Pressure is building in the N.C. General Assembly against state Rep. Stephen LaRoque, the Kinston Republican indicted last week on federal charges of stealing from his federally-funded economic development non-profits.
N.C. House Speaker Thom Tillis released a statement this morning saying that he’ll create a bipartisan investigatory committee of House members to look into LaRoque, and that the Legislative Ethics Committee will continue their probe.
“The allegations against Rep. LaRoque involve serious matters and will be given a full and fair hearing in the House. In the next few days, I will appoint a bipartisan investigatory committee of the House to review the matter. This committee will have the authority to submit a range of recommended actions to the full House”
Those recommendations, if the committee finds wrongdoing, could range from censure to expulsion from the legislature.
Last week, Tillis stripped LaRoque of his committee chairmanships, including the powerful House Rules committee, and advised LaRoque to resign.
LaRoque was indicted by a federal grand jury last Tuesday on four counts of stealing federal money and four counts of making financial transactions with criminally-derived funds. If convinced, he could face up to 10 years in prison on each of the eight counts. (Click here to read a previous story about the indictments.)
The three-term Republican was in charge of two economic development non-profits, the East Carolina Development Company and Piedmont Development Company, which was funded with $7 million by the U.S. Department of Agriculture as part of a program that gives small businesses in struggling areas loans.
LaRoque’s defense attorney Joe Cheshire has said the lawmaker denies any wrongdoing and plans of fighting the federal charges in court.
But instead of doing that, LaRoque is accused of siphoning off money to fund his political campaign and his own lifestyle, including buying ornate Faberge eggs for his wife, a house for a stepdaughter, and a Greenville ice-skating rink for another stepdaughter. Two fellow legislators, state Rep. Mark Hilton and state Sen. Debbie Clary, were also given low-interest loans by the smaller of the non-profits. Clary used the money to buy a building in Shelby for her marketing business while Hilton bought mobile homes for a trailer park he ran.
N.C. Policy Watch, first raised questions about LaRoque’s management of the federally-funded non-profits in an investigation published in August 2011,
Shortly after the N.C. Policy Watch investigation, the Legislative Ethics Committee was asked to look into allegations of misconduct, but nothing had come out until after last Tuesday’s indictments. The committee, chaired by House Majority Leader Paul Stam and state Sen. Fletcher Hartsell, works largely in secret.
This week, the committee issued a brief report saying that it had reviewd the indictment and if if LaRoque is found guilty of the charges, he would be violating legislative ethics rules.
“The Committee finds that, if true, the acts alleged in the indictment are unethical and warrants such action as the House of Representatives may determine,” Hartsell and Stam wrote in the committee report.
On Aug. 6, LaRoque will appear go before a federal judge in Raleigh for his first court appearance.
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