LaRoque’s contempt order for non-profit stands, now up to $5,000 in fines

By: - September 14, 2011 3:53 pm

KINSTON — State Rep. Stephen LaRoque’s federally-funded non-profit will have to keep paying $250 a day for failing to provide documents in a defamation lawsuit LaRoque filed against a past political opponent, a Lenoir County judge ruled today.

That brings the total owed by the economic development non-profit up to $5,000, and counting.

The East Carolina Development Company is an economic development non-profit funded with more than $7 million from the U.S. Department of Agriculture and started by LaRoque in 1997.

It’s part of a national USDA program, the Intermediary Relending Program, that seeks to fight poverty in rural areas by providing low-interest business loans to struggling small business owners unable to get financing from commercial banks.

Lenoir County Superior Court Judge Paul Jones, in a brief court hearing held Wednesday afternoon in Kinston, turned down a request by LaRoque’s attorney Bert Diener to stay the $250 daily contempt fine while LaRoque appealed the decision to the N.C. Court of Appeals. Lawyers for Van Braxton, the Democratic opponent being sued by LaRoque for defamation, have said that the non-profit hasn’t turned over enough board minutes, loan documents and other information.

Diener, who represents both LaRoque and the non-profit, said he will continue with the appeal, a process that could take several months. (Go here to read the initial post we wrote about the contempt order.)

LaRoque, a Kinston Republican serving this third term in the state legislature, has come under significant public scrutiny following N.C. Policy Watch’s investigation “Public money, personal gains”  into two non-profits LaRoque runs, the East Carolina Development Company and Piedmont Development Company.

The investigation, published in early August, found that LaRoque received generous salaries of up to $195,000 a year from the federally-funded non-profit; ran counter to IRS guidelines by allowing his wife and brother to join the non-profit’s board of directors; and arranged to loan federal money to close associates, including Diener, his lawyer; two GOP state legislators; and LaRoque’s wife, when the two were dating.

Last week, court records revealed that LaRoque took a $200,000, no-interest loan from East Carolina Development Company in July 2010 for his for-profit company, LaRoque Management Group.

Campaign records also show that LaRoque’s campaign committee owes LaRoque Management Group $19,000 for a loan his campaign took out in 2008 from the company. (LaRoque got in some trouble in last fall with the N.C. State Board of Elections for that loan, click here to read an earlier post about that.)

This story has had a lot of twists and turns, so those that are interested keep checking back in with N.C. Policy Watch for any new developments.

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Sarah Ovaska-Few

Sarah Ovaska-Few, former Investigative Reporter for N.C. Policy Watch for five years, conducted investigations and watchdog reports into issues of statewide importance. Ovaska-Few was also staff writer and reporter for six years with the News & Observer in Raleigh, where she reported on governmental, legal, political and criminal justice issues.