RALEIGH — The chairman of North Carolina’s Republican Party, an insurance magnate and two of his associates are facing federal charges for a plan to shower the state’s top insurance regulator with campaign contributions to ensure special business treatment, a criminal indictment unsealed Tuesday said.
State GOP Chairman Robin Hayes and insurance and investment firm founder Greg Lindberg were among those charged with bribery, conspiracy and other crimes.
The four defendants appeared Tuesday before a federal magistrate.
Hayes also was charged with lying to the FBI. The 73-year-old former congressman from Concord announced Monday he had changed his earlier plans and won’t seek re-election as the state Republican Party’s chairman in June. Hayes said complications from recent hip surgery led him to change his mind.
Lindberg — largely unknown in political circles until his contributions started flowing heavily in 2017 — has given more than $5 million to North Carolina candidates, party committees and independent expenditure groups.
Federal prosecutors alleged that between April 2017 and last August, Lindberg sought to shower Republican state Insurance Commissioner Mike Causey with contributions through the state GOP and an independent committee he constructed “in exchange for specific official action favorable to” Lindberg’s business.
Among the things Lindberg wanted were the removal of a deputy insurance commissioner responsible for examining one of Lindberg’s Durham-based businesses, Global Bankers Insurance Group.
That deputy commissioner — not named in the indictment — was “deliberately and intentionally and maliciously hurting my reputation with other regulators,” Lindberg was quoted in the indictment as complaining to Causey.
Lindberg, political consultant John Gray, and John Palermo — an executive for another Lindberg company, Eli Global LLC, and a former Chatham County Republican Party chairman — met with Causey at least five times in the winter and spring of 2018 to discuss favors and money, prosecutors said.
Lindberg’s team urged Causey to hire Palermo to replace the investigating deputy commissioner or become her boss, prosecutors said. Causey eventually refused, fearing Palermo’s ties to Lindberg’s company would be discovered by journalists, the indictment said. Lindberg then proposed “we recruit someone brand new to the Department with the same skill set,” the indictment said.
Palermo then created an independent expenditure committee able to spend unlimited amounts on political campaign with limited public disclosure that was funded with $1.5 million of Lindberg’s money, prosecutors said. In all, Lindberg and his associates promised Causey $2 million in donations.
Hayes, prosecutors said, directed that $250,000 previously contributed to the state GOP by Lindberg be transferred to Causey’s re-election campaign. In October, as the federal investigation was building steam, Causey turned over $250,000 in campaign donations from the state GOP to U.S. Marshals.
Lindberg also had donated $5,000 directly to Causey’s campaign, but the commissioner returned the money.
Causey — who was first elected to a four-year term in 2016 — was not charged in the indictment. Prosecutors said in a news release that he voluntarily reported the scheme.
“Everything I did was in cooperation and with direction of the federal investigators,” Causey told The Associated Press in a phone interview Tuesday.
Causey said he was sorry to hear about the indictments, “but everybody makes their own decisions.”
Hayes and Palermo, 63, of Pittsboro, did not return calls inviting comment. A published number for Gray, 68, of Chapel Hill, was disconnected.
Spokesmen representing Lindberg did not provide comments. A spokesman for Global Bankers and Eli Global noted the companies were not charged. Global Bankers has cooperated with federal prosecutors and will continue doing so, spokesman Steven Goldberg said.
Also, Eli Global has “always worked to operate with integrity and honesty in all aspects of our business and will continue to do so,” Goldberg wrote in an email.
Lindberg’s contributions included at least $250,000 to the state Democratic Party. He’s also given in the past to outside groups that have supported then-Insurance Commissioner Wayne Goodwin, a Democrat who is now chairman of the state party, and to the N.C. Republican Council of State Committee, which is chaired by Republican Lt. Gov. Dan Forest, who is running for governor in 2020.
Forest’s Exploratory Committee for Governor released a statement Tuesday afternoon that Lindberg had not made donations directly to Forest’s campaign committee and that Forest was never interviewed or questioned by the FBI or any other investigators. “I know these men and consider most of them friends. I have read the indictments and they are very troubling,” said Forest in the statement. “I believe in the presumption of innocence and thus will withhold judgement. But I agree with the rule of law and if laws were broken, then justice should be served. They are facing serious charges.”
The North Carolina Republican Party released a statement later on April 2 from party counsel Josh Howard, in response to the developments.
“Early this morning, the North Carolina Republican Party was made aware of several indictments surrounding the conduct of a major donor to both major political parties and two of his associates. The Party has been cooperating with the investigation for several months, including staff members providing statements and responding to various document requests. The Party, which has its day to day operations managed by professional staff under the direction of the NCGOP Central Committee, remains fully operational and focused on its mission at hand.”
North State Journal staff contributed to this report.