Analysts question McCrory's payout disclosure

The Associated Press reported Tuesday that McCrory and U.S. Rep. Mark Sanford of South Carolina each received six-figure payouts while holding elected office from Tree.com, the corporate parent of the website LendingTree. The two Republicans had served on the company's board and resigned after they won election, which would have rendered their unvested shares in Tree.com worthless. The board voted to give them the shares anyway.

"It's one of those things that creates a smell," said Carter Wrenn, a Republican strategist whose past clients included the conservative icon Sen. Jesse Helms. "If the payment was for legitimate work and it didn't have anything to do with politics, that would be OK. But you're better off to disclose it, because it's going to raise questions. ... And when you don't disclose, it looks like maybe you were trying to sweep something under the rug."

McCrory's office issued several statements denying the governor had done anything improper or illegal, saying he had adequately disclosed the income and his business relationship with the company on his ethics forms. McCrory's re-election campaign appealed to supporters for cash to "fight back" against the AP report.

"I continue to uphold high ethical standards and follow the law," McCrory said in a written statement.

Sanford disputed the AP's report in an interview with his hometown newspaper, The Post and Courier of Charleston.

The AP investigation relied on public documents Tree.com filed with the U.S. Securities and Exchange Commission, interviews with top company officials and ethics disclosure forms filed by the politicians.

North Carolina officials are required to disclose their business dealings and their sources of compensation on annual ethics forms.

On his forms covering 2013, McCrory didn't disclose the $14,438 in fees and cash dividends he received from Tree.com. The forms specifically ask officials to include stock dividends and fees exceeding $5,000 from a single source.

McCrory's office said the governor wasn't required to disclose his cash compensation from Tree.com, citing a passage in state law reading: "if that source is not listed under subdivision (2) of this subsection." Because McCrory had disclosed owning more than $10,000 in Tree.com stock, as required under subdivision (2), McCrory spokesman Josh Ellis said the governor had no obligation to report his Tree.com income later on the same form.

Jane Pinsky, director of the non-partisan North Carolina Coalition for Lobbying & Government Reform, said she had never heard that interpretation of the statute.

"The governor should be setting an example," Pinsky said. "He can't just play to the letter of the law, but needs to follow the spirt of the law. He should be, if anything, over disclosing. He should be showing that ethics matter and that filling out those forms matter."

Thomas Mills, a Democratic political strategist in Raleigh, said the payments could damage McCrory's 2016 re-election bid, especially since he originally ran on a platform of transparency and clean government.

"He can argue that it's legal all he wants, but that doesn't matter in politics. It's how the public perceives what he did — and this looks sleazy," he said.

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Weiss reported from Charlotte.

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