Public money, personal gains

An N.C. Policy Watch investigation

by Sarah Ovaska

Stories in this investigation:
NC lawmaker gets big pay while loaning friends federal money | LaRoque a polarizing force in N.C. General Assembly
| Poverty target of federal program | How the investigation was done | The story continues…

NC lawmaker gets big pay while loaning friends federal money

Stephen Laroque

KINSTON—N.C. Rep. Stephen LaRoque tells it on the campaign trail, both state and federal government are too big, wasteful of taxpayers’ money and in the way of private business.

“Government can’t be all things to all people,” said LaRoque, a conservative Republican from Kinston, in a televised debate before his 2010 re-election. “We need more self-reliance and accountability.”

Comparing Paychecks

But LaRoque, who returned in January to the N.C. General Assembly after a four-year hiatus, takes aim at government waste while quietly accepting generous six-figure paychecks for running two public charities funded with $8 million in federal dollars since 1997.

He’s earned up to $195,000 a year heading the two small economic development organizations—the East Carolina Development Company and Piedmont Development Company—and used the non-profits to loan some of the public funds to his close associates and political allies. Past board members say they were kept in the dark about his pay.

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LaRoque a polarizing force in N.C. General Assembly

N.C. General Assembly

Controversy stays close to N.C. Rep. Stephen LaRoque, a Kinston Republican whose unapologetic, aggressive style thrusts him into the spotlight on a regular basis.

Now in his third term after a four-year hiatus, LaRoque was named co-chair of the powerful Rules Committee this year by N.C. House Speaker Thom Tillis.

With his heightened role in the state legislature, LaRoque’s return to Raleigh has been anything but quiet.

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Poverty target of federal program

USDA Rural Development

The USDA’s Intermediary Relending Program works in areas where big banks won’t, by using infusions of federal cash to fight rural poverty through small business loans.

The program has sent $280 million into the national economy over the last seven years, including $25 million in North Carolina.

Officials based in North Carolina, one of the largest participants in the program, say it’s been an important weapon in fighting poverty in the state’s rural counties.

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How the investigation was done

I-990

N.C. Policy Watch investigative reporter Sarah Ovaska spent two months looking into N.C. Rep. Stephen LaRoque’s financial connections with his non-profits before publishing this report. Data came from a host of sources—interviews with officials at the U.S. Department of Agriculture’s Rural Development office, past and current board members, experts in the laws governing non-profits as well as some of the borrowers themselves.

For this report, LaRoque was contacted well before the publication and asked for comment, and to provide any information relevant to the inquiry. LaRoque refused to answer questions, saying he felt that the investigation would not be fair to him, but did agree to answer questions submitted to him in writing. He was provided 16 detailed questions about his two non-profits, the East Carolina Development Company and Piedmont Development Company.

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The story continues…