When Kenneth Moore moved back to this Halifax County town a year ago, he hoped to trade in the street violence of Philadelphia for the peace and safety he remembered from growing up in this Eastern North Carolina.

But Moore hasn’t been able to find that since arriving back in the rural town in southeastern Halifax County in November 2010.

Scotland Neck – remembered by Moore as a proud, working-class community– is a skeleton of what it once was, with staggering rates of poverty ravaging the town of 2,000.

A downtown that used to be flush from tobacco, farming and manufacturing money is now desolate, some buildings collapsed from neglect. Video sweepstakes parlors break up the monotony of empty storefronts.

Enormous collapsed trees from an August hurricane are still in front of Moore’s neighbor’s yards, untouched by city clean-up crews, and there are few basketball courts and no after-school programs for youth to attend, he says.

Moore talked about his frustrations he has in the community immersed in poverty at a meeting held last week in Scotland Neck as part of the NAACP’s “Truth and Hope Tour of Poverty in NC: Putting a Face on Poverty.”

Spearheaded by the Rev. William Barber II, the head of North Carolina’s NAACP, the poverty tour filled a bus with media, community organizers and anti-poverty advocates made stops in Washington, Roper, Elizabeth City, Winton, Scotland Neck, and Rocky Mount – all areas that have impoverished populations topping 20 percent. The UNC Center on Poverty, Work and Opportunity and the N.C. Justice Center, the parent organization for N.C Policy Watch, partnered with the NAACP for the poverty tour.

The goal of the tour was to highlight the harsh conditions that the poor face in North Carolina, and how the neediest communities often end up dismissed by the powers that be, Barber said.

“It’s not a sin to be poor,” Barber said. “But it is a sin to see our brothers and sisters in poverty and ignore them.”

A second leg of the tour will start up in February.

The November killing of an unarmed, disabled man on a bicycle by a police officer’s Tazer rattled the town’s African-American community, which makes up nearly 70 percent of the town’s population, according to the U.S. Census.

The death of Roger Anthony, 61, was ruled a homicide, the first homicide in the town in the last four years. The State Bureau of Investigation is looking into the police-involved death, and the officer (who had been on the job a month) has since tendered his resignation.

Meanwhile, jobs are hard, if not impossible, to come by in the rural town.

“I’ve been finding it very hard to find a job anywhere,” said Moore, 43, a cook with years of experience working in busy chain restaurants. “There’s nothing you can do here.”

He doesn’t have a car, and with no public transportation in the Eastern North Carolina county, he has no way to get to a restaurant job in the larger, and more prosperous, cities of Roanoke Rapids, Tarboro or Rocky Mount.

So he idles his time in this small town, where he and his wife live off the $9.40 she makes an hour deboning chickens at a nearby poultry processing plant.

But that’s often not enough, and their church recently stepped in to help pay their mounting heating bills.

One in four in Halifax in poverty

In Halifax County, more than one in every four people is living under the federal poverty line, defined as a household income of $23,000 for a family of four. That statistic goes up in Scotland Neck, where former mayor James Mill estimates that 40 percent of his town’s population is impoverished.

The county is one of 10 in the state that have “persistent poverty,” with poverty rates of over 20 percent for more than three decades, according to a study released earlier this week by the N.C. Budget and Tax Center, a project under the N.C. Justice Center.

Poverty and progress are tied to race here, possibly even more than in other Eastern North Carolina rural communities where blacks and Latinos typically experience higher rates of poverty than their white counterparts.

Overall, black and Latino residents of North Carolina are much more likely to live in poverty than white North Carolinians. In the state, 27.7 percent of African-Americans live in poverty, while 34 percent of Latinos do, according to an analysis by the N.C. Budget and Tax Center. Less than 12 percent of the state’s white population lives in poverty. Those rates go up even higher for children

The economic racial disparity emerges in other ways as well.

Moore, the unemployed cook, told Barber during the town’s leg of the “Truth and Hope” poverty tour that he was frustrated that a community meeting held after the stun-gun death of Anthony, the disabled bicyclist, was only attended by African-American city councilors. Antony was black and the officer involved in his killing is white.

Six of the police department’s seven full-time officers were white, and one was Latino, at the time of Anthony’s death. Police Chief Joe Williams has since hired an African-American officer to replace the officer who resigned as a result of Anthony’s killing.

“It was an unfortunate incident,” Williams said about Anthony’s death. “We all hated what happened.”

Williams said that he’s often unable to attract qualified black officers, because they often opt to go to towns or cities that can pay better than Scotland Neck. Three of his part-time officers are black, he said, and he’s had black officers working for him in past years who got picked up by better paying departments.

Scotland Neck Town Administrator Nancy Jackson later said she was unaware that there was community outrage about Anthony’s death.

“I haven’t heard of any relations that are bad,” she said. “No one has come forward and said we have a complaint. We’re like any other small town and we have issues.”

County’s economic engine far from Scotland Neck

A lack of jobs is one of the major issues. As Barber, the state NAACP head, walked several blocks of the city’s east side — a poor, predominantly African-American neighborhood – last week, residents came out to tell him their frustration about the town’s stagnant economy.

Most of Halifax County’s economy is centered in Roanoke Rapids, 30 miles northwest of the town.

A large part of that reason is because of the city’s presence near Interstate 95, said Cathy Scott, the director of Halifax Development Commission , the county-run economic development organization. The city, though better off than the rural parts of the county, has economic woes of its own. A former textile town, it saw mills close up in the 1990s and no industry has been able to replace those jobs in large numbers, Scott said.

The county’s wood industry, a big part of the economic engine in the rural areas that are thick with loblolly pine forests, has suffered hits as a result of the county’s economic downturn, leaving lumberyards with reduced demand, Scott said. Scott hopes to build on emerging markets for the wood industry, including expanding existing factories that turn wood pulp into diaper fill and wood pellets that have become popular fuel sources in Europe in recent years.

Segregated schools link to poverty

But one of the biggest reasons for the disparity between rural Halifax County and the city of Roanoke Rapids is the presence of a three racially-segregated school districts, said Mark Dorosin, a senior managing attorney with the UNC School of Law’s Center for Civil Rights.

The center published a lengthy report in 2011, “Unless our Children Begin to Learn Together….The State of Education in Halifax County, North Carolina” that examined the racial disparity in the county’s schools. The number of students that the three school districts serve is small, with approximately 8,000 students attending the three public school districts in the county. In comparison, Wake County, the state’s largest school district, has more than 140,000 students enrolled in the schools.

The county has had three separate school district since the 1910s, two of the school districts (Halifax County School District and the tiny Weldon City School District) are nearly 100 percent non-white, while the remaining school district, the Roanoke Rapids Graded School District, has a student population that’s 70 percent white, according to the UNC report.  The Halifax County school system performs at such low levels that it’s under a court order to improve, though both of the other school districts are also struggling to provide quality educations.

“You’ve got this clear racial and socio-economic isolation in these three school districts,” Dorosin said. “Roanoke Rapids is this white island or enclave in the middle of this predominantly non-white county.”

The report declared that the segregation was unconstitutional, and called for the school districts to merge.

“The county’s three districts – Halifax County Public Schools (HCPS), Weldon City Schools (WCS) and Roanoke Rapids Graded School District (RRGSD) – remain among the most segregated in the state and are tainted by the ongoing impacts of the legacy of Jim Crow segregation,” the report concluded. “By maintaining this tripartite system, Halifax County and the state more deeply entrench racial segregation in the community, limit the educational resources available to students based on their race, cause irreparable harm to the academic opportunities for all children in the county, and stunt the economic viability of the region.”

Gary Grant, a community organizer in the black farming community of Tillory in southeastern Halifax County, agrees that continuing racial division in the county’s school has been a direct link to the high levels of poverty.

“The civil rights movement must have jumped over us and went to right to Virginia because it never did come here,” Grant said. “We’ve had complete white flight from the county school system.”

Montre Freeman, a Halifax County resident active with the county’s NAACP chapter, said the school segregation doesn’t make sense on the financial level, with the rural county paying for three separate school administrations, and also hurts the county’s chances of being a desirable place for businesses to set up shop.

“Because we have somehow have crafted a separate but equal school system, the (black) children are born into a defeatist mentality that they (the Roanoke Rapids school children) are better than us,” Freeman said. “For business, at the end of the day, you want to make money, but you don’t want to have to worry about the way your children are educated.”

Scott, the head of the county’s economic development group, agreed that the quality of the schools and the uncertainty over the future of the schools make it hard to lure businesses to the area.

“It may be a factor of eliminating us early on that we don’t even know about,” Scott said. “We can’t be blind to the fact that the better we educate our children, the more comfortable the companies are that there’s going to a workforce in the future.”

The Center is pushing ahead with residents to try and merge the three school districts, though both the Weldon and Roanoke Rapids school districts are opposed to any merger. The Halifax County Board of Commissioners, which holds the purse strings for all three school districts, would have the authority to make any changes. Litigation or official complaints to the federal education department are also possibilities Dorosin is considering.

Dennis Sawyer, the superintendent of the Roanoke Rapids school district, said his school district is unfairly painted as being an exclusive, white enclave and says that the system is seeing its student population diversify.

“There a very strong misunderstanding and misrepresentation about Roanoke Rapids being rich and heavily Caucasian,” he said. “We’re continuing to diversify, and have less money to operate with but our performance has increased.”

High electricity bills hurt poor, stall job growth

Making it more difficult for the poor to get by in Scotland Neck are the high electivity bills, a recurring problem in many Eastern North Carolina communities that are part of the Electricities utility system.

Scotland Neck is one of the many Eastern North Carolina municipalities that are part of Electricities, and beholden to millions of dollars of debt from a deal made in the 1970s that’s resulted in unexpected costs passed on to consumers.

Moore, the unemployed Scotland Neck man, had a bill of $279 last month in a home with only a handful of electronic appliances.

He’s suspect of how the town determines his bill, and says that he never sees anyone come to read his meter.

“I don’t see anybody come out here,” he said.

When he called the town to complain, he said he was told to “use common sense” and that the clock on his stove must be leading to the high bills, he said.

Jackson, the town administrator, said many people don’t understand that their bills include sewer, water , trash and electricity. When the town joined Electricities in the 1970s, it thought it would end up be a savings for townspeople.

“It turned out into not such a good deal,” Jackson said.

The town of 2,000 ends up cutting off electricity for 20 to 25 people a month for unpaid bills, she said. They wait to disconnect until after the first of month for disconnections, so those surviving off of Social Security or veteran’s benefits checks can have a chance to pay their bills.

That same high cost of electricity is also a factor in bringing jobs to Scotland Neck, said Scott, the economic developer.

“Being an Electricities community, the electricity rates are traditionally higher than in other areas of the county,” she said. “We can work with industry to try to overcome some of that, but it is a factor.”

Moore said he felt encouraged by the stop the poverty tour made in his town last week. He hopes that something will come of it, and that a restaurant job will come his way soon.

“I’m used to working and not working gets me down sometime,” Moore said. “Cooking is all I’ve ever really done, and that’s my passion.”

Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

The federal agriculture department has opened an ongoing investigation into state Rep. Stephen LaRoque’s two economic development non-profits, a spokeswoman for the agency confirmed.

The Kinston-based non-profits – the East Carolina Development Company and Piedmont Development Company – have taken in $8 million in federal funding since 1997, as part of the U.S. Department of Agriculture’s Intermediary Relending Program. The program aims to combat poverty by allowing non-profit organizations to borrow money from the federal government and then lend the funds out to struggling businesses in rural areas.

Delane Johnson, a spokeswoman for the USDA’s Rural Development division in North Carolina, confirmed Wednesday that the agency is conducting an investigation into LaRoque’s non-profits.

“There is a federal investigation going on related to Stephen LaRoque and his intermediaries,” Johnson said. “I’m not at liberty to discuss him nor his non-profits at this time.”

Joe Cheshire, a high-profile Raleigh defense attorney retained by LaRoque, did not respond to recent requests for comment. LaRoque has declined requests to speak with N.C. Policy Watch about his management of his non-profits on several occasions, but said in an August press conference that he has nothing wrong and ran the non-profits according to federal agriculture department rules.

An N.C. Policy Watch investigation from last summer found LaRoque, a Kinston Republican serving as a co-chair of the powerful House Rules Committee, received a plump salary (up to $195,000 a year) from the federally-funded charities and had members of his immediate family in key roles on the non-profit’s board of directors. Loans were given out to close associates, including two fellow GOP legislators, and LaRoque loaned his own for-profit business $200,000 from the non-profit, a potential violation of IRS tax laws that prohibit non-profit leaders from receiving personal or excessive benefits from tax-exempt charities.

Johnson, the USDA spokeswoman, referred further comment to the USDA’s Office of Inspector General. The OIG office did not confirm nor deny the existence of an investigation.

“We simply don’t comment on investigative matters or acknowledge whether we have something ongoing,” said Paul Feeney, a Washington-based spokesman.

The OIG office has two branches for conducting investigations, an audit division as well as an investigation division where law enforcement agents look to see if matters run afoul of criminal laws. No information was available from USDA about the nature of the probe into LaRoque.

In addition to the USDA investigation, LaRoque is also facing the possibility of an inquiry into his actions by his fellow legislators, after N.C House Minority Leader Joe Hackney asked N.C House Speaker Thom Tillis in November to refer the matter to the Legislative Ethics Commission for review. Tillis has asked the bipartisan Legislative Ethics Committee to decide if looking into LaRoque’s federally-funded non-profits falls under the committee’s jurisdiction.

Those legislative committees work largely in secret, and the status, scope and nature of any probe is not publicly known.

LaRoque’s wife signed his contract

Documents recently made available to N.C. Policy Watch also reinforce the existence of a cozy relationship he enjoyed with his board directors, with both his wife and brother in key roles on the board of directors.

When LaRoque needed his lucrative management contract with an economic development non-profit organization renewed, it was his wife Susan LaRoque – the chairwoman of the non-profit – that signed the contract on behalf of the federally-funded charity.

A copy of the 2009 contract was obtained by N.C. Policy Watch through attorneys representing a past Democratic opponent sued by LaRoque, a Kinston Republican, for defamation. (To view a copy of LaRoque/s contract with the non-profit, click here.)The lawsuit LaRoque filed against former state Rep. Van Braxton was dismissed by LaRoque in mid-November, with LaRoque agreeing to have the non-profit pay more than $17,000 in contempt of court fees to the opposing side’s lawyers.

At an August press conference, LaRoque indicated that East Carolina Development Company had a contract with his fon-profit company, not him personally, and said he was paid only out of interest and fees paid by the companies repaying the non-profit, and not overall assets.

“We’ve never received one dime of taxpayer money or grant or foundation money to pay our operating costs, something that not many other non-profits can claim,” LaRoque said at his press conference. “Our contract is derived from interest and fees.”

But the actual contract appears to show LaRoque is also entitled to a portion of the federally-funded non-profit’s assets, as well as a portion of the interest and fees collected by the non-profit. It gives him 3 percent of the non-profit’s total assets, half of all the loan fees collected by the non-profit and 10 percent of the annual profit of the company. (The 2010 tax return for the East Carolina Development Company can be viewed here.)

The contract signed by Susan LaRoque is a clear violation of the laws that govern non-profits, said Thomas Kelley, a professor at the University of North Carolina’s law school who specializes in non-profit law.

Tax law does not allow insiders of non-profits to benefit personally from the non-profit’s funds, and LaRoque’s wife, as a director, would be hard-pressed to set aside her and her husband’s personal financial interests, Kelley said.

In addition, tax returns for LaRoque Management Group obtained from Braxton’s lawyers also show that the company operated at losses of $40,000 to $100,000 from 2006 to 2009, which resulted in the state lawmaker’s for-profit company paying little or nothing state or federal income taxes in those years, according to copies of the tax returns.

Past probes by OIG

The USDA’s OIG has looked into the finances of LaRoque’s non-profits before.

A critical June 2010 audit from the USDA’s Office of the Inspector General office found significant problems overall with the national Intermediary Relending Program, taking particular issue with the USDA giving contradictory messages about whether those repaid funds are public. The report called for the Rural Development division to begin defining the money as federal dollars.

The report also found $7.9 million in funds, $4 million from LaRoque’s non-profit, were loaned out improperly and called for the money’s return to USDA. The final decision about whether the money will have to be returned hasn’t been made, more than 18 months after the audit was published.

The USDA inspectors found that the non-profit exceeded the program’s lending cap of $250,000 on several occasions, including more than $2 million in loans that went to a developer to built multi-family homes in Greenville. The developer has said he repaid the loans to LaRoque after the souring economy made the project not feasible.

A final decision has not been made by USDA about whether it’ll require the money that was improperly leant out to be paid back immediately, but a decision is expected soon, said Jay Fletcher, another USDA spokesman.

“The final recommendation is nearing its completion,” Fletcher said.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

The nation’s largest for-profit virtual education company quietly took steps this week to open up an online charter school in North Carolina that would subsist off of public funds and siphon off profits to Wall Street investors.

The move comes as the company, K12, Inc., faces mounting questions in others states over the quality of education students receive from the company.

A representative of K12, Inc., a publicly traded company on the New York Stock Exchange (NYSE: LRN), attended a Cabarrus County school board meeting Monday to ask if the school system would partner with the company to open up a virtual public charter school that would draw from students statewide.

The company first began talks with the school district by having former state Rep. Jeffrey Barnhart, now a lobbyist at the prominent Raleigh law and lobbying firm McGuireWoods, to approach the school district in his home county, according to Cabarrus County Superintendent Barry Shepherd.

Neither Barnhart nor a spokesman for K12, Inc. returned calls for comment on this story.

The move by K12, Inc., isn’t entirely unexpected, after the newly-empowered GOP-led state legislature passed a bill this summer lifting the state’s 100-school cap on charter schools. Lifting the cap has not been without controversy, with proponents arguing that charters offer more innovative ways of teaching while critics warn it could defund existing public schools and be a dangerous first step to privatizing public education in the state.

K12, Inc. kept a big presence on Jones Street during the talks, and hired seven well-connected lobbyists in 2011, according to the N.C. Secretary of State’s lobbying division.

However, the push to tap into the North Carolina market comes as the company faces mounting criticism of putting profits before education. Teachers at some virtual schools have complained of being overloading with large classes while the company loosely monitored student’s progress, at times charging states money for educating children who withdrew soon after signing up or barely attended the online classes.

“Their curriculum is limited, it looks like a pretty hollow experience for the kids,” said Gene Glass, a research professor at University of Colorado-Boulder who has been critical of K12, Inc., as well as other for-profit educational companies. “It’s just all about business.”

Booming business

2011 has been a good year for the company, with North Carolina and several other states opening up laws to allow more charter schools, including charters that are based online. K12 CEO Ron Packard, made $5 million in combined salary and stock options last year, according to filings made with the U.S. Securities and Exchange Commission. (To see a breakdown of Packard’s earnings, go to page 33 of K12’s 2011 Proxy statement.)

As of 11 a.m. Friday, the company was trading at $20.23 a share, a big drop for the company following the New York Times publication of an extensive article Tuesday that found the company “tries to squeeze profits from public school dollars by raising enrollment, increasing teacher workload and lowering standards.”

The Times mentioned a state audit in Colorado that found taxpayers paid $800,000 to the company for students that were never enrolled in the virtual school, or who lived out-of-state. It also mentioned a Pennsylvania virtual public school run by a K12, Inc. subsidiary that saw 60 percent of its students behind grade level in math, and 50 percent trailing in reading.

The virtual charter school, if the N.C. State Board of Education allows it to open, could mean a steady stream of state, federal and local funding flow through to charter as the company makes a profit off of education, as it has in over half of the states in the country.

The company uses an online-based system where children use both physical workbooks while communicating with teachers over the Internet and anticipates serving 2,750 North Carolina students in its first year. It would provide computers for low-income students and suggests using public resources like library Internet access for those not able to afford connections at their home, according to documents provided by the company to the Cabarrus County schools.

A charter school gets an average of $4,712 funds per student as well as additional local and federal dollars. A virtual charter school would be entitled to getting the same funding amount as charter school with physical buildings, despite the obvious differences in operating costs.

“There are no policies right now that would state they would get something different,” said Alexis Schauss, director of school business with the N.C. Department of Public Instruction, which oversees charter schools.

North Carolina law requires that charter schools be operated and managed through non-profit organizations, an attempt to make sure school leaders keep their interests on education and not in financial incentives.

If the company recruits 2,750 students in its first year, the cost would be $18 million to taxpayers in state and local education funds, not including federal funds, according to a 299-page application the company sent to the Cabarrus school district.

K12 staff told Cabarrus County school officials it hopes to open up in the fall, but that appears unlikely. The N.C. Department of Public Instruction set a November deadline for “fast-track” applications for charter schools hoping to open by the 2012-2013 school year, and are already well into their selection process.

By 2016-2017, the company wants to have 5,109 students, and anticipates taking in $34.5 million in public education funds, according to the application.

The virtual public charter school would be open to all grade levels, and offer diplomas for high school graduates.

But it’s not as if the state of North Carolina doesn’t offer anything by way of online education.

The state runs the North Carolina Virtual Public School, an online school that allows students in public schools to take classes online that aren’t offered in their home districts. Offerings for middle school and high school students include 17 AP classes, foreign languages like Chinese or Arabic, and other advanced classes. The cost to taxpayers is about $349 for each course a student takes, said David Edwards, a spokesman for the state-run virtual school.

It may be more cost-effective and offer a better quality education to think about expanding the state’s offerings, instead of hiring a private company to run an online school, said Alex Molnar, another University of Colorado-Boulder professor critical of for-profit virtual schools.

In order to get around state rules that require charter schools to be managed and run by non-profit organization, the company would set up a non-profit organization called “North Carolina Learns” and then contract with K12, Inc. for all services, the company wrote in its application. No non-profit by that name has been registered yet with the N.C. Secretary of State’s Office, as is required.

Molnar said founding a non-profit to act as a shell for the for-profit company is typical of K12.

“It’s a way to run around the clear intent of the law,” Molnar said.

Powerful players

It’s also not uncommon for the company to tap former elected officials to make its cases, as it appeared to have done in Cabarrus County, Molnar said.

Shepherd, the school superintendent, said he got a call from Barnhart, the former five-term state representative for the area, in October about the possibility of K12 partnering up with the school district.

Barnhart resigned from his legislative seat in late September to take a job with the McGuire Woods lobbying firm in Raleigh. K12 has hired four lobbyists from the firm, according to filing at the N.C. Secretary of State’s office.

“Jeff (Barnhart) contacted me to see if I would be interested in our district pairing with a virtual charter school,” Shepherd said. “I was impressed with what I heard.”

Barnhart stepped down from the N.C. General Assembly on Sept. 30 after serving five terms and is prevent from lobbying until the close of next year’s legislative session, according to lobbying rules outlined in a recent N.C State Ethics Commission opinion. With Barnhart prevented from lobbying at the state level until a cooling off-period passes, he was not listed as one of the four McGuireWoods lobbyists hired by K12.

Because reforms to the state lobbying laws don’t cover local government, Barnhart can push his clients’ causes on the school district level, said Bob Hall, director of Democracy NC, a government watchdog group that’s been active in lobbying reform in North Carolina.

“Lobbying local government is not covered,” Hall said.

Shepherd, the Cabarrus County superintendent, said school staff have met with K12 representatives, and that the school board members will make a decision in January about whether to partner with the school after holding work sessions to discuss the proposal.

Having a school online could help reach homeschooled children, or those unable to succeed in a traditional school setting, Shepherd said. Part of the agreement, if Cabarrus County were to partner with the school, would be receiving three percent of state and local funds the charter school would receive.

Shepherd said he wasn’t aware of some of the national criticism of the company, but plans on doing more research and passing on the information to board members. He said his goal is to increase the offerings for students.

“We’re looking at innovations that will reach all children with education possibilities,” he said.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

Attempts by the state legislature to pass local bills requiring voters in some, but not all, counties to produce photo identification at the polls would fail to meet the constitutional guarantee of equal protection, according to a recent analysis by the N.C. Attorney General’s Office.

The state Department of Justice, in a Nov. 23 advisory letter sent to Gov. Bev Perdue’s office, indicated that a strategy by GOP leaders to circumvent Perdue’s June veto of a voter ID bill would run into constitutional issues. Having individual counties ask for more stringent identification rules would create an unconstitutional scenario where voters in some counties face more hurdles to vote than in other areas.

“It is therefore our views that significant equal protection concerns would arise if voter identification requirements were established for some voters and not others based merely on their county of residence,” wrote Grayson Kelley, the chief deputy Attorney General, in the letter. He later added, “The enactment of local acts applying photo voter identification requirements in only certain counties would raise serious equal protection issues under both the United States Constitution and North Carolina Constitution.”

Click here to read Kelley’s seven-page advisory letter to Mark Davis, Perdue’s general counsel, obtained by N.C. Policy Watch through a public records request.

In recent weeks, a handful of conservative county commissions (in Craven, Davidson, Gaston, Lincoln and Rowan counties) have passed resolutions requesting that the legislature allow the counties to require photo identification to vote. The legislature would then, during a special session, have to pass what’s called a “local bill” in order to grant those powers to those counties. Local bills are generally exempt from governor vetoes, and usually deal with issues specific to counties.

But Kelley, in his letter, said that the courts would likely find that lawmakers don’t have the ability to push through piecemeal changes to voter identification requirements, and that state law calls for changes of that magnitude be made through an all-encompassing general bill, like the one that was vetoed by Perdue.

Kelley also says in the letter that Perdue would necessarily be stripped of her ability to veto those local bills, because the larger voter registration issue had already been taken up by state lawmakers.

Like much of what happened in this year’s legislative sessions, the push to require voters to show ID at the polls has broken down on partisan lines, with Republicans behind the additional requirements and Democrats voting against the proposal. The “Act to Restore Confidence in Government by Requiring that Voters Provide Photo Identification Before Voting” passed both the House and Senate in the spring, but failed to become law after Perdue vetoed it on June 23.

House Republicans are a few votes short of overriding Perdue’s veto, and N.C. House Speaker Thom Tillis told the News & Observer in June that a vote could come anytime he has enough votes lined up.

“If seven Democrats don’t show up for a publicly announced session, that would be the easy way to override it,” he said in an interview, referring to the required three-fifths needed.

According to Democracy NC, a good government watchdog group, the push at the local level also broke down on partisan, as well as racial, sides, with 27 white Republicans county commissioners voting to ask for the voter identification rules in the five counties. Opposing the bills in the five counties were three Democrats, one white and two African-Americans.

During legislative debates, supporters of the bill said that requiring that voters show picture IDs would prevent voter fraud. But critics said the bill would do little to prevent the already minimal issue of voter fraud in the state, and amounts to voter suppression. It would create barriers to voting especially among the poor, African-Americans and elderly who may not have valid driver’s licenses or other photo identification, critics say.

Nearly a half-million voters don’t have state-issued identification, according to an estimate by the N.C. State Board of Elections.

A Democracy NC analysis also found that in the 25 counties with the highest percentage of registered voters lacking a state photo ID in the state, 15 of those counties are also home to the largest impoverished populations in the state. That means many of the voters who would have to go out and get photo ID in order to vote are living in some of the poorest areas of the state.

Lawmakers should conduct a bipartisan ethics investigation  into the business dealings of state Rep. Stephen LaRoque, a top Democrat in the legislature said today.

House Minority Leader Joe Hackney, the Democratic leader in the Republican-controlled N.C. House of Representatives, wants a bipartisan committee to look into Stephen LaRoque, an embattled Kinston Republican lawmaker facing scrutiny over his management of two economic development non-profits.

Hackney sent a letter this morning to N.C. House Speaker Thom Tillis asking for an independent investigation into LaRoque. (See below for text of letter.)

“(W)e should hold the members of our chamber to a higher standard of behavior to help build public faith in government,” wrote Hackney. “An open, bipartisan review of the allegations against Rep. LaRoque best serves the people of North Carolina and our fellow House members.”

LaRoque, a Republican serving his third term after a four-year hiatus from the state legislature, could not immediately be reached for comment. He’s previously defended his pay at the non-profit, which was up to $195,000 a year, and having his immediate family on his board of directors as an acceptable way of doing business.

Tillis could not be reached for immediate comment Wednesday morning, but has previously said his staff was looking into the matter and taking it seriously.

LaRoque, a Kinston Republican serving as a member of Tillis’ leadership team, has faced tough questions in recent months about two economic development non-profits he runs, the East Carolina Development Company and Piedmont Development Company. The non-profits, both based out of Kinston, have taken in $8 million from the U.S. Department of Agriculture as part of the agency’s Intermediary Relending Program that aims to combat poverty by loaning money to struggling entrepreneurs in rural areas. Neither non-profit has received money from the state. A USDA inspector general’s report in 2010 also found that more than $4.5 million was improperly lent out by the non-profits.

An August investigation by N.C. Policy Watch, “Public money, personal gains,” found the federally-funded-charities paid the sole employee Laroque generously, as high as $195,000 a year, without the knowledge of several board members; his board of directors included his wife and brother; and the non-profit gave loans of federal money to close associates of LaRoque – including his wife (his girlfriend at the time); two fellow GOP legislators and his lawyer.

NC Policy Watch also found a for-profit company owned by the lawmaker, LaRoque Management Group, took a $200,000, no interest loan in July 2010 from the non-profit, a potential violation of IRS tax laws that prevent non-profit insiders from personally benefiting from their charities.

LaRoque failed to report the loan on the non-profit’s most recent tax return, despite questions that specifically asked about personal benefits from the charity’s coffers.

Hackney called for the investigation after LaRoque dismissed a defamation lawsuit last week filed against the N.C. Democratic Party and Van Braxton, the Democratic opponent LaRoque unseated in  the 2010 election.

LaRoque took issue last fall with campaign fliers that accused him of stealing the home and business of a well-known Kinston barbecue restaurateur by foreclosing on the properties after a loan between the two went bad.

The only monetary settlement in the dismissal was $17,250 the East Carolina Development Company paid in contempt of court fines to Braxton for not turning over key documents in the lawsuit.

Decision in Tillis’ hands

The decision about whether to appoint a separate commission or send it the N.C. legislative Ethics Committee is up to Tillis, who gave LaRoque a leadership role this session as the co-chair of the powerful House Rules Committee.

Bob Hall, director of the government watchdog group Democracy NC, said an investigation could be conducted behind the scenes or out in the open, depending on the decisions made by legislators.

“It would be to the benefit of everyone if (an investigation) was aired, and it would be best if it were aired in the light of day,” Hall said.

The last high-profile ethics inquiry looking at the behavior of a legislative member was in 2007, when Hackney, then the House Speaker, formed a commission to looking into Thomas Wright Jr., a Wilmington Democrat eventually ousted from the legislature because of improprieties in his campaign finances and with a non-profit. Wright is now serving a six to eight year sentence in state prison.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

Text of letter sent by Hackney to Tillis

Source: Joe Hackney’s office 

November 16, 2011

The Honorable Thom Tillis

Speaker of the House

North Carolina General Assembly

Raleigh, North Carolina 27601

Dear Speaker Tillis:

Several recent media reports have raised questions about the business practices of our colleague Rep. Stephen LaRoque. The reports appear to point to a pattern of violating several guidelines for nonprofits as well as the rules for the U.S. Department of Agriculture loan program that provides the capital for Rep. LaRoque’s business.

I understand that you and your staff are monitoring this matter and I appreciate your attention. However, I believe the House of Representatives and the public deserve a fuller examination of the allegations made against Rep. LaRoque. I am asking that you appoint a bipartisan commission to independently review the matter and make recommendations about the best course of action in this case. The leadership of this commission should also be bipartisan — as is the leadership of our Ethics Committee – to assure the public that political gamesmanship is not a factor in this review.

No member of the House of Representatives should be exempt from the laws and regulations of our government. In fact, we should hold the members of our chamber to a higher standard of behavior to help build public faith in government.  An open, bipartisan review of the allegations against Rep. LaRoque best serves the people of North Carolina and our fellow House members.

I would be pleased to consult with you about the membership, duties and procedures for this proposed committee and I hope we will discuss this matter soon.

Thank you for your serious consideration of my request and please let me know if I can be of any assistance to you as you move forward.

Very truly yours,

Joe Hackney

State Rep. Stephen LaRoque’s federally-funded non-profit will pay thousands in contempt of court fines as part of the state lawmaker’s agreement to dismiss a defamation lawsuit against a political opponent.

LaRoque, a Kinston Republican, dismissed a defamation lawsuit Tuesday that he filed a year ago against the state Democratic Party and Van Braxton, the Democratic opponent that LaRoque unseated in the November 2010 elections.

The East Carolina Development Company, the small economic development non-profit founded by LaRoque in 1997, will pay $17,250 to Braxton’s lawyers for failing to turn over key documents in court proceedings, according to court documents.

The lawsuit had been ongoing for a year, and Braxton’s lawyers fought it, contending that statements in a campaign mailer about LaRoque stealing were true.

The dismissal and contempt fine are the most recent blows for LaRoque, a polarizing lawmaker that’s come under scrutiny for the generous annual pay, as high as $195,000, he’s gotten from the non-profit and loans he approved to close associates. The East Carolina Development Company and Piedmont Development Company, both based out of Kinston, have taken in $8 million from the U.S. Department of Agriculture as part of the agency’s Intermediary Relending Program that combats poverty to making business loans available to struggling entrepreneurs in rural areas.

Braxton said he was glad to see the lawsuit dismissed, but that federal authorities should be brought in to determine if any laws were broken by LaRoque’s management.

“Just because the lawsuit is over, we’re not stopping what we’re doing,” Braxton said. “We’re hoping to have him held accountable for his actions.”

Braxton added that he doesn’t plan to run for office again.

LaRoque’s attorney Bert Diener did not return calls seeking comment.

LaRoque was the subject of an August investigation by N.C. Policy Watch, “Public money, personal gains” that found the two small economic development non-profits paid him salaries that early board members were unaware of; he later stacked his board of directors with immediate family members; and gave loans to close associates of LaRoque – including his wife (his girlfriend at the time); two fellow GOP legislators and his lawyer.

NC Policy Watch also found that LaRoque’s for-profit company LaRoque Management Group took a $200,000, no interest loan from the non-profit, a potential violation of IRS tax laws that prevent non-profit insiders from personally benefiting from their charities.

LaRoque also failed to report the loan on the non-profit’s most recent tax return, despite questions that specifically asked about personal benefits from the charity’s coffers.

A spokeswoman for the U.S. Attorney’s Office for the Eastern District of North Carolina declined to comment when asked if the federal prosecutors would be taking a closer look at LaRoque.

“I can’t confirm or deny any investigation that we may or may not have,” said Robin Zier, a spokeswoman for the federal prosecutor’s office.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

The county in North Carolina’s Sandhills has a skyrocketing poverty rate growing at a clip that’s been surpassed by only four other counties in the country.

The extent of poverty wasn’t realized until the September release of poverty data through the U.S. Census’ American Community Survey. The survey found 18.5 percent of Moore County’s population lived in poverty in 2010, up from the 7.7 percent of county residents who lived below the poverty rate in 2007. (Click here to see a chart of N.C. counties with the highest jumps in poverty)

Poverty is defined as a family of four living off less than $22,314 a year, or an individual making less than $11,139.

The jump in poverty came as a shock to many, including some of those who have long worked with the area’s poor.

“We were floored that no one was talking about it,” said Susan Bellow, the director of Family Promise, a long-term shelter for homeless families in the county. “It just sort of showed up, and nobody that should have known was talking about it.”

No big employer in the area has shut down, nor has a single industry taken a hit large enough to explain the big jump in poverty.

Instead, the worsening situation in Moore County is attributed to the same factors being seen across the country — the belt-tightening in well-off households leading to less consumer spending; job losses and emergency funds whittled away in middle-class families; and the poorest households trying to hold on through the toughest job market since the Great Depression.

Volunteer nurse Shirley Baldwin (right) speaks to patient Vickie Quimby in an examination room during a visit to the Moore Free Care Clinic in Southern Pines, NC. The clinic depends on many volunteers like Baldwin, who volunteers there 1-2 days a week. (Photo by Ricky Leung / NC Policy Watch)

At places like the Moore County Free Care Clinic, which provides healthcare to uninsured adults, the 50 to 100 new patients seeking help each month signaled long ago that those who were solidly in the middle class had slipped.

“I knew these people in thriving business years ago, and they’ve lost their businesses,” said Debra Bateman, the clinical director and a nurse practitioner at the Southern Pines Clinic, about the new waves of patients.”There are only a small percentage of people that are doing well.”

When people end up seeking help at the clinic funded through donations, grants and volunteer work, common health conditions like hypertension and diabetes have often gone untreated for a while.

That can lead to life-threatening situations, as it did for one man a hospital referred to Bateman for follow-up care. The diabetic man was homeless and living out of his car when he contracted gangrene in his toes from his untreated diabetes. He couldn’t afford to treat the infected toes, and didn’t go to a hospital seeking help until after rodents got into his car and ate parts of his toes.

Few cases have been as bad as that, but Bateman said many of her patients forewent needed health care before finding the free clinic.

“There are a lot of people that don’t know where to go,” Bateman said. “My goal is that I prevent them from going to the emergency room.”

Moore Free Care Clinc volunteer Susan S. Harvey sorts out bags of medicine that patients will come pick up. The clinic, operating out of Southern Pines, NC, has seen increases in the number of eligible patients as job losses increase in the surrounding area. (Photo by Ricky Leung / NC Policy Watch)

Poverty getting attention

Moore County’s new poverty ranking means nearly one out of every five residents is facing the pressures of empty food cabinets, electric bills they can little afford and worries about whether paychecks will be enough to keep a family fed and clothed.

Though it doesn’t have the state’s highest poverty rate — that undesirable spot goes to Robeson County where 31.1 percent of people are impoverished — Moore County saw the biggest jump in poverty, a sign that the recession hit the county particularly bad. Statewide, 17.5 percent of North Carolinians lived at or underneath the poverty level in 2010.

The sudden increase of poverty in the three-year period caught the attention of national publications like The New York Times, which ran a graphic listing Moore County as the fifth-hardest hit county in the country, as well as CBS Evening News, which sent down a television crew to the blighted former mill town of Robbins to see what was behind the growing poverty numbers.

The county is well-accustomed to dealing with the rich, especially in the Pinehurst and Southern Pines golf communities in the southern part of the county. The fabled Pinehurst No. 2 golf course played host to the U.S. Open in 2005 and will see the golf championship come back in 2014, when both the men’s and women’s championships will play there in during a two-week period.

Poverty has largely been relegated to unincorporated pockets around the resorts, as well as the communities like Robbins in the northern end of the county that have struggled to keep employers in the area.

But the new surge in poverty isn’t just coming from those entrenched pockets of poverty but as a result of the decline in the service and hospitality industries that support the 40-plus golf resorts and courses found in the county.

Demand has been high at food pantries, free health care clinics and service providers in the county that have seen neighbors who used to be firmly set their middle class now asking for help with basic needs.

“There really is poverty in Pinehurst,” said Barrett Walker, who runs the Sandhills-Moore County Coalition for Human Care, an emergency crisis center founded by several church communities. “We’re seeing people who have worked all their lives but their hours have been cut, or there’s been some type of illness or major life event.”

Walker said many who come by looking for help with electricity bills, emergency food packages and clothes have jobs, but have seen their hours and benefits cut in service-industry jobs.

The non-profit is also contending with the increase in request for help as donations are going down. The county’s services for the poor are often deemed ineligible for help from federal or state resources because the high levels of affluence in the county gives the impression that the county is economically okay.

Moore County is ranked as a Tier 3 county by the N.C. Department of Commerce, a designation reserved for the most economically sound regions. Being a Tier 3 county means not getting much of the state and federal aid that flows to ailing economies.

A home in Jackson Hamlet, less than 2 miles away from the wealthy golfing community of Pinehurst. (Photo by Ricky Leung / NC Policy Watch)

Carol Henry, a resident from the Jackson Hamlet community near Pinehurst, said she sees most families around her suffering from the effects of the economic downturn.

Jackson Hamlet is a primarily African-American neighborhood on the outskirts of Pinehurst that’s fought to get basic services while in the shadows of one of the state’s wealthiest communities.

“Employment was not that good to begin with,” Henry said. “Now, everyone’s afraid for their jobs, and there’s been a lot of cuts in hours.”

Henry, 71, has seen that firsthand. Her grandson moved in with her after his hours were cut at the grocery store where he works. She lives off of her Social Security and the $5,000 a year she estimates making as a substitute teacher.

She doesn’t think she’ll be able to stop working any time soon.

Not everyone convinced

The high poverty rate is being met with disbelief, and skepticism, by some leaders in the area.

“We don’t believe that the situation is correct,” County Manager T. Cary McSwain said in an interview.

McSwain questioned the Census data, and found The New York Times’ listing of Moore County’s poverty rate “slack journalism” that unfairly painted the county as among the most troubled in the nation without looking at the county’s attributes.

He mentioned the U.S. Open’s double-header in 2014, saying that being highlighted as a poor county on the national stage could have lasting effects on the tourism industry of the county.

Belvedere Plaza in Southern Pines, NC, illustrates the image of wealth often associated with the well-to-do golfing communities of Pinehurst and Southern Pines. (Photo by Ricky Leung / NC Policy Watch)

He says he hasn’t seen any outward signs of poverty, with no large homeless populations gathering in parks. The county’s unemployment rate for September was 9.2 percent, lower than the state’s 10 percent unemployment rate. McSwain said there haven’t been neighborhoods hit with foreclosures, as has happened elsewhere.

When asked about the homeless population that might be living in cars, McSwain responds that doesn’t necessarily point to a dire situation.

“If they have a car that’s not been repossessed, that’s one step from being without a car,” he said.

For now, his hope is resting in “The Heart of North Carolina Mega Park,” an unbuilt industrial park that will straddle Montgomery and Moore Counties. Part of that effort led to Poultry Power, a company that turns chicken refuse into energy, opening a facility in Biscoe, a Montgomery County town on the border of Moore County. Moore County residents could get some of those jobs that will be coming, McSwain said.

Until then, the county needs to find out what led to the recent spike in poverty, he said.

“If there’s a population that hasn’t been identified, we need to meet their needs,” McSwain said. “We have to be able to offer people opportunities.”

N.C. counties with the highest jumps in poverty

*Poverty rate is the percentage of people living under the federal poverty line, defined as a household of four living on $22,314 a year, or an individual making less than $11,139.

Source: U.S. Census, N.C. Budget and Tax Center. Poverty rates for all N.C. counties available in BTC’s “Poverty Grows, Opportunity Declines”

Back to Top

A federal tax return for Stephen LaRoque’s nonprofit didn’t disclose a loan given to the lawmaker’s private company last year, despite the IRS asking if the nonprofit’s leaders benefitted from the charity.

The loan’s omission on the tax forms could put LaRoque, a Kinston Republican serving as a co-chair of the state legislature’s powerful House Rules Committee, at odds with federal tax rules that bar insiders from reaping personal benefits from the charitable organizations they run.

“When you see an interest-free loan, it’s usually inappropriate,” said Richard Schmalbeck, a Duke law professor who specializes in nonprofit tax law.

Schmalbeck couldn’t comment directly on the situation facing East Carolina Development Company, an economic development nonprofit founded by LaRoque in 1997. But the law professor said IRS officials can choose to levy excise taxes of up to 25 percent on any excess benefits or, in rare cases, revoke a nonprofit’s tax-exempt status.

The legislator’s private company, LaRoque Management Group, took out a $200,000, no-interest loan from the federally-funded nonprofit in July 2010, and repaid it in May, according to a copy of a promissory note. The note was entered into the court records of a defamation lawsuit LaRoque filed against Van Braxton, his Democratic opponent from the 2010 election.

The East Carolina Development Company’s recent tax return, commonly referred to as an I-990, didn’t acknowledge the July 2010 loan in a section that specifically asked if any of the nonprofit’s principals received a loan or other economic benefits.

The tax form, available here, covered all the nonprofit’s transactions from Oct. 1, 2009 to Sept. 30, 2010, and was filed with the IRS in late August 2011, according to the tax return provided to N.C. Policy Watch by East Carolina Development Company.

It also shows LaRoque earned $105,000 in compensation during a year in which the nonprofit reported losses of nearly $300,000.

IRS officials have previously declined to comment, citing agency rules that prohibit public comment about taxpayers.

LaRoque, through his attorney Bert Diener, declined to comment for this article. LaRoque has not publicly given an explanation about what the loan was for, and whether it fell within the charitable purpose of the nonprofit.

Bob Hall, the director of the government watchdog group Democracy NC, said the lack of disclosure is troubling, and called for a legislative ethics investigation into LaRoque.

“All of this is raising pretty serious questions about his commitment to telling the truth and serving the public,” Hall said. “It’s not directly related to the legislature, but he is a public official that has an organization that receives tax benefits.”

N.C. House Speaker Thom Tillis, who appointed LaRoque to a leadership role, told N.C. Policy Watch in September that his office was reviewing the questions raised about LaRoque’s nonprofit.

“It’s still something we’re looking at and something we’re taking seriously,” Jordan Shaw, Tillis’ spokesman, said Thursday.

USDA officials indicated they weren’t aware of the $200,000 loan, in line with agency rules that don’t require approval for economic development loans made with money that’s been repaid to the intermediary lender, according to Delane Johnson, a spokeswoman for the agency’s Rural Development Office in North Carolina.

“As businesses repay the initial loans back to the intermediary, the funds are revolved and relent for continued economic development in rural areas,” Johnson wrote in a statement to N.C. Policy Watch. “The current regulations do not require USDA concurrence on loans made from the revolved funds.  The $200,000 loan was made from revolved funds.”

The $200,000 loan is one of several questionable management practices disclosed in recent months at East Carolina Development Company and Piedmont Development Company, two nonprofits founded by LaRoque and funded with more than $8 million in funds from the U.S. Department of Agriculture’s Intermediary Relending Program. The program, which loans the funds to intermediaries like LaRoque at a one-percent interest rate, aims to combat poverty in rural areas by enlisting nonprofits to lend out the federal money to small businesses unable to get loans from commercial banks. Money that is repaid by the businesses is then lent out again to other small businesses to improve economic development, though with less oversight from the USDA.

In early August, N.C. Policy Watch published its investigation “Public Money, Personal Benefits” that found LaRoque earned generous salaries, as high as $195,000 a year, for running the two small economic development groups with a board of directors often dominated by LaRoque’s immediate family members. NC Policy Watch found LaRoque also arranged to give loans to close associates of Laroque’s – including his wife (whom past board members said was dating LaRoque at the time of the loan), two GOP legislators and his own attorney. USDA oversight was also lacking, and the agency went as long as four years without conducting required site visits.

Courthouse contempt

The nonprofit is also facing problems in the courtroom.

A $250-a-day contempt fine issued against the nonprofit by a Lenoir County judge will be $14,000 by the end of the week.

The nonprofit was fined for not turning over documents in the ongoing defamation lawsuit filed by LaRoque, and the mounting fine could shut the nonprofit down if it continues, according to filings at the N.C. Court of Appeals made last week by Diener, the attorney for both LaRoque and the nonprofit.

“ECDC is a nonprofit organization with limited resources and the indefinitely daily accrual of sanctions coupled with the obligation to pay attorney’s fees to Defendant Braxton has the real potential to render the nonprofit insolvent,” Diener wrote. “Again, ECDC is not in a position to pay such an amount.”

The nonprofit has yet to post a $100,000 surety bond it was supposed to file with the Lenoir County Clerk of Court to ensure the fine would be paid, according to staff at the Lenoir County Clerk of Superior Court’s Office.

The mention in court records of financial difficulties at East Carolina Development Company’s contrasts with the recent tax records showing the federally-funded nonprofit was flush with cash.

In its most recent tax return to the IRS, the East Carolina Development Company reported having $2.6 million in savings accounts as of Sept. 2010.

The appeals court has turned down requests from LaRoque’s lawyer to immediately intervene in the defamation case, and hasn’t made a final decision about whether the court will reconsider the nonprofit’s contempt ruling.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

From the “Checklist of Required Schedules” for ECDC’s I-990:

• “Was a loan to or by a current or former officer, director, trustee, key employee, highly compensated employee, or disqualified person outstanding as of the end of the organization’s tax year?”
• “Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor, or a grant selection committee member, or to a person related to such an individual? “
• “Was the organization a part to a business transaction with one of the following parties? A current or former officer, director, trustee, or key employee?”

In each case, the “no” box was checked off on the I-990.

Failure is not an option.

Christy Zemcik used to hang that quote in her middle-school classroom, to inspire her students.

Now, she uses it as a daily mantra to get her through her grim reality of being jobless, homeless and broke.

Zemcik, of Charlotte, has been out of work since being laid off two years ago from an administrative job in a doctor’s office. She’s sent out hundreds of resumes and applications since, but rarely gets calls back or interviews.

She sells her blood plasma for $62 a week, the only type of income she has coming in. That pays for some food, gas, and a storage unit stuffed with what’s left of her life possessions.

We first talked with Zemcik, 41, in May and introduced her to NC Policy Watch readers as one of thousands of long-term jobless workers who had their unemployment benefits suspended as a result of an impasse at the GOP-led legislature. She told us then that she was on the verge of being evicted from her Charlotte apartment.

In the past four months, things have gone from hard to dire for Zemcik.

She was evicted from that apartment, and exhausted all of her unemployment benefits.

Zemcik’s found a place to sleep every night, thanks to the generosity of a member of her church who opened up her home. She doesn’t know how long it’ll be before she wears out her welcome.

Her parents are under their own financial pressures and unable to take her in and help her out. Her mother and father are in their 60s, and her dad recently had to come out of retirement and start working again to pay his own bills.

Zemcik doesn’t have a computer. She applies to jobs by mailing in applications and through the sporadic email contact she has by using the local public library, which limits people to two hours of Internet use a day because of high demand from others like Zemcik.

In job applications, she touts her experiences at past jobs as a teacher, researcher and an assistant in a medical office to no avail. No job offers have come her way.

Her cell phone was cut off weeks ago for lack of payment, and her car is on the verge of being taken off the road because of a busted catalytic converter and an expired inspection ticket.

She feels forgotten.

“So many are going through this, but people have just stopped asking about me,” Zemcik said. “People think you’re not trying, that you don’t have a job because there’s something wrong with you.”

She has plenty of company in North Carolina, where the state’s unemployment rate recently rose to 10.4 percent.

Zemcik manages to remain hopeful that things would change if she could get one job offer, doing anything, to get back on her feet.

“I have to take things and grow from it somehow and some way,” she said.

She ultimately wants to do something that helps others, and brings attention to those like her who want to be working and have the skills to work but can’t find jobs.

So many have lost their voices, and are cut off and isolated like she is, Zemcik says.

But, until she can help others, she needs a job of her own.

For that, she’s wishing that someone, anyone, takes a chance on her.

To hear Zemcik describe her situation in her own words, listen to Chris Fitzsimon’s radio interview with her on N.C. Policy Watch’s weekly News & Views program.

Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

With a gun strapped to his hip and a hat emblazoned with “ICE,” Tommie Rand Pierce told hundreds of immigrants in North Carolina that, for a fee, he could get them the legal status they wanted.

But federal authorities, notified of Pierce’s dealing by an attorney with the N.C. Justice Center, now think Pierce was a fraud who took advantage of people looking for a way to stay in the United States.

The Raleigh man was arrested last week in Utah on charges of impersonating an immigration agent and defrauding immigrants.

A federal judge in Utah released Pierce, 68, on his own recognizance and ordered him to make contact with prosecutors in the U.S. District Eastern District of North Carolina within a week. No hearings have been scheduled in the case.

Federal agents think Pierce, from December 2007 to now, charged immigrants seeking help in obtaining legal status up to $2,000 to $5,000, according to a 25-page affidavit filed by Christopher Brant, a special agent with the U.S. Immigration and Customs Enforcement. Pierce posed as an ICE agent, wearing a gun and hats or shirts with “ICE” stamped on them.

In all, they think he defrauded 265 immigrants by filing false claims, most of which resulted in their deportation orders because the applicants had either overstayed visas or came to the United States through improper channels, making them ineligible for immigration relief. Most of the claims happened in North Carolina, but Pierce and his associates also filed fallen claims for immigrants living in Washington, Virginia, Indiana, Texas, California, Maryland and Tennessee, according to Brant’s affidavit.

He held meetings with his clients at his home in Raleigh, as well as Bojangles’ and Kentucky Fried Chicken restaurants.

Pierce’s actions were first reported back in 2008, by Paola Jaramillo of La Conexion, a Spanish-language paper based in Raleigh. Jaramillo’s investigation (available in PDF here) found that Pierce, of Guatemalan roots, defrauded a Raleigh church community looking to help Latino parishioners as well as owners of a local air conditioner company.

A federal investigation didn’t begin until May 2010, when Kate Woomer-Deters, an attorney with the N.C. Justice Center, called federal officials to report Pierce’s actions, according to Brant’s affidavits. (Full disclosure: N.C. Policy Watch is a project organized underneath the N.C. Justice Center)

Posing as an agent

Pierce went to great lengths to keep up the appearance that he was a federal immigration agent.

“’I am the one you do not want to see knock on your door,’” Pierce told one informant who was wearing a wiretap.

Federal court records say he drove a truck with police-style lights on it, and carried a badge. He often wore shirts or hats with “ICE” printed on it, and would tell immigrants that he worked to help immigrants get legal status during the day, and arrested people at night.

He told immigrants he purported to be helping he would call in favors to helped immigrants he knew to be good people and get the legal status they wanted, according to court documents.

But he also warned his clients that there would be payback if they didn’t pay him. One woman who later spoke with ICE agents about Pierce said he warned her that once he wasn’t paid and “took a bus the female’s neighborhood and deported everyone living there,” according to the criminal complaint.

But nearly all of the 265 he intervened on behalf of weren’t entitled to relief, because they had entered the United States by overstaying tourist visas or crossed the border undetected. Many, after Pierce filed applications at a Charlotte immigration office, had deportation orders issued against them.

Robin Zier, a spokeswoman for the U.S. Attorney’s Office for the Eastern Distinct of North Carolina, declined to say what would happen to the immigrants defrauded by Pierce.

“I can’t comment on that,” Zier said.

Hearings for Pierce’s criminal proceedings could be held as early as next week, at the federal courthouse in downtown Raleigh.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919)861-1463 or sarah@ncpolicywatch.com.