RALEIGH, N.C. (AP) — In a series of clandestine meetings in closed restaurants and small airport terminals, the pressured insurance magnate and his associates offered North Carolina’s insurance commissioner money for special treatment, federal prosecutors say.
Greg Lindberg, in 2017 suddenly a major political donor, wanted the regulator investigating his company replaced or one of his insurance executives made her boss, federal prosecutors described in newly unsealed indictments. State Insurance Commissioner Mike Causey would receive up to $2 million funneled anonymously into his 2020 re-election campaign if he went along, prosecutors said.
Or the deputy insurance commissioner could stay in her post, Lindberg consultant John D. Gray told Causey in a phone call, as long as “she doesn’t breathe a word outside that office, or send a slip of paper outside that office, that is not first reviewed by John” Palermo, the Lindberg insurance executive proposed as her replacement.
But Causey reported the scheme to corrupt his agency by giving favored treatment to Lindberg’s company, Global Bankers Insurance Group, which was headed toward a periodic financial examination, prosecutors said. And the review discovered problems, which the company agreed in May to correct, prosecutors said.
For their efforts to turn Causey to Lindberg’s cause, Lindberg, Gray, Palermo and the chairman of the North Carolina Republican Party, Robin Hayes, were charged with conspiracy and bribery. Hayes agreed to use the state Republican Party as a conduit to funnel $250,000 to Causey, prosecutors said, and amplified Lindberg’s message urging that the unnamed deputy commissioner be sidetracked.
“They were hoping that you would, and I don’t even know the lady that was apparently really, really good, in financial analysis, that they would like to see put back into that department to make sure that things got done that needed to get done,” Hayes told Causey in a May telephone call, according to prosecutors.
Hayes also was charged with lying to FBI agents investigating the case.
The 73-year-old former congressman from Concord announced Monday that he would not seek re-election as party chairman, citing health problems. His attorney said Tuesday that Hayes “steadfastly denies the allegations made against him.”
In October, as the federal investigation was building steam, Causey turned over $250,000 in campaign donations from the state Republican Party to U.S. Marshals. Lindberg also had donated $5,000 directly to Causey’s campaign, but the commissioner returned the money.
“Everything I did was in cooperation and with direction of the federal investigators,” Causey told The Associated Press in a telephone interview Tuesday.
Lindberg — largely unknown in political circles until his contributions started flowing heavily in 2017 — has given more than $5 million to North Carolina candidates, party committees and independent expenditure groups. Recipients include the state Democratic Party and outside groups that supported then-Insurance Commissioner Wayne Goodwin, who’s now chairman of the state Democratic Party, and Republican Lt. Gov. Dan Forest, who is running for governor in 2020.
Federal prosecutors claim that between April 2017 and August 2018, Lindberg, Gray, and Palermo met with Causey repeatedly to discuss favors and money. Palermo was an executive for Lindberg’s Eli Global LLC and until last fall was chairman of a county Republican Party.
Palermo created an independent expenditure committee able to spend unlimited amounts on political campaigns with limited public disclosure that was funded with $1.5 million of Lindberg’s money, prosecutors said. In all, Lindberg and his associates promised Causey $2 million in donations.
The case also threatens to embroil an unidentified official whom prosecutors said spoke to Causey several times on Lindberg’s behalf. Lindberg made a $150,000 contribution to a political committee backing “Public Official A” on the same February 2018 date he learned the politician was willing to help sway Causey, prosecutors said.
Federal Election Commission records show Lindberg made a contribution in that amount to Republican U.S. Rep. Mark Walker’s “Mark Walker Victory Committee” around the same time. It’s the only $150,000 contribution by Lindberg listed in 2018 on the FEC website.
Walker’s spokesman, Jack Minor, said he couldn’t confirm if Walker was “Public Official A,” adding that the February 2018 contribution eventually went to the Republican National Committee and wasn’t used for Walker’s campaign.
“Walker is not and never has been a target of this investigation, and has committed no wrongdoing,” Minor said in a statement, adding that Walker helped federal investigators.
The four defendants appeared Tuesday before a federal magistrate.
Palermo, 63, of Pittsboro, did not return calls seeking comment. A published number for Gray, 68, of Chapel Hill, was disconnected.
“Greg Lindberg is innocent of the charges in the indictment and we look forward to demonstrating this when we get our day in court,” his attorney, Anne Tompkins, said in a statement.
The state Republican Party cooperated with the investigation, including turning over requested documents, attorney Josh Howard said in a statement.
A spokesman for Global Bankers and Eli Global noted the companies were not charged. Global Bankers has cooperated with federal prosecutors and will continue doing so, spokesman Steven Goldberg said.
Also, Eli Global has “always worked to operate with integrity and honesty in all aspects of our business and will continue to do so,” Goldberg wrote in an email.