From racial to glacial

Yes, this is a very serious proceeding – the House hasn’t kicked anyone out in, what, 120 years? – so it’s understandable if folks want to make sure all their i’s are dotted and their t’s are crossed. But I’m starting to wonder whether this hearing’s going to run up till Wright’s March 31st trial date.

The first witness du jour was SBI Assistant Special Agent in Charge Johnnie Umphlet. He interviewed Wright for the state’s criminal case, and he took the stand today to talk about that investigation.

A lot of his testimony came straight from Umphlet's official statement – a document that both sides agreed not to release to the committee. Why? I’d guess it contains some spoilers we’ll hear about in the upcoming trial, topics no one wants to address just yet, at least in this venue. But there were hints - like the tax ID issue, for example.

Last year, the state elections board alleged Wright used a made-up federal tax ID number for his non-profit, the Community’s Health Foundation. According to the IRS, there’s no record that the CHF was ever given tax-exempt status. And the non-profit tax ID number Wright gave his donors -56-2252434 - isn’t assigned to any group.

Umphlet testified he asked Wright about that. On the stand, he read aloud from his report:

Wright reported that he had applied for the tax ID number with the internal revenue service. Wright advised that his legislative staff in Raleigh helped him in getting the tax ID number. Wright did not want to say who those staff members were, but advised that some were no longer employees.

Wright advised that he had a copy of the application – even a response from the IRS that they had faxed to Wright with the tax ID number on it. ASAC Umphlet asked Wright would he (Wright) show ASAC Umphlet the fax from the IRS with the tax identification number on it. Wright said he would not show the fax to ASAC Umphlet because the fax was his “smoking gun.”

According to Umphlet’s statement, Wright said Congressman Mike McIntyre’s staff had helped him get the tax ID number, telling the agents he had the number and could prove it.

ASAC Umphlet asked Wright: if the issue concerning the tax ID number could be ended by Wright showing ASAC Umphlet and ASAC Perry the fax, would he show them the fax? Wright advised that he knew he could not fictitiously create that tax ID number. ASAC Perry advised Wright that he, ASAC Perry, and ASAC Umphlet were trying to get to the truth. Wright advised he was trying to protect himself.

Wait. If you’re being investigated for falsifying a tax ID number, and you have proof you didn’t, what better way could there be to protect yourself than to produce that evidence? (And why would you even need a “smoking gun?”)

If Wright did falsify the number, that’s tax fraud. Something tells me we’ll be hearing more about this one.

“Sweat Equity”

Umphlet’s testimony shed some light on the receivables end of the non-profit, too. He says Wright admitted to taking $9800 $8900 donated to the CHF by Anheuser-Busch, Astra Zeneca, and AT&T. (An odd coincidence: maybe Wright never made it past the As in the corporate lobbying directory.)

Wright reported he deposited all three of those checks into his personal bank account…to reimburse him for his work for the foundation. When ASAC Umphlet asked what type of work Wright had done, Wright advised, “Lots of work.” ASAC Umphlet asked what type of work Wright had done. Wright advised, “I’ll save that. I don’t want to say that at my point. I don’t want to incriminate myself. It looks to me that y’all are trying to build a case against me.”

…Wright advised the checks from AT&T, Astra Zeneca, and Anheuser-Busch were not restricted as to how they were to be used. Wright advised no one goes into business and does not expect to be reimbursed. Wright advised it would’ve been his decision on what to do with the money. Wright stated that, with what he put into the Foundation in sweat equity - Wright then continued by stating, “I put more into it than this.”

…Wright advised there was nothing illegal about paying himself.

You can hear Umphlet’s testimony on the stand here.

I’m a non-profit president, too, and I can vouch - we don’t get paid. But Executive Directors do, and that’s where Wright’s attorney Irving Joyner appears to be heading. His line of questioning consistently seeks to highlight Wright’s day-to-day management role at the Foundation. The next step, I’d guess, is to argue that Wright is its de facto Executive Director, and therefore entitled to compensation. We’ll find out Thursday when Joyner makes his case for the defense.

Kim Strach

The final witness of the day was Kim Strach, the deputy director and chief investigator for the State Elections Board. She’s always impeccably prepared, and she’s pretty much unflappable on the witness stand (she’s had lots of practice this past year). She’ll probably play a major role in the criminal case against Wright later this month.

Strach testified about her office’s investigation into Wright’s campaign finances. Their comparison of Wright’s campaign records and bank accounts to his donors’ reports showed he failed to report $185,000 in political donations between 2000 and 2006.

She’s quick to concede that many campaigns make mistakes on their reports. But she says Wright’s omissions are too consistent to be accidental.

Certainly in my time at the State Board [of Elections], I’ve never audited a committee that had this amount of non-disclosure.

Strach is back on the stand tomorrow for more cross-examination by the defense. More on how that went later.

Comments? Drop me a line.