Governor Easley
Rob Christensen, News & Observer
October 6, 2000

When federal agents moved in on the telephone boiler room of a Southern California company conducting a "prize" scam in April, they found a memorandum that is regarded now by state Attorney General Mike Easley as war booty.

The memo warned the company's telemarketers not to call North Carolinians - and said that if they took an order from here, they would "NOT BE PAID."

Easley's crackdown on telemarketing scams is one reason the N.C. Department of Justice is recognized today for having one of the best consumer-protection agencies in the nation. And that achievement is one of the highlights of Easley's tenure.

During eight years as attorney general, Easley has perfected a balancing act as the state's top lawyer and top cop - being a tough guy with scam artists but preferring a more conciliatory, consensual approach when dealing with powerful economic interests. His style has been to prosecute what he calls "the bad actors," then bring everyone else to the negotiating table.

Easley has had notable successes, such as in consumer protection and the role he played in the national tobacco settlement. But he has lost some big cases as well, such as two class-action suits brought by taxpayers involving government worker pensions and intangibles taxes that have helped paint the
state into a financial corner.

Dealmaker. Negotiator. An "outside of the box thinker." Those roles during Easley's tenure as head of one of the most important and powerful agencies in state government provide clues to how he might perform if elected to the state's top job.

As governor, Easley probably would delegate considerable power to his Cabinet secretaries, would disdain ribbon-cutting and other routine duties and would concentrate on a few top priorities. He also would have an unorthodox working style.

From a gray stone 1930s building facing the Capitol, the 50-year-old Easley is the top lawyer in state government and the state's top cop. He oversees a department of 1,191 employees, including 224 lawyers and 582 State Bureau of Investigation employees, with a budget of $ 89.8 million.

As a public official, Easley seems most comfortable when he peels off his jacket and sits at a conference table or works the telephone to put together an agreement. Applying his country-boy charm, the Rocky Mount native has achieved some of his most important successes in back-room dealings. Those included:

- Spending five months shuttling between Raleigh and New York City to help work out a national $ 206 billion tobacco settlement, announced in 1998. Easley acted as a go-between with the cigarette-manufacturing conglomerates and the state attorneys general who were suing the companies to recover smoking-related health-care costs.

In the end, Easley received a gift of a dozen roses from Steven Goldstone, RJR's chairman, and became close friends with the chief litigator, Mike Moore, the attorney general of Mississippi. And North Carolina, as part of the settlement, got
the Golden LEAF Foundation, a $ 2.3 billion foundation to help revive the economy of Eastern North Carolina.

- This year, Easley worked six months behind the scenes with Smithfield Foods, the state's largest hog producer, to phase out hog-waste lagoons on company-owned farms and provide $ 65 million to research alternative waste disposal methods and help clean up the environment.

Easley says that consummating deals and solving public-policy puzzles give him the most satisfaction.

"I've always believed your job in public service is to build bridges, not walls," Easley said. "There is so much false dichotomy in politics. Clean environment or strong economy? Are you pro-business, or are you pro-worker? I think you've got to be all of these things. I see both sides of those issues."

Protecting consumers:

Easley was elected attorney general in 1992 after making a name for himself as a hard-nosed prosecutor from the small Brunswick County town of Southport, where he was known for prosecution of drug dealers and corrupt politicians. He was also a smooth, TV-friendly politician who unsuccessfully sought the
Democratic nomination for the U.S. Senate in 1990.

Easley arrived in Raleigh as public concern about crime was at a high pitch, with legislatures across the country soon meeting in special sessions to consider law-and-order measures.

But Easley was trumped by a more experienced politician. It was Jim Hunt, the veteran governor, who got out in front on the crime issue, overshadowing Easley and leaving relations between the two men cool.

But Easley had consumer affairs all to himself. "To me," Easley said, "it was the biggest plum waiting to be picked."

Easley's lawyers prosecuted fly-by-night operators and broke up price-fixing schemes. His lawyers sued such firms as Brentwood Towing, Toys "R" Us, Sears, American Cynamid, Mattel and Reebok.

The department's reputation prompted a California telemarketing firm to issue a memo to their salespeople telling them that North Carolina and California were off-limits to their work.

"If you are found putting an order in from one of these states you will NOT BE PAID on that order," the memo from Global Network Enterprises Inc. said.

Easley helped push through the General Assembly the first law in the country to curb predatory lending, through which companies add as much as $ 10,000 in hidden fees to the bills of unsophisticated homebuyers.

"North Carolina is undoubtedly the best state in terms of the protections it has established for predatory mortgage lending," said Margot Saunders, managing attorney for the National Consumer Law Center in Washington. She said other states and Congress are considering bills modeled after North Carolina's.

In taking companies to court, the Attorney General's Office has recovered a large sum of money. More than $ 20 million was returned to consumers. Another $ 4.5 million went to charities; $ 5 million to the public schools, $ 2 million went to the state treasury; and $ 905,000 was used for consumer public service ads.

It was the last expenditure that has become one of the biggest issues in the governor's race and the target of Easley's Republican opponent, former Charlotte Mayor Richard Vinroot. The TV, radio and newspaper ads, which ran from 1995 until mid-1999, featured Easley and provided him with favorable publicity as he prepared to run for governor.

The ads were paid for from settlements in about 30 consumer-fraud cases prosecuted by the state. Documents later showed that the public service announcements were handled by Justice Department officials who would become key campaign aides. And there is some evidence to suggest that two of Easley's political consulting firms were involved in producing the ads.

Easley and his aides say the public service ads helped many people avoid being deceived. The ads, he says, were paid for with money collected in court settlements from "the bad guys."

But critics argue that the state constitution requires that all fines, penalties and forfeitures be turned over to public schools, including the $ 905,000 spent on the public service ads.

"A good cause like consumer education does not excuse taking money from schoolchildren and spending it on political ads," said Chuck Fuller, director of N.C. Citizens for a Sound Economy, a conservative taxpayers group. "There are non-political ways to properly educate the public."

State Auditor Ralph Campbell, a Democrat, reviewed the spending and said that Easley's office did not violate any legal requirements.

Easley has been on television quite a bit in other circumstances, as well. He is on a first-name basis with many of the TV anchors across the state. He has gotten face time on such national programs as "Good Morning America," "20/20" and "60 Minutes."

Both sides of business:

Although Easley has gone after scam artists aggressively, he is no populist like his predecessor, Lacy Thornburg. He has courted big business politically, and one of his oldest friends, Ken Thompson, is the new chief executive of First Union in Charlotte.

In his only appearance as attorney general before the state Supreme Court, Easley defended the state's use of financial incentives to attract new or expanding industry - a move in which Easley sided with most business leaders.

Easley has also shown an independent streak. He has been willing to take action against powerful interests, such as when he joined the federal government's antitrust lawsuit against Microsoft, despite some behind-the-scenes arm twisting by the computer giant's lobbyists.

In 1997, Easley took on Blue Cross and Blue Shield of North Carolina, which wanted to be converted into a for-profit organization.

The measure seemed poised to pass. The bill's chief sponsor was state Sen. Tony Rand of Fayetteville, Easley's closest legislative ally. Easley helped slow the measure's passage, leading to a major concession by the insurer that would create a large charitable trust if it converted to a profit-making firm.

"In terms of standing up to the biggest insurer in the state and the sponsor of the bill, Tony Rand, who was truly a good friend - that stands out as the big point of trying to do the right thing," said Adam Searing, a public-interest lawyer who
worked on the issue.

Still, some critics have occasionally accused him of ethical lapses - a golfing weekend in Southern Pines that was paid for by Carolina Power & Light Co. and a fund-raising letter by supporters to the video-gaming industry after a favorable ruling.

Perhaps the biggest setbacks during Easley's tenure were the loss of two class-action lawsuits brought by taxpayers who were appealing state decisions requiring them to pay taxes. One case involved the pensions of state and federal workers; the other involved an intangibles tax. Together, the cases cost the state
more than $ 1 billion.

Gene Boyce, a Raleigh attorney who was a leading plaintiffs' attorney in the two major tax suits, argues that Easley and the Justice Department blundered by not settling the case at less cost to taxpayers.

"He's rolling the dice with somebody else's money," said Boyce, whose son, Dan, is the GOP candidate to replace Easley as attorney general. "He's got some lawyers over there. But the $ 1 billion buck stops with the top lawyer."

But Easley says settling the cases would have been irresponsible.

"I can't ask the legislature to give away $ 400 million or $ 800 million because we think it's unconstitutional, when we have 300 yards away a Supreme Court who can tell us," Easley said.

Easley has brought unusual work habits to the Attorney General's Office. He doesn't usually show up at the office until midmorning - a function of his insomnia-induced habits of working and reading half the night and his preference for doing his telephone work at home.

His management style is a product of his complicated personality - he is a natural wit, storyteller and gifted mimic who at the same time is an introvert who jealously protects his privacy.

A quick study, Easley can be a demanding boss. He hates long meetings and lengthy memoranda, and he does not suffer fools gladly. Some see him as a remote boss who does not readily circulate among his rank-and-file employees. Easley is not good about returning phone calls, except to his inner circle.

He reorganized his agency, refused to defend state agencies when he disagreed with their positions and forced the Justice Department to become more of a policy-maker and not just the passive legal counsel for state agencies. One of Easley's favorite buzz phrases is to "think outside the box."

If his tenure as attorney general is any guide, Easley as governor would focus on a few issues that he views as critical to his administration's success, allowing power to be diffused. Easley says his Cabinet would be "as strong as there has ever been in the state."

"People don't elect a governor to figure out how to decorate the rooms at the state hospital," Easley said. "They elect a governor to set a direction and to see that it is followed. What they want is someone who gets the job done."