Conflict-of-interest charges fly in North Carolina Senate contest

Sen. Kay Hagan (D-N.C.) poses for a portrait at the U.S. Capitol in Washington, D.C., on Wednesday, Jan. 14, 2014.
Sen. Kay Hagan (D-N.C.) poses for a portrait at the U.S. Capitol in Washington, D.C., on Wednesday, Jan. 14, 2014. MCT

With a month to go in the hotly contested North Carolina Senate race, the candidates traded dueling allegations Monday over supposed conflicts of interest and who benefited from a federal economic program.

North Carolina Republicans filed a request with the U.S. Senate for an ethics investigation over a company co-owned by the husband of U.S. Sen. Kay Hagan, D-N.C., that received a grant and tax benefits under the 2009 federal economic stimulus program.

On the same day, the state Democratic group, Forward North Carolina, said it planned to file a complaint with the State Ethics Commission against Hagan’s Republican opponent, state House Speaker Thom Tillis, over his vote in 2010 to allow the state to participate in a federal renewable energy tax credit program that benefited Aquesta Bank, where he owns stock.

Tillis and Hagan, who is seeing a second term, both denied wrongdoing.

“It’s disappointing to see Sen. Hagan’s campaign and her Democratic allies are resorting to such desperate and baseless attacks,” Tillis said in an e-mail on Monday. “I own a small amount of shares in Aquesta Bank and I have absolutely no control over their day-to-day operations, including which companies they lend to. Sen. Hagan voted for the stimulus, which was a waste of taxpayer dollars, and now it appears that she directly benefited from federal stimulus dollars.”

Hagan said in an interview last week that she was not involved in her husband’s business, and added: “I had absolutely no part, my office had absolutely no part, on the grant awarding process. This is a last ditch effort for Speaker Tillis to distract from his disastrous record.”

The North Carolina race is one of several Senate contests viewed as toss-ups that will likely determine which party controls the chamber in January. Hagan has held a consistent, if narrow, lead in recent polling, according to the Real Clear Politics website

Politico, a Washington-based political news website, reported on Sept. 25 that JDC Manufacturing, co-owned by Chip Hagan, received $390,000 in government grants and tax credits under the stimulus. The report said Hagan’s firm added solar panels and made other improvements to a building it owns in Reidsville, N.C.

In the same story, the publication reported that the stimulus also benefited Aquesta Bank in Cornelius, where Tillis owns $50,000 to $100,000 in stock, according to the range reported in his financial disclosure form. The report said that Aquesta specializes in projects that receive government tax credits, including some credits created by the stimulus.

The North Carolina Republican Party sent a letter Monday to the U.S. Senate Select Committee on Ethics asking for an investigation of the award of stimulus funds to Hagan’s husband’s company and whether she used her office or insider information to help him.

Hagan voted for President Barack Obama’s plan to stimulate the economy during the recession. The American Recovery and Reinvestment Act provided $763 billion in tax cuts, spending on mandatory programs such as Medicaid and investments in infrastructure, energy efficiency and other areas.

The Senate Ethics Committee doesn’t comment about complaints it receives.

Melanie Sloan, an expert on congressional ethics and the executive director of the Citizens for Responsibility and Ethics in Washington, a nonpartisan government watchdog group, called it “a stupid complaint” and predicted the committee would dismiss it.

The Senate ethics rules only would involve a senator’s vote if the vote only affected that senator and his or her family. The huge stimulus bill directed money to large numbers of people nationwide, she said.

The conservative Daily Caller recently published an article about Hagan’s son, Tilden. His solar company, Green State Power, put the solar panels on JDC Manufacturing’s roof. It also did installations for two other North Carolina projects that together got $521,000 in stimulus grants. The projects are all on Green State’s website.

On Monday, the Huffington Post carried a story about a Huntersville trailer park once owned by Tillis’ company, TRT Holdings. The article says in 2007, Tillis’ first term in the House, he pushed an annexation bill that could have increased the value of the three-acre property.

Jim Morrill of The Charlotte Observer contributed to this article from Charlotte, N.C.

CORRECTION: In an earlier version, Citizens for Responsibility and Ethics in Washington was Center for Responsibility and Ethics in Washington.