Guilford GOP wants to know: Where’s the money?

by Jordan Green

The former executive director of the Guilford County Republican Party is under investigation by the party organization to determine how funds raised for a dinner to honor Congressman Howard Coble were spent.

Information about the investigation was provided to Triad City Beat by two sources who spoke on condition of anonymity.

The tribute dinner, held at the High Point Country Club on Feb. 8, was billed by then-High Point Republican Party Chairman Paul Norcross as “the biggest party High Point has seen this century!” The dinner attracted high-ranking Republican officials such as state House Speaker Thom Tillis and state Senate President Pro Tem Phil Berger, along with several candidates running to fill the 6^th Congressional District seat that Coble is vacating, including Zack Matheny, Bruce VonCannon, Jeff Phillips, Mike Causey and Dan Collison.

The elected officials, candidates and other GOP activists who paid upwards of $100 to attend the dinner were told that proceeds from the dinner would be split between the High Point and Guilford County party organizations, according to the Mark Walker congressional campaign and other party members who spoke on condition of anonymity.

At some point early in 2014, discussions within the party leadership began to take place about merging the High Point Republican Party with the Guilford County Republican Party, so party members believed the funds would ultimately go to the same recipient.

Members of the Guilford County Republican Party were surprised and dismayed to learn that the event did not turn a profit, and became suspicious when they learned that funds had been spent by the High Point Republican Party to rent and refurbish a campaign office in Jamestown that was leased to the Phil Berger Jr. campaign for Congress. Berger, the son of the state Senate Republican leader who attended the event, was one of several candidates seeking to replace Coble at the time of the tribute dinner. He placed first in the May 6 primary, but received less than 40 percent of the vote. Berger now finds himself in a bitter run-off with Mark Walker.

Phil R. Graham, a private donor, contributed $1,000 to purchase a table at the dinner on behalf of the Walker campaign. The Walker campaign said in a formal statement to Triad City Beat that the table was secured with the understanding that the proceeds would be split between the High Point Republican Party and Guilford County Republican Party.

“We were asked to give more, but we declined the invitation,” the campaign said. “We were sad to hear that neither organization benefited from the event.”

Ed McDonald, Coble’s chief of staff and press secretary, said the congressman had no involvement in planning for the event other than getting Coble to the dinner. McDonald said he asked Norcross that evening if he anticipated making any money and Norcross replied that “they would be lucky if they broke even.”

As talk of a merger between the county and High Point party organizations unfolded, Guilford County Republican Party Chairman Michael Picarelli appointed Norcross executive director of the county party, filling a vacancy left by Justin Conrad, who resigned to run for county commission. In March, Norcross resigned from his positions as executive director of the Guilford County GOP and chairman of the High Point Republican Party to officially join the Berger campaign. An announcement published in the High Point Enterprise named Norcross as “chief political advisor” to the Berger campaign.

When the High Point Republican Party’s first-quarter report to the state Board of Elections was filed on April 25, county party leaders learned more about how the funds were spent and began seeking additional answers from Norcross.

The High Point Republican Party appears to have grossed $21,320 from the Coble dinner, based on a tally by Triad City Beat of contributions between Nov. 16, 2013, the day before Norcross announced the event on Facebook, and Feb. 10, 2014, just two days after the dinner.

The tally does not include $300 in refunded contributions. The first check received, for $1,000, came from the campaign account of state Senate President Pro Tem Phil Berger Sr. Other elected officials who made contributions include state Reps. John Faircloth and Roger Younts, Guilford County Commissioner Alan Branson, Jamestown Mayor Keith Volz, Summerfield Mayor Pro Tem Dena Barnes and Oak Ridge Town Councilman George McClellan.

Tallying $9,903 paid to the High Point Country Club for event facilities, food and beverages; $6,077 paid to Charlotte-area political consulting firm the Red Dome Group for event management, direct-mail and design services; $1,100 paid to the Southern Express Bluegrass Band and Keith Byrd Entertainment; and $236 to Action Engravers for printing, the event appears to have cost $17,316 to produce.

Norcross declined an offer to review Triad City Beat’s analysis of receipts and expenditures.

“If you saw what was on my plate you attest to the fact that when I turned that page I didn’t have time to look back,” he said in a Facebook exchange. “A contracted third party was responsible for the details, so I really don’t have anything to add.”

The expenditure of $6,077 to the Red Dome Group, including $5,000 earmarked for “event management,” has raised eyebrows among county party leaders.

The Red Dome Group was founded by Andy Yates and Todd Poole, who have each worked in various capacities for US Rep. Virginia Foxx. Poole recently took a temporary leave from the consulting firm to serve as executive director of the North Carolina Republican Party.

Yates could not be reached for comment for this story.

Had the tribute dinner been produced without the $5,000 payment to Red Dome Group, a comparison of receipts and expenditures suggests the event would have netted $9,004 — a healthy return for an annual fundraiser held by one of the two major political parties in Guilford County.

Asked whether the functions performed by the Red Dome Group could have been handled by party volunteers, Norcross responded, “My question would be, have you ever held a tribute for 300 people with all of the senior executives and high-ranking officials in 60 days? [I] believe the question answers itself.”

Considering the payments to Red Dome Group, the fundraiser should have netted $4,004.

Asked about the tribute dinner’s lack of profitability, Norcross said the High Point Republican Party “was responsible for $2,200 worth of donations to the Guilford County GOP.” A review of the High Point organization’s 2013 campaign-finance reports turned up a $1,000 contribution in August, before planning for the Coble tribute dinner began. Asked to account for the rest of the money, Norcross said $1,000 came from “VIP ticket sales” and $200 came from an individual named Jason Deans. Those transactions could not be confirmed through campaign-finance reports filed by either organization.

Even as Norcross was making preparations for the Coble dinner in December 2013, he also made arrangements to rent a campaign office in Jamestown. Norcross said the High Point Republican Party had been seeking space for eight months. The office wound up being rented by the Phil Berger Jr. campaign for the 6^th Congressional District.

The Berger Jr. campaign began using the Jamestown office space in December 2013, campaign spokesman Gillum Ferguson said. The High Point Republican Party reported a payment to Duke Energy with the comment “start service @ office” on Dec. 10.

The High Point Republican Party paid a Jamestown real-estate company owned by George and Jenny Ragsdale $2,400 for rent in $600 increments, and paid Duke Energy and Piedmont Natural Gas a total of $1,721 from Dec. 10, 2013 through March 20, while Norcross reimbursed himself for $298 for office cleaning and computer cords. The High Point Republican Party also paid the Wyatt Early Harris Wheeler law firm in High Point $791 for assistance to prepare the lease for the building, according to filings with the state Board of Elections. The total amount spent on rent, utilities, cleaning, supplies and legal fees came to $5,210.

Ferguson said the Berger Jr. campaign paid $600 per month to rent the office. Under an agreement with the High Point Republican Party, the campaign rented space through the May 6 primary. The most recent campaign-finance report filed by the High Point Republican Party reflects that the Berger Jr. campaign paid a total of $3,000 in rent, covering a five-month period between Dec. 10 and May 6.

The High Point Republican Party also received a total of $500 in January and March from the re-election campaign of state Sen. Trudy Wade for use of the office.

The difference between the total amount spent by the High Point Republican Party on rent, utilities, cleaning, supplies and legal fees — $5,210 — and the total amount of rent paid by the Berger Jr. and Wade campaigns indicates that the High Point Republican Party subsidized the campaigns’ use of the office to the tune of $1,710. When filing closed on Feb. 28, Wade had no opponent, so her need for the campaign office was negligible.

Political parties typically remain neutral in primaries, and the idea that proceeds from the Coble tribute dinner might have benefited one candidate, particularly in a contest as high profile as the 6^th Congressional District race has created discomfort among some Guilford GOP members. Coble himself remained officially neutral before the primary, but endorsed Berger Jr. after the race went into a runoff.

The $5,210 spent by the High Point Republican Party for rent, utilities, cleaning, supplies and legal fees does not include $4,696 paid by the High Point Republican Party to a company called Decorative Sales and Service on Jan. 25 for the stated purpose of “office repairs.” The company is owned by Coy Willard, who leases out showroom space for the biannual furniture market in downtown High Point. Willard said he believes the work his company performed for the organization consisted of painting the interior of the campaign office.

Ragsdale said as a general practice he does not discuss the terms of leases with any third party. Without specific reference to the arrangement with the High Point Republican Party, he said, “Each lease is different. Some tenants take the space as is. Some request improvements. If someone is leasing property of mine, they’re typically allowed to do what they want as long as the space is brought back to the original state when they vacate it.”

A placard for the Berger Jr. campaign recently remained affixed to the brick exterior of the now-vacated storefront in a strip mall anchored by Ace Hardware on West Main Street in Jamestown. The moderate-sized storefront had been stripped of furniture, with a pile of floor sweepings and a fresh coat of paint the being most visible signs of recent tenancy.

Norcross told Triad City Beat that he had intended that the office space be used for 12 months. Given that timeframe, the cost of painting would have amounted to $375 per month, he said. Added to rent, the monthly cost would be $975, which Norcross said was $225 below market value.

“One would think that is pretty fiscally responsible,” he said.

Norcross said that at the time the office was leased, the High Point Republican Party was not planning to merge with the Guilford County Republican Party, “so the fact that it was able to lease the space to both DA Berger and Senator Wade was actually a huge score to defer expenses that it would have had to fully absorb.”

The High Point Republican Party also spent $1,423 with 7 Degrees of Change, a nonprofit founded by Norcross for printed materials, photography, computer supplies and ink. Assuming Norcross reimbursed himself for legitimately incurred costs, it remains unclear who derived the benefit from the services.

Norcross noted in an interview with Triad City Beat that he resigned from all Republican Party positions, but did not deny that he served as chairman of the High Point Republican Party during the period when the funds were raised and spent. The two campaign finance reports from that period were filed by incoming treasurer Joseph Keith Miller.

The $4,004 that could have been netted from the Coble tribute dinner, even including the $5,000 payment to Red Dome Group for event planning, was spent in a variety of ways that could be considered questionable, along with reserves in the campaign account. Those expenditures included $4,696 paid to Willard’s company, $1,935 paid to the Rhino Times and $1,710 spent to subsidize the Berger Jr. campaign not counting the painting job.

Depending on whether the $5,000 payment to Red Dome Group is considered a legitimate expense for the Coble dinner or not, the Guilford County Republican Party should have raised $4,004 to $9,004 to support its candidates in this year’s general election.

Norcross and Berger Jr. share a common interest in charter schools. Norcross co-founded Phoenix Academy in High Point, according to the announcement published in the High Point Enterprise. Berger Jr. is listed as a member of the board of directors on the website of Providence Charter High School, which is expected to open in Rockingham County in August.

Norcross resigned as a regional chairman of the North Carolina Alliance for Public Charter Schools to join the Berger Jr. campaign. Berger is listed as a member of the organization’s board of directors. And Norcross is listed as a member of the North Carolina Public Charter School Advisory Council, which recommends policies for adoption by the state Board of Education. Norcross is one of three board members who was appointed by Senate President Pro Tem Phil Berger.

Norcross said he’s baffled about how anyone could draw a connection between the funds raised from the Coble tribute dinner and money spent to set up the campaign office used by the Berger Jr. campaign, considering that the campaign office was set up prior to the dinner.

“How does one logically make that connection?” he asked.

After the bills were paid, the High Point Republican Party reported $123 in cash on hand in its most recent campaign-finance report.

Norcross indicated he doesn’t see what the fuss is about.

“Other than the fact that it was the best dinner ever held in High Point with Congressman Coble being extremely grateful with all vendors paid, all funds accounted for and everyone having a great time,” he wrote, “Kinda confused about the point.”