Wednesday, June 27, 2007

Excerpts From Mike Nifong's State Bar Deposition, Part 5: What Do Campaign Finance Laws and The Revised Rules of Professional Conduct Have in Common?

Please Note: Deposition Excerpts Parts 1 - 5 Are Not Presented In Sequential Order.


Doug Brocker: You made a couple of personal loans to your campaign during the primary; is that correct?

Mike Nifong: I made a personal loan in the amount of $5,000 to my campaign. I understand that my wife may have also made a loan to my campaign, but I don't know the specifics of that.

Brocker: Okay. Can you look at Exhibit 18 for me and see if you recognize that as a disclosure report filed--is Mr.--is it Palombo?

Nifong: Ed Palombo, yes, sir. He was the--

Brocker: (interposing) Was he your treasurer for your primary campaign?

Nifong: Yes, sir.

Brocker: Have you seen this document before?

Nifong: I can't specifically say. I may have.

Brocker: All right. And if you look on the second page of that, do you see that it reflects that there was a loan from you by check in the amount of $6,601.32?

Nifong: Yes, sir.

Brocker: Do you recall whether you made a loan?

Nifong: My recollection is that I made a loan in the amount of $5,000.

Brocker: Do you know when you would have made that loan of $5,000?

Nifong: No, but it would be certainly possible to find out through my bank.

Brocker: Okay.

Nifong: I would have borrowed the money against my personal line of credit there, and so I mean it would be--it would certainly be easy to determine.

Brocker: Okay. Let me ask you--and we'll follow up on that, but let me ask you to look at Exhibit 19. Do you see that disclosure report dated--received by the Board of Elections on July 12, 2006?

Nifong: Yes, sir.

Brocker: And it's for the period from April 1st through June 30th, 2006. You'll see it if you go about a third of the way down on the page.

Nifong: Yes, sir.

Brocker: Okay. And if you'll look on the second page of that exhibit it has loan proceeds. The lender is Mike Nifong in the amount of $22,388.88?

Nifong: Yes, sir, I see that it says that.

Brocker: Okay. Were you aware of that loan made to your campaign?

Nifong: Not like this; I mean I was aware that my wife had loaned some money to the campaign, but I was not sure--I mean I don't know why it's in my name, and I did not know the amount. And I don't recall ever seeing this report before.

Brocker: If you will look at the third page of that report?

Nifong: I'm looking at it.

Brocker: Do you see there that this is a repayment, which appears to be dated 6/30/06? And the repayment amount there is $20,357.03?

Nifong: Yes, sir, I see that.

Brocker: Were you aware of that?

Nifong: No, sir, I was not.

Brocker: Okay. Would it be possible for you to go back and determine and provide documentation of the information--I mean presumably these reports are filed with the Board of Elections and are supposed to be true and accurate--

Nifong: (interposing) Yes, sir.

Brocker: ---representations of what happened in the campaign?

Nifong: They are.

Brocker: Okay. I would ask you whether you would be willing to--I didn't ask for it in discovery because obviously I wasn't aware of it at that point, but I would ask you if you'd be willing to go back and see if you can provide documentation about the two loans and the repayment of those loans from the campaign. Do you think you will be able to do that?

Nifong: I don't even know what to say. I mean certainly with respect to the $5,000 that I loaned to the campaign, yes, sir, I can do that. With respect to the other, I'm going to have to talk to my wife and, you know, find out from her. I mean I can certainly tell her the question was raised. And I can't--

Dudley Witt: (interposing) We'll see what we can do about it.

Nifong: I mean this is all news to me.

(a) No individual, political committee, or other entity shall make any contribution ... in the name of another. No candidate, political committee, referendum committee, political party, or treasurer shall knowingly accept any contribution made by any individual or person in the name of another individual or person ... If a candidate, political committee, referendum committee, political party, or treasurer receives anonymous contributions or contributions determined to have been made in the name of another, he shall pay the money over to the Board, by check, and all such moneys received by the Board shall be deposited in the Civil Penalty and Forfeiture Fund of the State of North Carolina.

§ 163-278.11. Contents of treasurer's statement of receipts and expenditures.

(a) Statements filed pursuant to provisions of this Article shall set forth the following:

(3) Loans. – Every candidate and treasurer shall attach to the campaign transmittal submitted with each report an addendum listing all proceeds derived from loans for funds used or to be used in this campaign. The addendum shall be in the form as prescribed by the State Board of Elections and shall list the amount of the loan, the source, the period, the rate of interest, and the security pledged, if any, and all makers and endorsers.

§ 163-278.8. Detailed accounts to be kept by political treasurers.

(g) All proceeds from loans shall be recorded separately with a detailed analysis reflecting the amount of the loan, the source, the period, the rate of interest, and the security pledged, if any, and all makers and endorsers.

§ 163‑275. Certain acts declared felonies.

(4) For any person knowingly to swear falsely with respect to any matter pertaining to any primary or election;

CITIZENS FOR DISTRICT ATTORNEY MIKE NIFONG - Loan Transactions (Will Include Repayments and Expenditures of Loan Proceeds)*

Transaction Type
Report Name
2006 First Quarter Plus 03/17/2006
Left Blank
CY GURNEY Loan Repayment 2006 First Quarter Plus 04/09/2006 $1,601.32 Check Left Blank
Loan Repayment
2006 Second Quarter
06/16/2006 $20,408.93 Check
Left Blank
CY GURNEY Loan 2006 First Quarter Plus 03/31/2006 $1,601.32 Credit Card Left Blank
CY GURNEY Loan 2006 First Quarter Plus 04/01/2006 $5,436.11 Credit Card Left Blank
CY GURNEY Loan 2006 First Quarter Plus 04/09/2006 $9,235.95 Credit Card Left Blank
CY GURNEY Loan 2006 Second Quarter 04/18/2006 $4,677.66 Credit Card Left Blank
CY GURNEY Loan 2006 Second Quarter 05/24/2006 $4,692.38 Credit Card Left Blank
CY GURNEY Operating Exp 2006 First Quarter Plus 02/07/2006 $275.81 Check REIMB FOR CAMPAIGN SUPPLIES
CY GURNEY Operating Exp 2006 First Quarter Plus 02/15/2006 $1,347.18 Check SIGNS
Cont to Other Comm 2006 Third Quarter Plus 07/31/2006 $600.00 Check AD TABLE
PEOPLES ALLIANCE PAC Cont to Other Comm 2006 Second Quarter 04/26/2006 $500.00 Check CAMPAIGN SUPPORT

*Reports appear to be amended. Additional information will be presented as it becomes available.

Latest Updates:

KC Johnson's description of Nifong's Second Quarter report as it was originally filed:

The recently filed campaign finance report for the period ending June 30 provides some tantalizing clues about the relationship between the district attorney’s political needs and how he handled the lacrosse case. The most important finding: as of late February, donations to the Nifong campaign had all but dried up. His donors, it seemed, had concluded he couldn’t win. Nifong’s bid for a full term was kept alive only by nearly $30,000 in loans from the candidate himself.

It is hardly unusual in politics, of course, for candidates to loan personal funds to their campaigns—often (as in races for the U.S. Senate) in sums far greater than occurred in Durham last spring. But Nifong’s behavior departed from the political norm in three critical respects:

  • First, the personal loans coincided with his hitting a brick wall in fundraising. The loans thus identified a point when Nifong’s campaign, apparently having been written off by the city’s legal elite, hit the panic button.
  • Second, Nifong had no chance of recouping his money if he lost the primary. In sharp contrast to the fundraising tactics of most of his fellow district attorneys, Nifong’s donors were almost exclusively local lawyers, whose professional responsibilities required maintaining good relations with the D.A.’s office. These figures could hardly give money to a vanquished Nifong knowing that Freda Black was awaiting installation as Durham County’s next district attorney.
  • Third, from all accounts, Nifong is not peronally wealthy. He therefore could ill afford to lose the nearly $30,000 he loaned his campaign.

Click to View: State Board of Elections letter to Ed Palombo notifying Nifong's PAC of State audit and requesting information on the $6,601.32 loan noted by Brocker that no longer appears on Nifong's amended finance reports, additional required information on other loans, and details on other questionable campaign transactions.

Click to View: State Board of Elections letter to Ed Palombo notifying Nifong's PAC of its failure to comply with the State's audit and request for information. Letter also notes that continued failure to comply will result in enforcement action.

1 comment:

Eric said...

Wow -- this looks interesting. I'd gathered that Nifong's wife paid for some expenses and was reimbursed -- but the amounts are much higher than I would have assumed, and do not appear to have been fully repaid. Worse, the loan for $6601.32 *WAS NOT ON THEIR LAST DISCLOSURE*. Their books have not, at least as of April 26, passed an audit. And since the $6601.32 loan is *still* not listed on the campaign finance site, it apparently has still not been reported. Apparently they know about that one because it *was* included (accidentally?) on an earlier iteration of their report. If they left it off the amended report, and have apparently not yet dealt with the issue even in the face of enforcement threats, I can only comment that there could just as easily be other loans which they did not include on any of their reports.

Despite the campaign finance laws, we still don't really know how far in the hole his personal finances may have been to prop up the election -- thus, we don't know the extent of his financial motive to guarantee an election.