoped to land a seat on the Commerce and Job Development Committee.

“Unfortunately, the more money you raise and give to the speaker, the better committee assignment you get,” she said.

The remark caused a titter of discomfort at the table. One person, observing that a reporter was present, suggested, “Off the record?” Another murmured, “Pay to play” — a phrase widely used to describe how business was transacted under now-disgraced Democratic House Speaker Jim Black, who went to jail after soliciting donations from professional associations in exchange for favorable legislation.

Jordan Shaw, spokesman for Speaker Tillis, said in September that there is no correlation between the amount of money would-be legislators raised for the caucus and the committee assignments they receive in the subsequent term.

“Committee assignments are done based on things like seniority and leadership experience with the issues they’re dealing with,” Shaw said, noting that a lawyer is likely to chair the Judiciary Committee, and so forth. “It has nothing to do with campaign finance or any money you raise.”

Conrad said in an interview after the candidate event that she had never spoken to Tillis about campaign fundraising, but that she had received e-mails from several other candidates asking for money. But whether directly communicated or not, the expectation was implicit.

“I hope I don’t disappoint him,” she said. “It’s more of a team mentality. If you don’t make the goals, you don’t get to play as much. It’s no criticism of the speaker; I just think that’s the way it is.”

Conrad noted that Lambeth was holding a fundraiser, and he didn’t even have an opponent.

“That’s why they’re putting pressure on him — because he doesn’t have an opponent,” she said, “and he can just turn the money over to the general pool.”

After speaking with Shaw, Conrad walked back on her earlier remarks in a written statement distributed to the media. “I do not believe that raising money in a political campaign is related to campaign assignments,” she said. “I am focused on representing the interests of the citizens of the 74th district, and look forward to doing so if I am given the voters’ trust in November.”

Conrad got her wish: She received appointment to a vice-chairmanship on Commerce and Jobs Development. She had demolished Democratic opponent David W. Moore by a margin of almost 30 percent. After clearing a contentious Republican primary, she had spent more than $20,000 on her general election campaign. As it turned out, she was the beneficiary of the caucus money system rather than the patron: Starnes and Hager each contributed $500, and Stam sunk $1,252 into a fundraising mailing for Conrad.

“Each caucus member is expected to donate something from the campaign, and chairs of major committees are expected to put in more, if they want to keep their positions,” the recent Democracy North Carolina report states. “The millions in the caucus fund then get spent in several hotly contested races that help the members keep or retake their majority status and power.”

Asked if he would agree that the House membership is encouraged to raise money to help fellow candidates in tight races so the party can retain and expand its majority, Shaw simply said, “Yes.”

Lambeth, who was running unopposed, raised a total of $33,601, including $250 to Starnes. In October, as the general election approached, he contributed $1,000 to the House Republican caucus. A retired hospital executive, Lambeth was appointed vice-chairman of the Appropriations Subcommittee on Health and Human Services.

Generally, all freshman members of the Republican caucus received at least an appointment as vice-chairman to a major committee or a subcommittee, regardless of how much money their campaigns raised for or accepted from the caucus.

The flow of campaign cash in the Senate reflects much the same pattern.

President Pro Tem Phil Berger (R-Rockingham, Guilford) raised $1.7 million and contributed $1.2 million. Majority Leader Harry Brown (R-Onslow, Jones), one of the chamber’s senior budget writers, raised $505,481 and gave away $404,393 while running unopposed.

Sen. Tom Apodaca (R-Henderson, Buncombe), described by Berger as “one of my most trusted advisors,” raised $478,707 and contributed $320,000. Berger appointed Apodaca to chair Rules and Operations, which the president pro tem described in a press release as “one of the most powerful [committees] in the Senate since it controls the flow of legislation and governance of the chamber’s operations.”

Sen. Pete Brunstetter (R-Forsyth, Yadkin), one of the other senior budget writers, raised $290,516, and gave away $257,000. The other senior budget writer, Sen. Neal Hunt (R-Wake), drew $102,986 from fellow caucus members to fend off a challenge from Democrat Sig Hutchinson.

Sen. Bob Rucho (R-Mecklenburg) and Sen. Bill Rabon (R-Brunswick) respectively ranked fifth and sixth for money donated to the caucus.

Apodaca, Brown and Rucho are primary sponsors of the bill to block Medicaid expansion, with Brunstetter and Rabon also signing on in support.

The funds raised by members of the leadership helped the Republicans maintain and expand their majority in the Senate.

Jim Davis, a Republican who swiped District 50 in the far western part of the state from Democrat John Snow in 2010, received a net $789,324 from the caucus to fend off a rematch. And Chad Barefoot, a former House aide whose mother-in-law was the lead organizer for the marriage referendum, helped the GOP pick up a seat in eastern Wake County after receiving a net of $797,975 from the caucus to help him defeat Democratic incumbent Doug Berger. Barefoot spent just shy of $1 million to win his race.

If the amalgam of young and old lawmakers, all embracing different flavors of conservatism, in the two chambers in Raleigh have one thing in common, it’s a characteristic they share with their new governor — an eagerness to do whatever it takes to please business.

“We’re hearing from the small businesses and mid-sized businesses that certain departments in state government treat the businesses as adversaries as opposed to customers,” McCrory said during a campaign stop at the Grandover in Greensboro in October. “Ladies and gentlemen, we need to have a relationship with our businesses — a personal relationship with our businesses — where we say, ‘We’re in this together,’ that we both benefit if we’re on the same team.”

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