February 13, 2020/Press

Sen. Berger Profits from “Unethical and Corrupt Conduct” Selling Campaign Contribution Funded Home to Lobbyist

Raleigh – Republican Senate leader Phil Berger sold a home financed by campaign contributions to a well connected lobbyist with clients who have business before the Senate for a handsome profit, according to several new reports

The move is a “manipulative, self-serving” action designed to “enrich” Berger using campaign contributions, according to watchdog Bob Hall — “a handsome gift from the lobbyist” to Berger. The eventual sale netted Berger “a 32% gain in just three years,” but the pass through of campaign funds to eventual sale means that Berger’s actual profit “topped $150,000 – nearly double what other sellers were making.” 

Berger has long bent or outright flouted ethics laws for himself and his family and courted lobbyists with business before the General Assembly. His campaign has paid his Eden law office nearly $110,000 “even though Berger often spends more than 200 days a year in Raleigh.” He headlined a fundraiser “hosted by several lobbyists who practice before the General Assembly” to benefit his son’s political campaign – a “simple-minded pay-to-play scheme” to skirt laws prohibiting state legislators from raising money from lobbyists.

Late last year, a separate ethics complaint regarding the property found Berger “created a property management company and [used] campaign funds to pay ‘rent’ to the company, which ultimately [paid] the mortgage on his Raleigh residence,” according to The News & Observer. 

While editorial boards have called on the legislature to “close the loophole,” Senator Berger is apparently finding new ways to benefit from it.

“There’s only one word to describe selling a house bought with campaign funds to a well connected lobbyist for a handsome profit — corrupt,” said Executive Director of the North Carolina Democratic Party, Meredith Cuomo. “Rather than working for North Carolina families by expanding health care access or giving teachers the meaningful pay raises they deserve, Senator Berger is using his position and campaign funds to enrich himself and his family.”

The News & Observer: NC Senate leader Phil Berger made $80,000 selling his house to a lobbyist
By Will Doran 
February 12, 2020 

  • State Senate leader Phil Berger sold his townhouse in Raleigh late last year to a well-connected lobbyist for an $80,000 profit.
  • Berger was previously the subject of an ethics complaint for paying himself monthly rent for that townhouse out of his campaign account. He bought the home in 2016 for $250,000 and sold it in December for $330,000 — a 32% gain in just three years.
  • Apodaca is also the son of former Sen. Tom Apodaca, a Hendersonville Republican who was a top lieutenant to Berger before he left office in 2016 to become a lobbyist. Both Apodacas lobby on behalf of many of the same clients now, and a message left at their firm, Vista Strategies, was not returned Wednesday.
  • The Bergers sold it to Tate Apodaca, a lobbyist for numerous business interests. Some of his clients include insurance company Blue Cross and Blue Shield of North Carolina, tobacco companies Altria and Phillip Morris, and a developer hoping to build a new casino outside of Charlotte — a controversial plan that Berger has opposed.
  • In addition to the townhouse, Berger’s campaign also pays a separate monthly rent payment to his law firm in Eden.

WRAL: Berger sells campaign-bought home in Raleigh to lobbyist
By Laura Leslie
February 12, 2020 

  • Senate President Pro Tem Phil Berger sold the home on Yarborough Park Drive in December to T. Tate Apodaca, a lobbyist and the son of Berger’s former right-hand man in the state Senate, Tom Apodaca, for $330,000.
  • Long-time campaign finance watchdog Bob Hall said Wednesday Berger improperly profited because he had used campaign donations to pay the mortgage on the home for more than three years.
  • Hall filed a complaint with the Legislative Ethics Committee, calling Tate Apodaca’s purchase of the home “a handsome gift from the lobbyist” to Berger in violation of state law.
  • “If he was renting the property from a third party and having to pay out rent, then that would be legitimate,” Hall said. “But there’s no third party involved. It’s a circle where the money is just coming from the campaign into his pocket.”
  • He said the campaign’s payments on the mortgage meant that Berger’s actual profit on the townhouse sale topped $150,000 – nearly double what other sellers were making.

AP: NC Senate Leader Complaint Focuses on House Sale, Payments
By Gary D. Robertson
February 12, 2020 

  • A retired campaign reform group leader filed an ethics complaint on Wednesday alleging that a powerful North Carolina legislator improperly benefited financially from the sale and purchase of a townhouse in Raleigh.
  • Shortly after the 2016 purchase, Berger’s campaign began making $1,500 monthly payments to a limited liability company that the Rockingham County Republican manages. Campaign finance reports often attributed the payments to “rent.”

NCPolicyWatch: Government watchdog claims in new filing that Phil Berger broke state law with Raleigh townhouse payments
By Billy Ball
February 12, 2020 

  • From August 2016 through December 2019—when the Bergers sold the townhouse—the lawmaker’s campaign sent monthly payments to YPD Properties, most of them characterized as rent. The payments totaled $73,500.  Last September, the Bergers purchased a space in this West North Street condo downtown.
  • In other words, Hall says, Sen. Berger used one hand to pay the other, pointing out the legislator lists himself as a “member/manager” paying taxes on his income from YPD Properties on his Statement of Economic Interest (SEI), an annual report intended to prevent potential conflicts of interest for public officials.

#TBT The News & Observer: Opinion: Senate leader’s housing deal exposes a big election law loophole. Let’s close it.
By The Editorial Board
November 7, 2019

  • As of June 30, 2019, Hall said in his complaint, “the Berger campaign has sent the Berger Law Firm a total of $109,800 in 80 monthly payments. I believe these transactions deserve more scrutiny by the State Board of Elections.”
  • [Bob Hall, the former Democracy NC leader] said Berger is using “trickery and cleverness” to get around the law. If the state board doesn’t reverse Strach’s interpretation, other lawmakers may see an opportunity to use campaign funds to acquire personal assets.
  • If Berger wants to be more than that, he should end the payment arrangement and return to his campaign fund the $55,000 paid to his company. Meanwhile, the State Board of Elections or the legislature needs to close the loophole.