Monday, April 19, 2021

Corruption trial of political mega-donor Greg Lindberg begin this week


As the bribery trial of insurance conglomerate owner and political mega-donor Greg Lindberg gets under way this week, new details are emerging through court documents and public records about allegations that Lindberg tried to work with the chairman of the N.C. Republican Party to bribe the state’s insurance commissioner.

The trial could feature an all-star lineup of political witnesses, including former Gov. Pat McCrory of Charlotte.

Lindberg and two of his business associates, John Gray and John Palermo, were indicted on bribery charges in 2019 along with then-NCGOP Chairman Robin Hayes, who has since taken a plea deal and could testify at the trial.

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The trio is accused of trying unsuccessfully to bribe Insurance Commissioner Mike Causey with campaign cash in exchange for actions favorable to Lindberg’s companies, including the removal of a top Department of Insurance official that Lindberg disliked. He sought to replace the official with Palermo, according to indictments.

The three defendants and federal prosecutors filed motions before the start of the trial Tuesday seeking for certain pieces of evidence to either be omitted or allowed during the trial — ranging from Lindberg’s divorce details to allegations that Causey once illegally sold blueberries at a farmer’s market. A ruling on these hearings motions will be needed as the trial begins.

The government has recorded at least 80 hours of phone calls and meetings and has more than 390,000 documents that could be used as evidence, according to the motions. U.S. District Judge Max Cogburn told the prospective jurors Tuesday that the trial could last three weeks.


Before the legal trouble, Lindberg made headlines in 2018 by donating millions of dollars to prominent elected officials and both state political parties, with Lt. Gov. Dan Forest and former Insurance Commissioner Wayne Goodwin standing to benefit from some of the largest contributions for their campaigns and committees and PACs that supported them. Some of the recipients of the money pledged to return the contributions after the indictments, but others — including committees backing Forest — did not, and gubernatorial candidate Forest has faced criticism for his Lindberg ties even though he’s not been accused of any wrongdoing.

Hayes, who stepped down from his party leadership role, pleaded guilty in October to lying to federal investigators. The plea deal calls for Hayes to work with prosecutors in the case and potentially testify against the three others. He hasn’t been sentenced yet.

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On Tuesday, Hayes’ name was among the list of potential witnesses read to the courtroom. McCrory, a one-term governor and a seven-term Charlotte mayor, was also on the list, as were fellow Republicans Causey and Dallas Woodhouse, former executive director of the state GOP.

At least three political figures are mentioned in the motions with their names redacted. However, “Public Official A” has been previously identified by media outlets as U.S. Rep. Mark Walker. Walker, who is not seeking re-election, has not been accused of any wrongdoing.


Walker benefited from Lindberg funding and helped arrange meetings with Causey, according to prosecutors, who said they plan to introduce texts, emails and testimony regarding conversations the defendants and the commissioner had with or about Walker. They also plan to present documents related to the money Lindberg gave in support of Walker.

Prosecutors said those pieces of evidence show Lindberg’s efforts to gain access to Walker and enlist his help in pressuring Causey to make the staffing changes Lindberg and the other defendants wanted.

Motions filed individually by attorneys for Lindberg, Gray and Palermo seek to keep any records of conversations between the three, Causey or Walker himself, out of the trial.

Court documents detail the exchanges between the men that prosecutors say convinced Walker to call Causey.

Between Feb. 1 and 4, 2018, Palermo and Gray explained in texts that contributions to Walker’s campaign were on hold because of recent publicity about Lindberg’s donations. At the time, articles had been published that Lindberg had made $3 million in donations that benefited Forest and the Republican Party.

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On Feb. 4, Palermo wrote in a text that Walker was not thrilled about that decision. Gray responded in text, “This NCDOI mess is critical,” according to motions from prosecutors.

Gray then texted Walker asking for a meeting. The next day, Gray texted Lindberg and said, “I have discussed our NCDOI matter with Walker. Please call before your trip to Greensboro today so we can discuss details. Excellent opportunity available for support here.”

That same day, Lindberg contributed $150,000 to a political committee supporting Walker. On Feb. 7, 2018, Walker called Causey to put in a good word for Lindberg, according to the motion from prosecutors. The motion said Walker told Causey he wasn’t telling him what to do or asking for favors but wanted to tell him Lindberg was doing good things for North Carolina businesses.

But Gray and Palermo continued messaging each other and said Lindberg was holding up political contributions because of issues with the Department of Insurance. Gray sent a text to Palermo saying, “All money on hold in NC until NCDOI issues resolved…IF DOI issues resolved then that $ used in NC.”


Court records also discuss two other politicians identified as only “Public Official B” and “Public Official C.”

Transcripts in court documents reference a recipient of Lindberg money who wasn’t up for re-election in 2018, and would be receiving big donations long before their race heats up. “Well, when people see [Public Official C] raising significant money at a time when nobody would expect anybody to be raising significant money,” the court record quotes Gray saying to Causey. “It grabs attention and I want to tell you something Mike… And this is – this is – this is me talking. Nothing attracts money like money!!”

Gray told Causey that he had their support and they would do whatever was necessary.


Lindberg’s website at one point described his business, Eli Global, as including “100 companies with 7,000 employees, $1.75 billion in revenue, and $20 billion in proforma assets including pending acquisitions.” His business began as a small health-care industry newsletter in the early 1990s, and it began buying up other companies in 2001.

Many of the companies in Eli Global’s portfolio are in the insurance industry, often under the umbrella of Durham-based Global Bankers Insurance Group. The Department of Insurance took over some of Lindberg’s companies last year over concerns that they couldn’t meet financial obligations.

Lindberg wants evidence regarding his political donations, wealth, financial circumstances and romantic relationships kept out of the trial. He is also seeking to keep out evidence, testimony, arguments and other references to civil lawsuits.

“As a longtime entrepreneur and business owner, Defendant Greg Lindberg and the companies he owns have been involved in various litigations over the years,” the motions said. “Mr. Lindberg has also been involved in litigation involving family disputes.”

The motion says those include divorce proceedings, business disputes between Lindberg and his ex-wife and employment contract disputes brought by former employees. His attorneys also want to prevent the use of evidence of other political donations Lindberg made.

Palermo’s attorneys are seeking to keep out his lobbyist status, as well as conversations he had with Causey that they say could be misconstrued and other “bad acts.” Palermo, along with Lindberg’s attorneys, filed a motion to prevent evidence that he was offered a job at the Department of Insurance. Throughout February 2018, according to prosecutors, Lindberg and Causey discussed the possibility of hiring Palermo at DOI. Causey told Lindberg that it wasn’t a good idea in March 2018.

Palermo’s team argues his potential employment is irrelevant to the case. “A job interview is not a crime, nor is it knowledge of an alleged bribe or a ‘conscious wrongdoing,’’ the motion said.

Judge Cogburn, of Asheville, warned attorneys on both sides to stick to the facts. He said the case boils down to whether there was a “quid pro quo” — whether the defendants tried “to give something to get something else.”


Recently released email records from the Department of Insurance show that Lindberg and his associates sought to cultivate a relationship with agency leaders from the time one of his insurance companies moved to North Carolina in 2014.

Before Causey took office in 2017, the Lindberg companies had frequent communications with two deputy commissioners. Louis Belo and Ray Martinez were top lieutenants to then-Commissioner Goodwin, who is now serving as NC Democratic Party chairman and seeking to regain his old job in November’s election. After Goodwin left office, both Belo and Martinez left the agency and took jobs with Lindberg’s companies.

In one email exchange from 2015, Martinez and Jeremy Ragsdale — the CEO of Eli Global’s insurance division — discussed details of Ragsdale’s vacation trip to Italy. “It was really incredible,” Ragsdale wrote in an email to Martinez, who’d asked if he’d arrived home yet. “Will catch up with you tomorrow if you have a few minutes?”

Also in 2015, Martinez and his staff corresponded several times with Ragsdale about pending legislation that might affect one of Lindberg’s companies. “Ray mentioned that this legislation may be a useful tool for Southland once it becomes fully effective,” department staffer Jan Andrews wrote in an email.

The bill, House Bill 361, was a package of small provisions requested by the Department of Insurance. It’s unclear from the emails exactly how the bill might have benefited Lindberg’s business, but one email from a DOI staffer references wording that the “industry may want.”

Email records also reference another legislation-related meeting scheduled in 2017, where Martinez and Belo were representing Lindberg’s companies and Causey had taken over as commissioner.

The topic was Senate Bill 509, a complicated insurance regulatory measure sponsored by then-Sen. Wesley Meredith, R-Cumberland. In the six weeks after the bill was filed, Lindberg and his business associates donated about $40,000 to Meredith’s campaign, WRAL reported last year.


Overall, though, emails show Causey keeping his distance from Lindberg starting in his first months in office. A month after he took over the position in 2017, an executive from Lindberg’s Global Bankers Insurance emailed DOI seeking an in-person meeting with Causey “to introduce our team and talk about our strategic plans and ongoing relationship with the NCDOI and the State of NC as a whole.” Causey’s assistant declined the meeting, saying he was “booked completely through mid-to-late March.”

Lindberg’s colleagues also got a hard no when they asked Causey to attend a ribbon cutting for the company’s new Durham headquarters in July 2017; his assistant cited his “demanding schedule.”

A month after that ribbon-cutting, Causey’s office got an email from Forest’s chief of staff, who said that Lindberg “has contacted our office through a friend to request our help in securing a meeting with him, Mr. John Gray and Mike (Causey).” WRAL, which first reported that email exchange, noted that committees supporting Forest received large donations from Lindberg and his associates in the weeks following the meeting request. Indictments in the case say Hayes was also seeking to arrange a meeting between Causey and Lindberg around the same time.

Ultimately, Lindberg had a meeting with Causey in November 2017, according to the indictments. Lindberg asked Causey to call insurance commissioners in other states where Lindberg had pending business deals to “vouch for” him and his company. Gray later called Causey and informed him that Lindberg had donated $500,000 to the N.C. Republican Party, with $110,000 earmarked for the commissioner’s re-election campaign, the indictment says. Such an earmark is illegal under campaign finance law.


The defense may plan to introduce evidence about Causey’s own alleged misdeeds in motions filed last week. Prosecutors are trying to stop that from happening.

Attorneys want to introduce evidence that Causey was once temporarily banned from a Greensboro farmer’s market for selling blueberries “under the table.” The alleged blueberry scandal happened in 2009.

“Testimony regarding 11 year old allegations of under the table blueberry sales has no relevance to the charges here, i.e., that Defendants engaged in honest services wire fraud and federal bribery,” prosecutors said in court records. “Even, if Defendant Gray were able to articulate how farmer Causey selling unauthorized blueberries under the table at a Farmer’s Market has some marginal relevance, such evidence should be excluded as the risk of confusion, misleading the jury, wasting time, and/or undue delay substantially outweighs any purported probative value of the evidence.”

Prosecutors said they believe defense attorneys also want to introduce litigation involving the Department of Insurance’s seizure of Cannon Surety, a bail bonds company. A motion filed Monday by defense attorneys said that “evidence of the Cannon Surety litigation is relevant to Mr. Causey’s bias against his political opponents.

“The evidence will suggest that Mr. Causey took government actions to shut down Cannon Surety because major donors of his opposed Cannon Surety and had given more money to his campaign than Cannon Surety’s owner.”


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