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How Bunkey Won

A Chatham County group tapped into Triangle-wide developers' coalition

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A coalition of development interests from around the Triangle shepherded the campaign to unseat Chatham County Commissioner Gary Phillips, who led the board's slow-growth movement, The Independent has learned.

The Triangle Community Coalition, an umbrella group based in Raleigh that represents homebuilders, realty associations and chambers of commerce, among others, coached and supported a group of pro-growth Chatham residents who produced three stinging fliers sent out in the days just before the election. The fliers attacked Phillips, one accusing him of representing only "well-funded special interests."

The fliers were issued by a group calling itself Chatham County NOW, which formed in July saying it was seeking to expand "economic opportunities" for the Triangle's least-developed county. It targeted Phillips, and some of the language in the fliers was so inflammatory that one of the group's founders called Phillips to apologize.

A founder of the group declined to say whether it was responsible for a controversial, anti-Phillips "push poll" that was the first sign of big money in the campaign.

The fliers were apparently just this side of legal, thanks to the Triangle Community Coalition pointing Chatham County NOW toward a political consultant it does business with and an attorney with experience in a similar but unsuccessful attempt to defeat Cary slow-growth Mayor Glen Lang. Due to recent court rulings, organizations do not have to register as political action committees if they don't specifically urge voters to vote for or against a specific candidate. That means the groups aren't bound by the spending limits of PACs, and don't have to reveal their contributors.

"They learn how to walk that line without crossing over, and still get their message across," says Kim Westbrook, the State Board of Elections deputy director for campaign finance. Her office, with its one investigator, is researching the Chatham County NOW campaign, along with 40 other controversies that emerged across the state during last month's primary.

The story began when Chatham County NOW called Triangle Community Coalition president Chris Sinclair for help this summer. The Chatham folks considered joining the Wake-Durham-Orange coalition but decided to remain independent, says Sinclair, who is also the regional coalition's lobbyist. After that, Sinclair says, he continued helping the Chatham group and its leader, Mark McBee, on his own time.

"I have an expertise that I could help Mark with, and I was happy to do that," Sinclair says. "I've enjoyed my relationship with Mark, and with Chatham County NOW. They are concerned about making sure that everyone has good information and is well-represented."

With the Triangle Community Coalition's connections and experience at their disposal, and apparently plentiful funding, Chatham County NOW leaders launched a successful campaign that booted Phillips and put a pro-growth majority in charge of the Chatham Board of Commissioners. The change comes just as a citizens committee has begun drafting a land-use plan and developers from Raleigh to California are buying land and preparing subdivision plans.

"The developers are just throwing money at Chatham to get rid of opponents of growth at any price," says Warren Murphy, the co-chair of Common Cause North Carolina, a campaign finance watchdog group that fought to expose a similar pro-growth group in Cary three years ago. "It just goes to show how influential money can be."

To what extent development interests directly funded Chatham County NOW, its leaders aren't saying--and so far, they don't have to.

Though campaign finance laws aim to prevent private interests from controlling public elections, state officials say their hands are just about tied by the courts. Since a 1976 U.S. Supreme Court ruling, judges in North Carolina have consistently protected the privacy of groups running campaign ads under the First Amendment as long as they avoid certain words.

In 1998, a group called Farmers for Fairness successfully targeted a Republican incumbent Duplin County legislator and hog-waste-control advocate with similar attacks. In 1999, a pro-growth Cary group called Citizens for a Responsible Environment (CARE) spent $83,000 trying to unseat Lang, who was then a town council member seeking the mayor's seat. In both cases, protests by campaign finance watchdog groups prompted the State Board of Elections to attempt to regulate the groups as political action committees, meaning they would have to comply with donor limits and disclose their finances publicly. The state lost both cases, and had to pay $38,000 in attorney's fees to CARE in the Cary case.

The legal precedent hinges on four sets of "magic words" and the term "express advocacy." The 1976 Supreme Court ruling established that groups putting out "issue ads" were not subject to PAC regulations unless they were expressly advocating for or against a particular candidate. Under the courts' narrow definition, groups can refer to specific candidates by name, as long as they avoid the four sets of magic words--"vote for," "vote against," "elect" and "defeat."

Chatham County NOW, using Cary's anti-Lang group as a model and its attorney for advice, avoided the "magic words" in their mailings and in recorded phone calls the day before the election, which urged voters to "let the elite few know who really runs Chatham County." They didn't mention his opponent, car wash owner (and former Republican) Bunkey Morgan, who narrowly won the Sept. 10 Democratic primary.

"Send Gary Phillips a message and let him know that you've had enough of his double talk," reads the last of the three postcards that landed in mailboxes in quick succession a few days before the election. "Remember that voters in Chatham can change things in the next election."

Using those tactics, and touting a "progress for everyone" mission, the group rallied conservative-minded voters in the southern and western portions of the county to give Morgan a 320-vote margin win. Morgan's Republican challenger subsequently dropped out and he faces only a Libertarian challenger in the general election.

In walking the legal line carefully, Chatham NOW had guidance from a long-time colleague of Sinclair's, experienced Raleigh consultant Brad Crone, who runs campaigns for dozens of local and statewide candidates and knows the legal precedents well.

"Chatham NOW played by the rules established under state and federal law," says Crone, insisting the materials he produced for his client did not specifically advocate Phillips' defeat. "[The Phillips campaign] got out-maneuvered, out-strategized and out-campaigned, and they lost an election."

Crone's client list includes the campaigns of Lt. Gov. Beverly Perdue and N.C. Agriculture Commissioner Meg Scott Phipps, as well as legislators, city council members and county commissioners, predominantly in Wake County but also in outlying areas of the Triangle. Crone's business also includes "political intelligence" for corporations. In that branch of his career, Crone offers to "research and identify potential coalition members, friends, allies and even enemies" for such clients as the Mount Olive Pickle company, Carolina Power and Light, and Bristol Meyers Squibb.

McBee met Crone through Sinclair, who uses his services for some of the Triangle Community Coalition's brochures. Sinclair and Crone's relationship dates back to Sinclair's previous lobbying job with the N.C. Manufactured Housing Institute, a prominent member of the Triangle Community Coalition and another client of Crone's.

Chatham County NOW also enlisted legal expertise from Paul Stam, a conservative Republican attorney in Apex who represented the organizers of the campaign to oust Lang.

The legal precedents have made state elections regulators wary of pursuing similar cases--at least until the U.S. Supreme Court takes some action on the federal campaign finance reforms that are currently facing legal challenge in D.C.

"Whoever wrote Chatham County NOW's material wrote it knowing the 'magic words' and the definition of express advocacy," says Don Wright, the state election board's attorney. "The board has repeatedly attempted to regulate these gray areas and we've lost every case."

While it is not registered as a PAC, Chatham County NOW did incorporate as a non-profit organization for tax purposes on Aug. 29, according to the N.C. Secretary of State's office. That paperwork lists three Siler City men as the group's leaders: McBee, an insurance executive and former chair of the county's economic development commission; Ed Spence, a building-supplies proprietor; and Craig Wood.

McBee says his new group wants to "provide opportunities for everyone," including encouraging more industrial growth in the southwestern end of the county.

"We want to look at a broader set of issues than we've been looking at," he says. "We have a democratic right to have an opinion, and a democratic right to do what's right for our county."

Other founders include Siler City pediatrician James Schwankl; Pittsboro development attorney Cynthia Sax Perry, who represents a Moncure grease-rendering plant that faced criticism from neighbors earlier this year but won key support from Morgan in his role as a planning board member; real estate agent Ann Hedgecock; and forester Twig Wood. After the mailings raised complaints about the personal angle of attack, both Schwankl and Spence drew back from the group slightly. Schwankl said publicly the mailings didn't express his personal political beliefs and Spence called Phillips to apologize for using his name.

"What was said was done in good taste, except for that," says Spence, a Republican who wants Chatham NOW to "bring the county together." McBee and other leaders decline to discuss much about their group, such as how many members it has in addition to the 14 names on their mailings and whether they will continue to be politically active. They are also closed-mouthed about their income, saying private donors paid for their activities.

Spence admits to contributing $200 himself, but donations that size don't go too far toward high-profile consultants and lawyers, three rounds of professionally designed direct mail estimated at costing $15,000, and countywide recorded phone banking, all of which group leaders admit to doing.

McBee declined to answer questions about whether it was Chatham County NOW that hired a California firm to conduct a "push poll" focusing on growth issues that promoted Morgan, denigrated the incumbent and provided the first evidence of a powerful anti-Phillips movement in early August. The private polling company, out of San Diego, declined to reveal its Chatham client, though it does a lot of work for the National Association of Home Builders and its local affiliates.

"I'm not going to share our internal matters," McBee said. "I'd be glad to address the issues and what we want for our county."

It's also unclear whether Chatham County NOW paid either the Triangle Community Coalition or Sinclair himself for the lobbyist's consulting services.

"I'm not comfortable talking about that," Sinclair says. "I don't see why that's relevant."

The coalition's members include the Wake and Orange-Durham homebuilders groups, residential and commercial real estate associations in Raleigh, Durham and Chapel Hill, and the Raleigh Chamber of Commerce. Its board of directors and individual and corporate members include big names in local real estate and development: Roger Bernholz, of Chapel Hill's Howard Perry and Walston; Don Fraley of Raleigh's M/I Homes; several companies run by Raleigh real estate magnate, "smart growth" advocate and former Mayor Smedes York; the Kilpatrick Stockton law firm, which represents an asphalt company seeking to expand its Chatham County plant; and Greg Sanchez of Tri Properties, a major player in RTP commercial development. The coalition, which charges annual dues ranging from $250 for individuals to $25,000 for organizations, is registered with the N.C. Secretary of State's office as a non-profit. Unlike many of its member groups, such as the homebuilders' associations that contribute to local candidates, the TCC does not operate its own PAC and has not openly contributed to candidates or made endorsements since its formation in 2000.

"What [Chatham NOW] came to the TCC seeking was suggestions on how best to reach voters with an opportunity to offer information--nothing more," says Steve Leach, who chairs the group's executive committee. "That's what we do, we educate people."

The coalition held a candidates workshop on how to run for elected office this spring, complete with tips from the National Association of Home Builders and former Durham Mayor Nick Tennyson, the Durham-Orange builders group lobbyist. The coalition sponsors forums touting the benefits of residential and commercial development and issues position papers opposing growth controls such as impact fees and supporting projects like Raleigh's controversial Coker Towers.

Chatham County's seemingly imminent land rush "isn't even on the radar screen" for the developers in the coalition, Sinclair says.

Yet, a California developer's plan to build the Briar Chapel subdivision of 2,700 homes north of Pittsboro drew some of the Triangle's biggest development headlines earlier this year. On May 20, with a commissioners vote on Briar Chapel scheduled that evening, Newland Communities' Durham consultant fired off emails to builders, mortgage brokers, real estate agents and other building interests all over the Triangle, asking them to email the Chatham commissioners urging approval for Briar Chapel and copying Newland Communities, who in turn would include supporters in the mailing list for business opportunities.

"Briar Chapel is one of the most important developments ever presented to Chatham County," wrote Lucy Gallo of Thomas, Knight, Trent and King, which invites client inquiries at profit@tktk.com. "Surrounding communities and the state will benefit from the number of construction jobs, permanent jobs and $10 million offered in public facilities."

Though the commissioners voted 5-0 to reject Briar Chapel in May, Newland continued buying land all summer, laying the groundwork to come back with another plan, and just joined the Chatham chamber of commerce. Meanwhile, a Wake County developer has quietly amassed more than 2,000 acres along the Haw River for another development. Tommy Fonville, a Raleigh developer who calls Morgan's win "positive for Chatham County," founded one of the Triangle Community Coalition's "sustaining member" companies, the Fonville Morisey Builder Marketing Group.

Still, the Triangle Community Coalition's support of Chatham County NOW was "not a targeted effort" to oust Phillips, says Leach, the Torrey Homes executive who leads the coalition.

"There was not a professional relationship here," says Leach. While TCC supported its staff member helping the Chatham group "educate voters," exactly how that was eventually accomplished was out of their hands, he says. Leach says he has not seen the Chatham County NOW materials.

Combined with the Cary and Duplin County cases, the trend toward private interests in public elections is disheartening, says one campaign finance activist, but it will take more than the courts to cleanse the system.

"You can't just rely on the legal system to combat this," says Bob Hall, the research director for Democracy South, which studies the influence of money in politics. "The public's got to stand up and say this can't happen, not in my backyard."

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