SPECIAL REPORT, PART II: Are Solar Lobbyists Trying to Hide Their Money Trail?

By Francis De Luca and Susan Myrick

In part one of this series we reported on right-of-center political consultants who have created an innovative business model advising a growing number of Republican legislators to turn their backs on conservative, free-market principles to take up the cause of more government mandates, political favoritism and higher electric bills. This year, they have organized opposition to a bill that would freeze the Renewable Energy Portfolio Standard (REPS) mandates at current levels, supported extending targeted tax credits for solar, and advocated for bills creating new solar carve outs.In part two we look at how the organizations pushing this particular agenda in North Carolina, namely “Big Solar”, are using a Political Action Committee (PAC) to further its agenda. The three key organizations are: North Carolina Clean Energy Business Alliance (NCCEBA) and its Political Action Committee, (NCCEBA PAC), and the North Carolina Sustainable Energy Association (NCSEA). Shared personnel and funders link all three together.Betsy McCorkle is political consultant to NCCEBA and is the Director of Government Affairs for the NCSEA. The Executive Director of NCSEA is on the board of NCCEBA. NCCEBA is the parent organization and supports the NCCEBA PAC. Conservatives for Clean Energy, associated with Republican political consultants Paul Shumaker and Dee Stewart, shares an address with an LLC filed by Scott Laster. Further connections between these four entities and the consultants/lobbyist were described in Part 1.Scott Laster and his wife Kristen are both partners with the Southern Strategy Group and both are lobbyists with NCSEA. Kristen Laster is the treasurer for the NCCEBA PAC. Scott Laster works with the PAC and has corresponded with the State Board of Elections on numerous occasions over the PAC’s persistent problems of filing their finance reports late. Scott Laster also worked as the House Campaign Director for the North Carolina Republican Party in 2010 and as Executive Director for the NCGOP in 2012.His last role as Executive Director of the NCGOP is particularly ironic as the current NCGOP platform calls for an end to the REPS to save consumers money. The Lasters’ advocacy has been in opposition to the party platform. The five Republican legislators who voted against HB 681, the NC Energy Ratepayers Protection Act also voted in opposition to the NCGOP platform.In researching Part 1 of the “Big Solar” article, we reviewed financial reports to find out more about the organizations involved in promoting solar. Reporting requirements for non-profits, such as NCCEBA and NCSEA are different than those for political campaigns and PACs, such as the NCCEBA PAC which are governed by state law and reporting requirements.While investigating we discovered the 2014 grants made to Conservatives for Clean Energy and NCSEA by the liberal Energy Foundation even though most 2014 IRS reports for non-profits are not yet public. Moreover, it was while examining NCCEBA that we first noticed its associated PAC, the NCCEBA PAC.Solar PAC – incompetence or trying to conceal activities?Since political committees in North Carolina are required to report at regular intervals each year, we went directly to the NCCEBA PAC’s financial reports on the State Board of Elections website.What we found was disturbing.The first red flag was that, without evidence or prompting, on April 2, 2015, NCCEBA PAC amended all but their first finance disclosure reports from the last 2 years – that first report appeared to be amended in August 2013.Below is a summary of the findings comparing the PAC’s original reports with the reports amended on April 2, 2015.2013 Mid-year semi-annual covering January 1, 2013 – June 30, 2013The amended report showed cash on hand at the end of the mid-year 2013 reporting period (June 30) was $300; at the beginning of the next period (July 1) they reported $2,400 cash on hand. There was no entry to explain the $2,100 discrepancy.2013 Year End Semi-Annual covering July 1, 2013 – December 31, 2013The original report for this reporting period showed $7,542.77 in in-kind contributions/expenditures (campaign finance rules require an inkind contribution to be simultaneously reported as a receipt and an expenditure). All six entries in this category listed the contributor as “North Carolina Clean Energy Business Alliance.” The contributions/expenditures appear to be administrative costs including PAC management fees, totaling $1,500, and $5,471.12 for room rental.None of these contributions are included in the amended report, however. There is an in-kind contribution/expenditure that does show up in the amended report. This was $2,277.58 for a fundraising event for the Ruth Samuelson campaign committee. We were unable to find a corresponding entry in the Samuelson campaign report. Samuelson has been a long-time supporter of environmental causes and legislation and was one of the GOP House leaders who voted against the 2013 REPS reform bill.Administrative expenditures made on behalf of a PAC by a parent organization are supposed to be reported on a separate form. In the case of NCCEBA PAC it was incorrectly reported and the required form never was used. In later amendments the transactions by the non-profit NCCEBA were omitted altogether. Somehow the management fees, which would have been paid to the Laster’s company and were initially reported as payments to the NCCEBA disappeared but the work of the PAC continued with no disclosure. Also in the initial reports and in later reports numerous contributions were reported on the date of the original fundraising event. So while the contributions remained the event expenditure by the non-profit disappeared from the record. It is of course still available on the originally filed report.First Quarter 2014 covering January 1, 2014 – April 19, 2014The amended report covering the first quarter of 2014 was different from the original report in the following ways:The amended report did not include a $1,916.61 in-kind contribution and disbursement that the original report included. In the original report the $1,916.61 contribution/disbursement was attributed to the North Carolina Clean Energy Business Alliance. The description read “Covered Cost of NCCEBA Fundraising Event”. Interesting to note, in the original report the $1,916.61 disbursement was listed twice. While this item disappeared in amended reports, it is clear from the record of contributions that there was a fundraising event on or about the date of the original reported expenditure. Again it appears that an attempt to conceal the amount of money being spent on this effort.A more troubling matter is a disbursement in the amount of $1,000, reported as an operating expense to the Jason Saine Committee in the original report, was not included in the amended report. The original report listed the $1,000 expense as an operating expenditure not a “contribution to candidate or other committee,” indicating that this amount was used to pay for services rendered, in other words something Rep. Saine did for the PAC. While this expenditure to Rep. Saine disappeared in a later amended report, it is clear from the other omissions that some of the expenditures actually occurred but a decision was made to not report them.  Rep. Saine reported this payment as a contribution on his disclosure reports but the PAC decided to omit this transaction completely.Was this another example of not wanting to disclose, or is it simply incompetence?Second Quarter 2014 covering April 20, 2014 – June 30, 2014The amended report for this period showed cash on hand at beginning of the period as $19,034.84, whereas the original report showed the sum to be $22,603.30. Other changes in this report included:An entry of $4,518.50, in the original report, was characterized as “Outside Source of Income” in the summary page of the report and was attributed to the NCCEBA for “Covered cost of NCCEBA PAC fund raising event – The Pit Restaurant, Raleigh NC” which was not included in the amended report. Because the $4,518.50 was considered an in-kind contribution, it was found in both the Receipts and Expenditures sections of the original campaign finance disclosure report but was left out entirely of the amended report.The total amount contributed to candidates changed from $16,000 in the original report to $19,000 in the amended report. The amendment included three contributions made to party and candidate committees that were omitted from the report filed a year earlier. Those contributions in the amount of $1,000 each were made to House Dem, NC Jimmy Dixon NC and Senate Dems, NC (the two Dem notations are the House & Senate Democratic legislative Campaign committees).  These three contributions equaled the $3,000 that did not appear in the original report.The amended report was filed April 2, 2015, long after the contributions were made and the elections were over. Did the PAC leaders not want Republicans to know how much they were contributing to the democratic legislative committees until after the election?The original report for this period also included a $32.03 electronic funds transfer operating expense which disappeared in the amended report.Third Quarter 2014 covering July 1, 2014 – October 18, 2014For this quarterly report, the obligatory amendment filed in April 2015 showed promise, in that on the summary page it looked like there was just one small change. On the original report the amount reported under Contributions to Candidates/Political Committees was $19,000 and on the amended report the amount was $19,500. While promising, the small evenly rounded difference belied the changes made in the amended report.The original report showed a $1,500 contribution to Brent Jackson for NC Senate, the amended report showed that contribution and another $1,000 contribution to the Jackson for NC Senate campaign. Sen. Jackson’s report had it correct for the fourth quarter without an amended report. The original report showed a $1,000 contribution to John Szoka for NC House, the amended report showed that contribution was actually $500.ConclusionBy no means are these all the problems in the NCCEBA PAC reports and this article is not meant to be an exhaustive analysis of the PAC. It started out as an attempt to determine the amount, sources and flow of PAC money from “Big Solar” into legislative campaigns.It is feasible that no one will ever know exactly what the PAC did with all of its money or exactly how much money actually flowed through the PAC and was contributed to campaign committees.  However, one conclusion can be drawn. It is impossible to believe that professional consultants and lobbyists don’t have the capacity to keep an accurate account of checks in and out or that they are incapable of adding and subtracting.If incompetence is ruled out, it leaves only one explanation: The reports and amendments are meant to conceal what was going on.2013 Mid Year Semi-AnnualYear End 2013 originalYear End 2013 AmendedFirst Quarter 2014 originalFirst Quarter 2014 AmendedSecond Quarter 2014 OriginalSecond Quarter 2014 AmendedThird Quarter 2014 OriginalThird Quarter 2014 AmendedFourth Quarter 2014 originalFourth Quarter 2014 AmendedThis article first appeared the Civitas Institute’s website on April 24, 2015.