Questions raised over fundraiser for new insurance commissioner

Published: Dec. 2, 2016 at 9:07 PM EST|Updated: Dec. 2, 2016 at 10:37 PM EST
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RALEIGH, NC (WBTV) - A fundraising event planned for Tuesday, December 6, 2016 in honor of newly-elected Insurance Commissioner Mike Causey is raising questions among lobbyists and industry professionals.

Causey, a Republican, is set to take office as the new Insurance Commissioner in January after defeating incumbent Wayne Goodwin, a Democrat.

Tuesday's fundraising reception is being hosted by Cannon Surety, an insurance company that underwrites bail bonds.

Cannon sent an email to an undisclosed list of lobbyists on Thursday inviting them to the event and enclosing an invitation for the reception.

The invitation lists a ticket to the event—billed as a reception honoring Causey—as $100 with additional sponsorship levels at $1,000, $2,500 and $5,100.

See for yourself: Click here to see the fundraiser invitation

Those who are unable to attend but wish to contribute are asked to do so on Causey's website.

The invitation lists North Carolina House Speaker Tim Moore as a special guest at the event. But, in an email Friday afternoon, a spokeswoman for Moore said the Speaker does not plan to attend.

"The Friends of Tim Moore campaign committee, nor Speaker Moore personally, approved this invitation. Use of his name was not authorized. Speaker Moore will not be attending this event," the spokeswoman said.

Law prohibits corporate contributions

North Carolina law governing political contributions prohibits corporations from contributing to or even supporting a political candidate's campaign.

Specifically, G.S. 163-278.15(a) says the following:

"No candidate, political committee, political party, affiliated party committee, or treasurer shall accept any contribution made by any corporation, foreign or domestic, regardless of whether such corporation does business in the State of North Carolina, or made by any business entity, labor union, professional association, or insurance company."

The law defines a contribution as "anything of value whatsoever" and includes in-kind contributions made when a person or group covers the expenses for an event to benefit a campaign.

A different section of the same law spells out the consequences for businesses and political candidates who make and accept corporation contributions.

Specifically, G.S. 163-278.19 says the following:

"It shall be unlawful for any corporation, business entity, labor union, professional association or insurance company directly or indirectly do any of the following: (1) To make any contribution to a candidate or political committee. (2) To pay or use or offer, consent or agree to pay or use any of its money or property for any contribution to a candidate or political committee. (3) To compensate, reimburse, or indemnify any person or individual for money or property so used or for any contribution or expenditure so made."

A violation of the law—both offering and accepting a corporate contribution—is a Class 2 misdemeanor.

Company, manager under scrutiny from Department of Insurance

Cannon Surety's fundraiser invitation comes months after an On Your Side investigation first raised questions about the scrutiny—or lack thereof—that the company had received from the Department of Insurance.

Former State Representative Robert Brawley filed a complaint against the company in July claiming he was duped into investing $850,000 into the company.

Brawley said he invested the money in 2014. At the time, Brawley said, he was not aware that one of the business' leaders was banned from being in the bail business; a ban that would preclude him from being involved in Cannon Surety.

Carl Valentine is listed in Cannon Surety's business plan as being one of five people who would manage the company.

Valentine surrendered his bail bond producer license in 2012 and was denied other bail bond-related licenses two other times, the DOI's licensure database shows, including most recently in June 2016.

Despite the disqualification, Cannon Surety received a license to operate from DOI with Valentine having been listed as a manager in the company's business plan.

Previous Story: Former lawmaker: NC Ins. Commissioner failed to act on disqualified bail agent

Brawley, who is a partner in the business, said Valentine ultimately sold his ownership stake in the company but continues to play a role in running the company.

It is not clear what, if anything, Insurance Commissioner Goodwin did in response to Brawley's complaint filed in July.

Goodwin refused multiple interview requests from On Your Side Investigates to discuss Brawley's claims.

In the time since our first story was published in August, On Your Side Investigates has learned the Department of Insurance is investigating bail agents with ties to Valentine.

It is illegal for anyone in the bail industry to be in business with someone who is disqualified from the business under North Carolina law.

Emails obtained by On Your Side Investigates show DOI staff actively questioning individuals believed to be in business with Valentine.

Causey claims no involvement

In a phone call Friday afternoon, Causey claimed to have been completely unaware of the planned fundraiser until he saw the invitation online this week.

"I had no knowledge of this invitation until I saw it yesterday or the day before. I was not consulted in any way about the invitation," Causey said.

"I had talked to some bail bondsmen who had asked if I would do a meet and greet fundraiser on my behalf and I had agreed to stop by a meet and greet fundraiser. However, at the time I said that, I didn't realize I had another event already that evening. I was unaware of anything that was on the invitation, so that's all I can tell you."

The incoming Insurance Commissioner acknowledged having conversations with bail agents, including many who sit on the board of the North Carolina Bail Agents Association but denied having ever met Carl Valentine.

Causey also said he was unaware of the outstanding complaint against Cannon and ongoing investigation into Valentine's associates.

"I'm not familiar with that situation and I certainly don't want to be involved in anything controversial whatsoever," he said. "My only interest is in fair and even-handed enforcement of the regulations."

But Causey demurred when asked if he would return any contribution made to his campaign as a result of the invitation from Cannon Surety, saying his campaign treasurer would have to answer any questions about campaign contributions.

Cannon Surety manager offers conflicting story

A manager at Cannon Surety offered a story on Friday afternoon that differed from Causey's explanation.

Dallas McClain, who is a part owner and operator of the company, told On Your Side Investigates that the event's date and time had been planned in consultation with Causey.

"We've spoken about it and, you know, the plans are underway," McClain said.

But McClain said Moore's attendance at the event was not definite.

"There was some indication that he might make it (to the event) but he never approved or saw it," McClain said of the invitation.

McClain also said there was a misprint on the invitation for the event that failed to identify the host of the event as the Cannon Surety PAC.

A search of the North Carolina State Board of Elections database shows no such political action committee registered in the state, a requirement for PACs to be able to contribute to candidates in North Carolina.

When a reporter pointed out the lack of a registration for the Cannon Surety PAC, McClain offered no explanation.

"Then you need to look harder," McClain said in response. "Just do you work."

When asked why an email promoting the event was sent from an email address tied directly to Cannon Surety and not it's PAC, McClain further refused to provide any explanation.

McClain ended the conversation by hanging up on the reporter with whom he was speaking.

"I don't want an opportunity to respond," McClain said before hanging up.

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