An investigation by The Independent reveals that most members of the Rules Review Commission have professional, political and personal ties to individuals and corporations with vested private interests in the state's rule-making process. While rarely drawing a direct line between individual commission members and the potential for personal financial gain, the board's composition does ensure that business and industry interests battling regulatory controls find a friendly audience, particularly with regard to environmental regulations on development.
More than just a sympathetic ear, the board is a powerful ally. With the exception of court appeals, the Rules Review Commission wields the final authority to tell public policy makers what they can and can't do in protecting the public's interests. An examination of public records such as court cases, corporate registrations, financial disclosure forms, state regulatory files and land transactions details the members' connections. Records also show that two of the 10 members have run severely afoul of some of the very rules and regulations they are empowered to approve or reject: developer Graham Bell was twice fined by state regulators for environmental damage his construction projects caused and was charged with violating alcohol regulations at his country club; and former community college president John Tart was cited by state auditors for financial irregularities.
Unlike a lot of other appointed citizen boards, the RRC seats do not require any particular expertise or professional experience. There are no lobbying laws covering special interests' contact with board members--though proposed reforms now moving through the General Assembly would apply to them. Last year, board chairwoman Jennie Jarrell Hayman even insisted that because they were appointed solely by legislators, RRC members were not covered under Gov. Mike Easley's "executive order no. 1"--a blanket ethics statement that reminds citizen appointees they have an obligation to recuse themselves from voting on matters in which they have a personal stake. After critics raised the issue of conflicts of interest following a controversial vote on stormwater rules, Hayman began reading part of the order at the outset of every meeting.
For the most part, RRC members come from business-friendly backgrounds and have close ties to Jones Street. That's not surprising, given who appoints them and considering the legislature created the commission to rein in what they saw as agency regulators gone wild, causing business leaders to complain about restrictive red tape.
The current board includes two former legislators, Bell and Tart, and the daughter of a former legislator, Hayman. Another commission member, attorney Dana Simpson, worked in the House Speaker's office prior to serving on the commission--at least the second legislative staffer to be named to the panel by their boss.
Two members, Simpson and fellow attorney Jeff Gray, are also current registered lobbyists, paid by private interests to promote their clients' agendas to the same lawmakers who put them on the commission.
And given that homebuilders, real estate agents, road-construction firms and other corporate interests loosely referred to as the "sprawl lobby" donate more money and wield more influence than any other private interest working the halls of the General Assembly in recent years, it makes sense that a lot of them are involved in the development industry, which is deeply invested in creating favorable conditions for economic and residential growth--while keeping regulations to a minimum.
Bell developed and built Cramer Mountain Country Club in Gaston County, a 750-acre project of luxury homes and a golf course. Gray, an attorney at Holt, York, McDarris and High in Raleigh, often represents developers in legal matters. Simpson, also a corporate lawyer, is married to one of Jones Street's paid advocates--the governmental affairs director of the N.C. Association of Realtors.
The chairwoman, Hayman, helps run two family-owned real-estate investment companies and is married to a partner in a prominent corporate law firm that does a lot of legislative work. Real estate agent David Twiddy heads the insurance and real estate investment branches of a large bank Down East. Retired restaurant executive Lee Settle of Pinehurst just helped found a new $80 million venture-capital bank scheduled to open in Durham later this year.
Nine of the 10 members are also active donors in statewide politics. An analysis by Democracy North Carolina using data from the state elections board shows that current members of the Rules Review Commission donated more than $11,000 to statewide campaigns and party organizations in the 2004 cycle alone. Since 1989, current members of the commission and their spouses have given more than $42,000 to legislative and other statewide candidates and political party organizations, according to Democracy N.C.'s analysis.
Finally, one look at the minutiae of administrative law the commission reviews each month explains why the board attracts interest from so many members with law degrees. Six of the 10 are lawyers, mostly at large firms that boast of big-business client lists and expertise in corporate-government relations.
The slogan of commission member Jeff Gray's law firm, splashed across his profile on the corporate Web site, even strikes a double entendre: "We know our way around government."