Candidates forfeit $10,000 over improper PAC donations, souvenir shop spending, and more

The 2018 midterm elections have barely gotten underway in North Carolina, but already this year a dozen politicians have had to pay fines for campaign finance violations or forfeit money to the state to avoid violations.

Fines and forfeitures so far this year total nearly $10,000. The campaigns for four Democrats and eight Republicans were responsible.

Some of them were based on what's happened in 2018 campaigns, while others were just now addressing issues from the 2016 elections.

Some of the candidates were late in filing mandatory paperwork. Others received prohibited contributions — either from a group that wasn't allowed to give money, or at a time when they weren't allowed to be fundraising — or otherwise ran afoul of state auditors. Some of those who turned over money are current state legislators. Others are running for seats in the legislature or in local government, and two of the candidates are in the running to become among the state's most powerful judges.

The 12 candidates' penalties and forfeitures ranged from $20 to $3,250. In total, they paid $9,826.93.

The biggest issues involved two Democrats who represent Winston-Salem in the state House of Representatives.

One of them, Rep. Ed Hanes, spent hundreds of dollars of his donors' money on personal expenses.

Although personal spending from campaign accounts has landed other politicians in prison — most recently Republican Sen. Fletcher Hartsell, who recently completed an 8-month prison sentence — Hanes is not facing any criminal charges.

Hanes has now paid back the state more than $1,000 after an auditor discovered an improper contribution from a PAC representing the drug company Pfizer, as well as hundreds of dollars his campaign spent for his personal gain.

"I greatly regret any negative appearance that may have arisen from my previous reporting efforts," Hanes said in an email to the News & Observer. "I thank the State Board of Elections for their efforts in helping my team identify and rectify those discrepancies."

Much of the improper spending occurred on a trip to Singapore in 2016 that Hanes said was official legislative business, including more than $200 he charged to his campaign at a souvenir shop.

A few weeks after he got back from that trip overseas, Hanes spent $41.92 at Chapel Hill Sportswear, a clothing and gift store focused on UNC athletics.

"Unless you can provide an explanation for this expenditure that is permissible under (state campaign finance law), it is considered a personal expenditure," an auditor wrote to Hanes about the Tar Heels gear.

Other similar concerns included $35 his campaign spent for a "gym consultation fee" and $18.63 for shoe repair.

Hanes did not dispute any of the state's findings and agreed to forfeit from his campaign the same amount of money that had been called into dispute — a total of $1,056.93.

Hanes said he cooperated fully with the audit and blamed his issues on "unintentional errors of filing and minor spending."

All the issues identified in that audit were from 2015 or 2016.

His fellow Winston-Salem Democrat, Rep. Evelyn Terry, had campaign finance issues in 2012 and 2013, which the state discovered in 2014. But it was just this year that her campaign and the state reached an agreement — for her to forfeit $3,250.

State auditors found "a number of mathematical errors" in her campaign finance reports and also discovered that in several instances, the campaign had reported receiving money when in fact the money was actually being spent. And in at least one case, money that the campaign actually did receive was not properly reported.

Three Republican legislators also had to forfeit money to the state. All of them took prohibited contributions.

Sen. Tommy Tucker of Union County had to forfeit $1,100 related to donations from UBS Financial Services and a group called Good and Godly Government. Both were prohibited from donating to politicians. His campaign was also dinged in the audit for a series of accounting errors that made it appear — incorrectly — that he was violating campaign finance law in other ways.

Rep. Donny Lambeth, a Winston-Salem Republican whose campaign accounting also featured several mathematical errors, paid back $1,000 that he had improperly received from the Pfizer PAC during a period when the legislature was in session. State politicians are prohibited from soliciting campaign donations from lobbyists and certain groups while the legislature is in session.

And Sen. David Curtis, a Lincoln County Republican, forfeited $500 after an audit found an improper contribution from International Paper PAC. It wasn't clear why the donation was deemed improper.

The smallest forfeitures involved the two judicial candidates.

Andrew Heath, a Republican who used to be the budget director for former Gov. Pat McCrory and is now running for a seat on the state Court of Appeals, turned $20 over to the state. His campaign received $20 in cash anonymously, and since there's no way of knowing whether that was a proper donation or not, it had to be forfeited.

Anita Earls, a Democrat who has been behind several high-profile lawsuits challenging laws about voter ID and gerrymandering, is running for a seat on the state Supreme Court. Her campaign turned $100 over to the state, which her campaign manager Caroline Spencer said was a routine matter.

"Anita's campaign forfeited $100 in cash that was received mistakenly at a fundraiser as soon as it was received," she said.

The rest of the money candidates have had to pay to the state this year has been in late fees for paperwork.

This story was originally published April 20, 2018 at 1:03 PM with the headline "Candidates forfeit $10,000 over improper PAC donations, souvenir shop spending, and more."